Patterns of funding allocation from public and private donors to first-level recipients have varied little between 2013 and 2017. In 2017, governments directed almost two thirds (64%, US$14.0 billion) of international humanitarian assistance to multilateral organisations. Meanwhile, most funding (85%, US$5.7 billion) from private donors was channelled to NGOs.

Channelling funding to local and national actors is recognised as an important way of providing responsive and effective assistance to people in need. Direct funding to local and national actors, as reported to UN Office for the Coordination of Humanitarian Affairs (OCHA)’s Financial Tracking Service (FTS), has grown since 2016, to US$648 million in 2018. Yet this accounted for just 3.1% of total humanitarian assistance, a slight rise from 2.8% in 2017. Reliable analysis of the Grand Bargain target of 25% of funding transferred “as directly as possible” is, however, impeded as only a small portion of indirect funding – through one intermediary – is currently reported to FTS.

Pooled funds play an important role in humanitarian response, allowing for flexible and collective responses. Funding provided to UN pooled funds doubled between 2013 and 2018 (from US$717 million to US$1,439 million). These funds received 6.4% of all international humanitarian assistance from public donors in 2018, an increase from 5.1% in 2013.

The predictability and flexibility offered by unearmarked and multi-year funding can enable more efficient and effective delivery of assistance in complex and protracted crises. However, reporting of this funding is currently limited. Between 2014 and 2018, unearmarked funding to nine UN agencies increased in volume, by US$604 million (28%) to a total of US$2.8 billion. Yet as a proportion of total contributions to these agencies, unearmarked funding has fallen incrementally from 20% in 2015 to 17% in 2018. In 2018, data collected directly from donors showed that multi-year funding accounted for 37% of their total humanitarian-related contributions, increasing from 33% in 2017. However, data reported by implementing agencies indicates that they received only 13% as multi‑year funding. Some of this discrepancy may be explained by the absence of a common definition and agencies having other income sources beyond public donors.

Cash-transfer programming can enable recipients to choose how best to meet their needs, with the potential to offer gains in dignity. Volumes of humanitarian cash and voucher assistance continued to rise to a record US$4.7 billion in 2018. An increasing proportion of this assistance has been transferred to beneficiaries in the form of cash rather than vouchers since 2015, rising from 55% to 78% in 2018.

The available data provides a clear picture of how international humanitarian assistance is passed from donors to first-level recipients. In some cases, funding passes no further and is used directly to assist people in need. However, funding often continues to be passed to one or more intermediaries before reaching the crisis location. For these subsequent transactions data is more limited or entirely lacking. For funding to first-level recipients, the data indicates that patterns of funding allocation from public and private donors have varied little between 2013 and 2017.

• In 2017, governments directed almost two thirds (64%, US$14.0 billion) of international humanitarian assistance to multilateral organisations. This represented an increase from the 60% (US$12.6 billion) provided in 2016 but remained consistent with proportions allocated since 2013. These have fluctuated between a low of 58% in 2015 and a high of 65% in 2013.
• Private funding to multilateral organisations increased both proportionally and by volume between 2016 and 2017, from 10% (US$572 million) to 12% (US$767 million). This compares with an average from 2013 to 2017 of 10%.
• As in previous years, in 2017 most (85% or US$5.7 billion) international humanitarian assistance from private donors was channelled to NGOs. The proportion of total private funding to NGOs has remained consistent over the past five years with on average 86% passed directly.
• NGOs received less by volume from governments (US$4.1 billion) than from private donors in 2017. Direct funding to NGOs accounted for 19% of all government allocations in 2017, falling from 20% in 2016, though representing the same overall volume of US$4.1 billion.
• The international humanitarian assistance channelled by private donors to NGOs made up well over half (58%) of the total funding they received in 2017, consistent with the average of 58% during the period 2013 to 2017.

Measuring progress towards the Grand Bargain’s 2020 “global, aggregated target of at least 25% of international humanitarian funding [passing] to local and national actors as directly as possible” remains challenging.^[1] Direct funding to local and national actors has grown by volume and proportionally since 2016 but remains a small share of total humanitarian assistance.

• International humanitarian assistance sent directly to local and national responders as a proportion of all international humanitarian assistance increased for the second consecutive year. In 2016, 2.0% (US$433 million) was reported to FTS as having been directed to local and national responders, increasing to 2.8% (US$552 million) in 2017 and 3.1% (US$648 million) in 2018.
• Of funding flowing directly to local and national actors, national governments continued to receive the majority. The proportion of this direct funding passed to national government grew to 83% (US$538 million) in 2018, up from 80% (US$347 million) in 2016 and 81% (US$448 million) in 2017.
• Conversely, the proportion of direct funding to local and national actors received by local and national NGOs has fallen, from 17% of direct funding in 2017 to 15% in 2018.
• This decrease was driven by a fall in the amount of funding that went to national NGOs, from US$83 million in 2017 to US$65 million in 2018.

