BRIEFING PAPER Red c humanitarian contribution Resource flows and the Jane Keylock &KerrySmith WORKSTREAMS: AUTHORS: Delivery Domestic response r May 2011 DATE: oss 1 VERSION: Contents Executive Summary

Executive summary 1 Arguably the world’s largest humanitarian Furthermore, there may be some double- organisation, the International Red Cross counting when funds move between Introduction 2 and Red Crescent Movement has a complex branches and headquarters, as well as Background to the Kenya Red Cross 2 resource mobilisation architecture, in the recording of costs recovered from which not only includes the International projects. However, being able to calculate Kenya humanitarian profile and study areas 3 Federation of Red Cross and Red Crescent the exact income is an aim of the society’s Societies (IFRC), the International 2011–2015 strategy. Study sites 3 Committee of the Red Cross (ICRC) and In 2010, the largest share of income national societies but also non-Movement Resource flows 4 generation to the headquarters came donors such as governments, individuals from administration costs recovered Source of income 5 and companies. Furthermore, national from projects (37.9%), while in 2009 societies operate a range of initiatives to Income generation 6 property provided the largest source of generate income domestically. Private sector 11 income (31.0%). As the KRCS receives This study explores this architecture from free land from the government and from Gifts in kind 12 the perspective of a recipient national the community at the branch level, it is Within the Red Cross society. The Kenya Red Cross Society (KRCS) in a good position to pursue property and Red Crescent Movement 13 provides an excellent example, as not only ventures. While many organisations can does it receive funding from Participating be given community-owned land, the Expenditure 15 National Societies (PNSs – donor national Kenyan Government does not provide any Humanitarian system 16 societies), the IFRC and the ICRC, but it other organisation with free land (with Key relationships 17 has also embarked on quite ambitious the exception of the Scouts movement). enterprises to increase its domestically Flexible funding from within the Movement Auxiliary role 17 raised income. Its two main ventures are a also helps the KRCS to develop its income Volunteers 18 private ambulance service (E Plus), which is generation activities. For example, private now Kenya’s largest ambulance service, and income to PNSs can be used to refurbish Community 18 a chain of hotels (Red Court). property that can be rented. Conclusion 19 Total income for the KRCS in 2010 was The KRCS is keen to reduce its dependence Acknowledgements 20 US$19.6 million, compared with US$28.2 on external funding so that it can undertake million in 2009. In both years, the largest activities not usually funded by donors, such source of income was from PNSs – 30.8% in as conducting needs assessments, rapidly 2009 and 28.5% in 2010 – while the second responding to disasters when donor funds largest source was from income generation are not yet forthcoming and responding to activities conducted at headquarters level, smaller-scale emergencies. However, high- which contributed 26.6% in 2009 and 28.0% profile income-generating schemes come in 2010. Although there is some income with an additional challenge, as there may and expenditure detail in its annual report, be a perception that the KRCS is an elite the KRCS admits that it does not know the society, which could result in a reluctance exact income for the whole society. This to contribute resources, be they financial, is mainly because domestically raised material or human. income at regional and branch levels remains uncounted by the headquarters.

1 Introduction

The International Red Cross and Red Crescent Movement is arguably the world’s largest humanitarian organisation, and with 186 national societies, covering almost every country, it has an unrivalled global presence. Such an extensive Movement, made up of the International Federation of Red Cross and Red Crescent Societies (IFRC), the International Committee of the Red Cross (ICRC) and national societies, comes with a complex resource architecture. By examining the resource flows from a country perspective, the Global Humanitarian Assistance (GHA) programme wanted to understand the functionality of the Movement’s fundraising mechanisms and how the different funding flows shape the overall humanitarian response. This case study, carried out in February 2011, set out to map the sources and volumes of funding to the Kenya Red Cross Society (KRCS) as well as the scope of the various resource flows. The wider contribution of the KRCS to the country’s overall humanitarian response was also explored, considering the auxiliary role the society plays to the Government, the extent of its autonomy, its role within the humanitarian system and its relationship with key stakeholders. The methodology included the compilation and analysis of financial data and key documents, as well as conducting interviews and focus group discussions with a range of stakeholders in Nairobi and in Garissa and Machakos, two districts where the KRCS has been implementing humanitarian assistance.

Background to the Kenya Red Cross

The Kenya Red Cross Society Act of 1965 Humanitarian response is managed legally transformed the Kenyan branch through a Disaster Management Unit, In January 2011 the KRCS launched a of the into the Kenya which has three elements – disaster drought appeal for KES 1,980,392,736 Red Cross Society. This Act officially preparedness/disaster risk reduction (US$23,257,000) to assist 1,860,000 recognised the society as an auxiliary to the (DRR), disaster response and tracing beneficiaries for six months in six of Government of Kenya in the humanitarian services. The activities of this unit are the country’s eight regions.2 Planned field, in accordance with the 1949 Geneva guided by the KRCS strategy. The society’s activities include food distribution, Conventions. The KRCS constitution also 2011–2015 strategy has recently been targeted supplementary feeding, states that, alongside this auxiliary role, launched and focuses on three thematic de-stocking livestock, providing the society maintains an autonomy which areas: operational excellence, investing transport to markets, water trucking, allows it to act in accordance with the in people and building a strong national rehabilitation of boreholes, nutrition Fundamental Principles of the Movement society. While the Government’s national education and hygiene promotion. at all times. With its headquarters in disaster policy has not yet been finalised, Nairobi, the current structure of the KRCS the KRCS has its own disaster policy which is organised across eight regions and 63 runs alongside each five-year strategy branches, covering the entire country.1 (although the disaster policy for 2011–2015 Approximately 500 staff and 40,000 has yet to be developed). volunteers work for the KRCS. As outlined in the 2011–2015 strategy, the The focus of the governance structure is KRCS is hoping to move away from food aid upon policy development. There are boards and towards community resilience. To date, at the national level (the National Executive it has implemented two small projects Committee) and at regional and branch classified as DRR: one on fire prevention levels, which are elected by members. for informal settlements and the other on The Council sits at the highest level of road safety. A Vulnerability and Capacity the KRCS and is headed by the Governor. Assessment (VCA) is currently being This body consists of members of the conducted in the North Eastern region National Executive Committee and four with a view to starting a DRR project in representatives from the eight regions. A drought-prone communities. There are substantial amount of campaigning takes also elements of DRR in its Food for Assets place during the election period, with programme (also known as Food for Work), elections being held every three years, and as the work undertaken by the community there is strong competition for places on the is aimed at building structures that boards at all levels. reduce vulnerability.

