Meaningful Business (MB:) 18 months on, how has the pandemic affected your ability to support the communities you serve?
Alessandro Fedele (AF:) 2020 will always be remembered for the pandemic, but for the International Federation of Red Cross and Red Crescent Societies it was also the year where we responded to more natural disasters than at any point than over the last 20 years. Natural disasters not only cause the unnecessary loss of life, but also have a negative impact on economic and social development. Climate – and weather – related disasters are causing massive humanitarian impacts across the world, directly affecting 1.7 billion people in the past decade alone. We know this will get worse as the number, intensity and variability of extreme events increases. The COVID-19 crisis offers an opportunity to build a better future – a future characterised by inclusive development and sustained climate action that prevents catastrophic humanitarian impacts triggered by climate change. With the combined threats of climate change and COVID-19, we need to build the resilience of communities and empower them so that they are prepared to handle such hazards.
MB: What is the biggest challenge you expect to see over the next year?
AF: While Central Banks have generated $5.6 trillion through quantitative easing in 2020 alone, there are 1.6 billion people in the world working in the informal economy who have been negatively affected by COVID-19 and will not directly benefit from this social support. Something must be wrong here! Moreover, we see official statements from institutional donors about budget cuts for humanitarian support. COVID-19 has increased food insecurity, something that disproportionately impacts people in poverty and is driving greater humanitarian needs. In those regions where there is a food crisis, emergency or famine, 82% of the population live below the international poverty line ($3.20 a day). Business as usual is not an option, we must find new financing mechanisms to fill the humanitarian funding gap.
Alessandro Fedele, Global Head of Private Sector Unit, International Federation of Red Cross and Red Crescent Societies – IFRC
MB: How can businesses support humanitarian work?
AF: I say, less talk, more action. Private sector organisations (foundations and corporations) make big public statements about their commitment to support humanitarian and development sectors. However, the data shows that at the moment they are contributing to only 5% of total cash donations globally. I know that private sector organisations are willing to do more than “just” donate. They support a lot by sharing assets, knowledge, technology and offering important pro-bono support. However, this cannot be in replacement of cash support. Think about this: according to the World Bank, global market capitalisation of listed domestic companies is worth 83.5 trillion in 2019. With just 1% of this every year, we could significantly accelerate the 2030 Agenda and cover the annual humanitarian needs.
MB: Many small, on-ground, charities have been heavily affected, with limited access to large corporate and public sector grants. How can they continue to expand their impact?
AF: Working for the International Federation of Red Cross and Red Crescent Societies, I come from a different perspective. We are the largest membership humanitarian aid organisation that reaches 160 million people each year through its 192-member National Societies with the work of 14 million volunteers. I believe that small on-ground charities play a unique role in supporting local communities but I also think that our humanitarian sector is too fragmented to work efficiently and effectively. In order to expand their impact, small on-ground charities should increase the collaborations with other NGOs, develop stronger coordination mechanisms and reduce duplications in the field.
MB: Can you share examples of successful private sector partnerships which have helped increase the positive impact of humanitarian work?
AF: I have the fortune to work with a lot of great private sector partners. The good partnerships are those at global scale, where we can really achieve large and tangible results. They occur when the partners come to us and ask how they can help and are ready to listen, rather than coming with a pre-defined list of thematic priorities. The most successful partnerships are multi-year agreements where private sector organisations have a genuine desire to make a difference for the people in need, offering in-kind and cash support without really looking at their business return.