By Paola Sanabria
Given the emergency that humanity is facing, Innpactia wanted to contribute its expertise to mitigate the impact of the crisis and the effects of isolation in Latin America. For this reason, it offers a consolidation of calls related to Covid-19, open to all users registered on the platform, regardless of their type of affiliation.
The information in this article is based off data collected between March – June 2020, and its objective is to help the social impact financing ecosystem face the Covid-19 emergency and create a strategic network that connects funders with projects that require resources and entrepreneurs who have been affected by the current situation, as well as chart the historical behavior of donors. Innpactia collects more information every day and will continue to update its Covid-19 Opportunities Page until the end of the year.
Thus far, the effort has identified US$ 798,479,859 available for projects in Latin America, distributed over 397 calls with the United States as the main originator.
One of the main findings focuses on the solidarity in the response, across both public and private sectors, to the crisis that has sought to mitigate the effects on health and the economic impact, without neglecting the recovery of the social fabric and the enhancement of culture. Therefore, there is a great diversity of topics associated with the calls and a series of financial assistance and technical support opportunities that seek not only to save the economy, but to save the essence of our humanity.
Focus of Calls Related to Covid-19
Most of the calls are aimed at helping small companies and enterprises, which is considered one of the most affected sectors, or at least a sector with large-scale impact, due to the economic effect from business closures and rising unemployment. Many of these aids are aimed at providing financial support and loans through soft debt and subsidies to keep their minimum production afloat or at least avoid bankruptcy. On the other hand, the technical assistance available includes platforms that allow companies to make their products known and accelerate the growth of their businesses, as well as support and advice during the pandemic to restructure their finances, redirect their production strategies, and transform their organization to adapt to new circumstances.
As expected, after calls directed at small businesses, the second most financed area is health research, including both the behavior of the virus and its effects on the population economically, socially, culturally, and emotionally.
Thirdly, there are the response funds that demonstrate the capacities and level of preparedness that each country has offered in the face of the pandemic, as well as the dynamics and interactions of the population. These calls are offered with names such as “Emergency Fund”, “Aid Fund”, “Rapid Response Fund”, among others and are more oriented to deal with issues of corruption, unemployment, data collection, and economic relief. In addition, there are also opportunities to fund more general strategies such as “combating the pandemic” that seek to find and promote innovative ideas that respond to the long term effects caused by the pandemic.
From the information collected, it is interesting to see the emphasis has also been given to supporting artists and musicians to alleviate the impact of cancelled concerts or presentations, to help in the search for alternative performance spaces, to finance future presentations, and to reward different works or photographs that represent the current situation of quarantine. This shows a certain solidarity for safeguarding art and culture and for not abandoning individual or smaller-scale economies to their fate. These cultural aids are given in combination with help and incentives to independent journalists who seek to document the current situation and who, due to their professional mission, are more exposed to the risks of the virus or have been affected by it in some way.
There is also considerable support for social organizations and communities to mitigate unemployment, vulnerability, and poverty. Beyond welfare aid, these opportunities seek to achieve productive and sustainable long-term developments, such as training for entrepreneurship, advice to structure new projects, and the promotion of organizations that have projects benefitting communities affected by the lack of economic activity.
Types of Aid
The main type of aid offered worldwide is grants, while the second place varies according to each country. For example, in the United States the second most widely available type of aid opportunity is in the form of awards and support for research aimed at solving the Covid-19 crisis worldwide. In Colombia, it’s soft debt to boost economic growth and avoid a sharp slowdown, and in Mexico, it’s awards that recognize social improvements during the pandemic or contributions to mitigate the negative effects. In addition, courses focused on individual crisis management during isolation and consolidation of business strategies to face the economic crisis are widely offered worldwide.
The majority of calls provide global coverage, a situation driven mainly by the United States. However, it is evident that Latin American countries are focused on saving their internal economy and improving social conditions within their borders before achieving solutions at the regional or global level.
Most Funded Sustainable Development Goals (SDGs)
As for the highest-financed SDG, it is logical that it should be SDG 8: Decent Work and Economic Growth. Considering this as a mechanism to save the internal economy, countries are financing wages and offering soft debt to companies. This aid includes everything that boosts companies and therefore the national economy.
Second is concern about the health crisis, SDG 3: Good Health and Well-being, and efforts to control the virus through studies of its behavior and evolution, as well as incentives to develop vaccines and ways to control or at least mitigate its effects on human health.
In conclusion, an analysis of the aid available reflects a concern to save the economy, as well as the current social infrastructure. Nevertheless, we’ll have to rethink the future and determine whether the effort to save a normality that will not return is worthwhile. The measures taken so far seem to be drowning the medium-term and are skidding to a halt in an economy in full transformation.
So, is the crisis being managed within the financing ecosystem?
It is being mitigated in the short term, but derailed in the long term. We are facing evidence of the fragility of the world economic system that, at the slightest bump in gear, disrupts the entire chain and we have not even seen the true, longer-term impacts on the social system.
To see the detail of the graphs, go to the Innpactia data presentation:
We also invite you to visit the Innpactia Covid-19 page on our website for more information on the response to this pandemic:
Paola Sanabria is leader of the investigation department with a remit over matters related with information, data and analysis at Innpactia.