Access and manage financial resources
Many innovations can be started up using volunteers, with people working extra hours on projects they are passionate about; partnerships can be leveraged, and favours called upon; supplies and materials begged-for and borrowed.
In the early days of an innovation, all these things point to a tenacious and passionate innovator and innovation team. However, at some point real money is needed, and the further you go along the journey, the more of it is required. Our research with ALNAP (Obrecht and Warner, 2016) found that access to flexible funding was absolutely key to the success of the projects we’ve supported.
Wherever possible, try and access this from within your organisation as this will provide you with the most flexibility and control. However, if this isn’t possible, you will be glad to hear that funding for innovation is undergoing significant growth. From just a few funders in 2013, our recent research found that there were at least 171 innovation funders in the humanitarian sector in 2017.
Look for flexible innovation funding
Funding for innovation comes in different shapes and sizes, but is generally defined by the stage of the innovation and the level of direction:
- Staged funding: most innovation funding is related to a stage of the innovation process. Although funds often use different terms, most funding tends to be aimed at the ‘invent’ and ‘pilot’ stages of the innovation process, with a smaller number of funders, including the HIF’s Accelerating the Journey to Scale initiative, focusing on maximising impact at ‘scale’. Funding for early-stage ‘recognition’ activities can be more difficult to find and may be more likely to come from research funders.
- Directed vs non-directed funding: while funding is sometimes available without restrictions on the theme and type of project, most funding is ‘directed’. This often comes in the form of innovation ‘challenges’ where a problem has already been identified and applicants are invited to propose and develop their solutions.
When looking to apply for funding, you should consider the following questions:
- Will they provide funding for core costs, and not just project implementation?
- How flexible are the funds in how they can be used?
- How much will they allow for research, monitoring and evaluation to help build the evidence base for your innovation?
- Do they provide support other than funding, such as mentoring or partnership brokering?
- Will they be able to advocate on your behalf with other funders and potential adopters of the innovation?
Here’s a small selection of innovation funders in the development and humanitarian sectors.
Consider emergency response funding where appropriate
While innovation-specific funding is much more likely to provide the flexibility and tolerance for financial risk that is necessary for developing and testing innovations, if you are seeking to pilot an innovation in an emergency, or to replicate an innovation that is already supported by evidence, you may be able to access resources from emergency response funds.
After diaspora remittances, (ie, payments from people abroad back to friends, family, etc, in disaster-affected countries), the second-most significant source of funding for emergency response is institutional donors. To access these funds, it is important to understand how funding is raised and allocated. You can find out more in the Humanitarian Architecture section of this guide.
Manage your budget carefully
Lastly, four key lessons on budgeting:
- Ensure you budget sufficiently for the core team. This is not a business-as-usual grant: you need to build the team’s strength and capacities to be able to manage the innovation journey.
- Ensure significant investment beyond your estimation of needs for the Pilot stage. You will need a contingency fund to enable changes and iterations, as well as budget for research, monitoring and evaluation.
- Build in as much flexibility into your funding request as you can. The innovation project will need to change direction on numerous occasions as you learn. Every dollar, pound or euro is not of the same value to you – the more flexible the funding, the more value it has.
- Get support within your organisation in order to carve out extra time and resources for innovation activities.