By design, the humanitarian–development aid architecture is strictly segregated, divided by mandates and rules that were originally designed to meet different kinds of needs. Today, this rigidity is hampering the aid system’s ability to manage risks and rapidly respond to crises. Pre-planned development programmes do not have the flexibility to quickly reallocate funding to address spikes in need, and humanitarian organisations are largely confined to funding instruments that prevent longer-term engagement in vulnerability reduction.

To address these issues, donors and NGOs are trialling a new set of innovative risk financing options to help deal with small-scale crises that impede development progress, and a humanitarian fund Providing Humanitarian Assistance for Sahel Emergencies (PHASE) has been embedded into to the multi-year Building Resilience to Climate Extremes and Disasters (BRACED) programme. This ‘crisis modifier’ is designed to enable early action and rapid response to new humanitarian needs that manifested in the project areas, and in doing so, protect development gains BRACED projects had made.

This paper showcases evidence from the use of the PHASE crisis modifier and situates crisis modifiers as a potential ‘solution’ for a more flexible aid system – if they are accompanied by a fundamental shift in the way development actors design their programmes and respond to predictable risks.

Report by the Overseas Development Institute