1 The eight regions of the KRCS do not exactly match the eight administrative provincial boundaries of the country; there is a 70% overlap.

2 The appeal covers Garissa district but not Machakos district.

2 Kenya humanitarian profile and study areas

As described in the Kenya Emergency (UNOCHA) estimated that 350,000 people Humanitarian Response Plan 2011, the were displaced after the post-election Figure 1: The five disasters which affected the most people between 1900 and 2011 humanitarian strategy in Kenya is informed violence and, while many have returned by a combination of underlying humanitarian home, some have not, though the number issues, which include the impact of climate is unknown. Total change on food security and livelihoods, Disaster Date affected Floods and associated epidemics seasonally endemic diseases and high levels of affect various parts of Kenya, especially Drought December 1999 23,000,000 malnutrition, inter-communal resource- along the flood plains in the Lake Victoria based conflicts, urban vulnerability, the Epidemic January 1994 6,500,000 basin and the Tana River. Figure 1 shows the socio-economic dynamics of refugee camps five disasters which affected the most people Drought July 2008 3,800,000 influenced by the situation in Somalia and between 1900 and 2011. Sudan, the humanitarian needs of a residual Drought December 2005 3,500,000 caseload of displaced populations resulting Figure 2 shows total official development from the 2008 post-election violence and assistance (ODA) and total humanitarian Drought 1991 2,700,000 needs emanating from disasters such as aid received by Kenya between 1995 and floods and mudslides. 2009. Over this period, humanitarian assistance has been steadily increasing Drought is the most prevalent natural hazard Source: EM-DAT: The OFDA/CRED International and, despite a small decline between Disaster Database in Kenya, affecting mainly the Eastern 2000 and 2002, ODA has also been and North Eastern provinces and parts of increasing since 1999. In 2009, ODA per Rift Valley and Coast provinces. Pastoral capita was US$46, whereas the figure for communities living in the arid and semi-arid humanitarian assistance was US$9. land (ASAL) areas, which make up 80% of the country, are particularly vulnerable to Study sites hunger. Around two-thirds of urban residents Garissa district in North Eastern Province live in slums where conditions are appalling. is located in the ASAL areas and most of Kenya also hosts the largest number of its rural inhabitants are either nomads refugees in eastern Africa, approaching or pastoralists. There has been cyclical 400,000 people. It receives hundreds of drought since 2004, with a slight break in Somalis every day. The majority of refugees 2008, and the area is also prone to flooding, live in Daadab, close to the border with when heavy rain that falls in the highland Somalia, which is the world’s largest refugee areas washes downstream. The KRCS has camp. Daadab was built to house 90,000 conducted general food distribution in this people but the number living there exceeds area since 2004 in partnership with the this. In addition, many Kenyans are internally World Food Programme (WFP) and currently displaced. The United Nations Office for 3 operates 150 distribution centres.3 Other In some areas, the KRCS took over from the Coordination of Humanitarian Affairs CARE in 2006.

Figure 2: Total ODA and humanitarian aid received by Kenya, 1995–2009

1,000 2,000 900 800 1,800 700 Humanitarian aid 1,600 600 ODA 500 1,400 400 1,200 300 1,000 200 US$ MILLION 100 800 0 600 Private USA Canada Saudi ECHO Funds from CERF Japan Spain Brazil (individuals and Arabia Red Cross/

400 organisations) Red Crescent 200 Inside the Appeal Outside the Appeal 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: OECD DAC 3 KRCS projects running in collaboration with food sourced by WFP and the other with WFP are those of Food for Assets (FFA) and food sourced by the Government; the KRCS supplementary feeding projects (these are is the sole distributor of food provided by the also run in collaboration with the United Government. Nations Children’s Fund (UNICEF)). In Machakos in Eastern Province does not some areas KRCS is contracted by WFP to lie in the ASAL areas, yet it still suffers operate its Extended Delivery Point (EDP) from drought, albeit to a lesser extent which means storing WFP food in a KRCS than the north. The KRCS has periodically warehouse.4 During the floods the KRCS distributed food relief in this area, most also distributes non-food items (NFIs). Two recently in 2010. food pipelines operate in Kenya, one with

Resource flows

While programme costs are currently access to a significant web of resources. entirely funded from external sources and Participating National Societies (PNSs) are likely to continue to be so, the aim of – the donor societies – do not implement the KRCS is that all core costs should be projects but work in partnership with the financed from domestic sources; branches Operating National Society (ONS) – the should be able to finance their own staff and recipient, or implementing, society – to running costs, for example. Machakos is the implement projects.5 The relationship first branch to achieve this. between a PNS and an ONS is bilateral. As such, the KRCS has been trying to The relationship with the ICRC is expand the volume of income from income bilateral. The ICRC has a central pool of generation activities (IGAs). These are quite funds which are mainly received from diverse and include two large business donor governments. It tries to keep the ventures (Red Court and E Plus– see below) earmarking of these funds at a low level. as well as a range of smaller activities. An ONS can also receive funds from External sources include governments, UN the IFRC, the primary source of which 2,000 agencies, the Red Cross and Red Crescent can either be private income, donor 4 It implements FFA in four of the six districts targeted by WFP for this approach. 1,800 system, other international organisations governments or a PNS. The relationship Humanitarian 5 1,600 and the international private sector. with the IFRC is multilateral. When a PNS receives funds from a donor, it aid becomes the recipient and the ONS becomes 1,400 Being part of the Red Cross and Red the sub-recipient and implementer of the ODA Crescent Movement, national societies have funded project. 1,200

S$ MILLION 1,000 U 800 Figure 3. Bilateral and multilateral funding flows within the International Red Cross and Red Crescent Movement 600

400 200 Donor governments Donor governments 90% of funding from 0 and private income and private income donor governments 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Participating IFRC ICRC national society

