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  • Report
  • 20 June 2023

Global Humanitarian Assistance Report 2023: Chapter 3

A better humanitarian system: Locally led action

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Read our latest report on humanitarian finance and reform

Our new report 'Falling short? Humanitarian funding and reform' presents the latest data on global humanitarian assistance, as well as progress on Grand Bargain localisation targets, cash and voucher assistance, and anticipatory action.

Read the report

Efforts to reform the delivery of humanitarian assistance and to channel more funding to local and national actors have received substantial focus, though they have delivered limited tangible outcomes. The significant growth in humanitarian funding from donors in 2022 did not come with a similar shift in how it was delivered. In her Insight piece, Hibak Kalfan , the Executive Director of the Network for Empowered Aid Response (NEAR) network, provides a clear call to action to the international system to shift the current model to be truly centred around local communities. In 2022, there was no increase in the proportion of overall international humanitarian assistance directly provided to local and national actors – just 1.2% (US$485 million).

Instead, public donors increasingly relied on UN agencies to deliver humanitarian programming, with 61% (US$22.8 billion) of total public funding channelled to multilateral organisations, up from 52% in 2021. With this current balance of funding towards international agencies, humanitarian funding and decision-making spaces are often inaccessible, particularly for women’s rights organisations, as the Feminist Humanitarian Network highlight in their Insight piece.

Limited improvements in the reporting of funding that passes through one or more intermediary organisation means that monitoring the Grand Bargain commitment of providing 25% of global humanitarian funding ‘as directly as possible’ to local and national actors remains impossible. One area where better data on indirect funding is available is for pooled funds, which are increasingly seen as an important mechanism to meet localisation targets. In 2022, the volumes of funding allocated through UN Office for the Coordination of Humanitarian Affairs (OCHA)’s country based pooled funds (CBPFs) and the Central Emergency Response Fund (CERF) grew to a record US$1.9 billion, with 28% (US$337 million) of CBPF allocations going to local and national actors, an increase from 24% in 2017, and a preliminary 18% (US$80 million) of CERF allocations were sub-granted to local and national actors in 2021. However, collectively these pooled funds received a smaller share of total international humanitarian assistance from public donors, decreasing from a five-year high of 7.6% in 2019 to 5.4% in 2022.

Another critical aspect in enabling greater locally led humanitarian responses is to ensure that local and national NGOs have equitable access to unrestricted funding for non-project costs (i.e., overheads). Shifts in practice are occurring and some momentum for change is building, for instance through recent Inter-Agency Standing Committee (IASC) guidance on overhead practice for UN agencies and international NGOs. As Virginie Lefèvre of Amel Association International reinforces in her Insight piece, the issue is one ultimately of equality.

System reform around delivery of assistance as cash and vouchers has been more successful. Humanitarian cash and voucher assistance increased significantly by 40% to US$7.9 billion in 2022 due to the widespread use of the modality in the Ukraine crisis response and in addressing the high levels of food insecurity globally.

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How is assistance channelled and delivered?

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Figure 3.1: Multilateral organisations continue to absorb the majority of international humanitarian assistance and there is a lack of transparency around subsequent recipients

Channels of delivery of international humanitarian assistance from public donors, 2022, by first- and second-level recipients

Figure 3.1: Multilateral organisations continue to absorb the majority of international humanitarian assistance and there is a lack of transparency around subsequent recipients

Sankey diagram showing that little is known about recipients of funding beyond the first level, where most funding is received by multilateral organisations and NGOs.

Source: Development Initiatives (DI) based on UN Office for the Coordination of Humanitarian Affairs (OCHA) Financial Tracking Service (FTS) data and country based pooled funds (CBPFs) and Central Emergency Response Fund (CERF) data hubs.

Notes: RCRC = Red Cross Red Crescent. Data is in constant 2021 prices. First-level funding (i.e., funding received directly from a donor) only captures assistance provided from governments and EU institutions, as DI's granular dataset on private humanitarian funding is only available up to 2021. 'Pooled funds' refers to funding to CERF, CBPFs and other pooled funds. 'Public sector' refers to funding to national governments and inter-governmental organisations. Private sector organisations (including academia, foundations and corporations) and undefined organisations have been merged under 'Other'. Data for subsequent recipients (i.e., funding received through one or more intermediary organisations) is taken from FTS for all organisations apart from flows from CBPFs and CERF, which are taken from respective data hubs. The 'International' category includes second-level funding to UN agencies and international NGOs. The 'Local/national' category includes second-level funding to local/national NGOs. ‘Other subsequent recipients’ includes second-level funding to RCRC, pooled funds, public sector and other categories.

Public donor funding patterns have remained very similar over the past decade, with most funding being channelled to multilateral institutions and international NGOs (INGOs). In 2022, the proportion of total public funding channelled to multilaterals grew.

  • In line with the growth in total volumes of international humanitarian assistance in 2022 (see Figure 1.3, Chapter 1 ), funding to multilateral organisations from public donors increased by 47% (US$7.3 billion) to US$22.8 billion, from US$15.5 billion in 2021.
  • Overall, funding to multilaterals accounted for 61% of total public international humanitarian assistance in 2022, an increase from 52% in 2021 and above the average of 56% over the past decade.
  • NGOs continue to be the second largest recipients of international humanitarian assistance, receiving around US$6.4 billion in 2022 (17% of total direct funding), followed by Red Cross and Red Crescent (RCRC) organisations (6.6%, US$2.5 billion) and pooled funds (6.3%, US$2.3 billion, see Figure 3.4 ). Nearly all of this funding to NGOs (US$6.4 billion) was channelled to INGOs, with only 0.2% (US$80 million) of direct funding being channelled to local and national NGOs (see Figure 3.2 ).

