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Title
Please provide a name for your action learning plan.
Round up Financing: Fostering Resilience Through Community-based Alternative Financing
Challenge statement
Challenge type: If you are working on multiple challenges, please indicate if this is your "big bet" or "exploratory" challenge.
Please note: we ask you to only submit a maximum of 3 challenges - 1x Big Bet, 2x Exploratory. Each challenge must be submitted individually.
EXPLORATORY
Challenge statement: What is your challenge? (Please answer in specific terms: "Our challenge is that...”.)
In Palestine, amidst the complex and volatile political situation imposed by the occupation including the ongoing war on Gaza, non-governmental organizations (NGOs) are facing significant challenges in sustaining their operations to support inclusive community resilience and assist the most disadvantaged groups. International funding for Palestinians has historically played a pivotal role in supporting these institutions and ensuring the continuity of their services to Palestinian society. However, over the past decade, there has been a systemic and significant decline in
international aid to the Palestinian government and people, affecting the operations of many Palestinian grassroots organizations.
Simultaneously, there is an undeniable trend of excessive reliance on international aid, which has led to overlooking other potential local funding sources for community initiatives spearheaded by these organizations. This oversight exacerbates the deficit in governmental and international aid to these organizations.
Background: What is the history of your challenge? What is causing or driving it? Who is involved? How does the current situation look like? What undesired effects does it produce?
Historically, charitable giving has been a crucial component of social solidarity, ingrained in the social values and embraced by local communities in response to the challenges they face, particularly impacting the most vulnerable segments of these communities. During these difficult times, it has become imperative to strengthen the collective community-based support to assist NGOs in realizing their goals. The widespread use of credit cards and, more recently, electronic wallets may provide an opportunity and means to streamline the process of charitable giving and enhance the level of accountability and transparency in collecting, channeling and fund utilization as well as fostering trust and attracting more people to donate through this mechanism.
One innovative approach to address this is Round-Up Financing, a mechanism that leverages microtransactions to accumulate funds for charitable causes. Round-Up Financing collects small donations by rounding up transactions to the nearest whole number. With fintech platforms and mobile applications, users can opt-in to donate their spare change from everyday transactions to charitable causes. This model has gained traction globally for its simplicity, convenience, and potential to accumulate substantial funds over time.
Quantitative evidence: What (official) data sources do you have on this challenge that better exemplifies the importance and urgency of this frontier challenge? You can add text, a link, or a picture.
Beginning in 2013, budget support to the PA started to decline. International assistance to the Palestinian people has been provided in the form of humanitarian assistance, project funding, and development lending that are also shrinking over time.
The expansion of digital financial services including e-wallets and online banking utilized by 15.1% of the population highlights a growing acceptance and utilization of modern financial tools. There was a substantial increase in the adult population having mobile money to 14% by 2021. According to Palestine Monetary Authority (PMA) statistics on financial inclusion, 50% of people aged 15+ have bank accounts and 21% have debit cards.
Qualitative evidence: What weak signals have you recently spotted that characterizes its urgency? Please provide qualitative information that better exemplifies the importance and urgency of this frontier challenge. You can add text, a link, or a picture.
Given the unprecedented destruction and socio-economic impact of the Gaza war in the State of Palestine, it is evident that traditional funding from donors will not be sufficient to address the extensive demands and investments required for early recovery and reconstruction. There is a need to consider alternative financing mechanisms established and institutionalized by the Palestinian people to mitigate the impact of the dynamic and volatile political situation on the availability of resources for development in the State of Palestine. Additionally, amidst the urgency of crisis and its differentiated impact on Palestinians, it is critical to protect and enhance social cohesion. Round-up donations could be one solution to facilitate solidarity among Palestinians and overcome challenges related to movement and outreach, thus enabling support for the most marginalized and affected segments and communities.
Value proposition: What added value or unique value proposition is your Accelerator Lab bringing to solving this challenge? Why is it your Lab that needs to work on this challenge and not other actors within UNDP, other stakeholders in the country respectively? Why is it worth investing resources to this challenge?
