ICRC sets up first ‘humanitarian impact bond’, worth £21m

In a programme run on a payment-by-results basis, the charity will help to build and run physical rehabilitation centres in three African countries

The International Committee of the Red Cross has set up what it says is the world’s first “humanitarian impact bond”, which is expected to be worth about £21m.

The new bond, which will help to build and run three physical rehabilitation centres in Nigeria, Mali and the Democratic Republic of the Congo, has the UK government as one of five “outcome funders” that will pay the ICRC if the scheme performs.

Approximately £21m in funding will be used to build and run the centres over the next five years, and the programme will run on a payment-by-results basis.

The bond, which is officially known as the Program for Humanitarian Impact Investment, will use initial funding from a number of social investors in the private sector to help the ICRC run each rehabilitation centre.

After five years, the five outcome funders – which include the governments of the UK, Belgium, Italy and Switzerland and the La Caxia Banking Foundation – will pay the ICRC according to the results achieved, in this case how many people receive mobility devices per rehabilitation professional.

The results will be benchmarked against existing physical rehabilitation centres in the region as part of the payment-by-results programme.

The ICRC will repay the social investors from the private sector using the money from the five outcome funders, dependent on whether the results achieved are above the benchmark.

Peter Maurer, the president of the ICRC, said: “This funding instrument is a radical, innovative but, at the same time, logical step for the ICRC. It is an opportunity not only to modernise the existing model for humanitarian action, but also to test a new economic model, designed to better support people in need.

“We hope that once the pilot project is proven, it will demonstrate that non-traditional financing models can work. There is great potential for investments that are built around improving the social, environmental and economic conditions so that humanitarian action advances in impact, effectiveness and scale in ways never seen before.”

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Regulator opens inquiry into humanitarian aid charity

The Charity Commission is looking into the governance of Anaya Aid, which works in Syria, after port officials seized thousands of pounds from it on two separate occasions

The Charity Commission has opened a statutory inquiry into a humanitarian aid charity that works in Syria after thousands of pounds of cash belonging to the organisation was seized by port officials on two separate occasions.

The regulator said it had opened the inquiry into Anaya Aid, which has the object of providing international humanitarian aid during emergency situations, after the charity ignored a warning from the commission that it should not try to take large amounts of cash across borders.

The commission said in a statement today it was told by police in December 2015 that a trustee and a former trustee of the charity had been stopped by UK port officials and about £5,000 of cash belonging to the charity had been seized.

The regulator said that, although the funds were returned, it warned the charity about the risks involved in couriering large sums of charitable funds.

In February, the commission and police issued a warning to charities telling them to avoid cash couriering because of the risks involved.

But the commission said that, in April 2017, it was told by police that the same trustee had again been stopped by UK port officials and cash totalling €23,000 (about £20,300) and £1,500 had been seized.

The regulator said the funds were subject to a cash detention order and were at risk of loss in the event of a successful forfeiture application by police.

The commission said it had also carried out three compliance visits to the charity because of a range of regulatory concerns, “particularly in relation to the charity’s work in Syria and the partners it has used”.

The regulator said: “The trustees have put charity funds at risk of loss on a number of occasions and have failed to comply with the commission’s regulatory advice and guidance.”

It said it had issued an order under section 84 of the Charities Act 2011, directing the trustees “to take specific actions within set timeframes” and issued a further order under section 76(3)(f) of the act, restricting certain transactions that the trustees can enter into without the commission’s prior consent.

Anaya Aid had an income of £418,347 in the year to the end of February 2016, according to its entry on the Charity Commission’s online register, up from £72,052 in the previous year.

The commission said the inquiry would examine such issues as whether the trustees had put the charity’s funds at risk by allowing a trustee of the charity to carry the charity’s funds in cash while travelling in a convoy; the inability of the trustees to adequately account for the end use of the charity’s aid; and trustees’ failure to comply with regulatory advice and guidance from the commission.

The charity did not respond to a request for comment from Third Sector.

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