The exact volumes and proportions of funding that pass from the first recipient to subsequent implementing partners is unknown due to incomplete and inconsistent reporting (see Box 3.1 ). The increase in reported indirect funding flows to UN OCHA’s Financial Tracking Service (FTS) suggests that this is slowly improving – in 2022, almost US$1.6 billion in indirect funding was reported to FTS, up from US$1.1 billion in 2021, and higher than the average of US$609 million over the last decade. A more complete picture of how funding is passed on can be seen in the UN OCHA-managed pooled funds allocations (see Figure 3.4 ).

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What progress has been made towards locally led humanitarian action? Funding and overheads

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Insight

Hibak Kalfan

Executive Director, NEAR

Hibak Kalfan is the Executive Director of the Network for Empowered Aid Response (NEAR). NEAR is a network of Global South civil society organisations who have come together to reshape the global response to economic, human and environmental threats. Kalfan has more than 15 years’ experience and worked with several stakeholders in the humanitarian, media, development and government sectors in the Horn of Africa and Middle East. She began her career as the founder of The African Future (2007), a non-profit organisation hoping to improve the education and healthcare in Somalia. She has since held several positions within Internews, World Bank Group, ACTED and Relief International, among others.

This year's GHA Report highlights the glaring disconnect between global policies and the actual humanitarian funding provided to local and national NGOs. Far from making progress, the proportion of funding allocated to these organisations is in decline.

In 2022, direct funding to local actors accounted for a mere 1.2% of overall assistance, unchanged since 2021, marking the lowest share since 2018. Despite ambitious donor intentions, direct funding for local NGOs stood at a paltry US$98 million, a stark contrast to the $39.2 billion directly received by international actors – a difference of nearly 40,000%. This disparity highlights the over reliance of donors on international actors to meet commitments, rather than embracing solutions that would allow for direct channelling of funding to local actors.

Recent large-scale crises in Pakistan, Syria, Türkiye and Afghanistan underscore the dire consequences for local actors when funding is unevenly distributed. NEAR network members have made it clear: local organisations are immediately and critically impacted by the lack of direct funding mechanisms, forcing them to rely on their own resources and whatever unrestricted funding they can secure from INGOs. Regrettably, obtaining appropriate funding to address community needs and their own requirements often takes months. Many local NGOs grapple with insufficient support for safety and assistance during disaster aftermaths, as witnessed following the earthquakes in Syria and Türkiye.

Amid the obstacles, we have seen some steps in the right direction. Within the Grand Bargain caucus on funding for localisation, co-convened by NEAR and the Grand Bargain Eminent Person’s Office with the technical support of Development Initiatives (DI), a group of signatories has agreed how to calculate funding for local actors, committing to report all funding to local actors publicly through the International Aid Transparency Initiative (IATI) or FTS, and developing individual roadmaps outlining when and how each agency and donor will achieve the 25% commitment. These steps are essential for enabling local actors to access increased volumes of humanitarian funding and better serve their communities.

NEAR and its members are fiercely working to turn global policies into tangible support for local actors by promoting transparency, accountability and innovative financing solutions. Initiatives like the locally led global Change Fund, [1] the Bulsho Fund in Somalia, and the Syria-Türkiye Solidarity Fund [2] itise funding for local organisations and initiatives that can swiftly and effectively address needs expressed by communities.

Numerous other initiatives exist, but achieving our vision for localisation demands sector-wide engagement. The time for rhetoric is long over, and positive steps in the last year must be built on and expanded with urgency.

Donors, the UN and INGOs must live up to their commitments on localisation and work collectively to provide equitable, effective and sustainable humanitarian support to local and national systems of response that centre communities’ needs. This demands a new model for the role of international actors at the national level, ensuring that the international humanitarian system complements local structures and approaches. The UN system must acknowledge its immense responsibility as the largest recipient of direct international humanitarian funding over the past decades (receiving 61% of total international humanitarian assistance funding in 2022) and shift its business models, becoming more transparent in its processes and overheads. Without these changes, next year’s GHA Report may again reflect a chasm between commitments to local actors and the reality they face.

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Figure 3.2: Funding to local and national actors as a share of total humanitarian assistance remained very small in 2022

Proportion and total volumes of direct and indirect funding to local and national actors, 2017–2022

Figure 3.2: Funding to local and national actors as a share of total humanitarian assistance remained very small in 2022

Line and stacked column charts showing that volume and proportion of funding to local and national actors has remained fairly constant since 2017, not changing between 2021 and 2022 at 1.2%.

Source: Development Initiatives based on UN Office for the Coordination of Humanitarian Affairs (OCHA) Financial Tracking Service (FTS) and UN country based pooled funds (CBPFs).

Notes: Local and national actors include all local, national or local/national NGOs, determined by internal organisation coding. Southern international NGOs, which receive funding to operate within the country they are headquartered in, are included as national actors. Red Cross Red Crescent (RCRC) national societies that received international humanitarian assistance to respond to domestic crises are included in local and national actors. Similarly, international funding to national governments is considered as funding to national actors only when contributing to the domestic crisis response. Funding is shown only for flows that reported with information on the recipient organisation. Data is in constant 2021 prices.