MUL 1,000

BILA BILA 900 TI LA

TERAL TERAL 800

TERAL 700 600 500 400 300 Operating national society 200 100 0 Private USA Canada Saudi ECHO Funds from CERF Japan Spain Brazil (individuals and Arabia Red Cross/ organisations) Red Crescent

Source: Development Initiatives Inside the Appeal Outside the Appeal 4 Source of income are totalled, they collectively remain the second largest source of income (26.6% The total income for the KRCS in 2010 in 2009 and 28.0% in 2010). In 2009, the was US$19.6 million (KES 1.5 billion), third largest source of income was from compared with US$28.2 million (KES 2.0 the UN (19.3%), whereas in 2010 it was 6 billion) in 2009. In both years, the largest from the IFRC (18.4%). However, within source of income was from PNSs – 30.8% the income generation category there are in 2009 and 28.5% in 2010 – while the questions around what is classed as income second largest source was from IGAs generation, as well as issues regarding conducted at headquarters level – 20.3% double-counting (see below). in 2009 and 20.1% in 2010. If the IGAs of the headquarters, regions and branches

Figure 4. Total income for the KRCS in 2009 and 2010

30.0

28.2

25.0

19.6 20.0

15.0 US$ MILLION

IGA regions and branches (estimated) IGA Headquarters Individuals 10.0 Domestic civil society Domestic private sector Government of Kenya International private sector Donor government UN 5.0 International organisations ICRC IFRC PNS

6 This estimated total for 2009 was KES 43,554,000 0.0 greater than the figure published in the KRCS 2009 2009 2010 annual report. However, there will be differences in the way that the figures are calculated. For example, the figure in the annual report does not include rent from the Red Court hotels or income generated at regional or branch level. Unfortunately, there was no Source: KRCS finance department at HQ, Garissa and Machakos scope to discern where the differences may lie. 5 Income generation fail, the KRCS believes that enough money could be salvaged from the sale of assets Red Court hotels and other property for the loan to be repaid. It also states that Perhaps the most ambitious venture of this hotel business is a long-term venture, the KRCS is its Red Court hotels. The the fruit of which will be produced in 10–15 KRCS had been paying significant sums years. Construction of another hotel in for training sessions and accommodation Eldoret is ongoing, and it is predicted that and therefore developed a plan to build a the value of the Red Court hotels will be Disaster Management Training Centre with US$24.4 million in total. Occupancy rates accommodation facilities. After speaking of the first Red Court hotel reached 75% to the business community, plans evolved at the end of 2010, and for the year ending to run a business venture within the December 2009 the hotel made US$142,769 hotel industry. in revenue after the rent had been paid. The total cost of the first hotel, which The KRCS believes that the best way to opened in Nairobi in 2007, was US$7 generate domestic income is through million, 80% of which came from the KRCS property: as the Secretary General puts it, while 20% came from PNSs. The KRCS “You can’t go wrong with property”. Barclays raised its share from selling property and Bank has the lease on KRCS-owned cashing in investments, while the land for premises located adjacent to the society’s the hotel was provided by the Government. office. Indeed, 80% of the domestically Crucially, as part of the auxiliary role that raised income of the Garissa branch is the KRCS plays to the Government, it does from property-related activities, whereas not receive funds but does receive land in Machakos it is 50%, which usually free of charge.7 With the exception of the takes the form of hiring out premises for Scouts movement, the Kenyan Government functions or for rent. The twinning system does not provide any other organisation with branches of PNS societies has been with free land. The KRCS has a tax waiver an important way of raising money for the on income tax and a Value Added Tax (VAT) construction or refurbishment of property. waiver from the Government, which means For example, the Machakos branch was that it is exempt from the 16% VAT charge twinned with a branch of the Swedish Red on every item it purchases; however, this Cross and received funds that enabled the does not currently apply to the hotel, a point construction of property from which income which is under negotiation. The Red Court is now received (half of the capital was hotel is registered as an independent hotel; raised by the and half although it is owned by the KRCS, it is run came from the Machakos community). The by Red Court Ltd. This company has a board fact that the branches of the PNS raised which works pro bono and consists of a mix these funds from private sources, which of business people, lawyers, a government means that the funds are not earmarked, representative and the Secretary General of makes this longer-term infrastructure the KRCS. There are currently five members development possible. At district level, land of the board, with capacity for nine. is community-owned and it is therefore the community which gives the land to the The three-star hotel started to receive KRCS, as well as to other organisations. guests on 1 October 2007. The original plan Communities seem happy to do this, was for the KRCS to receive the profits at as they recognise that they are likely to the end of each year. However, due to the benefit through employment and broader society’s need for a more regular flow of assistance from the organisations. income, this model was never implemented. Instead, the KRCS receives a monthly Given that other national societies within rental sum, which currently stands at KES the East Africa region raise money, or seek 2 million (US$23,487), from this first hotel. to raise money, from property-related activities (for example, the Ethiopian Red The second phase is now underway and a Cross has a training centre), the IFRC in five-star hotel is being constructed next to Nairobi is embarking on a land and property the first hotel. To pay for this, Red Court initiative. This will facilitate partnerships Ltd took out a loan of US$16 million over a between leading business schools, ten-year period; no funds from the KRCS or corporate partners and national societies to elsewhere within the Movement have been examine how to use national society-owned used. It is hoped that the loan will be paid off land and property to generate income. after ten years although currently, while the interest is being paid off, the capital is not. As with the first hotel, a monthly rent will be paid to the KRCS. Even if the venture were to

