Promemoria

26 August 2015
Ministry for Foreign Affairs
Department for Multilateral Development Cooperation
Humanitarian Affairs Section
Peter Kvist
Telephone +46 8 40 54 756
Mobile +46 725 259 130
Email peter.kvist@gov.se

Non-paper: The case for flexible funding for effective humanitarian action

Summary: Humanitarian financing is lacking in quality as well as in

quantity. While the renewed focus on and growing trend of multiyear humanitarian financing is most welcome, the reverse trend of
decreasing core and pooled funding is extremely worrisome. Increased
use of core and pooled funding in humanitarian action would have
significant benefits for efficiency, accountability and speed of
delivery. Although donor concerns about core funding with regard to
accountability to taxpayers are largely misplaced, humanitarian actors
must do more to ensure donors of flexible funding receive the
recognition and visibility they deserve.
Problem statement funds lacking in quality as well as quantity
The desperate state of humanitarian financing is well known. The USD
11 billion provided in humanitarian aid in 2014 was a record amount.
However, the enormous global humanitarian needs eclipsed this
generosity, illustrated by a much sadder record the USD 7.4 billion
that was lacking to meet the worlds humanitarian needs1. Humanitarian
requirements in 2015 have grown even larger still, amounting to over
USD 19 billion.
While we must continue our efforts to bridge the gap between
humanitarian needs and resources in terms of quantity, it is evident that
we must also strive to make the most of what we give in terms of quality.
The renewed focus on and increased trend of multi-year humanitarian
financing is most welcome. However, the reverse trend of decreasing
core and pooled funding is extremely worrisome.
UN agencies have seen substantial reduction in the share of their
financing resources provided through un-earmarked core funding. In
2014, just 9% of the World Food Programme (WFP)s USD5.5 billion
funding was unearmarked2.

Report of the Secretary-General: Strengthening of the coordination of emergency humanitarian assistance of the
United Nations, p. 7.
2
Future Humanitarian Financing Report, p. 20.

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Compared with the increase in needs and donations, the proportion of
funding channelled through pooled mechanisms such as the Central
Emergency Response Fund (CERF) and country-based pooled funds has
also decreased significantly. While the total amount of humanitarian
funding almost doubled between 2012 and 2014, contributions to the
CERF increased by only 10 percent.
The case for flexible funding for humanitarian action
Several reports and studies, including the Secretary-Generals 2015
report on the strengthening of emergency humanitarian assistance,
highlight the importance of sufficient core and pooled funding for the
humanitarian system to operate effectively.
Specifically, un-earmarked core funding allows humanitarian actors to:
Respond quickly and effectively to sudden needs, without having
to wait for directed and ad hoc funds to be processed.
Address humanitarian requirements based on needs, in
accordance with the humanitarian imperative.
Set up and implement programmes in line with corporate
strategies and internal expertise.
Better plan and manage programmes and budgets, particularly
when flexible funds are given early in the year.
Make full use of tools such as bulk procurement or
prepositioning of humanitarian goods.
To a lesser extent, engage in resource intensive competition with
other humanitarian actors over limited ad hoc funds.
In addition, funding through pooled fund mechanisms can:
Promote country-led leadership, coordination and accountability,
in line with the IASC Transformative Agenda.

Allow actors that are closest to affected populations to determine

funding allocations.

Facilitate financial support to local NGOs and first responders.

Accountability and visibility
The benefits listed above are all significant, and the value of flexible
funding is repeatedly raised by humanitarian actors. So why is the level
of core and pooled funds low? One reason is donors legitimate concerns
about the control of and accountability for tax-payers funds. Another is
the inherent challenge of providing appropriate visibility and political
recognition to donors of core and pooled funding, compared with
donors who provide multiple ad hoc contributions directed at specific
crises.

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However, we believe these concerns are largely misplaced for two
reasons:
1) In recent years, the humanitarian UN agencies have developed
substantially in terms of organisational professionalisation and
results-based management. Significant achievements have also
been made in the area of humanitarian reform, where combined
efforts under the framework of the Transformative Agenda have
led to better needs analyses, more strategic appeals and clearer
accountability lines at country-level.
The work to ensure an effective and accountable humanitarian
system is not complete and will continue indefinitely. However,
considerable progress has been made and this deserves
recognition through donors trust in agency expertise. We believe
the best way to work together in partnership towards our
common goal is to focus on the improvement of management and
organisational systems at global level, rather than increase the
burden for overstretched agencies through resource-intensive
management of a large number of individual ad hoc grants.
2) Given the significant benefits of flexible funding, and considering
the challenges the humanitarian community is currently facing,
we believe that accountability to tax-payers is best ensured
through the most effective use of their funds i.e. an increase in
the proportion of funding that is provided on flexible terms.
We believe these arguments make a compelling case for flexible funding
in their own right. However, the issue of lacking visibility and
recognition for core and pooled funding must be taken seriously. UN
humanitarian agencies have a responsibility to rethink the way in which
they communicate to recipient states, to the general public in donor
countries and within their own organisations - about the contributions
they receive. Donors who provide what many humanitarian actors call
their most valued resource flexible funds - should be given the
appropriate recognition.
Flexible funding and good humanitarian donorship
Providing flexible funding is one of the guiding principles of the Good
Humanitarian Donorship Initiative3. Despite this, only a small part of
humanitarian financing was provided through un-earmarked core
funding or through pooled fund mechanisms in 2014. Our vision is to
reverse this trend and significantly increase the proportion of flexible
funding by 2020. We believe that in doing so, we will greatly contribute
to the effectiveness and quality of principled humanitarian action, carried
out by strong and empowered humanitarian actors.

GHD Principles and Good Practice of Humanitarian Donorship, principles 1112.

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Our vision by 2020, humanitarian financing:
- to the humanitarian UN agencies should consist of at least 30 per
cent un-earmarked core funding;
-

to the Central Emergency Response Fund should be increased to

at least USD 750 million per year (and the grant element target
should be increased accordingly);

to Country-based Pooled Funds should at least double compared

with 2014.