Despite sustained advocacy from local and national actors and allies, increasing commitments from top donors, and momentum generated through the Grand Bargain, [3] efforts to increase the volumes of funding available for local and national actors continue to fall short. Only limited progress has been made to improve the transparency of funding, with data on indirect funding still not publicly reported by many actors. Tracking progress towards the 2016 Grand Bargain target of providing 25% of global humanitarian funding to local and national responders ‘as directly as possible’ therefore remains challenging. Nevertheless, available data on direct funding to local and national actors shows that little progress has been made as part of these efforts.

  • In volumes, trackable humanitarian assistance to local and national actors (comprising data on direct flows plus partial data on indirect flows) totalled US$860 million in 2022, an increase of 6.6% from 2021 (US$807 million).
  • Direct funding to local and national actors, as a share of total humanitarian assistance, remained static at 1.2% in 2022, while the volume (US$485 million) increased from 2021 (US$377 million) in line with the rise in total international humanitarian assistance.

Challenges remain in accurately capturing the volumes of funding channelled ‘as directly as possible’ (from donors to local and national actors through only one intermediary), due to inconsistent and incomplete reporting (see Box 3.1 ). 95% of all reported funds on the UN OCHA FTS in 2022 provide no information on whether they are passed on and, if so, where to. Since data is only reported on a limited portion of indirect funding, the fluctuations between indirect funding levels across years are difficult to attribute to actual changes in funding patterns rather than just changes in reporting consistency.

  • Trackable indirect funding to local and national actors fell in both share and volume in 2022, from 1.4% (US$430 million) in 2021 to 0.9% (US$375 million) in 2022.
  • UN CBPFs represent a significant proportion of trackable indirect funding to local and national actors; [4] this increased from US$272 million in 2021 to US$337 million in 2022. This represents 28% of all CBPF funding (see Figure 3.4 ).
  • Given the inconsistencies in reporting, it is difficult to verify whether this drop in indirect funding represents a real drop or a reduction in reporting. A notable drop between 2021 and 2022 was a reduction in US$23 million from the World Food Programme.
  • As a result, combined direct and indirect funding to local and national actors fell from 2.7% of overall assistance in 2021 to 2.1% in 2022. This suggests that it is at the lowest level since 2017, when implementation of the Grand Bargain commitments began, and is a second consecutive year-on-year decrease from 2020.

The broad patterns of direct and indirect funding are consistent year on year: direct funding is primarily provided to national and local governments, whereas the majority of indirect funding reaches national and local NGOs.

  • The share of funding to national and local governments rose in 2022 to 76% of total direct funding to local and national actors, US$370 million, compared to 66% (US$250 million) in 2021. 20% was directly provided to local and national NGOs (US$98 million) compared to 28% (US$107 million) in 2021, whereas 3.6% of direct funding was provided to local and national societies (US$17 million), compared to 5.2% (US$20 million) in 2021.
  • 54% of all tracked direct and indirect funding to local and national actors was channelled to local and national NGOs (US$463 million) in 2022. Of this, 79% (US$365 million) passed to local and national NGOs through at least one intermediary, with a large majority channelled through CBPFs (US$340 million).
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Insight

Feminist Humanitarian Network (FHN)

Staff at FHN

The Feminist Humanitarian Network is an international network of feminist leaders committed to a transformed humanitarian system that promotes a feminist agenda. Its diverse network is currently comprised of 83 members including: grassroots and national feminist and women’s rights organisations; national and regional feminist and women’s networks; international NGOs, federations and organisations headquartered in the Global North; and individuals. Together it is working to redress power inequalities within the humanitarian system.

Feminist and women’s rights organisations (WROs) representing crisis-affected communities play a unique role in humanitarian action at both community and national levels. Their work ensures that women’s, girls’ and gender-diverse people’s rights are protected before, during and after crises.

Their work is critical, yet largely unrecognised for its humanitarian value. WROs are systematically denied access to funding and decision-making: a reality that has direct outcomes for the women and marginalised communities they represent. This reflects the colonial and patriarchal dynamics within the current humanitarian system and demonstrates the need for a transformation driven by feminist principles: a goal the Feminist Humanitarian Network is working to achieve.

In order to shift power to actors on the frontlines of humanitarian response, it is essential that they receive significant, long-term funding directly. However, the findings of this report – that very little quality funding is reaching local and national actors, and that direct funding to local actors has fallen between 2017 and 2022 – are consistent with the experiences of WROs leading emergency responses in their communities and at a national level.

Previous research shows that donors’ multi-year commitments are impeded, and the benefits of these commitments to different actors are often misunderstood. WROs leading humanitarian action report that their work is limited by a lack of quality and multi-year funding.

Funding restrictions during crises force WROs and feminist organisations to choose between undertaking emergency response efforts or continuing their long-term work: work that ensures critical services for women and marginalised groups, transforms gender relations and advances women’s rights. The lack of access to quality long-term funding for WROs is a direct threat to women’s rights – both when emergency strikes and in the longer-term.

Multi-year, quality funding would allow WROs to continue their long-term work and respond to crises simultaneously – harnessing the catalytic potential of crises to advance their objectives more rapidly and achieve transformational shifts in gender dynamics through their humanitarian efforts.

Donors who state a commitment to feminist action and feminist foreign policies must apply feminist principles to their own funding priorities and mechanisms. This means examining the power dynamics of their own policies and processes, with the goal of meaningfully shifting power to women and their organisations in the global south.