7 This agreement probably stems from when the Government of Kenya gave a government building to the British Red Cross in Nairobi to house its headquarters. 6 E Plus the President of Kenya is a life member. It appears that there is a certain prestige In March 2010 the KRCS created a private attached to membership, which is a ambulance service called Emergency Plus large draw. Members can also vote in the (E Plus), which is owned by the society society’s governance elections, and this but managed independently. E Plus takes seems to be popular. However, the KRCS charge of the technical side, but the has recognised that there could be more KRCS is responsible for policy and human benefits from membership, and this is resource management. Prior to this, being explored. Kenya‘s medical services were poor quality, with Government-owned ambulances First aid activities provide a source of based in hospitals and rarely travelling any income, especially at branch level. The great distance. The initial funding for this KRCS offers first aid training courses and enterprise was US$800,000, which was also sells first aid kits. Promotional items raised from domestic sources such as the such as t-shirts and keyrings are also sold, sale of properties and the recuperation of though income from these can be patchy. investments. The service began with five In addition, collecting tins are positioned vehicles but there are now 18, with seven in key locations such as supermarkets and more on the way. The vehicles are on a long Nairobi airport. Around 60% of KRCS staff lease from IFRC. E Plus is now the largest donate part of their salary each month, provider of ambulance services in Kenya, with the average donation being KES covering 12 districts throughout the country. 200–1,000 (US$2–12). As the service is private, people register Some costs, such as administration with E Plus at a cost of KES 2,500 (US$29) overheads, use of vehicles and office per year, and since its establishment it rent, are recovered from projects. Some has had 7,800 members. The target is donors have voiced concerns when there to make KES 2 million (US$23,487) from are administrative contributions from membership per month. Other income both core funding and project funding. streams come from the sale of first aid kits Organisations such as UNICEF store and from training for schools (a training items in KRCS warehouses at times, for course costs KES 12,000 (US$141)). Around which there is a charge, and office space 50% of the income is raised through and vehicles can also be hired out for trainings: currently, the KRCS receives non-KRCS use. KRCS’s fleet of vehicles KES 3.5 million (US$41,103) from such is deemed to be self-sustaining. trainings, and has a target of KES 7 million Importance of different income (US$82,205) per month. E Plus is still a new generation activities company and the KCRS is not yet receiving any income from it, as all earnings are put In 2009, property provided the largest back into its development. However, it is source of income (31.0%) to the envisaged that ultimately 80% of the profits headquarters of the KRCS, while will go to the KRCS, while 20% will cover administration costs recovered from the cost of transporting and treating people projects provided the second largest who do not have insurance. source (30.4%). In 2010 administration costs recovered from projects were the Other sources largest source of income (37.9%), while The KRCS’s Annual Gala in 2010 generated cost recovery for vehicles represented a profit of KES 6,088,199.70 (US$72,295). the second largest source of funding IGAs in Machakos include a charity golf (36.5%). However, there are issues tournament, which in 2010 raised KES around the current accounting system for 100,000 (US$1,187), a restaurant, a car administration, vehicle and office costs wash and a resource centre with computers recovered from projects (see below). In that people pay to use. Like other national both years funding from property included societies, the KRCS operates a membership rent received from Red Court Ltd. In 2009, scheme whereby people can become the annual rental income of KES 24 million ordinary or life members (there are around (US$303,147) from Red Court made up 5,000 life members). Life membership 17.1% of the income raised from property, costs KES 5,000 (US$61) while the annual while in 2010 it was 76.9%. This difference cost of ordinary membership is KES 1,000 was due to the fact that the 17th Session of (US$12). Members come from a variety the General Assembly of the IFRC and 2009 of backgrounds; some members of the Council of Delegates meetings were held community are ordinary members and in Nairobi, which brought in revenue from accommodation.

7 Figure 5: Income from income-generating activities by the headquarters of the KRCS, 2009 and 2010

100%

90%

80%

70%

Warehousing Vehicles Training 60% Tins Tender Staff Sale of goods Property 50% PR Project administration New Partnership for African Red Cross and Red Crescent Societies subscription

40% Membership Gala First aid Bank Branch Ievy 30%

20%

10%

0% 2009 2010

Source: KRCS HQ finance department 8 Figure 6: Domestic and external income for north-eastern region, 2008–2010

2008 2009 2010 Branch Internal External/donors Internal External/donors Internal External/donors Total US$ US$ US$ US$ 13,977 325,336 10,271 44,714 12,996 783,221 1,190,515 Garissa 4% 96% 19% 81% 2% 98% 190 0.0 672 10,431 286 139,402 150,981 Ijara 100% 0% 6% 94% 0% 100% 0 8,857 0 1,870 0 0 10,727 Mwingi 0% 100% 0% 100% 0% 0% 16,257 49,545 8,689 71,714 9,439 48,510 204,154 Wajir 25% 75% 11% 89% 16% 84% 0.0 98,008 1,761.9 122,001 4,681 378,910 605,362 Mandera 0% 100% 1% 99% 1% 99% North- 522 59,693 1,302 291,508 15,651 281,432 650,108 eastern region 1% 99% 0% 100% 5% 95%

Total 30,948 541,439 22,695 542,238 43,053 1,631,474 2,811,846 5% 95% 4% 96% 3% 97%

Source: KRCS north-eastern region finance office

Figures 6 and 7 show the proportion US$16,257 domestically in 2008 and half of funds received from domestic and that figure the following year. Machakos external sources by two KRCS regions, branch raised US$112,054 in 2009 and the north-east region and lower-eastern less than half of that in 2010. The north- region, between 2008 and 2010. The eastern region, on the other hand, has seen volumes of income from domestic sources a steady increase, from US$522 in 2008 to fluctuate. For example, Wajir branch raised US$15,651 in 2010. (See figure 7).

Figure 7: Domestic and external income for lower-eastern region, 2009–2010

2009 2010 Total Internal External/donors Internal External/donors

Branch US$ US$ US$

3,043 5,751 9,422 3,607 21,823 Kajiado 35% 65% 72% 28%

Karen Langata 13,684 14,840 20,767 16,137 65,428 48% 52% 56% 44% 112,054 291,504 44,433 303,447 751,437 Machakos 28% 72% 13% 87% 1,076 79,815 3,226 94,309 178,425 Kitui 1% 99% 0% 1% 127,105 96,687 120,891 66,139 410,822 Nairobi 57% 43% 1% 35% Lower-eastern 12,926 66,139 79,065 region 16% 84% 256,962 488,597 198,738 483,638 1,427,935 Total 34% 66% 29% 71%

