Private contributions vital against backdrop of economic downturn, claims Global Humanitarian Assistance report
Individuals, businesses and foundations have continued to give money to humanitarian and development organisations despite harsh economic times, providing a crucial source of funding in the face of declining official aid.
The resilience of private funding is highlighted in a report by Global Humanitarian Assistance (GHA), an aid funding watchdog.
According to the report, 24% of the international humanitarian response from 2006 to 2010 came from private voluntary contributions – at least $18bn. In 2010 alone, $5.8bn was donated privately, mainly in response to the earthquake in Haiti and the floods in Pakistan. As a share of the total humanitarian response, private funding grew from 17% in 2006 to 32% in 2010.
"Private funding has remained consistent despite a severe global economic crisis, so, at a time when government resources are limited and maintaining response to the growing number of aid challenges is particularly demanding, private money has become the answer for many organisations," said Velina Stoianova, policy adviser at GHA and author of the report.
"It is therefore imperative that we are able to gain as clear a picture as possible about the effectiveness of this funding source in responding to humanitarian needs and tackling vulnerability."
NGOs have benefited the most from private support, receiving a 70% increase in private funding between 2009 and 2010. In the five years from 2006 to 2010, NGOs respectively received $1.7bn, $2.7bn, $3.2bn, $3bn and $4.9bn from private sources, according to GHA estimates. The data indicates private donors account for an average of 57% of NGO income. By comparison, only 5% of UN income and 28% of Red Cross income came from voluntary contributions during the same period.
Overall figures for the NGO community hide considerable variations. Médecins Sans Frontières (MSF), the medical aid group, receives 90% of its funding from private sources, while the Norwegian Refugee Council relies on official funding for an average of 98% of its income.
MSF is notable for the amount of money it receives. In 2010, donations amounted to $1.1bn; were it a country, MSF would have been the second largest humanitarian donor after the US.
"MSF base their existence on independence, so they rely on individuals and private foundations, which they say allows them to be neutral and to be able to respond quickly whenever crises appear," said Stoianova.
NGOs also implement a considerable share of funding on behalf of other organisations, particularly UN agencies, although tracking that flow is hard.
Among UN agencies, only the UN High Commissioner for Refugees (UNHCR) systematically collects data on the volume or share of spending implemented by partner organisations. UNHCR transferred $2bn to NGOs between 2006 and 2010.
The strength of private giving comes against a backdrop of declining official development assistance. The OECD club of rich countries last week reported that 2011 marked the first drop in the value of aid for 17 years; inflation wiped out the increase in cash terms, while some countries cut back on development aid.