Perspectives 2020-2021 Public Sector

Citi Perspectives for the Public Sector 22 23 COVID-19 Catalyzes Digital Donations and Disbursements COVID-19 Catalyzes Digital Donations and Disbursements C rowdfunding and mobile money have a critical role to play in helping multilateral development organizations working to address the impact of the pandemic on the world’s poorest countries. The COVID-19 pandemic and emergency measures to control it, such as lockdowns and travel restrictions, have dramatically impacted lives and livelihoods around the world. By the end 2020, there were millions of infections and over one million deaths: 1 the economic shock is estimated as three times greater than the 2008 financial crisis. 2 And with a vaccine not arriving soon enough for all, disruption and hardship are expected to continue for some time. The United Nations (UN) has called for solidarity and increased funding, launching a $2 billion global humanitarian response plan to fund the fight against COVID-19 in the world’s poorest countries. 3 However, multilateral development organizations working in humanitarian contexts also have a key role to play in helping the world to alleviate the impact of the pandemic and recover from its economic consequences. Digitization in the donations and disbursements space were already a key global trend for multilateral development organizations before COVID-19. Now, as part of their response to the pandemic, development organizations and NGOs are looking to digital funding tools as potential solutions for the challenges they face. Crowdfunding: Social media is critical COVID-19 has put governments, companies and the development sector under financial pressure. Many development organizations face funding gaps as a result of the economic downturn and shortfalls in traditional government contributions. One increasingly popular solution for development organizations and NGOs seeking to diversify funding and raise funds in crisis situations is crowdfunding from citizens: COVID-19 makes such strategies even more relevant. Digital campaigns can appeal to citizens through social media and the ease of making donations using a variety of traditional and alternative payment methods. They have transformed the mechanics of donations by improving efficiency. Social media is a critical factor in crowdfunding success: for every order of magnitude increase in Facebook friends of 10, 100 or 1000, the probability of success increases by 9%, 20% or 40%. 4 In a world of social media, attention is currency. The World Health Organization (WHO) is leading the global effort in supporting countries to prevent, detect, and respond to the pandemic. Working with the UN Foundation, WHO rapidly established the COVID-19 Solidarity Response Fund. With a straightforward donation mechanism for citizens and companies, it raised nearly $235 million to procure and distribute essential commodities, catalyze vaccine R&D and protect at-risk communities, such as children and refugees. Digitization of both donations and disbursements was already a hugely important trend that has gathered pace in recent years. COVID-19 has accelerated its adoption. 22 1 https://coronavirus.jhu.edu/map.html 2 https://www.weforum.org/agenda/2020/09/an-economist-explains-what-covid-19-has-done-to-the-global-economy/ 3 https://www.un.org/en/un-coronavirus-communications-team/funding-fight-against-covid-19-world%E2%80%99s-poorest-countries 4 https://nonprofitssource.com/online-giving-statistics/#Mobile Dustin Ling Global Public Sector Banking, Citi