Additionally, those with commitments to localisation must enact long-term funding strategies to ensure that WROs are equipped to take up the role currently held by international agencies as funding intermediaries. As is reflected in the findings of this report, the impact of INGOs and multilaterals continuing to act as intermediaries is significant for WROs, which are burdened with having to comply with the priorities and requirements of both the donor and the intermediary. This makes funding less accessible – as WROs must operate within the compliance and due diligence policies of at least two entities – and limits WROs’ agency to make decisions about their own work and how they can best serve the needs of their community and the women they work with.

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Box 3.1

Data issues around indirect funding and reporting

Supporting greater local humanitarian leadership through increased funding is a growing global policy priority, yet donors have not been able to provide direct funding to local and national actors at any meaningful scale (see Figure 3.2 ). In addition, there is a large information gap around how much funding reaches local and national actors indirectly from donors, through one or more intermediaries. As was apparent from the recent discussions among members of the Grand Bargain Caucus on Funding to Local and National Actors, intermediary systems are not necessarily set up to effectively track funding to local and national actors (see Figure 3.1 ).

Humanitarian donors and international organisations have committed to increased transparency of funding flows, however data reported to global platforms and standards, such as UN OCHA’s FTS and IATI, is incomplete, particularly around funding passed on by UN agencies. In some cases, agencies do not have the systems in place to collate data globally on the funding they provide. This means they are often unable to extract the relevant data for public reporting platforms or to report back to individual donors how funding received was sub-granted. In turn, donors themselves are then unable to properly estimate how much of their funding reaches local actors. This lack of basic transparency around where and how funding is channelled through the humanitarian system undermines coordination, targeting and accountability at regional, subnational and national levels. Moreover, it means that it is not possible to properly monitor progress made against Grand Bargain commitments.

Recent research tracking funding flows for the Syrian refugee response in Türkiye (carried out by DI in partnership with the Refugee Council of Türkiye) illustrates the importance of this indirect funding data and of disaggregating funding data by actor type (for instance refugee-led or women’s organisations). As shown in Figure 3.3 , the majority (86%) of international funding for the Syrian refugee response in Türkiye in 2019 and 2020 was provided to international organisations, however much of this was then channelled to the Turkish Red Crescent and government institutions for implementation. The study – which manually collected data directly from donors and organisations – found that funding reaching local/national NGOs (L/NNGOs), both directly and indirectly, made up a very small proportion (5.3%) of total funding across both years, with even smaller fractions reaching refugee-led or women’s organisations. Moreover, almost none of the data collected on funding flows to second- and third-level recipients – just 0.3% of all funding – was captured by FTS, highlighting the widespread lack of reporting. The study also investigated the impact on L/NNGOs of receiving international funding indirectly through one or more intermediary organisations, with findings highlighting their limited ability to influence donor funding priorities and the lack of flexible, multi-year funding.

DI has been supporting partners to improve the tracking and reporting of funding to local and national actors through the Grand Bargain Caucus on Funding to Local and National Actors. Recommendations endorsed by caucus members in March 2023 include an agreement to measure direct and indirect funding to local and national actors and to report all funding to publicly available platforms. [5] It is hoped that this stimulates similar commitments among donors and international organisations beyond the caucus. With the right political will and support where needed – for example to gather and share different approaches to tracking, and assistance in improving internal data collection – certain relatively simple technical changes would provide some long-overdue transparency on how and where humanitarian finance is spent.

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Figure 3.3: Mapping funding flows for the Syrian refugee response in Türkiye

Total international grant funding to Türkiye for the Syrian refugee response, by recipients and intermediaries, and subsequent recipients (volumes), 2019–2020 in aggregate

Figure 3.3: Mapping funding flows for the Syrian refugee response in Türkiye

Sankey diagram showing that most funding was received by the Government of Türkiye and the Turkish Red Crescent, with much smaller proportions received by local and national NGOs and other actors.

Source: Development Initiatives based on survey data provided directly by donors and intermediaries, UN Office for the Coordination of Humanitarian Affairs (OCHA)’s Financial Tracking Service (FTS), OECD Development Assistance Committee (DAC) Creditor Reporting System (CRS), International Aid Transparency Initiative (IATI) data and publicly accessible project lists for individual organisations.

Notes: IFIs = international financial institutions; RCRC = Red Cross Red Crescent. Data is in current prices. 'Other donors' category includes unknown, private individuals and organisations and other global pooled funding mechanisms. 'Other local and national actors' category includes professional associations and academic institutions. 'International (NGO and other)' category mainly includes international NGOs and other bilateral actors such as the German Agency for International Cooperation (GIZ).

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Box 3.2

Overheads policy development

Local and national actors have been advocating for fairer funding practices around the sharing of overheads or indirect costs for many years. More recently this has become a central priority for policy change as part of wider reform efforts to support more locally led humanitarian response. Members of the Grand Bargain caucus on the role of intermediaries have committed to allocating overheads to local and national partners [6] and the Inter-Agency Standing Committee published guidance on the issue for its members in November 2022. [7] As a result, several international organisations have recently updated their funding policies, for example UNICEF, Trócaire and members of the Dutch Relief Alliance. Momentum is building for further change across the system in 2023.

As well as international organisations, which more often act as funders to L/NNGOs (see Figure 3.1 ), donors also have a responsibility to ensure that all partners involved in delivering humanitarian programming have their eligible direct and indirect costs compensated. Recent research into current donor approaches to overheads for local actors found that this was not an issue familiar to all donors. Most rely on the pass-through policies of their UN and INGO partners and provide no regulations or guidance around how their funding – including overheads – should be provided (or shared) to sub-granted partners. Exceptions to this include the INGO funding guidelines of Canada, the UK and Denmark.

