Cost-savings and efficiency in times of growing need: A Nexus Solution

REFLECTION No. 002

Perhaps one of the hardest challenges faced by responding entities is to “do more with less”. This phrase strikes fear and frustration into the hearts of the most experienced aid workers, as it has been the mantra for several years now. While intended to promote efficiency, it is a mantra that has become synonymous with the abolishment of posts, and the reduction of resources where they are often needed most. As a result, most entities look inwardly, identifying areas of resource flexibility, or suspending/ cancelling less critical activities and operations.

But significant cost-efficiencies can be found where agencies are not working together; where duplication of efforts abound. Research and analysis often face this challenge, and is most evident when analysis of an emergent situation is needed. Rather than pausing long enough to identify common data needs and potential shared research, entities tend to conduct their own surveys and analyses, sometimes in the same location and at the same time as others. The same questions, with perhaps a small tailoring to the agency’s mandate, are asked repeatedly of people who are in urgent need of help.

To compound this waste of resources, agencies often arrive with food and non-food items linked to their mandate as a sweetening of the request for information. These “gifts” are sometimes the result of a needs assessment, but more often a reflection of the agency’s mandate. As a result, such “gifts” may be thrown or given away, as was often witnessed in Somalia in the 1980’s: CSM biscuits distributed to refugees were considered better as livestock feed.

How the Nexus Approach Can Contribute to Cost-Savings and Cost-Effectiveness

The nexus approach provides two concrete opportunities to contribute to cost-savings and cost-effectiveness:  collective actions and prevention always.

Collective actions: One of the key characteristics of the nexus approach is collectivism. Stakeholders and partners are urged to work together towards achieving collective outcomes. Taking that spirit of partnership to all aspects of assistance would include joint assessment missions, information sharing and joint programming. Sectoral or thematic coordination mechanisms can be transformed into common support mechanisms, such as joint analysis units, programme support units, and operational units such as procurement, logistics, transportation, offices and recruitment. Joint programming would be characterised by joint teams, rather than each partner having its own complete programme team. Even if not possible across agencies, within organisations there can be shared teams for core operations, rather than separate teams for each project. This can apply to donors as well as implementers; there are examples where this has been done successfully among smaller donor presences in some countries, to enable each to be present without the cost of a full team for each country.

The immediate effect of these actions is that more funds can be delivered as direct costs to beneficiaries, rather than swallowed by personnel charged to the project. The nexus takes a longer-term view in regards to having an impact, but depends on the foundational structures and activities undertaken during the immediate term, consolidated and fortified in the medium term, and resilient and localised in the longer term.

Prevention always: While this is often viewed in a humanitarian context, preventive development can contribute significantly to reducing the impact of crises on a community or nation. Over the years there have been mantras such as “build back better”, but there is little advocacy for “build better first”. Situational analysis complemented by scenario analysis is needed to determine how potential impacts can be mitigated, whether it is a flood, pandemic, or conflict. A strong prevention and mitigation process also builds communities’ social cohesion, which is just as important as building back better.

Over time, these interventions with national development investments, as well as external support if needed, will create resilient and sustainable communities and nations able to withstand known potential shocks with less negative impact and therefore reduced need for resources to rebuild. This kind of cost-saving happens mostly for the donors, but eventually also for the national budget as prevention and mitigation investments and measures are put in place and become standard practice.

Traditionally, the nexus approach is considered in contexts with a crisis – a humanitarian situation. However, considering the proactivity of the “prevention always” concept in the nexus, it would make both fiscal and humanitarian sense to initiate the nexus approach in development contexts a priori. There will always be some sort of humanitarian need, whether as a result of internal dynamics or as spill over from a neighbouring country.

Climate change is perhaps the strongest argument for the development actors to take the nexus seriously and engage in preventive development thinking. Climate change has no natural or political boundaries, and response to its impacts needs to be collective, serving those most affected in a given area.  If each country only works within its territory in devising responses, those investments will be lost if neighbouring countries are not part of the response as well.

This requires regional political and resource coordination, strong causal analysis of identified risks, and engagement of populations likely to be impacted. Development actors and national stakeholders need to recognise the benefit of upfront investments reducing costs in the long term by reducing impacts and therefore need for humanitarian assistance.

Conclusion:

Funders seek cost-savings, but they must also see the need for investment in preventive actions to realise those savings sustainably. Short-term measures of cutting financial and human resources will have only a short-term internal effect, and potentially lead to accelerated deterioration of the humanitarian situation requiring increased resources. However, if resources are invested in the nexus, and specifically in promoting preventive development action linked to humanitarian response and peacebuilding, the need for humanitarian resources and assistance will reduce in the future.

With the growing impacts of climate change, population growth, and poverty on all nations, it is essential to act now with a full understanding of the immediate needs, and the desired long-term impact, and invest financing towards achieving that impact. The nexus approach helps stakeholders work together, rather than in silos, and gives the leadership and decision-making into the hands of those impacted rather than those who pay.

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There are a number of excellent training programmes to help organisations and individuals understand the concepts underlying the HDP Nexus, but few move participants to the next steps of operationalisation. The Centre for HDP Nexus Solutions (C4NS) was created to address this gap; to provide support services to all levels of actors and stakeholders, promoting localisation as key to the success of any programming, regardless of whether it is labelled as humanitarian, development or peace.  Services range from assessments at the country and organisational levels, training of staff and stakeholders, and support to strategic planning for durable solutions. Contact us for more information at: connect@hdpnexus.org.