9 Calculating the contribution of income generation to total income: the complexities

At present the exact income received by offices and branches which could be the KRCS is undetermined, hence the double-counted. Some support costs, total income specified in this report is an such as office rents and fuel costs, are estimation. Funds from external donors recovered from projects that are financed (external funds are channelled through externally, yet in the accounts appear as headquarters and do not go directly to income generation. While the entire project the regions or branches) and income administration category in Figure 5 is most generation at Nairobi level do appear in the likely funded from external sources, it is headquarters accounts. However, funds difficult to say from the data how much raised through income-generating activities of the income raised in the vehicle and by regions and branches stay within that property categories comes primarily from region or branch and do not appear in external sources. In addition, the KRCS at the accounts at headquarters level; the headquarters level charges an annual levy headquarters does not compile the total on domestically raised income by regions income raised throughout the whole society. and branches, which will appear as income For the purposes of this calculation, the both at headquarters and from the branch income generated by two regions (north- or region paying it. Similarly, headquarters eastern and lower-eastern) were averaged will charge branches for other costs, such and extrapolated across the eight regions, as printing first aid certificates, which and similarly the income generated by again will appear as income generation at the branches in those two regions was headquarters and yet the primary source of averaged and extrapolated across the 63 funding used by the branch to pay this fee branches. This was added to funds from will also be counted. external donors and income raised from KRCS is aware of these issues and is trying income generation at headquarters level. to address them in its 2011–2015 strategy, This methodology is obviously not only under the objective “strengthening branch crude, but masks differences between network and infrastructure”. The aim is to regions and branches. fortify the system for generating income by Also within the total income calculation branches and regions, including reporting. there may be some double-counting. Figure 8 shows the movement of funds between the headquarters, regional 2,000 1,800 Humanitarian 1,600 aid 1,400 Figure 8. Movement of funds between headquarters, regions and branches ODA which could be double-counted 1,200 1,000 US$ MILLION 800 600

400

External 200 Donor governments Donor governments 90% of funding from donors 0 and private income and private income donor governments 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Project administration costs Project administration costs Participating IFRC ICRC (mileage, office rent, PR etc.) (mileage, office rent, PR etc.) national society

MUL 1,000

BILA BILA 900 TI-L AT ERAL

TERAL TERAL 800 IGA at IGA at regions 700 headquarters and branches 600 500 400 300 Operating national society Levy on IGA, first aid certificates etc. 200 100 0 Private USA Canada Saudi ECHO Funds from CERF Japan Spain Brazil (individuals and Arabia Red Cross/ organisations) Red Crescent 10 Inside the Appeal Outside the Appeal Impact of IGA income sponsor the event itself, but during the gala initial connections are also made. Funds raised from income generation allow Companies tend to fund the KRCS when national societies to undertake activities there is a shared interest in the type of that are not usually funded by donors. Aside project activity and sector. For instance, from administrative costs, these include Coca-Cola is keen to fund water projects, as conducting needs assessments, rapidly water forms the basis of its products, and responding to disasters when donor funds the company therefore donates funds to the have not yet materialised or been released, KRCS for such activities. Such companies responding to smaller-scale emergencies often fund long-term projects: for example, and participating in activities in the districts the KRCS has a long-term relationship (such as funding community events). with Nestlé, which funds some of its food Income raised by branches can be used security work. However, in many instances according to their own plans and decisions. companies prefer to donate when an appeal However, the KRCS also understands that is launched, as this can provide them there are additional, and not always useful, with good publicity. Domestic income for consequences that arise from high-profile appeals, from both the private sector and income-generating schemes. Firstly, people individuals, varies according to the profile may view it as an elite society, which could of the disaster and the attention it receives create a reluctance to provide resources, from the media. In 2010, 40% of the funds whether financial, material or human. raised in response to the appeal following Private companies may be less inclined the floods were from domestic sources, due to fund projects, while communities and to the fact that the crisis had a high profile volunteers may be less willing to contribute inside Kenya. to activities. The Government may be less In general, funding in cash from private incentivised to provide free land. Secondly, companies is quite flexible. When donating there may be a displacement of the role of to an appeal, companies do not tend to volunteers in the provision of first aid by E earmark the funds and, outside of the Plus. Volunteers have been providing first appeal, the company will have agreed aid in their communities, yet with the arrival to a proposal but conditions beyond that of E Plus as a large provider of first aid will not have been attached. In cases of (albeit not yet present in many regions) the longer-term relationships, the KRCS is volunteer spirit may become eroded if they considering making it standard practice to are made to feel redundant. have written agreements with companies, Private sector as relationships are often with an individual The development of relationships between within the company who has bought into the KRCS and the private sector over the the idea, rather than it being a company- past five years is demonstrated by an wide policy. This can therefore run the risk increase in the number of donor companies of breaking down if that particular contact and the volume of funds they donate. A key moves on and their replacement does not event for initiating such relationships is the support the work. KRCS Annual Gala, held each November. Private companies are approached to

Safaricom Foundation Safaricom is the leading communications provider in Kenya, and delivers its corporate social responsibility (CSR) mandate through the Safaricom Foundation. The Foundation funds around 150 projects a year in the areas of education, health, economic empowerment, environmental conservation, water, arts, sport and disaster relief. It has funded the KRCS since its inception in 2003, and has a commitment to disburse donations amounting to KES 196 million (US$2.3 million) over the next three years (2011–2014). The KRCS is the only organisation funded by Safaricom Foundation to implement disaster relief. It also funds the KRCS to implement water projects, with ActionAid being the only other organisation receiving funds for this sector. For disaster response, Safaricom always gives cash: in 2010 it gave KES 7,756,256 (US$93,080) and in 2009 KES 12,713,373 (US$152,569). Safaricom cited timeliness, resilience, the understanding of needs, as well as the good geographical coverage of the KRCS as qualities that made it an attractive organisation to fund.

11 Gifts in kind The KRCS prefers to receive cash rather than gifts in kind because there are often While the KRCS tries to discourage additional costs associated with the latter, unsolicited items, it does receive gifts in such as transport costs. Branches do not kind. When an appeal is launched, the KRCS receive gifts in kind directly from donors will provide a ‘shopping list’ of required (these are received at headquarters level), items and some donors may choose to give but they may receive items given by the specified goods rather than cash. Some community. Figure 9 shows the gifts in kind companies also prefer to donate gifts in received by the KRCS headquarters in 2010. kind, although the level of earmarking can be quite high in such cases – for example, when the company specifies the location where the items are to be distributed. Despite attempts to deter gifts of unwanted items, some members of the general public still assume that the KRCS welcomes anything and will donate an assortment of goods, especially when an appeal has been launched. Instances also occur when the KRCS will ask the community to donate gifts in kind after a crisis hits, such as a small-scale house fire, for instance, although these items are not documented anywhere. For the first two weeks after the post-election violence in 2008, a large proportion of the relief given by the KRCS was made up of gifts in kind.

