As defined by the world economic forum, humanitarian investing means mobilizing your capital in a manner that supports the most vulnerable people and communities while having financial returns. Over the past years, humanitarian investments have faced several challenges, including insufficient or lack of investable opportunities, poor financing of humanitarian initiatives, and many more.
However, there is a way we can strengthen the existing efforts and establish new ways to overcome the challenges that came along—for instance, transferring donor capital from other facilities to boost humanitarian investment, creating a market catalyst, and establishing a pipeline of deals.
Strengthening the organization’s readiness to deal with risks in humanitarian investing is also essential. The article looks at the factors to consider in your humanitarian investment portfolio.
The Risk Involved In Humanitarian Investing
Even as you plan to invest in areas that strengthen community resilience and prevent a crisis, you must be aware of the risks involved. And a framework to reduce disasters and risks is put forward with much emphasis. Sustainable investments that focus on reducing the negative consequences to the environment and vulnerability of communities worldwide should be your portfolio’s priority.
Diversity of Resources and Efficiency
Every humanitarian investment should focus on diversity to guarantee sustainability. Over Reliance on one resource can lead to failure if, for some reason, such resources get depleted or become scarce. Variety helps offset the risks in your portfolio because if one actor fails, the other will do. And when all actors are actively performing, the efficiency of what you can deliver increases.
Consider Investments That Focus On Local Capacities
Humanitarian investments acting in local capacities are better positioned to understand the priorities of specific communities and the underlying risk. You are, therefore, in a better position to deliver humanitarian assistance.
Local actors can scale up the resource volumes to deliver support more sustainably. Also, a predictable way of financing is outlined to prevent further occurrences of disasters, quick response, or recovery from the ongoing crisis.
Invest More in Stability
The efforts in humanitarian investing should be channeled to fragile and unstable areas; This means that there must be a concrete plan of action to end the instability. Accountable institutions and good political will should have a hand in restoring the damages caused. Establishing Sound policies and spreading community awareness helps curb the hostile social forces ailing the community.
Collaboration and Innovation
Humanitarian resilience requires collaborating with other stakeholders to pioneer new projects that increase your ability to make an impact. Partnering puts in more resources to assist many vulnerable societies.
On the other hand, innovation bridges the gap between funding and humanitarian help required. Innovative ideas guarantee sustainability by creating a better funding model, proper utilization of resources, and efficient delivery of services.
The factors to consider in your portfolio as you prioritize humanitarian investing include; the diversity and efficiency of resources, the risk involved, investment in stability, areas to focus on, and the potential for collaboration and innovation.