Start Fund Bangladesh: Locally Driven Humanitarian Action

Start Fund Bangladesh (SFB) is a £10m rapid emergency response fund that was created in 2017 with support from UK Aid. Modelled on the Start Network's successful Start Fund, which activates funding within 72 hours of a crisis alert, it fills a crucial gap in humanitarian funding. It is accessible to local, national, and international member non-governmental organisations (NGOs) operating in Bangladesh to respond early to under the radar emergencies.

SFB was built on the spirit of the Grand Bargain and World Humanitarian Summit commitments. In addition to responding to the country's many underfunded small to medium-sized crises, it also focuses on enhancing coordination mechanisms; increasing representation of local and national agencies in decision-making fora; strengthening systems through which local/national agencies can access and manage funds; and improving accountability to affected populations.

Since its inception, SFB has purposefully grown from a membership of 20 international non-governmental organisations (INGOs) to include 27 local and national organisations (L/NNGOs), through a comprehensive mapping and due diligence process. As a result, this membership-driven funding mechanism supports humanitarian responses that are participatory, transparent, and accountable to affected communities. It requires diverse humanitarian stakeholders to come together for every crisis, allowing responses to be informed, coordinated, and community-centric.

"In the midst of the pandemic, Bangladesh has coped with two other disasters – cyclone Amphan and devastating monsoon flooding. On World Humanitarian Day, I thank Start Fund Bangladesh and their network of national and international NGOs across the country," said Judith Herbertson, Head of DFID Bangladesh. 

"Uttaran, with the help of Start Fund Bangladesh, responded in Assasuni Upazila during Cyclone Bulbul, Cyclone Amphan, and COVID-19. They were the fastest agency to do so and later on others followed. Uttaran has a dedicated team who coordinated with the administration to ensure that the most affected people receive emergency support," said Mir Alif Reza (Satkhira Local Government Office, Bangladesh).

What we do:

Rapid response funding: Since 2017, the fund has directly reached more than 757,475 people by quickly responding to small to medium-sized crises, allocating £6.85 million to its members and their partners. This innovative funding model was created to move away from reactive humanitarian response to that which has more scope for early action, where support is made available before a crisis occurs or immediately afterward. The fund provides rapid and effective financing, focusing on three types of humanitarian need: (i) underfunded small to medium-sized crises (ii) spikes in chronic humanitarian crises and (iii) forecasts of impending crises.

Local anticipation: In November 2019, informed by the knowledge and expertise of Start Network's Crisis Anticipation and Risk

Financing team, as well as the Forecast-based Warning, Analysis and Response Network (FOREWARN), SFB launched a national FOREWARN platform to facilitate a pool of forecasters, analysts and sectoral experts at the local and national level. This partnership is the first step toward facilitating the localisation of the FOREWARN model by creating a pool of forecasters, analysts, and sectoral experts at the local and national level. The group supports SFB's members to anticipate crises and initiate action before disaster hits, and strengthens their resilience and ability to recover. To date, SFB has had three anticipatory responses for predictable crisis, including a decrease in livelihood due to an upcoming fishing ban, a spike in dengue outbreak in the urban capital, and river bank erosion posing a threat to communities living near riverine areas. The anticipatory alert to dengue outbreak was the first alert of its kind globally, informed by FOREWARN analysis.

Funding Local Organisations Directly:  SFB became one of the first funds that allowed local and national NGOs to access international aid directly. This allowed more localised disasters to be highlighted and strengthened the capacity of local actors, to identify needs and apply for funding. A big development for their sustainability has been their scope for charging Indirect Cost Recovery

(ICR) when raising an alert to SFB. This enables them to invest in organisational development – an opportunity that was not always possible during typical sub-grant agreements with INGOs. Local and national NGOs can now directly access the funding, lead consortiums with INGOs as the implementing partner, and claim fairshare of the ICR as the implementing partner of INGOs. INGO country offices are also being more proactive in negotiating with offshore head offices to ensure adequate allocations of ICR for local partners. Which has led to a significant shift in members ICR allocation under the fund in recent years. In 2018, local partners of international organisations were receiving 0% ICR through sub-grant agreements but by 2020 the sharing of ICR between international members and their local partners stood at 73%:27%.

How we see change:

How we work:

The SFB secretariat comprises six staff members who oversee the implementation of the fund and compliance; facilitate coordination, learning and innovation among members and other actors; and support member development. Members, rather than the secretariat, have decision-making power over the fund's alerts and allocations. The SFB legal registration and secretariat is hosted by Action Against Hunger, a Start Network member.