Figure 9: Items received as gifts in kind, 2010

Item Source Quantity Mosquito nets 32,440 pieces Tarpaulins Finnish Red Cross 10,885 pieces Kitchen sets Finnish Red Cross 17,762 pieces Bars of soap Finnish Red Cross 15,000 pieces Blankets Finnish Red Cross 19,875 pieces Jerrycans Finnish Red Cross 33,120 pieces Wheelchairs Individual 13 pieces Domestic private sector 22,008 kg Food Local civil society 82 kg Unknown 43 bags Clothes Domestic private sector 15 bags Individual 11 bags

Source: KRCS logistics department

12 Within the Red Cross and Red Crescent Movement Danish Red Cross The largest PNS donor to the KRCS during The Danish Red Cross (DRC) started 2009 and 2010 was the Danish Red Cross, working in Kenya in 2002. The DRC which gave 17.0% (US$2.3 million) of all delegate is responsible for expanding funds received from PNSs. The Finnish Red the DRC-funded work in Kenya and Cross was the second largest donor, giving to raise funds, since it was felt that 14.1% of the total (US$1.9 million) (see the KRCS now has the capacity to figure 10). implement a larger programme. Delegates from some PNSs are based in The main focus of the programme is the KRCS headquarters and fundraise for, water and sanitation, and since the and oversee, bilateral projects. Most PNS delegate’s arrival in 2008 its funding delegates sit within the IFRC Regional has doubled, with US$6 million being Representation. Delegates from Spain, raised. The DRC receives annual Denmark, Sweden, the United Kingdom, funding from DANIDA, which is the Netherlands, Germany, Norway, flexible provided activities fall within Australia, the United States, Finland and the agreed strategy. In addition, Japan are currently present in Kenya.8 The 32% of the funds to the DRC come geographical area covered by the delegates from private sources. Some of the may differ: for example, the delegate water projects are funded by the from the Danish Red Cross covers Kenya, private sector: for example, Grundfos whereas the delegate from the Finnish Red provides funding for water pumps Cross covers the East Africa region. There while Coca-Cola Denmark also funds water projects. 8  Although the Spanish Red Cross delegate was may be some competition between PNSs to present at the time of the study, she was shortly win funds, especially European funds. due to leave Kenya due to resource constraints.

Figure 10. Proportion of funds received from Participating National Societies, 2009 and 2010

2.7% Swedish RC 12.9% Swiss RC Unknown 7.2% 7.2% 1.7% American RC 1.4% Australian RC 11.0% 2.5% British RC Canadian RC Danish RC Finnish RC 7.9% German RC 17.0% Iranian RC

3.6% Japanese RC 10.6% Netherlands RC 0.2% 14.1% Norwegian RC Spanish RC

Source: KRCS HQ finance department 13 Globally, the IFRC is structured into five three primary reasons. Firstly, much PNS zones, with the zonal office for Africa based funding is project-based and designed to in South Africa. Zones are divided into perform a specific, time-limited service sub-zones, with an IFRC office in Nairobi in a specific, geographical area. The IFRC which covers East Africa. Fundraising would like to identify funding opportunities within the IFRC is both centralised (funds that allow national societies to concentrate generated through global grants) and on the core business of volunteer-led decentralised. Decentralised fundraising community resilience initiatives. Secondly, is done at the sub-zonal level, which is the IFRC would like to support national natural, as most government donors and societies to work with donors outside of some of the key PNS delegates are based in the Movement in order to help them adapt Nairobi. The KRCS decides which activities to more rigorous reporting, monitoring it will undertake with IFRC and which and evaluation standards. Thirdly, the with other donors, and every two years it regional office would like to maintain some produces an appeal outlining the support autonomy from the impact of political shifts it would like the IFRC to help fundraise from bilateral to multilateral preferences for. To date, these have been called Appeal among Movement partners. However, the Plans, although the system is likely to office still sees its primary role as enabling change. These annual appeals do not Movement partners to work together in include emergency work or the Disaster the interest of supporting host national Relief Emergency Fund (DREF). The DREF societies to meet humanitarian challenges. is used prior to an appeal only, and not in The ICRC also has an office in Nairobi parallel: once an appeal is released, the where it works bilaterally with the KRCS DREF merges into it. The January 2011 on projects such as tracing, water and drought appeal was updated into a smaller livestock. The ICRC aims to support KRCS international appeal, as several donors activities in a way which will enable it to indicated a preference for supporting an undertake the activities independently in international appeal over a national one. future. Funds are accessed from the ICRC’s Funds received by the IFRC from private central funding pool, donations to which are sources, such as companies or individuals, generally not earmarked, so it is difficult to tend to be more flexible than those from know the primary source of the income. donor governments, which have a greater degree of earmarking attached to them. The IFRC East Africa regional office now aims to obtain half of its resource base from non-Movement donors, motivated by

14 Expenditure is very difficult to distinguish between ‘humanitarian’ and ‘development’ projects In 2010 the total humanitarian expenditure because, on the ground, both types of project of the KRCS was US$11.1 million, US$9.2 address the same needs. The bifurcation million of which was for programme between humanitarian and development costs and US$1.9 million for core costs. projects is, therefore, artificial, although Expenditure has increased from US$1.1 an exception is during flooding, as the million in 2003 to US$11.1 million in 2010. distribution of non-food items is perceived During this period core costs accounted for as humanitarian. The KRCS does note which 17.8% of the total humanitarian expenditure. projects are ‘humanitarian’ and which are General activities have been the best funded ‘development’ in its project database. of all activities in each year, except for 2006 The fact that needs in Kenya are addressed when water and sanitation received the most through a ‘humanitarian’ system may funding. In this year, the drought appeal had mean that they are addressed in a short- a high response, with leftover funds going to term manner, for example by delivering support water and sanitation interventions prolonged food aid rather than by scaling as a mitigation measure. General up effective agricultural programmes. The activities include workshops, trainings and fact that DRR funding (which would include information, education and communication reducing the risk associated with drought (IEC) materials (see figure 11). and climate change) is harder to access than Although the data below details money for other projects may reflect this. humanitarian expenditure, in reality it

