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Money can’t solve the displacement crisis, strategic digital transformation will

With less than 5 years before the global number of displaced people exceeds the resources available to help them, there is urgency to amplify relief efforts through digital innovation and collective action.

April 19, 2022

By Nicholas Kerastas, Business & Research Analyst, Center for the Digital Nonprofit and Jean-Louis Ecochard, Senior Director, Center for the Digital Nonprofit

The humanitarian community is approaching a dreadful event horizon:  a point where resource depletion meets the proliferation of global calamities, leading to fewer resources to help more people in need.

All of us have become keenly aware of the extreme levels of human suffering across the world. In the past 6 months, the news cycle has brought us stories from Afghanistan where 6 million people are displaced, Central Africa and South Sudan where 3 million people are displaced, and of course Ukraine where 6.5 million people are displaced. As we write this, a renewed armed conflict in the DRC is pushing more refugees to shelter in Uganda. As ongoing crises continue in tandem, often amplifying their worst impacts, we are all feeling increasingly overwhelmed by the intersection of global disasters, and it can be paralyzing for humanitarians trying to make a positive change in the world.

Traditionally, as awareness of global crises spread to high income countries and aid-focused governments, a global cosmopolitan identity and sense of responsibility amongst humanitarians has led to positive action. Nurturing this identity and its many manifestations has inspired global responses of volunteerism, monetary and in-kind donations, as well as other forms of civic and social activism. Our connection to the shared network of humanity motivates us to work in the nonprofit sector instead of Wall Street. Unfortunately, even the most powerful movements of goodwill are reliant on the ebb and flow of the magnetism behind money. This is true even for humanitarian activities where the Center for the Digital Nonprofit (CDN) research shows that we are experiencing a paucity of funds.

NetHope’s CDN research team aggregated the financial statements of its Members involved in emergency response activities. While the available financing for humanitarian response is significant, amounting to over $16 billion in 2020, Figure A below reveals a clear flatlining trend occurring over the last 10 years. By 2030, if the situation holds, humanitarian response organizations will experience massive failures in humanitarian aid. This future lack of financial resources for nonprofits exists within the context of increasing global government debts ($226 trillion (Gaspar et al, 2021)), and particularly rapidly accumulating debt amongst less-developed countries that has reached $43 billion (UNCTAD, 2021).

Figure A

Another trendline in Figure A highlights a more disturbing development. The global numbers of displaced persons are rapidly increasing without any indication of slowing. With numbers of internally displaced persons (IDPs) projected to hit 80 million by 2027, the humanitarian and development community has only 5 years before the resources required to support them greatly exceeds the funds available. This exponential rise in the number of people in need does not include the projection of added displacements caused by the impacts of climate change and proliferation of geo-political conflict. Soon, the humanitarian sector will be so starved for funds that it will have to choose which people it helps, and which it will leave to suffer – a moral crisis like no other for those dedicating their lives to the humanitarian cause.

In the face of this approaching dilemma, NetHope is working diligently to coordinate collective responses to the global displacement crisis as well as the contributing factors of natural disasters, conflict, and climate change. When there were enough resources, the either/or approach was an efficient decision framework. Today we must address this challenge with both/and model. For the NetHope community, this means both continuing traditional approaches to humanitarian aid and newly developed digital approaches. While financial resourcing is always integral to humanitarian operations, we are also seeking to collaborate with subject matter experts, corporate technology partners, and humanitarian innovators to leverage digital transformation to help bridge the gap between nonprofit finances and human need.

We know that the nonprofit community is strategically interested in pursuing Peak Performance throughout their operations (Ecochard and Kerastas, 2021). This theoretical concept has the potential to bring about truly transformative, and measurable returns. While digital transformation often promises 100% revenue growth (Forbes, 2021), throughout the NetHope community even a modest 20% return on investment through new-found digital efficiencies and collaboration would be equivalent to an annual $5.2 billion gift to the sector. That translates to the hands-on support of the health, nutrition, and safety of 240 million more people. These results are the outcome of the bare minimum of success. Now imagine if we can achieve scaled transformation through the NetHope Effect, moving the entire sector forward as one. With this inspiring perspective, NetHope believes we can increase efficiency and amplify the impact of every dollar spent through digital transformation.

With the prerogative of furthering the entire humanitarian community through digital transformation rather than one-off or siloed innovations, NetHope is performing a 2030 strategic alignment initiative to identify the precise digital investments that will help make a strategic difference. We must complement the era of big money in humanitarian work with that of digital, based on mutual collaboration, symbiotic sector investments and collective, digitally enabled action. Our goal is to scale and boost the visibility of promising investments thereby achieving greater efficiency and impact across the entire sector. It is through these joint pathways that we can hope to avoid the worst outcomes of the proliferating global displacement crisis.

If you or your organization is interested in learning more about NetHope’s Strategic Alignment Initiative, please view our first white paper on phase 1 of the project. Additionally, you can get in touch with the CDN by contacting us to setup a conversation with the strategy team within the CDN.

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