Rethinking the Humanitarian Business Model

Key Takeaways:

• Humanitarian reform efforts in recent decades have underperformed because they have focused on enhancing coordination without realigning funding incentives. The predominant business model in the humanitarian sector encourages UN agencies to conflate their designated normative and technical leadership functions with their own programmatic fundraising in ways that directly impede cohesive, end-user-centered humanitarian response.
• Emerging trends in humanitarian aid—particularly around unconditional cash programming, impartial and comprehensive needs assessments, and country-based pooled funds—are disrupting these incentives. These trends have the potential to more objectively and efficiently orient funding toward needs, rather than the global mandates of large agencies.
• But disrupting the traditional humanitarian business model holds risks that must be managed carefully. If this disruption proceeds in an ad hoc manner, it could harm humanitarian effectiveness. Donors should reexamine their funding practices and work closely with aid groups to ensure these changes deliver constructive outcomes for populations in need.