Aid agencies are looking to individuals, businesses and foundations for more income as government budgets are squeezed
p>LONDON (AlertNet) - Private funding for humanitarian response has become increasingly important in recent years, rising to 32 percent of total humanitarian assistance in 2010 from 17 percent in 2006, a report from a UK-based aid tracking group said on Thursday.Private voluntary contributions – from individuals, companies and foundations – to organisations that provide emergency aid grew to $5.8 billion in 2010 from $2.1 billion in 2006, according to the research from the Global Humanitarian Assistance programme. They accounted for a quarter of the overall $73.9 billion in humanitarian donations over that period.
The bulk of humanitarian aid still comes from governments. But the report notes that institutional funding has been rising at a slower rate than private donations, as the finances of many rich states are constrained by high levels of debt.
For example, in 2010 – the year of the Haiti earthquake and massive Pakistan floods – state-funded aid increased by 28 percent from the previous year, whereas that from private sources jumped by 70 percent, reaching close to $6 billion.
"The financial and economic crisis of the past four years and the subsequent squeeze in many government donors’ budgets have prompted aid organisations to intensify their collaboration with private donors," the report says.
"For many organisations, private money is the answer to the dilemma of how to keep responding to the growing number of aid challenges when there are limited government resources available," it adds.
Private funding has remained consistent, even without the driver of mega-disasters and despite the global financial crisis, the report notes.
In 2006-2007, around three quarters of private funding came from individuals, with foundations accounting for only 7 percent and companies just 8 percent – although more businesses have begun contributing their skills and expertise to emergency response work, little of which is captured in the data.
STRATEGIC APPROACH
Both U.N. agencies and non-governmental aid groups have shown greater interest in raising money from the private sector, and are adopting a more strategic approach to private donorship, said report author Velina Stoianova.
This may account for the resilience of private aid contributions amid economic troubles in many wealthier nations, she added.
"The only explanation I can think of is that this funding now has been actively sought out," she told AlertNet.
"As opposed to relying on emergency appeals, when typically private donors would go and give some money, I think organisations are approaching them on a more strategic basis and trying to engage their funding regardless of the variation of the scale and number of crises."
Non-governmental organisations receive the lion's share of private humanitarian funding, with an average of 57 percent of their income having come from private donors between 2006 and 2010.
By contrast, only 5 percent of U.N. income and 28 percent of income for the Red Cross Movement came from private voluntary contributions in the same period, according to the data in the report.
Stoianova said many NGOs want to increase private funding not only because they see it as a way of meeting growing demand for aid, but also because it can often be used more flexibly than government cash.
"Private money is important because it allows organisations to carry out the type of work that may not be the fashion with (institutional) donors," she said.
Her analysis of how private donations were spent by five organisations, including Medecins Sans Frontieres and International Medical Corps, shows they tend to channel these funds towards countries with long-running crises that are a low priority for Western governments.
For example, Afghanistan, Iraq and Pakistan – three countries of high interest for total official humanitarian assistance – receive relatively little funding from private pockets. But Niger and Central African Republic, which suffer from severe funding shortfalls, are key areas for allocating private contributions.
One of the main problems in tracking private aid is the lack of an international mechanism for reporting it, together with patchy efforts to record both income and expenditure from private sources, the report said.
Global private support for large-scale emergencies is relatively easy to gauge, but it remains unclear how much private money is out there in any given year, it added.
That also makes it hard to know whether the money is being used effectively, Stoianova said.
"We need some type of system for recording private giving because, as this report shows, it is becoming more relevant, it is a trend and it is here to stay," she said.
(Editing by Rebekah Curtis)
For the full report, visit the Global Humanitarian Assistance website.
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