Alert Cycle: SFB responds to crises through an alert cycle, which begins when a member or a group of members identify a crisis that needs rapid emergency funding. The Start Fund Handbook sets out the operational processes and governance mechanisms used by SFB and includes some of the mandatory requirements by which all Start Network members are bound as part of their membership agreement.

Value for money:

The mechanism is hosted by one of its member agency that supports SFB with supporting functions

(such as HR, finance, admin and logistics), reducing overhead operation and management cost.

l NGOs with national bank accounts receive funding within hours of being awarded, which saves time

and ensures the rapid implementation of responses. SFB's fast decision-making in allocating funds translates into fast implementation of responses at field level by awarded agencies. Reaching affected communities through need-centred interventions and providing more unconditional cash support with shorter delivery chains allows disaster-affected people to rebuild without relying on negative coping mechanisms.

Sustainability:

• Building community resilience - working with anticipation and risk financing allows humanitarians to be better prepared in advance of humanitarian events by quantifying risks in advance of crises or disasters, pre-positioning funds, and releasing them according to pre-agreed protocols. SFB, through its national FOREWARN platform and tools like Pre-crises Data Repository, supports member agencies to analyse the risk of crises, and have timely and reliable funding options to disburse for different types of crises. This also enables communities to prepare in advance, reduce loss and damage, and avoid negative coping strategies. In addition, these local and national members have a longer-term presence in the communities and will continue to serve them after the completion of a project.

• Strengthening capacity - SFB supports its member agencies on organisational development, due diligence, risk management, governance, accountability, and safeguarding. Most of the local and national members are directly accessing the fund, and there is ongoing mentoring and coaching from the SFB secretariat on issues like financial management, procurement, and internal control mechanisms. In addition, through its role in the coordination efforts, SFB provides needs analysis and real time information to the wider humanitarian sector to reach communities in anticipating of a disaster or immediately after.

• Future funding – Equipped with the evidence of its impact and enhanced visibility, SFB is now ready to diversify its funding source, from one core donor (FCDO) to investment from other bi-lateral and multi-lateral donors, as well as those from the private sector and individuals, with an emphasis on shifting toward the localisation of donors. Having more donors will allow SFB to influence the humanitarian architecture and practices at the national level, while providing more speed and flexibility to responses and reduce transaction costs.

• Replicability – SFB is generating substantial evidence in terms of its processes and mechanism, impacts, scalability, and replicability. It is gaining recognition as best practice among national and international humanitarian actors.

Building on our success – the future direction of Start Fund Bangladesh

In addition to the provision of funds, anticipation, and capacity strengthening, SFB's work will also focus on the following initiatives going forward:

• A unique and dynamic pooled fund mechanism – there is now growing recognition of the value of pooled funding mechanisms for humanitarian financing, and SFB has an ambition to transition into a pooled fund with support from a variety of donors. What makes SFB unique is that local actors make decisions on how resources are allocated based on their local expertise, thereby decentralising the process, shifting the power dynamics of the humanitarian system, and reducing transactional layers.

• Preparedness - SFB will invest more in predictable and forecastable crises, and work toward preparing vulnerable communities and local governments before these crises occur.
  
   
• Community innovation - In 2020, SFB tested the feasibility of using a smaller portion of funds to satisfy real-time community demands or non-traditional response ideas with the aim of nurturing innovation and inspiring wider community participation. It plans to introduce an 'Innovation Window' and set aside a minimum lump sum of £300k (with a cap of £30k for each proposal) to incentivise the innovation of disaster risk financing tools and approaches.

• Increasing women's participation in response - In consultation with its members, SFB will design and introduce Standard Operating Protocols (SOPs) and relevant budgetary provisions to increase support and space for women to participate in humanitarian action, so that agencies can better address the specific challenges of accountability to women and girls.
  
   
• Extended Humanitarian Assistance – In exceptional circumstances where an emergency situation is ongoing (i.e. a transition to recovery is not in sight) and alternative sources of funding are not available, or where the humanitarian situation has deteriorated due to a new crisis within an ongoing response, SFB will open an 'Extended Humanitarian Assistance Window'. This will cover the unmet needs and will be applicable only to those alerts that have received the first tranche of funding for 45-day rapid response interventions.