Despite this, most donors recognise the logic for both L/NNGOs and international organisations needing overhead funding, and many are currently developing relevant guidance or policies. Donors have a clear role in incentivising their partners – especially their UN partners – to develop equitable funding policies. With INGOs, DI’s recent discussion paper emphasises the need for donors to recognise the indirect costs of both their INGO and L/NNGO partners and not inadvertently disincentivise INGOs from partnering with L/NNGOs by requesting that existing fixed rates are simply shared, without considering the financial implications. Providing an additional budget line specifically for sub-granted L/NNGOs’ overheads would be an impactful and practical way for donors to recognise the role indirect costs play in supporting the institutional development and sustainability of L/NNGOs and demonstrate their commitment to shifting toward more effective, locally driven humanitarian response.

Read DI’s report in partnership with UNICEF and Oxfam on overhead allocation in the humanitarian sector and our discussion paper on donors’ current indirect cost policies and perspectives on the issue .

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Insight

Virginie Lefèvre

Head of Programs and Partnerships, Amel Association International

Virginie Lefèvre is a Jurist who has been working for the past 15 years with NGOs, particularly for the promotion and for the protection of human rights. Since 2010, she has been living in Lebanon where she is involved in the humanitarian and development sectors. She is now the Head of Programs and Partnerships at Amel Association International, a Lebanese NGO. Through her work, Virginie Lefèvre is committed to improve operations and coordination, notably within the framework of the Syrian crisis emergency and stabilisation, pandemic and Beirut Blast responses, while contributing to reflections around the international humanitarian system, South–North partnerships, localisation and access to social rights in emergencies. She is a member of the Lebanon Humanitarian and Development NGOs Forum and ICVA Boards.

Within local and national NGO (L/NNGO) discussions in Lebanon and abroad on localisation, one of the first topics raised is overhead costs, or rather the inequities they present. This is mainly because most L/NNGOs do not have a structured access to overheads, as reported by DI in their 2022 publication .

From my perspective, as a long-time advocate of localisation, this is an evident practice of inequitable and non-principled partnerships in which organisations, often local, work hard to deliver programming but are unable to recover indirect costs, while others do not directly implement but can access overheads. Contrary to other examples, the inequity here does not lie in the access to overheads but in the question often raised by our donors or partners asking, “Why do you need overhead costs?” or comments such as “You can charge all costs to the project, you do not need to recover any costs”.

In effect, when talking about the inequity in overheads, we need to take a step back from the access and focus on the need and the right of L/NNGOs to ask for this cost – as organisations and as humanitarian practitioners. Indeed, not all costs can be recovered under the project budget; core functions such as safeguarding, staff care, accountability, and so on, are costly and need dedicated resources. In the longer-term, overheads enable organisations to acquire further capacities that enable them to diversify their portfolio of fundings.

Different partners and stakeholders within the international community, including civil society organisations, agree that accessing and including overheads is crucial. However, this still remains insufficient as in practice many additional challenges arise, specifically the different percentages granted to local and international actors, or suggestions that local actors should include overheads in direct costs. Recent research carried out by DI on behalf of the IASC summarises our main challenge effectively: “the provision of overheads to L/NNGOs is inconsistent and at best ad hoc, both between and within organisations”.

Undeniably, many actors agree on the challenges, however it is currently imperative to move forward in the discussion with practical and actionable recommendations that could include ensuring that:

  • All actors (donors, UN, NGOs, etc) acknowledge the need for NGOs to recover their indirect costs through overheads no matter if they are local, national or international.
  • The IASC Guidance on the Provision of Overheads to Local and National Partners [8] is disseminated.
  • The percentages of overheads granted by donors and partners are the same between local and international NGOs.
  • Partners, when cascading funding to other L/NNGOs, are granting an equitable/proportional amount of their overheads.
  • Donors are embedding an equitable approach towards overheads in their policies.
  • The ‘right to fair overheads’ is known and reclaimed by local and national actors.

Finally, it is important to note that overheads are not a means to an end. They are one of the crucial funding tools enabling local and national actors in collaboration with other stakeholders to respond to the needs of the affected communities and to ensure a dignified, localised and sustainable response towards the humanitarian need.

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Figure 3.4: UN OCHA’s pooled funds provided more funding to local and national actors than ever before

CERF and CBPF allocations by partner type and share of allocations to local/national partners, 2017–2022

Figure 3.4: UN OCHA’s pooled funds provided more funding to local and national actors than ever before

Stacked column and line charts showing gradual increase in funding to local/national partners since 2017.

Source: DI based on country based pooled fund (CBPF) data and Central Emergency Response Fund (CERF) annual results reports.

Notes: RCRC = Red Cross Red Crescent. The 2021 CERF data is partial, representing sub-grants for 83% of the total allocations the CERF made that year. CERF data on indirect funding in 2022 is not yet available. Data is in constant 2021 prices.

UN OCHA pooled fund allocations to local and national actors

Pooled funds are seen as one mechanism to channel funding more quickly and effectively to frontline humanitarian responders. This includes local and national actors, and they are regarded as an important means to achieve the Grand Bargain commitment of providing at least 25% of global humanitarian funding directly to local or national actors, or through a single intermediary. UN OCHA’s CBPFs are able to directly fund local and national organisations, which in addition receive sub-grants within CBPF-funded projects. CBPFs also set a high standard on transparency of funding flows within the humanitarian system by providing data in close to real time on these allocations and sub-grants. While the CERF can only fund UN agencies, its funding is sub-granted to local and national actors. Total combined allocations by CBPFs and the CERF were the largest ever reported in 2022. The volume of funding allocated to local and national actors through CBPFs has slowly increased over recent years, and in 2022 it was the largest by volume and as a share of total allocations.