Figure 11: Expenditure by the KRCS, 2003–2010

2010

2009

Agriculture 2008 Coordination and support services 2007 Food Health 2006 Multi-sector Shelter and non-food items

2005 Water and sanitation Core costs

2004

2003

0% 20% 40% 60% 80% 100%

Source: KRCS finance department, HQ 15 Humanitarian system

The KRCS takes part in the UN Consolidated assessments are carried out after each Appeals Process (CAP). As part of the Kenya of the two rainy seasons, the short rains Emergency Humanitarian Response Plan from October to December and the long 2011 (EHRP), the KRCS has requested rains from March to May. The process for US$132,000. It also expects to receive these assessments is long and results US$150,000 from the Emergency Response often emerge some time afterwards, and Fund (ERF) following the launch of the can then tend to be disputed. Following an KRCS drought appeal in January 2011. In event such as flooding, rapid assessments 2010, it requested and received US$300,000 are conducted which are sometimes a as part of the Kenya EHRP 2010, receiving collaboration between agencies and in US$200,000 of this through the ERF. which the KRCS does take part. The UN cluster approach was initiated The KRCS is generally viewed as a good in Kenya in January 2008. At national source of information because of its level there are two principal coordination extensive community reach. It often quotes mechanisms, the Kenya Disaster data that it has gathered where other Management Platform and the Kenyan organisations are unable to do so. On Food Security Steering Group (KFSSG). occasion it receives criticism about the data The KRCS is co-chair of the KFSSG it produces, with claims that it is alarmist. with the Government, and is on the However, considering the problems around Secretariat of both. At district level, the current data and given the KRCS’s capacity district steering group (DSG) facilitates to produce data, there could well be a role humanitarian coordination. The KRCS for the society in improving the quality of is the national lead agency for NFIs and information available (assuming there was sudden-onset disasters and at district a quality assurance element built in). level is the lead agency for relief food in six The KRCS produces approximately 90 of the 13 districts that receive food via the donor reports each year via its Planning, WFP pipeline. There is currently debate Monitoring, Evaluation and Reporting around the selection of lead agencies, (PMER) department, which reports and guidelines are being developed on the quarterly. Most donors accept a standard identification of a lead agency. KRCS reporting format, and PNSs will Due to the number of implementing report to their donors. Sometimes, agencies in Kenya, coordination is regarded government donors will not accept the as challenging. Many local NGOs will not KRCS reporting format or will request share their plans for fear of being usurped, monthly financial reports, which are done by and government ministries, which are the financial office. The KRCS produces an tasked with leading coordination forums, annual report which is also published on its tend to be weak. It can also be argued that, website.9 This outlines its activities for that despite their role, organisations such as the year and includes a financial statement. KRCS may be deterred from attending such When viewed alongside other international fora as such meetings tend to be driven by humanitarian organisations, the KRCS is the international community. unique as it responds to small incidents at While an early warning system was a community or household level, such as established through the Arid Lands fires. It is also involved in crises outside of Resource Management project, data from Kenya. Funds were raised from the private this does not influence decisions by the sector, local civil society, schools and humanitarian community, as the quality individuals for Haiti, and KRCS staff went of data is reported to be poor. Instead, to Uganda following flooding in 2007.

9 http://www.kenyaredcross.org/ 16 Key relationships

Auxiliary role Branches may find it harder to maintain independence. Whilst trying to play a Autonomy The relationship between the Government credible role within the mechanism of The credibility and profile that the of Kenya and the KRCS appears to be close, operational stakeholders, who may not KRCS has built up over the past five with the Government consulting the society be concerned with the auxiliary role of years contributes to its autonomy, as a matter of course, almost to the point the KRCS, they are also dealing with as does its relationship with the of seeking its consent. Meetings have been government counterparts who may have Government, which allows negotiation. postponed because the KRCS is absent, and no knowledge about the auxiliary role or, at While domestically raised income often the Government will request that the the other extreme, are overzealous about allows a certain freedom, it is still KRCS is the implementing organisation. it to the detriment of existing coordination minor compared with project costs, Legislatively, the details of the relationship mechanisms. In Garissa, after WFP carried and donor decisions will therefore are not defined beyond the KRCS being a out its annual evaluation of its FFA partners continue to shape the response. humanitarian auxiliary to the Government and attempted to transfer a contract Although the KRCS is keen to move and that it should maintain its autonomy from the KRCS to another organisation, towards DRR interventions, funding in accordance with the Fundamental this having been approved by the DSG, for these is still harder to access than Principles of the Red Cross Movement. As the intervention of the Government led to for emergency response, for which the with the recent drought appeal, it is not stalemate. Furthermore, as the KRCS is the KRCS is well known. The society has a necessary for the KRCS to have permission sole distributor of government food aid, and good relationship with the media, but from either the Government or the IFRC to food aid is often associated with rumours were it to stop distributing relief food, launch an appeal. of political agendas, the KRCS is left with even if this were a justifiable move, the the choice of either addressing or ignoring At times, the KRCS substitutes for the media may not look upon it favourably. such criticism. Government when it fails to respond. The establishment of regions is Pressure to respond may arise from the On 4 August 2010 Kenya approved a new welcomed as a step in decentralising fact that some communities do not trust Constitution. To date, it is uncertain what decision making within the society. the Government, but do trust the KRCS. this means for the auxiliary role of the However, it is important that the KRCS does KRCS, but it is being monitored by the legal not become possessive of this auxiliary services department. New aspects such role, at the expense of allowing other as receiving grants or providing an official organisations with better expertise or better training role with the Government may be capacity to respond. possible, but on the other hand it could Moving away from Nairobi, less is known mean that other organisations can legally about the auxiliary role of the KRCS. At play an auxiliary role. The constitution also district level, there may be varying degrees dictates that 46 districts will be replaced of understanding amongst government staff, by 47 counties, and the impact that this will ranging from a fair understanding to no have on the current location of the KRCS knowledge at all. While some branches have branches remains to be seen. conducted sensitisation sessions, regular staff turnover means that this awareness can be lost. Communities themselves do not have knowledge about its role. Despite the closeness of the relationship, the KRCS will publicly criticise the Government when it considers it necessary. After the post-election violence, the Government allowed the KRCS to respond first and the KRCS provided information on the situation as well as treating individuals. It received both praise and criticism for its response: some praised it for its timely and impartial response, while others lamented that the response was not impartial at all. However, the ICRC did deem it neutral enough to work through its local branches.

