{"id":26776,"date":"2017-11-15T22:53:34","date_gmt":"2017-11-16T03:53:34","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/the-cash-before-the-storm-forecast-based-financing-at-red-cross\/"},"modified":"2017-11-16T07:52:15","modified_gmt":"2017-11-16T12:52:15","slug":"the-cash-before-the-storm-forecast-based-financing-at-red-cross","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/the-cash-before-the-storm-forecast-based-financing-at-red-cross\/","title":{"rendered":"The Cash Before the Storm: Forecast-based Financing at Red Cross"},"content":{"rendered":"

The apocalypse is near.<\/strong><\/h3>\n

Since 1970, the number of annual disasters worldwide have more than quadrupled.[i]<\/a> In 2015 alone, natural disasters affected nearly 100 million people, leaving 22,773 dead, and resulting in $66.5bn of economic damage. This number is only projected to rise.[ii]<\/a><\/p>\n

\"\"<\/a><\/p>\n

[iii]<\/a><\/p>\n

A costly bottleneck in disaster relief<\/strong><\/h3>\n

Technological advances in radars, satellites, and machine-learning have improved our ability to predict catastrophe. Yet, disaster relief efforts remain predominately reactionary \u2013 particularly when it comes to raising the funds necessary to mobilize operations. According to UN figures, more than five time as much funding is spent on disaster response than disaster risk reduction.[iv]<\/a><\/p>\n

Consider funding operations at the International Red Cross, a global humanitarian organization and leading disaster responder. The Red Cross operates with roughly 97 million volunteers, members, and staff worldwide. Its national subsidiary, The American Red Cross, responds to more than 700,000 US disasters on an annual basis alone.[v]<\/a><\/p>\n

The Red Cross conducts some variation the following operations when disaster strikes:<\/p>\n

    \n
  1. Assess damage<\/li>\n
  2. Determine tasks required to relieve damage<\/li>\n
  3. Triage tasks<\/li>\n
  4. Unlock funding based on determined plan<\/strong><\/li>\n
  5. Mobilize (predominately) volunteer task forces[vi]<\/a><\/li>\n<\/ol>\n

    In developed nations, where funds are readily available, this process typically flows quickly. However, fundraising faces unpredictable timing in developing nations dependent on foreign aid. The result is a bottleneck that delays relief. An example of this catastrophic bottleneck was seen in 2010, when a flood occurred on the Mono River in Togo, West Africa and it took 34 days for international funding to reach the Red Cross in Togo.[vii]<\/a>\u00a0<\/strong><\/p>\n

    Forecast-based financing promises to save time, money, and lives<\/strong><\/h3>\n

    Enter Forecast-based financing (FbF) \u2013 identified as one of the five Red Cross innovations of 2017.[viii]<\/a> FbF leverages advancements in forecasting algorithms to anticipate and deploy the funds needed to trigger preventative measures before disaster strikes.<\/p>\n

    FbF operates by establishing a risk vs. cost threshold. Each threshold level is associated with a standard operating procedure agreed upon by humanitarian responders, meteorological services, and communities. Thus, forecasts with greater likelihood of disaster trigger more expensive operating procedures and vice versa.[ix]<\/a><\/p>\n

    The Red Cross pilots forecast-based-financing <\/strong><\/h3>\n

    In the near-term, The Red Cross has identified flood risk as a primary focus for FbF, piloting efforts in Peru, Bangladesh, and West Africa.[x]<\/a> Flood risk was selected as the focus for several reasons:<\/p>\n