The Accelerator Lab is committed to assisting the CO in exploring various viable alternatives for financing. The CO has been approached by unconventional partners, including the Palestine Investment Fund, to collaborate on establishing alternative impact financing mechanisms. Additionally, the CO is keen on strengthen the resilience of the financial sector in the State of Palestine and integrating new technological solutions to improve access to finance and funding opportunities for individuals and institutions.
Among the many options to be explored in this multifaceted endeavor, round-up financing stands out as a promising avenue to enhance and streamline community engagement in recovery and development efforts and reducing dependency on international aid.
Short “tweet” summary: We would like to tweet what you are working on, can you summarize your challenge in a maximum of 280 characters?
Palestine Accelerator Lab aims to explore alternative financing options to support inclusive recovery and reconstruction in the State of Palestine. Round up financing stands as a promising avenue to streamline community engagement and foster digital transformation for good.
Partners
Who are your top 5 partners for this challenge? Please submit from MOST to LEAST important and state Name, Sector and a brief description of the (intended) collaboration.
Please state the name of the partner:
Financial institutions and regulators including banks and Palestine Monetary Authority
What sector does our partner belong to?
Private Sector
Please provide a brief description of the collaboration.
Collective thinking with the banks on viable models that would be adopted for structuring the round-up financing mechanism and understanding internal and external challenges related to restrictions by banks and regulatory bodies for rolling out such financing mechanism.
Is this a new and unusual partner for UNDP?
Yes
Who are your top 5 partners for this challenge? Please submit from MOST to LEAST important and state Name, Sector and a brief description of the (intended) collaboration.
Please state the name of the partner:
Pool of non-governmental organizations
What sector does our partner belong to?
Civil Society
Please provide a brief description of the collaboration.
Assess their interest and outline practical steps for engaging in and leveraging round-up financing to support the social causes they are leading or contributing to.
Is this a new and unusual partner for UNDP?
No
Who are your top 5 partners for this challenge? Please submit from MOST to LEAST important and state Name, Sector and a brief description of the (intended) collaboration.
Please state the name of the partner:
Build Palestine
What sector does our partner belong to?
Civil Society
Please provide a brief description of the collaboration.
Engage in the design thinking process on the best model for round-up financing given their experience in crowdfunding at the local and international level.
Is this a new and unusual partner for UNDP?
No
Learning questions
Learning question: What is your learning question for this challenge? What do you need to know or understand to work on your challenge statement?
What models could be adopted to institutionalize round-up financing in Palestine?
To what stage(s) in the learning cycle does your learning question relate?
Explore
Usage of methods: Relating to your choice above, how will you use your methods & tools for this learning question? What value do these add in answering your learning question?
We aim to assess citizens' perceptions and interest in utilizing a digital round-up financing to contribute to the social causes and organizations they desire to support. Furthermore, we plan to facilitate design thinking studios with banks and NGOs to develop the most suitable model customized for the Palestinian context. This model will carefully consider restrictions and regulatory challenges to ensure efficient operationalization, sustainability, and transparency.
Existing data gaps: Relating to your choice above, what existing gaps in data or information do these new sources of data addressing? What value do these add in answering your learning question?
Understanding citizen's behavior in using digital payment methods
Closing
Early leads to grow: Think about the possible grow phase for this challenge - who might benefit from your work on this challenge or who might be the champions in your country that you should inform or collaborate with early on to help you grow this challenge?
Initiate the pilot phase of the co-created round-up financing model with three banks and a minimum of five organizations. Following the successful completion and validation of the initial pilot, the growth phase will involve expanding the pilot program to encompass all 13 banks operating in Palestine with support from the Palestine Monetary Authority. Additionally, during this phase, efforts will be made to involve more NGOs, thus fostering broader participation and impact within the community.
END OF ACTION LEARNING PLAN: Thank you! The form saves automatically and your submission has been recorded. You may now exit this window.
1No poverty
10Reduced innequalities
17Partnerships for the goals
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