  • The combined allocations by the CERF and CBPFs in 2022 were the largest reported, at US$1.9 billion, an increase of US$60 million from the previous high in 2020. 63% of these allocations were from the 20 CBPFs and 37% from the CERF, a split consistent with the average over the past 6 years.
  • CBPFs allocated 28% (US$337 million) of funding to local and national actors in 2022, an increase from 24% (US$183 million) in 2017. Including funding that reached local and national actors through sub-grants from CBPF partners, this accounted for 36% of total allocations in 2022.
  • The CBPFs with the highest shares of funding allocated to local and national actors were the Venezuela Humanitarian Fund (66%, US$6.3 million), the Somalia Humanitarian Fund (61%, US$43 million) and the Democratic Republic of the Congo (DRC) Humanitarian Fund (46%, US$18 million). While the share allocated to local and national actors from the Venezuela Humanitarian Fund was already high since its first round of allocations in 2021, the Somalia Humanitarian Fund saw an increase from 38% in 2017 and the DRC Humanitarian Fund from 23% in 2019. The Nigeria Humanitarian Fund managed to achieve the largest increase in its share of allocations to local and national actors over the time period, growing from 5% (US$1.3 million) in 2017 to 36% (US$9.1 million) in 2022.
  • In total, the CBPFs that allocated the highest volumes of funding directly to local and national actors were the Afghanistan (US$62 million, 22%), Syria Cross Border (US$60 million, 42%) and Ukraine Humanitarian Funds (US$44 million, 23%).
  • Excluding CBPFs for Jordan and Iraq, which have been reducing their operations in 2022, those with the lowest percentages of funding to local and national actors in 2022 were the Central African Republic Humanitarian Fund (7%) and the CBPFs in Sudan and South Sudan (both 12%).
  • 9 of the 20 CBPFs active in 2022 allocated 25% or more of funding to local or national actors directly, the same average number across 2017 to 2022.

An increasing share of CERF funding is sub-granted to local and national actors. However, this technically does not count towards the Grand Bargain target as it is channelled through two intermediaries (CERF and subsequently UN agencies). [9]

  • In 2021, 18% (US$80 million) of CERF allocations were sub-granted to local and national actors, according to preliminary data for 83% of the total allocations the CERF made that year. This has slowly increased from 13% of total allocations (US$58 million) in 2013.
  • In late 2020, the CERF made its first ever allocation of US$25 million to specifically support local women-led or women’s rights organisations on gender-based violence prevention and response programming, through block grants to United Nations Population Fund (US$17 million) and UN Women (US$8 million). These grants included a condition that at least 30% of funds were granted to local women-led or women’s rights organisations. [10]
  • In 2020, the CERF made its first ever NGO allocation, in response to the Covid-19 pandemic in a joint pilot with the International Organization for Migration. In total, US$25 million was allocated. Of the 26 grants awarded, 8 went to national NGOs. While support to local and national actors specifically was not a stated objective, an independent review found that the large grants and application process made the allocation far less accessible for local and national NGOs. [11]

UN OCHA’s pooled fund country allocations

In 2022, UN OCHA’s pooled funds allocated a combined total of US$1.9 billion; 37% of this was allocated through the CERF and 63% was allocated through 20 CBPFs.

  • As in 2021, Afghanistan received the largest volume of allocations in 2022 from UN OCHA’s pooled funds (US$296 million). The Afghanistan Humanitarian Fund had the largest allocations of any CBPF that year, making up US$286 million of this amount.
  • The second largest country recipient was Ukraine, which received US$255 million in 2022, up from US$15 million in 2021. Ukraine was the largest country recipient of CERF funding (US$61 million), and the Ukraine Humanitarian Fund made the second highest volume of allocations (US$194 million) globally that year. Given the Ukraine Humanitarian Fund received the highest level of donor contributions out of all CBPFs in 2022 at US$341 million, its allocation will likely be even larger in 2023.
  • Syria received the third largest allocation of funding from UN OCHA’s pooled funds (US$213 million).

UN OCHA’s pooled funds contributions and donors

Pooled funds enable the collective commitment of resources and greater responsiveness to need. UN OCHA’s CBPFs and the CERF are a well-established part of the humanitarian response system. In 2022, CBPFs and the CERF jointly received the largest volume of contributions since 2017.

  • In 2022, CBPFs and the CERF received US$2.0 billion in contributions, an increase of a third (33%) since 2017.
  • This increase was mostly driven by donor contributions to CBPFs, which were the largest ever at US$1.4 billion. This volume compares to US$947 million in 2017 and is an increase of almost a quarter from 2021.
  • Contributions to the CERF have remained at a similar level over the period 2017 to 2022, fluctuating between US$585 and US$683 million, except for 2019 where exceptionally high contributions from the UK drove CERF contributions to US$942 million.
  • Overall, the balance of donor contributions to UN OCHA’s pooled funds has consistently shifted towards CBPFs since 2019, which made up 69% of total contributions in 2022 compared to an average of 60% in the previous five years.

Despite these high levels of contributions, UN OCHA’s pooled funds make up a decreasing share of the total international humanitarian assistance provided globally by public donors (governments and EU institutions). In part, this is explained by the small volume of support provided the US and EU institutions but whose assistance accounts for a large share of total public contributions of international humanitarian assistance.