The working definition of funding passed “as directly as possible” includes funding that is transferred through one intermediary to a second-level recipient.^[2] Consistent, comparable reporting of funding through one intermediary is very limited. In 2018, only 7.9% of the total volume of flows were reported to UN OCHA FTS at this second level, though this represents a slight increase from 7.1% in 2017.^[3]

• The limited data reported to FTS indicates that funding provided to local and national responders directly and through one intermediary accounted for 3.8% (US$783 million) of total humanitarian assistance in 2018, up from 3.5% (US$681 million) in 2017.
• At country level, more comprehensive data collected in Uganda and Bangladesh indicates the proportions of funding passed directly and through one intermediary to local and national actors were significantly higher, at 8.4% and 9.7%, respectively.^[4]

Pooled funds play an important role in humanitarian assistance, allowing for flexible and collective responses. UN and NGO-led funds can enable rapid responses and provide funding where gaps in other assistance are identified. Since 2013, the volume of total funding to UN pooled funds has doubled. Proportionally, the total public contributions to international humanitarian assistance that this represents has also increased, but at a slower rate.

• UN pooled funds received a record level of funding of US$1,439 million in 2018, the fifth consecutive year of growth and a 3.9% increase from the US$1,385 million contributed in 2017.
• Of this funding, country-based pooled funds (CBPFs) received US$911 million and the Central Emergency Response Fund (CERF) US$528 million.
• Funding provided to UN pooled funds has doubled since 2013 (from US$717 to US$1,439 million). However, sharp rises in total international humanitarian assistance over the same period mean that the proportion of all public donor contributions provided to these funds has grown by only 1.3%. These funds accounted for 6.4% of donor contributions in 2018, a return to a level just above the 6.0% three-year average between 2009 and 2012.

With the increase in overall funding to UN pooled funds, a growing share is directed to CBPFs and then passed onto NGOs.

• While funding to both CBPFs and the CERF has risen since 2013, the proportion of all funding allocated to each has shifted, with the share received by CBPFs growing from 43% in 2013 to 63% in 2018.
• CBPFs have disbursed an increasing proportion of their funding to NGOs, with allocations increasing by 139%, from US$201 million to US$482 million, between 2014 and 2018. This represents an increase from 52% to 65% in the proportion of total CBPF allocations passed to NGOs.
• 33% (US$158 million) of CBPF contributions to NGOs were channelled to local and national actors in 2018.
• The CBPFs receiving the largest allocations in 2018 were Yemen and Syria, which both had sharp increases in funding from 2017, rising by US$53 million to US$181 million and by US$25 million to US$112 million, respectively.
• The largest allocations of CERF funding in 2018 were to the Democratic Republic of the Congo (US$56 million) and Yemen (US$48 million).

The majority of funding to UN pooled funds has come from a small group of donors since 2014.

• Between 2014 and 2018, five countries provided nearly three quarters (73%) of all contributions to pooled funds: the UK (US$1.6 billion), Germany (US$809 million), Sweden (US$789 million), the Netherlands (US$653 million) and Norway (US$403 million).

The Grand Bargain commitment to improve the flexibility of funding seeks to “achieve a global target of 30% of humanitarian contributions that is non-earmarked or softly earmarked by 2020.”^[5] Regular and consistent reporting of unearmarked funding does not yet occur.^[6] Data collected directly from nine UN agencies indicates that the proportion of unearmarked funding received by these agencies has declined steadily for the past three years.

• Between 2014 and 2018, unearmarked funding to nine UN agencies increased by US$604 million (28%) to US$2.8 billion. 79% of this total came from increases in unearmarked funding to the UN High Commissioner for Refugees (UNHCR) of US$305 million and to the UN Relief and Works Agency for Palestine Refugees in the Near East of US$173 million.
• Over the same period the volume of earmarked funding has increased at an even faster rate, rising by US$4.2 billion, an increase of 45%. Consequently, the proportion of funding reported as being unearmarked has incrementally fallen since 2015, from 20% to 17% in 2018.

The volume and proportion of total unearmarked funding received by individual UN agencies vary markedly between agencies.

