The Role of Donations in Financing Extreme Risk Events

Abstract

Globally, post-event funding needs are growing, while the material and human damage caused by extreme events is constantly growing. The 2015 United Nations (UN) Global Assessment Report on Disaster Risk Reduction estimated that worldwide, these extreme events cause losses of approximately $ 250-300 billion annually.

Although there are now various post-event financing options (insurance, grants, loans, donations, etc.) for the population, companies or public institutions, these instruments are often not sufficient for post-event recovery and reconstruction, so many challenges remain for post-event recovery.

Thus, there is often a gap between the financing needs of companies or the population and the existing financing instruments, most often the amounts needed for financing being higher than the amounts that are available through the various existing financing mechanisms.

In this article we addressed the topic of post-event funding sources such as donations and highlighted that these, although they are one of the cheapest sources of funding, the support of post-event donors is often uncertain.

Also, in the elaboration of this paper I used qualitative and quantitative research based on the use of methods such as Spearman correlation indicator, data processing and analysis, documenting reports, studying reference works and other studies.