  • The proportion of total international humanitarian assistance channelled through UN pooled funds has steadily decreased, from a 5-year high of 7.6% in 2019 to 5.4% in 2022.
  • Two of the largest donors that have driven increases in total international humanitarian assistance in recent years – the US and EU institutions – are small contributors to OCHA’s pooled funds relative to the size of their humanitarian budgets. The US made up only 2.7% of total contributions to CERF and CBPFs in 2022, compared to 39% of the total global assistance from public donors (see Figure 1.5, Chapter 1 ). EU institutions do not contribute to the CERF and only started to fund CBPFs in 2020, though so far at a small scale – around US$5 million per year.

A small number of donors provide the bulk of funding to UN pooled funds, especially Germany.

  • In total, two-thirds (66%) of total funding to UN pooled funds came from just five donors (Germany, the UK, the Netherlands, Sweden and Canada).
  • Germany continues to be by far the largest donor to UN OCHA’s pooled funds, contributing 29% of all funding received by the CERF and CBPFs in 2022 (US$602 million). This is similar to its share in 2021 (31%), following a large increase in its total contributions of US$159 million from 2020 to 2021.
  • The UK, formerly the largest contributor to UN OCHA’s pooled funds between 2017 and 2019, has since been the second largest contributor and provided 13% of total funding in 2022 (US$268 million), compared to an average of 30% from 2017 to 2019.

Other humanitarian pooled funds

In addition to UN OCHA-managed pooled funds, the number and size of other pooled funds have also grown in recent years. Pooled funds are seen as an effective way to shift decision-making closer to those affected by humanitarian crisis, contribute to commitments to increase funding to local and national actors and improve the flexibility, efficiency and timeliness of humanitarian funding. [12] Some pooled funds increasingly have anticipatory funding elements.

  • The Disaster Response Emergency Fund (DREF), managed by International Federation of Red Cross and Red Crescent Societies, was established in 1985 and disburses funding to RCRC national societies. In 2022, the DREF, including its anticipatory pillar, disbursed US$62 million to 91 national societies through a mixture of loans and grants. Of these disbursements, over half (54%, US$33 million) were focused on responses to weather-related events including floods and drought.
  • The Start Fund, the foremost NGO-managed pooled fund, disbursed US$20 million to its 55 members in 2021 of which US$4.0 million was provided directly or indirectly to local and national actors and US$3.1 million was disbursed for crisis anticipation. In 2021, Start Ready was launched, which provides pre-positioned funding for predictable crises. [13]
  • The Network for Empowered Aid Response (NEAR) Change Fund was established in 2022 with the aim of supporting more locally led humanitarian responses. Being funded by a single donor (the Conrad N. Hilton Foundation), it is not technically a pooled fund. So far, the fund has disbursed US$1.5 million to NEAR members. [14]
  • Other thematic pooled funds include the Women’s Peace and Humanitarian Fund (see Box 3.3 ), and Education Cannot Wait, which disbursed US$180 million in 2022, of which over half (59%) was provided to UN agencies, with 0.9% to national NGOs. [15]
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Box 3.3

Women’s Peace and Humanitarian Fund

The UN Women’s Peace and Humanitarian Fund (WPHF) is a multi-partner trust fund mobilising urgently needed financing for local civil society organisations led by and working alongside women on the front lines to respond to crisis and build lasting peace. Established in 2016, WPHF aims to address the structural funding barriers that hold back women’s participation and leadership in crisis and conflict settings. WPHF supports local and national women-led and women’s rights organisations, as well as young women-led and youth-focused organisations, to prevent conflict, respond to humanitarian emergencies, support the protection of women and girls, and accelerate peacebuilding and recovery efforts. In addition to programmatic funding, the fund has an institutional funding stream that aims to support the sustainability and resilience of grassroots women’s organisations through core funding, and an adaptive and rapid funding mechanism to support women humanitarians respond to emerging crises.

Since its inception, WPHF has mobilized US$130 million, [16] supporting over 900 civil society organisations and women peacebuilders across 41 countries. Over 40% of funding has been allocated for humanitarian and crisis response (including Covid-19 emergency response). [17] In total, 19 donors have contributed to WPHF. The largest donor by far is Germany, which has contributed nearly half (44%, US$57 million) of all funding. [18] In 2022 alone US$44 million was generated, an increase of 15% from the previous year and representing the highest growth since its inception. This was channelled through four funding windows: the regular funding cycle organised around six peace and humanitarian outcomes, the Covid-19 emergency response window, the WPHF rapid response window for women’s participation in peace processes and the implementation of peace agreements, and the window for women human rights defenders. In 2022, 76% of WPHF allocations were provided to local and subnational organisations. Close to half (44%) of the organisations that received funding from WPHF in 2022 are first-time recipients of UN funding. [19]

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What progress has been made towards delivering cash and voucher assistance?

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Figure 3.5: Global transfer volumes of humanitarian cash and voucher assistance saw their largest increase on record in 2022

Total humanitarian cash and voucher assistance transfer values, 2017–2022

Figure 3.5: Global transfer volumes of humanitarian cash and voucher assistance saw their largest increase on record in 2022

Stacked column chart showing sharp increase in 2022 with most accounted for by UN agencies.

Source: Development Initiatives based on data collected by the CALP Network from implementing partners and supplemented with UN Office for the Coordination of Humanitarian Affairs (OCHA) Financial Tracking Service (FTS) data.