• Unearmarked funding to the Food and Agriculture Organization (FAO), rose by 90% (US$4.4 million) in 2018, though this unearmarked funding still accounted for only 1.5% of FAO’s total budget. Unearmarked funding also increased to the UN Development Programme, by 25% (US$5.6 million), World Food Programme, by 19% (US$45 million), and UN OCHA, by 18% (US$19 million) in 2018.
• The World Health Organization, UNICEF and UNHCR all reported decreases in the volume of unearmarked funding received in 2018, falling by 16% (US$12.1 million), 9.7% (US$15.9 million) and 3.6% (US$48.4 million), respectively from 2017.

Multi-year funding provides predictable resourcing that can enable more efficient and effective delivery of assistance to people in need. Openly reported data on flows of multi-year funding from donors to first-level recipients and any subsequent passthrough of funding is limited (see Box 4.1). Independently collected data from donors and first-level recipients indicates that the volume and proportion of international humanitarian assistance provided as multi-year funding in 2018 has grown.^[7]

• In 2018, multi-year funding accounted for 37% of total humanitarian-related contributions from 11 donors, increasing from 33% in 2017 and 32% in 2016.
• Between 2016 and 2018, the volume of funding reported as multi-year has grown from US$2.7 billion to US$4.8 billion, an increase of three quarters (75%).

There is no commonly applied definition of multi-year funding, either by time period of agreement or contract conditions. This hampers analysis and may in part explain the apparent disparity between the volumes of multi-year funding donors report granting and those that first-level recipients report receiving.

• Most donors reported that multi-year funding grants were those with a duration of 24 months or more.
• Where donors reported grants as multi-year with a duration of between 12 and 24 months, this accounted for 8% (US$922 million) of total multi-year funding reported from 2016 to 2018.
• In 2018, data collected from 10 agencies indicated that they received only 13% of funding as multi-year, compared with the 37% donors reported allocating.

The transfer of multi-year funding to implementing agencies is critical if it is to have a transformative impact on the delivery of assistance to people in need. Independently collected data shows that donors passed the largest volumes of multi-year funding to UN agencies and international NGOs. However, tracking data on subsequent transactions of multi-year funding beyond the first level remains challenging both at organisational and system-wide levels.

• Between 2016 and 2018, international organisations (UN agencies, international NGOs and other multilateral organisations) received a growing proportion of donors’ reported multi-year funding, increasing from 60% (US$1,634 million) to 71% (US$3,397 million).
• Among these international organisations, UN agencies received the largest proportion, up from 30% (US$817 million) in 2016 to 45% (US$2,153 million) in 2018.
• Direct multi-year funding to local and national actors and pooled funds has increased sharply between 2016 and 2018 and was 19 and 22 times greater respectively in 2018. Yet despite this growth, local and national actors directly received only 2% of total reported multi-year contributions and pooled funds received only 1%.

Cash-transfer programming can enable recipients to choose how best to meet their needs, with the potential to offer gains in dignity. More agencies are now tracking their cash-transfer programming but challenges remain and openly reported data is limited. Data collected directly from donors and agencies by Development Initiatives indicates that while volumes of humanitarian cash and voucher assistance continued to rise to a record US$4.7 billion in 2018, the pace of growth is slowing.

• Global volumes of humanitarian cash and voucher assistance programming grew by 10% from 2017 to 2018.
• This growth was largely driven by an increase in cash and voucher assistance programming by UN agencies (increasing by 25% to US$2.8 billion). Volumes implemented by NGOs and the International Red Cross and Red Crescent Movement (RCRC) remained at a similar level although they decreased slightly as a proportion of total global cash and voucher assistance (from a combined 46% to 40%).
• The apparent increase of US$1.5 billion from 2016 to 2017 in the global volumes of cash and voucher assistance programming was mostly due to newly available data from the RCRC.
• Discounting this previously unavailable data, growth from 2016 to 2017 in the global volume of cash and voucher assistance programming was 21%, down from a 38% increase from 2015 to 2016.

An increasing proportion of cash and voucher assistance has been transferred to beneficiaries in the form of cash since 2015, compared with vouchers.

• In 2015, there was a roughly equal split between the use of cash for transfers, at 55% and vouchers, at 45%. However, by 2018 the preference for using cash is much more distinct, accounting for 78% of transfers. Meanwhile vouchers were used in just 22% of transfers.
• The growing proportion transferred in the form of cash is largely driven by a shift in the practice of UN agencies, with their use of cash for transfers growing from 45% in 2015 to 72% in 2018.^[9]
• Both NGOs and the RCRC have consistently preferred the use of cash for transfers. In 2018, NGOs transferred 78% and RCRC 95% as cash – a slight decrease from 2017 for NGOs, from 84%,^[10] and a rise for the RCRC, from 82%.