Why humanitarian action is the most cost-effective investment
The gap between humanitarian need and available funding is wider than ever. Image: Reuters
- The humanitarian world is navigating an era marked by civil wars, rising numbers of refugees and a surge in complex and protracted crises.
- We need more commitment from the private sector, donors, UN agencies, thought leaders and NGOs to embrace innovative and cost-efficient ways of improving lives.
- Impact evaluations, technology, cost-efficiency and private sector partnerships are imperative for tackling today’s most complex challenges.
The humanitarian world finds itself at a crossroads, navigating an era marked by increasing civil wars, a growing number of refugees, and a surge in protracted crises and complex emergencies.
This ‘world on fire’ urgently demands a shift – a new level of commitment from the private sector, donors, UN agencies, thought leaders and non-governmental organizations (NGOs) to embrace and push evidence-driven approaches and innovations that hold the greatest promise for improving lives.
Humanitarian aid funding gap wider than ever
The International Rescue Committee’s (IRC) Emergency Watchlist paints a stark picture: a world profoundly out of balance. The 20 countries identified in the 2025 Watchlist comprise only 11% of the global population, yet they account for approximately three-quarters of all people in humanitarian need.
The gap between humanitarian need and available funding is wider than ever, leaving millions at risk of being left behind. This reality underscores the moral imperative to ensure that every dollar is spent as effectively as possible, optimizing the impact of every intervention.
As a new administration in Washington takes the reins with a promise to disrupt the status quo, we should ask: what if disrupting the status quo is precisely what the humanitarian sector needs?
Meeting this unprecedented moment of global upheaval and suffering requires bold, transformative action. By prioritizing cost-efficiency, embracing innovation, and ending business-as-usual approaches, we can meet the scale of today’s challenges head-on.
Here are three humanitarian bets that can drive transformative, and cost-efficient, change in 2025 and beyond:
1. Rigorously test and scale for cost and impact
Impact evaluations are the backbone of efficient humanitarian action. They enable us to spend resources as effectively as possible while showcasing the successes of the aid sector in transforming lives.
At the IRC, we aspire for every humanitarian programme to be evidence-based or evidence-generating – and ideally, both. This commitment is reflected in our track record: while the IRC accounts for just 3% of the global humanitarian budget, we have conducted 30% of all impact evaluations in humanitarian settings.
Our evidence-based approaches have led to transformative outcomes. For instance, simplified approaches the IRC has championed for diagnosing and treating malnutrition have proven as effective as traditional methods - while costing 20% less per child treated.
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The IRC has been at the forefront of developing and scaling cost-efficient innovations. We need to share best practices and work together on these global challenges. In 2018, we distilled our cost analysis methodology into a software tool called Dioptra, which calculates the cost per output of any intervention.
Today, eight organizations with a combined $7 billion annual budget have adopted Dioptra. This consortium is proving that cost data can stretch humanitarian dollars further and unlock new efficiencies across the sector.
These evaluations not only improve programs but also build a compelling case for the power of aid, countering critics who question its efficacy.
2. Leverage technology and AI to scale
Technology and artificial intelligence (AI) are expanding the frontiers of humanitarian action, offering unprecedented opportunities to enhance reach, cost-efficiency and scalability.
The IRC has embraced these tools across sectors, from using AI to improve access to education for displaced children to forecasting climate disasters to provide anticipatory assistance to vulnerable peoples. Technology, when responsibly implemented, can be a gamechanger is expanding the reach of humanitarian service delivery.
These innovations are not just about efficiency; they are about equity – ensuring that even the most marginalized populations can benefit from life-saving interventions.
3. Partner with the private sector and local markets for resilience
Building resilient communities and maintaining a steady flow of funding requires deeper collaboration between the private sector and humanitarian organizations. Private-NGO partnerships offer untapped potential for driving innovation, funding critical programmes and fostering long-term resilience.
One example is the IRC’s Advisory Model, which demonstrates how private sector expertise and resources can amplify the impact of humanitarian efforts. By engaging local markets and fostering community-driven solutions, these partnerships can sustain progress long after traditional aid programs conclude, disrupting business-as-usual.
The road ahead for humanitarian aid
Impact evaluations, technology, cost-efficiency and private sector partnerships are not just tools; they are imperatives for meeting the scale and complexity of today’s challenges.
The stakes are high. As crises intensify and funding gaps widen, the humanitarian sector has no choice but to adapt.
By disrupting the status quo and embracing innovation, we can turn the tide – optimizing every dollar spent and transforming the lives of millions in need.
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Gilles Moëc
February 10, 2025