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Summary of Catalogue of Quality Funding Practices to the Humanitarian Response

Core Content

This report, published by the Norwegian Refugee Council (NRC) and Development Initiatives (DI), serves as a reference tool for policymakers and practitioners aiming to improve the efficiency and effectiveness of humanitarian funding. It provides examples of quality funding mechanisms and includes case studies to illustrate how these mechanisms are implemented and their impacts.

The document is the second edition of a catalogue first published in 2020, updated in 2024 in response to the Grand Bargain signatories' call for enhanced quality funding by 2026. It outlines 11 types of funding mechanisms and 11 case studies, offering a descriptive overview rather than an exhaustive evaluation.

Main Views and Key Information

Quality Funding Properties

The report identifies several key properties that define quality funding:

• Funding Duration: Multi-year funding (24 months or more) allows for long-term planning and sustained support.
• Earmarking: The degree to which funds are restricted geographically or thematically. Fully unearmarked funds offer the most flexibility.
• Flexibility to Adapt: Enables funders to adjust spending based on changing needs, even within earmarked frameworks.
• Reporting Requirements: Frequency and detail of reporting impact transparency and accountability.
• Disbursement Timeliness: How quickly funds are released and their timing in the funding cycle.
• Accessibility: Who can access the funding (e.g., local, national, or international actors).
• Locally Led: Facilitates local decision-making and ownership.
• Other Funding Conditions: Restrictions or requirements on how funds are used, such as indirect cost recovery or conditions for release.

Funding Mechanisms

The catalogue includes the following 11 funding mechanisms:

1. Multi-year core support to UN organisations
2. Strategic NGO partnerships
3. Multi-year, unearmarked funding to an NGO alliance
4. Funding earmarked to a refugee situation or a region
5. Multi-year funding at country level
6. UN internal pooled funding mechanisms
7. Resilience Food Security Activities - Ethiopia
8. Rapid response funding mechanisms for NGO action
9. Locally led humanitarian funds
10. Localised NGO consortia
11. NGO-led crisis response funds

Each mechanism includes a description, how it operates, key features (including earmarking, flexibility, reporting, and conditions), advantages and disadvantages, and lessons learned.

Case Studies

The report also features 11 case studies, including:

• Start Network's Global Start Fund
• UN OCHA's Country Based Pooled Funds
• CERF's support for anticipatory action
• RCRC National Societies Development Funds Ecosystem
• Spain's Framework Agreements for Emergency Assistance and Humanitarian Action
• UNFPA Humanitarian Action Thematic Fund
• Programme Based Approach
• Programmatic Partnership
• Concertación Regional para la Gestion de Riesgos (CRGC)
• NEAR Change Fund
• The Human Mobility Hub

These case studies highlight real-world applications of the funding mechanisms and provide insights into their effectiveness and challenges.

Key Advantages and Disadvantages of Quality Funding

Advantages

• Predictability and Sustainability: Multi-year funding supports long-term planning and reduces administrative burden.
• Strategic Use: Enables recipients to use funds strategically to address complex humanitarian needs.
• Localisation and Inclusion: Supports local and national actors, enhancing community ownership and response.
• Reputation and Relationships: Builds trust and improves donor-recipient relationships.
• Innovation and Adaptation: Encourages innovative approaches and flexible adaptation to emerging crises.

Disadvantages and Challenges

• Visibility and Transparency: Core funding may have limited visibility for donors, making it difficult to demonstrate impact.
• Administrative Burden: Some mechanisms require significant administrative effort, especially during proposal and reporting stages.
• Inflation Risk: Multi-year funding may lose value over time if not adjusted for inflation.
• Geographical Allocation: Core donors may have limited control over where funds are directed, which can be a challenge in politically sensitive contexts.
• Reporting Complexity: While reporting is often simplified, it can still be time-consuming and resource-intensive.

Lessons from Users

• Trust and communication are essential for successful multi-year arrangements.
• Flexibility is a key enabler of effective humanitarian response, even within earmarked frameworks.
• Local and national NGOs benefit from multi-year funding and partnerships, especially when supported with capacity-building measures.
• Donors should ensure that funding mechanisms allow for transparency and visibility to maintain accountability and public support.

Conclusion

The report underscores the importance of multi-year, flexible, and unearmarked funding in enhancing the efficiency and effectiveness of humanitarian response. It serves as a guide for donors and recipients to consider and adopt quality funding practices that align with the Grand Bargain and broader humanitarian goals.