Funding for humanitarian innovation

11.30.2017

To share experiences, ideas and reflections with donors, HIP authored a paper (Nov 2017) outlining funding modalities that could further enable and foster innovation in the humanitarian sector.

This paper (docx) was drafted by members of the Humanitarian Innovation Platform (HIP): Norwegian Red Cross, Save the Children Norway, Norwegian Church Aid, and the Norwegian Refugee Council.

I. WHY IS INNOVATION IMPORTANT FOR THE HUMANITARIAN SECTOR?

The challenges facing the humanitarian sector today makes innovation imperative. There are growing needs, less funding and a strong realisation that the humanitarian sector can do things better. Innovation can help humanitarian actors reach more people with higher quality services, improve accountability towards beneficiaries, improve participation, save costs and build response capacity at a national and local level.

Despite this recognition, innovation in the sector is slowed down by a series of factors, such as short term project funding, weak linkages between humanitarians and other sectors, entrenched ways of working, risk adversity among donors, difficulties to capture and disseminate learning, and challenges to include beneficiaries in programming processes.

II. HOW CAN THE NORWEGIAN GOVERNMENT BEST SUPPORT?

To help organisations work around the current challenges to innovation in the sector, donors can play an important role. We believe that the Norwegian government can best support humanitarian innovation through a number of different funding mechanisms. Some ideas for how these could work are outlined below.

As there are many existing mechanisms for funding innovation in the sector, some working better than others, we also encourage the NMFA to commission a study to look at the lessons learned and good practice of existing funding mechanisms globally before establishing new structures.

III. IMPORTANT ELEMENTS THAT SHOULD BE TAKEN INTO ACCOUNT WHEN FUNDING HUMANITARIAN INNOVATION

The goal of humanitarian innovation should always be one: make the humanitarian response better and more effective. The needs of those affected by man-made or natural disasters or crises should be at the centre of all innovation efforts in the humanitarian sector.

Innovation in the humanitarian sector takes place at many levels and in many ways: on a project level, in partnerships with local organisations, as part of modernisation processes within humanitarian organisations, in partnership with private sector and government, and through interagency collaboration in the field and at the head offices. A well-functioning funding structure should be flexible enough to stimulate innovative activity on all levels (systems, partnerships, themes, and projects) and phases in the innovation process (ideation, piloting and scaling).

IV. WHAT FUNDING FOR HUMANITARIAN INNOVATION SHOULD SUPPORT AND ENCOURAGE

Projects that have the potential of generating important humanitarian impact
Insight and ideation activities in humanitarian organisations that leads to ideation, piloting and scaling
Collaboration with both local and international private sector and academia, beneficiaries, and other relevant actors
Attract more private capital, new and non-traditional funding
Capacity building throughout the organisations and in the sector
Ensuring organisational learning and efficiency through tailored reporting structures
Implementation of projects grounded in humanitarian principles

V. POSSIBLE FUNDING MECHANISMS

Several funding initiatives can be made possible in a new structure. The organisations recommend to look at a variety of options for funding, to ensure opportunities for activities at different levels and phases in the innovation process. Funding for humanitarian innovation can come through a new stream in the existing framework agreements, or other more long term funding. For private sector collaboration, funding can be made possible through budget allocation from the Section for Business Relations and Private Sector Development or through other private funders. An innovation fund or programme could be build to ensure the ability to scale great projects. The mechanisms would allow the MNFA to position itself as a key donor for humanitarian innovation, in line with the humanitarian principles and the principle of doing no harm. Below are concrete examples of how the funding initiatives could work.

I. FUNDING THROUGH EXISTING FRAMEWORK AGREEMENTS

Funding for innovation today is mostly limited to project funding, which offers little predictability and limited room for long-term planning. It also allows little space for developing strategic areas for innovation in humanitarian organisations. An innovation stream in the framework agreement structure can support the ideation and piloting phases of the innovation process. An innovation stream should be flexible enough to make room for change as organisations build capacity and structure innovation better. To ensure that the organisations actively address innovation challenges and support truly innovative projects this paper suggest fresh funding for an innovation stream and not merely a reallocation of existing funds.

With set guidelines for what type of action is eligible for funding, a new innovation stream requires little in terms of additional administrative work in the NMFA. Including an innovation stream in existing framework agreements would allow for:

Scaling up or creating internal innovation funds to provide smaller grants for the first phases of innovation in the field offices and at head office. This would allow for a greater room for risk and for testing out new solutions with potential of drastically improving the way the sector works.
Increasing the amount of innovation projects and initiatives from the field, as well as testing innovative solutions from other organisations.
Enabling a focus on the side effects of innovation and new technology – such as data protection issues and intellectual property rights.
Human resources on innovation for learning and support and capacity building on innovation throughout the organisation, both in the field and at head office.

II. SEPARATE INNOVATION PROGRAM OR FUND

To be able to scale up great solutions across organisations and the sector, there is a need for a mechanism that would allow for funding larger innovation initiatives over a longer period of time. A separate innovation program or fund may be dedicated to funding larger projects that are outside the scope of the innovation stream in the framework agreements. The main goal for such a programme should be to scale up solutions which provide better and more effective services for beneficiaries. An innovation fund should be flexible enough to include a range of different types of projects and types of collaborations, with or without private partnerships.

A separate innovation program or fund can support the following activities:

Secure funding for larger projects, such as scaleable projects, collaborative projects (interagency, with private sector and academia), and cross sectoral projects.
Can be open for humanitarian innovation projects initiated by actors outside the sector.
Possibility for calls on specific thematic areas, where the NMFA sees a need for strategic investment.
Provide funding for areas where organisations see a benefit of targeted joint focus.or a continued platform consisting of organisations, private sector and academia.
Provide additional funding for internal innovation funds, as well as co-fund large projects with private donors,
Facilitate much needed learning on scaling across the humanitarian sector.

The management of such an innovation program or fund is a central factor. The management of the fund must combine expertise on both the humanitarian sector and innovation. It may be run by the NMFA, a consortium of humanitarian NGOs, or another qualified entity. If the mandates of the governing body interfere with the overall goal of improved humanitarian response, a clear mandate for managing the program or fund must be set. Expertise of the humanitarian sector is needed both when it comes to strategic management, assessing calls for proposals, determining selection criteria, and selecting applications.

VI. REPORTING FOR LEARNING

An innovation stream in the framework agreements should optimally not be measured only on expected end-results of the innovation projects. It should also focus on for instance: ideation and insight activities, proof of concepts and pilots generated, sector-specific learnings, innovation-specific learning, increased innovation capacity and collaboration. By also encouraging to failing fast, and seeing ‘failures’ as a potential for learning in reporting structures, the mechanisms can break down some of the barriers to risk and uncertainties prominent in the sector. A main priority when structuring a funding mechanism and setting up reporting requirements is to ensure that flexibility is maintained throughout the process, as innovation is not a streamlined process.

The reporting collected through the funding mechanisms can be aggregated and published in a yearly “State of Innovation” report from the NMFA and humanitarian organisations. This can be compiled both from learning from internal innovation funds and scaling projects supported through a separate funding structure. This would provide updated learning and generate knowledge across the sector, as well as in the private sector, academia and other actors interested in collaboration on innovation.