The Value for Money of Multi-Year Humanitarian Funding: Emerging Findings
The last decade has seen major growth in humanitarian need, putting the international humanitarian system under pressure and stretching donor resources. Within this context, the UK Department for International Development (DFID) introduced multiyear humanitarian funding (MYHF) for protracted conflicts in 2014. This recognised the long-term nature of many of the top recipients of humanitarian aid, as well as the complexity of the contexts in which they were operating.
DFID commissioned a thematic evaluation focused on protracted crises, using Ethiopia, Sudan, the Democratic Republic of Congo (DRC) and Pakistan as case studies. An inception report for this study and a set of formative reports set out the detailed portfolios, evaluation questions and design.
This report presents interim findings from the study to date on the Value for Money (VfM) of MYHF and contingency funding, summarising emerging findings.
Multi-year humanitarian financing offers significant opportunities for VfM gains
This study has found several areas in which MYHF has advantages over short term and annualised funding.
In the inception report for this study, and in previous pieces of work that led to this study, a number of potential value savings were hypothesised. MYHF could potentially bring about both administrative savings and deliver better value operational solutions over the medium term.
Evidence gathered in the four countries suggests this is the case. The greatest savings so far have been identified in Ethiopia through smarter WFP procurement. By purchasing at the optimal time, WFP spent between 18 and 29% less than if they had had to buy in the heat of an emergency. Even compared to routine purchasing there look to be significant gains from longer term predictable funding, as it allows for better planning. There were also some modest staffing cost savings.
The area of planning appears to be the main gain associated with MYHF. The best example so far is in DRC where UNICEF has been using MYHF for a cash transfer programme for people displaced by conflict. Because of the longer-term nature of the funding, UNICEF has commissioned several studies alongside implementation and used the results of these to improve delivery. They have also managed to reduce delivery costs by giving fewer, larger grants, something that recipients said they wanted in ongoing consultation.
In Sudan, both MYHF projects financed by DFID found that they needed longer timeframes to plan adequately. In eastern Sudan a consortium of FAO, WFP and UNICEF is implementing a programme aimed at tackling stubbornly high rates of malnutrition. It is multi-sector and combines both direct inputs and behaviour change messages. The consortium found that consultation with communities and subsequent design changes took a lot longer than planned, as did finding a way to work together properly as three big agencies. In Darfur, an NGO consortium led by CRS used the longer timeframe to do operational research, giving valuable insights into where the programme was working.
But there is still a long way to go for these gains to be fully realised
Whilst the promise of MYHF is becoming clearer, there are still significant hurdles to its implementation.
Most significantly, much of the MYHF examined in this study still ends up being effectively short term in nature. This is either because agencies do not pass on the multi-year benefits to sub-grantees (‘pass through’), or because their systems do not allow them to work longer term.
In Ethiopia both OCHA and UNHCR are in receipt of MYHF but neither is able to fund partners for longer than a year. OCHA receives MYHF for the Ethiopia Humanitarian Response Fund (HRF) but their in-country rules mean the longest grants are for six months. UNHCR has to sign an agreement annually with government and has a global annual budget cycle, meaning that they cannot sub-grant partners for longer than a year. In both of these examples, MYHF effectively acts as standard short term emergency funding by nature of the onward grant process. WFP in Ethiopia also uses DFID MYHF in the same way as other donor financing, against a plan of emergency food distribution worked out monthly (budgeted on an annual basis, within a framework of a three year PRRO).
In the other three countries studied for this thematic evaluation the picture is more mixed. As already highlighted UNICEF in DRC takes a longer-term planning perspective and also signs grants longer than a year with its partners. ACF is the other MYH partner in DRC, operating an emergency nutritional response model. Interventions are in response to spikes in malnutrition and are mostly short term in nature (once the situation is stabilised ACF withdraws). MYHF ensures this capacity to respond is in place, an entirely positive outcome, but it does not lead to different approaches.
In Sudan the partner programmes are explicitly multi-year, with objectives that are primarily about resilience. DFID also funds emergency programmes with traditional annual funding, raising the interesting question as to whether the MYHF in Sudan can really be thought of as humanitarian (and of course where the boundaries lie). In Pakistan it is too soon to really understand how MYHF is operating (the funding started later), but there is an interesting blend of both MY emergency funding (for IDPs and natural hazards) and resilience funding.
Quantitative evidence to support the case for better VfM is thin.
In addition to a lot of the MYHF being used in traditional annualised or short term planning frameworks – or perhaps because of this – there is a lot less evidence on anticipated value savings than was expected. Aside from the WFP example highlighted above for Ethiopia, VFM data has been surprisingly thin despite significant efforts to collect this.
It is too early to say definitively that this lack of evidence means that VFM is less than expected. Agencies clearly have trouble collecting the data as it is complex and costly. Analysing the administrative savings of less proposal writing, or less recruitment because of longer contracts requires systems that are built to deliver this information, and the time of hard pressed staff to compile such data.
There are also several examples of potential cost savings associated with up-front investment, realised over medium term time frames. Using transitional shelter instead of tents for refugee camps, or building semi-permanent water systems instead of tankering. Unfortunately, whilst these gains seem logical on paper, the actual accounting of work in the real world is highly complex – tankering is still needed while water systems are built; tents are patched up and lived in for a lot longer than is justifiable.
Three years on from this study being commissioned multi-year humanitarian financing has moved from being an esoteric instrument to an increasingly mainstream part of protracted crisis financing. This study is still collecting data on what this means in terms of changes in programming and ultimately outcomes. However, the contours of potential change are becoming clearer.
There is a definite benefit in terms of planning, programme design and a change in approach that this can bring about. These benefits remain tentative in the programmes under examination and a lot more work will need to be done to ensure such gains become routine.
There are also many hurdles still to overcome. Systems have been built over many years to deliver short term programming, and these cannot be unravelled overnight. In fact, the very word humanitarian has become synonymous with short term intervention, a significant philosophical and psychological barrier to implementing longer term approaches in crises labelled humanitarian. And yet complex problems like chronic and acute malnutrition have proven stubbornly resistant to quick fixes.
Finally, there is a major gap in terms of data to prove the value case, meaning the hypothesis that MYHF can lead to more efficient aid is only partly proven. Once more, systems design within agencies may be a large part of the issue.