Crisis Modifiers – A Solution to Development Financing Gaps

As the sometimes-unexpected effects of climate change become harder to counteract in high-risk, vulnerable areas across the globe, humanitarian aid and development programs are looking for ways to continue serving communities’ needs while addressing short-term crises such as droughts, market crashes and conflict. Because of the fragmented nature of development and humanitarian policies, programs, and financing, it is oftentimes difficult to respond to local crises in an efficient manner while also continuing to work toward the long-term goals of a program.

As more and more research is conducted on bridging those difficulties, the development industry has begun piloting programs that incorporate “crisis modifiers.” One solution for funding early action to crises, “crisis modifiers” can take many forms but have most recently been used as flexible resources set aside as humanitarian contingency funds to be accessed by a multi-year resilience-building program. These funds allow development agencies to be proactive or respond quickly to crises while continuing to serve their target communities and build resilience.

The United Kingdom’s Department for International Development (DFID) is the most recent agency to implement a crisis modifier. Set up to serve their Building Resilience and Adaptation to Climate Extremes and Disasters (BRACED) program, DFID’s humanitarian fund Providing Humanitarian Assistance for Sahel Emergencies (PHASE) was established in December 2015 and sits at the program level for BRACED projects to apply to in the event of an anticipated or observed crisis.

In a recent report examining PHASE’s successes and challenges, authors Katie Peters and Florence Pichon measure PHASE’s real impact on three BRACED programs against the crisis modifier’s theory, and propose six adjustments for future versions. They also explore the benefits and challenges of crisis modifiers in general. In the case of BRACED programs utilizing PHASE funds, Peters and Pichon found that, in all cases, timely PHASE intervention helped program beneficiaries adapt to the “shock” or “stress” that occurred. Other measured steps in the process of applying for and utilizing PHASE varied in success throughout the three programs, and demonstrate the need to further refine crisis modifiers to serve vulnerable communities in a more proactive and sustainable way. The study proposes six changes for future versions of PHASE:

  1. Make contingency planning a prerequisite— “Shocks” and “stresses” can’t be considered anomalies, as programs are carried out in vulnerable and often unstable areas. Being more prepared to address these likely events will expedite the process of reacting to a crisis.
  2. Act at a pace that reflects a situation’s urgency— The PHASE Assessment Panel—in charge of releasing funds—was often slow in making decisions due to meeting delays and misrepresented requirements. Faster processing is key in reacting to crises.
  3. Prepare for transitions into and out of the recovery phase— Unique needs arise after a community has dealt with a crisis. Many of those needs may need extra funding or programming.
  4. Adhere to humanitarian norms when targeting— In choosing which crises to respond to, always use the four core principles: humanity, impartiality, neutrality and independence.
  5. Start responding to the right signals— To be proactive rather than reactive to a crisis, pay attention to market signals, use livelihood assessment tools and track early warning data with specific triggers for action.
  6. Harness existing social infrastructure and recognize intangible benefits— Responding to needs builds trust, and can go a long way in advancing the long-term goals of a program.

Blumont’s RIC4REC program, which is funded by BRACED and focuses on building climate change resiliency for vulnerable populations in Mali, has not yet benefitted from PHASE financing. As different forms of crisis modifiers are utilized and tested, Blumont hopes to become involved in the growing tool.

To learn more about the PHASE case studies and to read the report in full, click here.

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