Enhanced quality funding (Increase collaborative humanitarian multi-year planning and funding and reduce the earmarking of donor contributions)
Multi-year planning and funding lowers administrative costs and catalyzes more responsive programming, notably where humanitarian needs are protracted or recurrent and where livelihood needs and local markets can be analyzed and monitored. Multi-year planning must be based on shared analysis and understanding needs and risks as they evolve. Collaborative planning and funding mechanisms for longer programme horizons that are incrementally funded can produce better results and minimize administrative costs for both donors and aid organisations. They can identify results which highlight the linkages between humanitarian, development, stabilization and conflict management initiatives that are fundamental to decreasing humanitarian needs.
Flexible funding facilitates swifter response to urgent needs and investment in fragile, potentially volatile situations, emergencies and disaster preparedness, as well enables response to need in situations of protracted and neglected conflicts. It strengthens decision-making bodies which include key stakeholders such as affected and refugee-hosting states as well as donors. It supports management systems and the use of cost-efficient tools as well as reduces the amount of resources spent on grant-specific administration, notably procurement and reporting.
Flexible funding requires accountability throughout the length of the transaction chain from donor to the field. Reducing earmarking should be considered as a means to achieving humanitarian collective outcomes. Increasing donors’ confidence in the quality of aid organizations’ own prioritization processes will encourage donors to increase the flexibility of their contributions.
The Secretary General’s recommendation to double the Central Emergency Response Fund (CERF) to USD$1 billion and to increase the portion of appeal funding to the UN Country-Based Pooled Funds (CBPF) to 15 per cent, including through new and additional sources, is recognized as important for increasing the amount of unearmarked and softly earmarked funding. The possibility of opening the CERF for direct funding to civil society organisations should be explored.
Aid organisations and donors commit to:
- Increase multi-year, collaborative and flexible planning and multi-year funding instruments and document the impacts on programme efficiency and effectiveness, ensuring that recipients apply the same funding arrangements with their implementing partners.
- Support in at least five countries by the end of 2017 multi-year collaborative planning and response plans through multi-year funding and monitor and evaluate the outcomes of these responses.
- Strengthen existing coordination efforts to share analysis of needs and risks between the humanitarian and development sectors and to better align humanitarian and development planning tools and interventions while respecting the principles of both.
- Jointly determine, on an annual basis, the most effective and efficient way of reporting on unearmarked and softly earmarked funding and to initiate this reporting by the end of 2017.
- Reduce the degree of earmarking of funds contributed by governments and regional groups who currently provide low levels of flexible finance. Aid organisations in turn commit to do the same with their funding when channelling it through partners.
Aid organisations commit to:
- Be transparent and regularly share information with donors outlining the criteria for how core and unearmarked funding is allocated (for example, urgent needs, emergency preparedness, forgotten contexts, improved management)
- Increase the visibility of unearmarked and softly earmarked funding, thereby recognising the contribution made by donors.
Donors commit to:
- Progressively reduce the earmarking of their humanitarian contributions. The aim is to aspire to achieve a global target of 30 per cent of humanitarian contributions that is nonearmarked or softly earmarked (see annex on earmarking definition in the Grand Bargain-A Shared Commitment to Better Serve People in Need) by 2020.