Emergency aid funding has risen tenfold in the last 14 years. A few major donors and a handful of giant aid agencies dominate this "economy" - one which outstrips any country for its inequality.
The following interactive graphs and figures by Christian Els and Nils Carstensen are jointly published with IRIN as a companion to the Local2Global Protection study on humanitarian financing.
BOOMING BUSINESS
The relief aid economy, worth US$156 billion, is criticised for being structurally resistant to change, diversity, competition and the inclusion of locally-based charities. NGOs and donors like to promote transparency and good governance in the countries they work in, but how much do we really know about where and how aid money is spent?
USA, Europe and emerging donors
Over the years, Europe and the USA have been the largest donors to the formal aid industry - press the play button below the graphic to see them take turns claiming the biggest share. Public generosity sometimes tops that of governments (think Haiti and the tsunami), while other donors, especially from the Gulf, are recently contributing more.
Follow the money
Conventional emergency aid money flows overwhelmingly to UN agencies, big western-based charities and the Red Cross / Red Crescent Movement. A tiny fraction is supplied directly to frontline charities in the affected countries. However, as the big agencies sub-contract smaller agencies, a lot of the actual work is done by national NGOs - how much, though, is remarkably unclear.
Money might pass through three or four agencies before reaching people in need. Each take some overhead and project management costs from the cash along the way, while reporting to the next level up. UN agencies implement little themselves, most often relying on international NGOs to be their first level sub-contractor.
“Pooled funds” further complicate the picture. The allocation of hundreds of millions of dollars is unclear, as some of the ambiguous grey boxes in the previous graphic show. The concentration of finance in the hands of large first-level agencies could be argued to provide a form of "cheque book coordination", but at what cost?
““We have come to regard western NGOs as ‘international’ and the rest of the world as ‘local...
When so-called northern NGOs engage with southern actors, it’s rarely a partnership, it’s more of a sub-contract.””
It’s a messy picture, as this graphic shows. The grey arrows indicate channels where there is particularly little information available. The definition of local (typically sub-national) versus national NGOs is discussed in the Local2Global Protection report.
HOW BIG IS THE PIE ANYWAY?
There are two main sources of data on humanitarian funding: the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development and the Financial Tracking Service (FTS) of UN OCHA. Another annual publication, the Global Humanitarian Assistance report, combines the two data sources adding its own research and analysis. If not otherwise noted, data for these figures comes from FTS. However, the discrepancies add up: the difference between FTS and GHA numbers is in the billions:
INEQUALITY
The three largest humanitarian actors receive more than all other humanitarian actors combined. (Estimates of active relief organisations range from about 700 recorded in FTS in 2014 into the thousands). The Gini coefficient is a widely-used measure of inequality, which ranges from 0 (every person/organisation has the same amount of money) to 100 (one person/organisation got everything, the others nothing). The Gini coefficient for the humanitarian “economy” is about 95, showing a very high degree of market concentration. The figure below compares the Gini coefficient of the humanitarian economy with a selection of countries - among them Norway being the most equal, and Namibia the least.
““Is that something that promotes innovation? I think most people would say that in all other circumstances in life, that doesn’t sound like a very healthy system.” ”
If the humanitarian “community” were a country, it would be by far the most unequal one on the planet.
The humanitarian one percent
These 30 humanitarian agencies - about four percent of the total number of emergency aid agencies, received about 85 percent of the total funding reported to FTS. The horizontal axis shows the percentage of active relief agencies (about 700), while the vertical axis shows the proportion of funding they control. By hovering at the one percent point, we can see that those few agencies control 70 percent of the resources, for example.
CASH RICH, Data poOR
Local2Global Protection researchers tried to dig deeper, but only a few of the major agencies contacted could provide details of their funding to local or national aid agencies.
A few points of light
Looking at the whole funding pie, funding directly to national NGOs and charities is shown below in the (tiny) yellow boxes.
Giving so little money directly to local organisations – which are on the frontline of response – not only limits their capacity development but also underlines the paternalistic – or even colonial – attitude held by donors in the North and West, about aid actors in the global South.
Read IRIN's new report on reforming the humanitarian financing system
Narrative and presentation: IRIN
All graphics (c) Local2Global Protection. Analysis and visualisation by Christian Els.
Contact the L2GP project manager Nils Carstensen at info@local2global.info for further information about the initiative.
For more detailed analysis, methodology and analysis, read the L2GP report.
Unless otherwise stated, data is from FTS.The FTS data does not systematically include private fundraising by individual aid agencies and is based on voluntary reporting. It therefore undercounts donations from the general public through any channel or agency.
Cover photo: George Fominyen/WFP