Worthwhile ideas: A Value for Money guide for humanitarian innovation
Talking about Value for Money (VfM) for humanitarian innovation may feel intuitively wrong – the nature of humanitarian work is, after all, to respond to urgent human suffering, regardless of cost-effectiveness. Moreover, innovation is inherently open-ended, exploratory and frequently disruptive; its high failure rates, uncertain costs and unpredictable timelines can seem at odds with the rigour, certainty and comparability we typically associate with VfM assessments.
Yet, with shrinking humanitarian budgets and rising needs, we have a responsibility to ensure that the humanitarian funds spent benefit people in crisis as much as possible. It is difficult to justify investing significant funds in innovations that offer only marginal gains over existing solutions, when those same funds could support life-saving efforts.
To ensure that innovation improves humanitarian practice, we need to set high standards for what we fund. We believe that a VfM methodology - when designed and applied thoughtfully and ethically - can help us achieve exactly that.
At Elrha, we believe that VfM can be reframed to support innovation rather than constrain it – and have developed an approach to doing so. As an organisation that supports innovation for humanitarian practice, we need to be confident from the outset that all innovations we fund have the potential to add value to the humanitarian ‘toolbox’, or set of solutions.
We take an end-to-end view of innovation, rather than grant-centric, proposing a practical framework for evaluating the potential benefits of an innovation in relation to its cost, specifically informed by the unique challenges and characteristics of innovation in humanitarian settings.
The three-step methodology:
- Evidence check. This step is to establish the evidence base for the assessment through a series of framing questions, to determine if there is sufficient information to allow for a meaningful VfM assessment.
- VfM assessment. In this step, the VfM assessment is conducted by examining a defined set of criteria, related to benefits (probability, learning, significance, scalability, equity, environmental impact) and costs (development costs, costs of use). Each criterion is assessed individually on a scale of –2 to +2 using a rubric-based framework to ensure consistency and clarity.
- ‘Do no harm’ review. In this step, a structured checklist is used to assess potential harm from the innovation. ‘Do no harm’ is a red line: any innovation that raises concerns at this stage should not be funded, regardless of its VfM score.
Our approach has been designed to respect the complex, context-specific and value-laden nature of humanitarian innovation. It prioritises transparent reasoning and dialogue over simplistic metrics, which is crucial in settings where human lives and ethical considerations are paramount.
We hope that this methodology will be useful not just to humanitarian innovation funders but also to practitioners and innovators themselves to support their assessments of the potential offered by innovations, and provide clarity to their decision-making processes.