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  • Background paper

Multi-year humanitarian funding: Global baselines and trends: Chapter 9

Conclusions and recommendations

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Donors and aid organisations agree that multi-year humanitarian funding has several benefits. Consensus points towards the suitability of long-term funding primarily in protracted or recurrent crises. In such settings, multi-year funds are reported to enable responders to sustain operations (often with lower transaction costs), invest in partners and strengthen their capacity, as well as to invest in learning and development. Equally, when crises escalate, aid organisations report using multi-year grants as bridge funding, until crisis-specific institutional funding is released. They also indicate that multi-year grants enable them to be more strategic and predictable, and consequently to respond more effectively. Such grants enable some aid organisations to make more substantive investments in their local partners and so to prepare exit strategies, particularly in smaller-scale crises.

Given these perceptions of the benefits of multi-year funding, it is encouraging that data from donors and aid organisations shows that volumes of multi-year humanitarian funding have increased. Both report that they are taking more intentional, long-term approaches to respond to crises. However, aid organisations remain cautious when it comes to programming predictably, due to a lack of income visibility and the conditionalities that accompany some multi-year grants. Nonetheless, there is a basis from which to make further progress in multi-year humanitarian funding and to enhance the evidence base for what works best, where.

The data analysis and interviews with donors and aid organisations indicate several key recommendations for making and assessing further progress with multi-year humanitarian funding.

Donors and aid organisations should agree a shared definition and lexicon for multi-year humanitarian funding. This would address issues of alignment of donor and aid organisation data and funding cycles. Initial efforts could focus on donors and implementers agreeing a glossary of financial terminology and typologies of multi-year or earmarked grants. A shared lexicon would facilitate clearer reporting, providing visibility and attribution for accountability purposes, and developing the foundation for future measurement frameworks.

Donors and aid organisations should discuss and agree on the expected outcomes and results that multi-year humanitarian funding can realistically achieve. There is a need to match donors’ expectations with what aid organisations can achieve with multi-year funding. This also relates to the tension between responding to immediate versus longer-term needs, to the limits of humanitarian response, and how best to integrate or transition to development activities. Consideration of what multi-year humanitarian funding can achieve will improve contractual partnerships and help to achieve better results at country level, supporting a shift from activities to results. Future research could focus on mapping existing long-term funding and programming indicators against an aspirational list of longer-term outcomes, to test assumptions and review results.

While there is demand for more evidence, including programme evaluations, donors and aid organisations should more systematically share existing evidence as a first step. Donors and aid organisations do not consistently share knowledge gained on their multi-year programmes. Rather than penalise circumstantial lack of progress, incentives should focus on capturing lessons and best practice. More evidence is also needed on how earmarking of multi-year grants prevents predictable planning for aid organisations, or conversely, what it has enabled them to achieve. Some aid organisations have reported their successes in using flexible, predictable funds in “neglected” crises or to establish local partnerships. Further examples of such initiatives would consolidate the business case for unearmarked multi-year funding.

Donors should indicate the timeframe of funding when they report to OCHA’s FTS and publish to IATI. Similarly, aid organisations should comprehensively report and publish the funding they distribute, indicating the timeframe. Given that aid organisations’ internal financial reporting processes may not readily provide this information, a first step for some when adapting existing accounting processes may be to assess what data is minimally required, how this could be collated and at what cost.

Donors should seek to enhance the coordination of funding decisions with other donors, acknowledging that the scope for taking multi-year approaches in the short term varies between donors. Multi-year humanitarian funding is well integrated into some donors’ grant-making processes, while others are restricted primarily to following the annual funding cycle. However, the latter may seek to award funds more flexibly, to respond to escalations in crises or to fund those deemed less suited to multi-year responses. More donor coordination would aid response by enabling a more balanced allocation between predictable and flexible grants.

Donors and aid organisations should continue to pursue coordination between their multi-year programmes and the multi-year UN appeals. Such coordination is currently sporadic and relies on organisations’ individual tendency to engage with UN appeal processes. There remains opportunity to enhance coordination between donors, implementers and UN appeals, which OCHA could further support at inter-agency level.

Aid organisations should seek to build on the closer alignment with non-humanitarian responders which multi-year programming has enabled in some crisis settings. For example, there is opportunity for enhanced complementarity between humanitarian aid organisations and domestic governments, development banks and other development actors who take a long-term view to supporting people in need.