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With rising needs and stretched resources, there is an increasing demand to demonstrate that innovation investments are bringing about high returns. However, the practicalities of the humanitarian system make calculations of the return on investment (ROI) and judgements on value for money (VFM) complex.  

A Return on Investment and Value for Money Assessment Methodology for the Humanitarian Innovation Ecosystem’ outlines a set of indicators to assess ROI and VFM for innovation-focused investments to help increase alignment of methods that could be adopted by actors currently investing in humanitarian innovation. This report is a part of Elrha’s Global Prioritisation Exercise (GPE) for Humanitarian Research and Innovation.  

During the desk review and key informant interviews, a few key issues were highlighted in the sector: 

  1. A lack of alignment in how key terms are used by different actors. Whilst the definitions and calculations of different ROI and VFM measures are not controversial, there is frequent misuse of terms.  
  2. A range of different interests exists in the area of ROI and VFM across the various institutions, going from project-level interests to portfolio-level and even higher-level considerations of the ROI of humanitarian innovation as a whole.  
  3. A review of documentation from recent funding opportunities particularly identified: 
    • Information on costs is the biggest gap. 
    • Cost and cost-effectiveness metrics are often not explicitly defined. 
    • A lack of explicit detail on what quantitative detail or indicators are needed, reducing the comparability of data that is reported. 
    • Guidance is often lacking on what evidence should be generated within each phase of the innovation pipeline. 

To try and support alignment and contribute towards solving some of these challenges, the report:  

  1. Sets out the key terms, in terms of both the innovation pipeline and for ROI and VFM terminology, with reference to similar efforts at increasing alignment from related contexts. 
  2. Focuses on portfolio-level considerations, as the area of broadest interest and highest potential for alignment. A ‘portfolio view’ is particularly important to innovation funds, where it is unlikely that every individual project will be a success, but where not every individual investment needs a positive return for the overall portfolio to be a success. 
  3. Presents a recommended set of ‘ROI indicators’ – measures which can be feasibly assessed at each of the relevant phases of the innovation cycle, and which are sufficiently aligned with the eventual portfolio ROI to provide the basis for decision-making about investments.  
    • These indicators are grouped in a 3*3 matrix looking at the ‘reach’, ‘impact’, ‘costs and cost-effectiveness’ for different stages of the innovation pipeline – proof of concept, transition to scale and scaling.  
    • For each indicator, details are provided for its measurement, and relevant time dimensions, comparisons, and case studies that demonstrate this indicator.  
    • The indicators are intended as selection criteria – where an innovation fund already requests similar information to some of these indicators, they could consider aligning their requirement phrasing and terminology as defined in Table 5 in the report. 
  4. Shows how these indicators can contribute towards the measurement of overall portfolio ROI and explains approaches to assessing this.  

Follow-on feedback from a subset of interviewees identified a number of cases in which this proposed methodology could be incorporated by actors in the sector. Through the proposed indicators and measurement approaches, particularly in terms of improving cost and cost-effectiveness data, it is therefore hoped that we can align methods across actors and help build the evidence base within the humanitarian innovation sector.  

The project was conducted in three phases which are literature review, key informant interviews and feedback and follow-ups. The co-authors, Fab Inc and the International Rescue Committee, first mapped the landscape of existing practice around ROI measurement of humanitarian innovation through desk-based literature review. This involved constructing search queries using keywords within key organisations’ websites. These organisations included the list of organisations selected for key informant interviews, as well as additional key actors identified based on experience in the sector. A semi-structured interview guide was developed and loosely followed during the interviews. An aligned approach to ROI and VFM was developed based on the learnings and common themes that came out of the literature review and the key informant interviews. This proposal was then discussed with a subset of the organisations who participated in the KIIs to gather their feedback and understand the practicality of whether this will be feasible for actors in the sector to adopt and incorporate into their processes. 

What is the Global Prioritisation Exercise?

The Global Prioritisation Exercise (GPE) aims to improve outcomes for people affected by crisis by amplifying the impact of investments in research and innovation and understanding the priorities at all levels. It will provide a detailed overview of the progress and performance of the humanitarian research and innovation ecosystem with a clear set of priorities for research and innovation funding and attention.

Find out more about the GPE

Related Events

Follow the money: a deep dive into investments for humanitarian research and innovation

11 May 2022, 13:00-14:30 BST Hybrid: Geneva, Switzerland or virtually (Zoom)

The State of The Humanitarian Research and Innovation Ecosystem – First Look at Insights from a Multi-Level Global Consultation 

Thursday 27 April 2023, 12:00PM (UTC) Hybrid: Geneva, Switzerland or virtually (Zoom)
Read the report (Accessible PDF)

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