Case Study

The ICRC: The Humanitarian Impact Bond (Abridged)

31 pages
November 2023
Reference: IMD-7-2464

In July 2017, the International Committee of the Red Cross (ICRC) launched the world’s first Humanitarian Impact Bond. This innovative finance pilot was an experiment by the ICRC to engage the private sector differently and diversify funding – critical given the widening humanitarian aid gap. It was a massive undertaking. The HIB, which had a maximum potential deal size of CHF 26 million, took over four years to plan and multiple stakeholders, including governments, foundations, investors and lawyers, to put together. How did the ICRC pull this off and what possibilities does innovative finance offer the humanitarian and private sectors? Drawing on a series of proprietary interviews with key characters, various internal documents shared by the ICRC, and secondary sources such as news reports, press releases and reports by third-party organizations, this abridged case delves into the ICRC’s motivations for entering innovative finance, why it chose the HIB instrument, what it was, the hurdles and challenges of designing and setting up this complex instrument, and what the ICRC did to get the project off the ground. Participants interested in innovative finance, the humanitarian and/or development sectors, cross-sectoral/industry collaboration, and social innovation will find the case particularly interesting.

Learning Objective
  • Recognize the benefits – and also the complexity – that innovative finance brings.
  • Articulate and refine the value proposition of innovative finance.
  • Explain how an innovative finance instrument – the social impact bond in particular – works.
  • Identify and map key stakeholders.
  • Identify the soft and technical success factors critical in innovative finance initiatives.
Keywords
Social Innovation, Social Impact, Humanitarian Organization, Impact, Innovative Thinking, Payment by Results, Lombard Odier, Goal Partnerships
Settings
Switzerland
International Committee of the Red Cross, Philanthropy, Non-profit Organizations Management
2013-2022
Type
Field Research
Copyright
© 2023
Available Languages
English
Related material
Teaching note
Case clearing houses
IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

Contact

Research Information & Knowledge Hub for additional information on IMD publications

This case study is part of a series
This case study is part of a series
Discover our latest research
IMD's faculty and research teams publish articles, case studies, books and reports on a wide range of topics
The ICRC (B): The Humanitarian Impact Bond
By Vanina Farber and Shih-Han Huang
Case reference: IMD-7-2380 ©2022
Summary
The ICRC’s Humanitarian Impact bond is based on the social impact bond model, which brings together outcome funders (donors such as governments, foundations and corporations), service providers (NGOs, social enterprises, etc.) and social investors to pay for the delivery of social outcomes through “pay-for-success” agreements. Case B explores the mechanics of the social impact bond model, how it is applied in the HIB case, and the purpose and role of the term sheet in aligning the needs of the different stakeholders and driving a transaction forward.
Reference IMD-7-2380
Copyright ©2022
Copyright owner IMD Copyright
Organization International Committee of the Red Cross
Industry Philanthropy, Non-profit Organizations Management
Available Languages English
Contact

Research Information & Knowledge Hub for additional information on IMD publications

The ICRC (C): The Humanitarian Impact bond, from concept to reality
By Vanina Farber and Shih-Han Huang
Case reference: IMD-7-2381 ©2022
Summary
The last case in the three-part series looks at ICRC’s journey and learnings in putting together the HIB bond. Additionally, it explores how the ICRC built on this first experience to build up its organizational readiness and launch more new financing models.
Reference IMD-7-2381
Copyright ©2022
Copyright owner IMD Copyright
Organization International Committee of the Red Cross
Industry Philanthropy, Non-profit Organizations Management
Available Languages English
Contact

Research Information & Knowledge Hub for additional information on IMD publications