In a world where change is rapid, we seek to use what is available to us to solve age-old problems in ways that consider the changing environments. We look at each challenge or problem individually, seeking to understand its context at both a micro and macro level. Then proceed to connect the dots between private sector learnings and impact requirements of the social development sector to develop never been seen before fit-for-purpose solutions.
Development Organizations are in fact the real experts in risk management: They manage activities with a high-risk exposure on a daily basis. The risks are however not the organization’s own risks, but the risks that they address as they serve in supporting vulnerable populations. It is often neglected that the social impact organization itself can be affected by a natural catastrophe, for example a flood washing away a warehouse with medical supplies, or it might be affected by drought. Other instances could include a rise in political instability or migration activity that could adversely affect operations.
What does risk in the development sector mean in real terms? Consider this example: In 2015, a fire sparked at the central medical warehouse in an African country, destroying tens of millions of dollars’ worth of supplies. The facility stored health commodities, equipment and other items to be distributed to medical facilities throughout the country. The goods in the warehouse were in part paid for by bilateral and international donors. The fire not only endangered the delivery of vital health services nationwide, but furthermore the facility and stock were not insured and the assets were lost.
It is important for a broad range of social impact organizations, ranging from donor-dependent charities to investor-funded social impact investments to provide a high degree of accountability and measure the social impact of all their operations in order to secure future investments or donations.
In order to determine which risk management strategy is the most suitable for the situation the organization must be aware of its risks at every step of their value chain; from receiving donations to delivering an activity in the field, from risks at headquarter level to those at Country Office level. With this knowledge, the organization can then set up a risk management framework, which describes how the organization wants to treat the identified risks.
Identifying risk exposures throughout a defined value chain
Defining solutions and strategies to mitigate risk and ensure aid delivery
Enabling the efficient and systematic use of insurance to guarantee delivery and mitigate losses
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The Sustainable Development Goals are 17 all-encompassing goals the UN developed in the course of its 2030 Agenda for Sustainable Development. They describe goals which include challenges for all countries, thus they are an advancement to the previous Development Goals, which focused on the developing countries only. Each SDG is subdivided into targets and those targets which are to be measured by indicators, in order to provide traceability and measure progress. In order to achieve the SDGs by 2030, a large joint effort is needed by all actors.
Good health and well-being
Clean water and sanitation
Affordable and clean energy
Decent work and economic growth
Industrial innovation and infra-structure
Sustainable cities and communities
Responsible consump-tion and production
Life below water
Life on land
Peace, justice and strong institutions
Partner-ships for the goals
The SDG agenda puts high emphasis on the consideration of ‘risk’. The UNDG makes the case for ‘risk-informed decisions’, meaning improved consideration of risks such as vulnerability, shocks and volatility when taking steps towards SDG achievement (UNDP, 2016a:8). The increased attention to risk focuses on how those are affecting developing countries and their inhabitants, which falls short of the fact, that said risks also have an impact on aid organizations.