Return on Investment in Disaster Preparedness

Project: Learning Project 6th June 2018

Preparedness is at the core of today’s humanitarian agenda. Humanitarian actors are progressively demanding more resources for emergency preparedness (EP) actions that enable and anticipate elements of humanitarian response. This study helps quantify the benefits of preparedness and provides guidelines to help practitioners apply an RoI methodology to make decisions about future investments. Key findings from the research are:

  • Investment in preparedness generally yields positive returns. Averaging across all investments analysed in this study, for each GBP spent, there is a return of £2.80. This figure is in line with previous ROI studies which yielded Financial ROI ratios ranging between 2 and 3.
  • Investments in capacity development for preparedness starts producing a positive Financial ROI after five years’ time. This implies that decision-makers can make the case for preparedness as a source of financial savings only by taking a long-term view. This may have ramifications for humanitarian planning processes which may not always encourage such foresight, particular donor funded programmes that are of shorter duration and expected to produce results within these shorter durations.
  • Preparedness investments analysed were found to enable time savings that are likely to save lives. Days saved average 59 across investments analysed. This average, which is significantly higher than that in past studies, points mainly to enormous potential gains through simplified funding and approval processes. It may also be specific to the government environment in the Philippines and Ethiopia, where local humanitarian ecosystems are arguably less aligned with government processes than they are in countries analysed in previous ROI studies. Previous studies also looked at UN investments, which typically benefitted from a stronger relationship with governments.

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