9 Some of these strengths are not exclusive to the KRCS: for example, there are NGOs that are able to access remote areas as well.

17 Volunteers The KRCS has occasionally gone to the community and asked for volunteers for The consistent, widespread and undisputed a specific project, but this recruitment opinion about the KRCS is that it is an method has tended to result in organisation with an unmatched coverage expectations of financial and material of the country which can respond rapidly, gain. Even where the society recruits understands the context of each area volunteers in the usual way it often battles in which it operates and has excellent with such attitudes, and in response to this 10 relationships with communities. It is a Machakos branch is planning to establish mobile organisation, and the resilience of IGA activities for volunteers so that they its field workers is striking. can be self-sustaining. These strengths exist largely because of its Community extensive volunteer network. The KRCS has various campaigns to recruit volunteers, While it is apparent that the KRCS has which include going into schools, excellent links with the community, The KRCS plans to formalise feedback advertising in newspapers and putting up particularly because of its volunteer loops and improve impact assessments posters in public places. Recruitment is network, in some areas it is often the only through the 2011–2015 strategy. helped by the fact that the society is visible implementing organisation. In general and well known, with a high profile. the community values the assistance it receives, but it can be a case of valuing the There is a KRCS Volunteering Policy, assistance rather than the fact that it is which outlines the roles, rights and from the KRCS. The KRCS does meet with responsibilities of volunteers. Volunteers community leaders to assess needs and to come from different economic, ethnic follow up on the impact of its interventions and educational backgrounds, some with and community leaders also communicate jobs and some without. Not all members with the DSG, which can provide feedback of the society are volunteers, nor are all to the society. However, feedback from the volunteers society members. Volunteers community operates on a more informal receive training according to the tasks basis, with individuals speaking to staff they perform, so for instance food security and volunteers from the KRCS who are monitors will receive the relevant training known to them. Mobile phones have for this job. Some volunteers work more increased the potential for this, and they than others – for example, the warehouse also facilitate the work of the volunteers, officer and the procurements officer in who are able to communicate with each Garissa are volunteers and they can each other and with KRCS staff. Communities work up to 24 days a month. report that they are unlikely to visit the The Volunteer Policy stipulates that KRCS offices, especially as these can be volunteers should not lose out financially far from some villages. In areas where this and it seems there is a general rule that if a is the case, and where no volunteers live in volunteer works more than six hours a day, such locations, then communication with they will receive KES 300 (US$4) as a lunch the KRCS can be weaker. allowance. Some volunteers receive bicycles The KRCS has a Memorandum of if they have far to travel. In Machakos, youth Understanding (MoU) with Maastricht volunteers attend road traffic accidents, University that facilitates an exchange of providing first aid; they will often take Masters students. Often the longer-term casualties to hospital, by public transport or impact of projects is not analysed, so the with help from car drivers offering lifts. They KRCS is hoping that students can investigate are not reimbursed for this. these aspects that are often forgotten. There is evidence of proactive and self- organising cohorts of volunteers with a strong sense of community service, such as the youth volunteers at Machakos branch. However, it is acknowledged that volunteers often see the KRCS as a ‘training ground’ and a pathway to employment. Volunteering with the KRCS is seen as more secure compared with other organisations that may need volunteers just for the short term.

10 Some of these strengths are not exclusive to the KRCS: for example, there are NGOs that are able to access remote areas as well. 18 Conclusion

The KRCS has made huge efforts to regions and branches, and to better define increase the volume of its income from income that can be classed as income income-generating activities, and property generation. The KRCS recognises this and plays a significant role in this. This is aims to address it under its latest strategy. facilitated by the free land given to the The annual report appears to be a good society by the Government and through vehicle for publishing financial information. funds from branches of PNSs, which The society can ensure that this is usually originate from private sources. The accessible to as much of the population KRCS acknowledges that the growth of as possible and can even go as far as domestically raised funds is a long-term assessing the requirements for financial vision and the fruit of current investments data from a range of stakeholders. may not be seen immediately. The next step is to better understand all financial flows and their interrelations, starting with a complete compilation of total income, including income generation from

19 Acknowledgements

Sincere gratitude goes to the members of the Kenya Red Cross team for their valuable collaboration and support, especially to Abbas Gullet for supporting the study and to Kiilu Kioko, Arthur Omolo, Lilian Ochieng, Joe Mbalu, Sahal Hassan Abdi, Red Cross staff in Garissa and Machakos and lastly to Farukh Keter for working so hard on the data. Many thanks go also to the participants in the study, including the Government of Kenya, Save The Children, Care International, WFP, UNICEF, Sisters Maternity Home (SIMAHO), IFRC, ICRC, Danish Red Cross, E Plus, Red Court, Safaricom Foundation, the Arid Lands project and the communities of Machakos and Garissa.

20 Kenya Red cross Resource flows and the humanitarian contribution This case study explores the complex resource architecture of the International Red Cross and Red Crescent Movement from the perspective of a recipient national society, the Kenya Red Cross. As well as attempting to capture the society’s income and humanitarian expenditure, the report examines the society’s contribution to humanitarian assistance in Kenya. The Kenya Red Cross is an interesting national society as not only does it receive funding from some of the more ‘typical’ channels, it is also vigorously pursuing a number of ventures aimed at increasing its domestically raised income.

Global Humanitarian Assistance | Development Initiatives, Keward Court, Jocelyn Drive, Wells, Somerset BA5 1DB, UK | Tel: +44 (0)1749 671343 Fax: +44 (0)1749 676721 | Email: [email protected] www: globalhumanitarianassistance.org Development Initiatives is a group of people committed to eliminating poverty. Follow us on Twitter @devinitorg

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