Notes: RCRC = Red Cross and Red Crescent Movement. Data for 2022 is preliminary as data for some organisations has not yet been provided or is partial. Double counting of cash and voucher assistance programmes that are sub-granted from one implementing partner to another is avoided where data on this is available. Transfer values for funding captured on FTS are estimates based on the average ratio of transfer values to overall programming costs for organisations with available data. Data is not available for all included organisations across all years. Data is in current prices.

The Grand Bargain has helped to focus attention on the importance of humanitarian cash and voucher assistance (CVA) as a means to provide choice and greater agency to those experiencing humanitarian crisis. With consistent growth in the volumes provided over the past six years, the increased use of CVA is commonly cited as successful example of humanitarian system reform. [20] In 2022, the use of CVA accelerated in response to the Ukraine conflict and the globally rising levels of food insecurity. Despite the rapid growth in global volumes of international humanitarian assistance that year, CVA accounted for a slightly higher share of the total funding provided. This seventh consecutive year-on-year increase in 2022 was the largest on record.

  • Preliminary data on global humanitarian CVA shows that the volume transferred to people affected by crises rose to US$7.9 billion in 2022, an increase of 40% from 2021.
  • According to self-reports by implementing agencies, the large-scale use of CVA in the Ukraine crisis response was the most commonly cited reason behind those increases. In Ukraine alone, US$1.2 billion of multi-purpose cash assistance (MPCA) was transferred to crisis-affected people in 2022. [21] Other reasons were the suitability of CVA to respond to the global food crisis and growing CVA programmes in Afghanistan.
  • The large-scale MPCA response to the Ukraine crisis also contributed to the continued shift towards cash as the preferred delivery modality, making up 81% of total CVA globally (with 19% provided as vouchers). This is compared to the average of 72% as cash and 28% as vouchers from 2017 to 2021.
  • Data on overall CVA programming costs was only available for around 12% of the total global volumes of humanitarian CVA transfers. Applying the same average ratio of transfer costs to overall CVA programming costs (79%) to those for which data was unavailable, the global estimated volume of CVA programming – including both the transfer value and the associated programming costs – reached US$9.9 billion in 2022.
  • CVA made up an estimated 20% of international humanitarian assistance in 2022. This is only marginally higher than in 2021 (18%), [22] as global volumes of international humanitarian assistance also increased significantly in 2022 (see Figure 1.3, Chapter 1 ). Recent research suggests that according to implementing organisations’ own CVA targets, there is potential for at least 30% up to 50% of all international humanitarian assistance to be delivered through CVA. [23]

UN agencies continued to deliver the majority of humanitarian CVA in 2022 and saw the most significant increases in transfer volumes that year.

  • UN agencies provided two-thirds (US$5.2 billion, 66%) of the global total of humanitarian CVA transfer volumes to crisis-affected populations in 2022. This is the highest share for comparable data since 2017, compared to an average of 58% between 2017 and 2021. Overall, CVA transfer volumes from UN agencies increased by more than half (53%).
    • UNICEF more than doubled its volume of humanitarian CVA transfers in 2022 to US$725 million, of which the Ukraine response made up around 40%.
    • The Office of the United Nations High Commissioner for Refugees (UNHCR) increased its volume of humanitarian CVA transfers by 46% in 2022 to US$977 million, with the largest CVA operations in the Middle East and countries affected by the Ukraine crisis. [24]
    • World Food Programme increased its volume of humanitarian CVA transfers by 43% to around US$3.3 billion, partly due to scaled-up CVA responses to crises in Somalia, Ukraine and Afghanistan.
  • NGOs also increased their volumes of humanitarian CVA transfers in 2022, by 23% (to US$1.5 billion), as did organisations that are part of the RCRC Movement, by 20% (to US$1.2 billion):
    • Of NGOs with available data, the International Rescue Committee (IRC) experienced the greatest increase in CVA transfer volumes to US$80 million in 2022, more than double the 2021 amount. This was mainly thanks to IRC’s capacity to quickly scale-up MPCA programming in Ukraine, Poland and Afghanistan.
    • Within the RCRC Movement, the International Committee of the Red Cross experienced a particularly large increase in CVA transfer volumes, which more than tripled to US$333 million in 2022.

Despite these large increases in the global volumes of humanitarian CVA, DI research has found that publicly available and timely data on where, for what and by whom CVA is transferred to recipients remains sparse, with the exception of a few humanitarian crises. [25] This has important implications for the humanitarian policy agenda to increase funding to and visibility of local and national actors:

  • While more implementing organisations have been able to report on the volume of sub-grants they provide for the delivery of CVA – amounting to US$291 million in 2022 [26] – this data is not publicly available and thereby limits visibility of actors facilitating the CVA delivery, which often are local and national actors.
  • The growing share of CVA implemented by UN agencies in 2022 also points to the emerging tension between humanitarian commitments to increase the use of CVA and to localise humanitarian funding, [27] as funding for the implementation of CVA remains largely concentrated among international actors.

► Read DI’s comprehensive assessment of the state of tracking CVA during humanitarian crises.

Read our latest report on humanitarian finance and reform

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Notes

  • 2
    NEAR. Syria-Türkiye Solidarity Fund. Available at: https://www.near.ngo/syriatrkiye-solidarity-fund-mechanism
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  • 4
    Here indirect funding just refers to funding passed from a country based pooled fund (CBPF) to a local and national actor, with the CBPF identified as an intermediary. It therefore excludes funding passed from a CBPF to an international actor and then to a local or national actor. See figure 3.4 for analysis on CBPFs.
    Return to source text