New protocol suggested for harmonizing cost classification and financial budgeting and reporting
The Money Where it Counts protocol was presented at an event in Brussels on 25 September 2019 by the Norwegian Refugee Council (NRC) and Humentum, with the support of the European Union Civil Protection and Humanitarian Aid (ECHO) and the Voluntary Organisations in Cooperation in Emergencies (VOICE) Network. The event was attended by 65 participants representing six governmental donor agencies, three United Nations agencies, 40 NGOs, as well as the Red Cross and the Grand Bargain Secretariat. The event was also live streamed through an open link (no participants’ information was collected); two additional UN agencies and an NGO are confirmed to have joined the event online.
The protocol presented at the event is the result of four years of work by NRC, initially in collaboration with the Boston Consulting Group and subsequently in partnership with Humentum. The design of the protocol was led by Humentum acting as an independent broker of an agreement among nine NGOs (NRC, ACF Spain, CARE, DRC, Humanity and Inclusion, Oxfam GB, Save the Children International and UK, Welthungerhilfe). Over the course of several months since the last quarter of 2018, Humentum analysed each participating NGO’s cost structure and cost charging methodology to design an intensely practical solution for harmonisation, which required compromises for every participating NGO and is applicable well beyond the initial group.
The Money Where It Counts Protocol sets out a new, harmonised and simplified approach to cost classification, cost charging and financial reporting for international funding of not-for-profit agencies. It is a collaborative initiative between not-for-profit agencies working internationally, which have come together to make these proposals. The complexity and cost of the current approach to cost classification, cost charging and financial reporting is unsustainable given the growing humanitarian financing gap. By signing up to this Protocol donors and not-for-profit agencies will make the delivery of humanitarian aid and development more efficient and fit for purpose.
At the time of the event, six of the nine NGOs involved already endorsed the protocol, with the remainder (ACF Spain, DRC, Oxfam GB) currently assessing the changes necessary before making a decision.
In line with the next steps outlined during the presentation, NRC and Humentum will focus on mobilizing resources through bilateral advocacy efforts to initiate a pilot project. Meanwhile, interactions with potential endorsers of the protocol will continue and intensify in preparation of the need to identify a core group of donors and implementing agencies to participate in the pilot project. Donors, UN Agencies, and NGOs interested in resourcing, endorsing, or participating in a pilot project were invited to get in touch with the NRC focal point Luca Peciarolo.
Please find below the full summary, including the main highlights, list of participants, the agenda, and the recording of the event.