Reduce the earmarking of donor contributions

Reduce the earmarking of donor contributions

Reduce the earmarking of donor contributions

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:

  1. 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.
  2. 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:

  1. 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)
  2. Increase the visibility of unearmarked and softly earmarked funding, thereby recognising the contribution made by donors.

Donors commit to:

  1. 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 earmak definition in the Grand Bargain-A Shared Commitment to Better Serve People in Need) by 2020.

Co-convenors: Sweden and ICRC

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