To meet the needs of people affected by humanitarian crises, sufficient funding is crucial; but how assistance is delivered is also key to the effectiveness and efficiency of response. Change is evident in some aspects of how assistance is delivered but not all. Progress against key Grand Bargain commitments is uneven and reporting on these commitments remains inadequate.

How international humanitarian assistance is channelled to first-level recipients has changed little over the past five years. In 2018, most assistance (62%, US$15.6 billion) from government donors was provided to multilateral organisations. Well over three quarters of funding (89%) from private donors was channelled to non-governmental organisations (NGOs).

The Grand Bargain signatories committed to a 2020 target of at least 25% of international humanitarian assistance being passed to local and national actors as directly as possible. After slight growth since 2016, direct funding to local and national responders decreased in 2019, both as a proportion of total assistance (from 3.5% to 2.1%) and in absolute volumes (from US$782 million to US$444 million).

UN pooled funds enable a flexible response with collective impact. UN pooled funds received a record volume in 2019 of US$1,869 million, an increase of almost 25% from 2018. This was the sixth consecutive year of growth, with total funding more than doubling since 2013.

UN country-based pooled funds (CBPFs) allocated more than US$1 billion in 2019, more than doubling total allocations since 2015. NGOs continued to receive the bulk (71%) of CBPF funding in 2019, with funding to local and national NGOs increasing to almost 25% of total CBPF funding.

Unearmarked and multi-year funding provides recipients with greater flexibility and predictability. Data collected by Development Initiatives from nine UN agencies indicates that unearmarked funding received by these agencies has declined since 2015, in volume and as a proportion of total contributions.

Humanitarian assistance provided as cash or vouchers increased in 2019, both in volume and as a share of total humanitarian assistance. As in 2018, this increase was primarily driven by increases in volumes for UN agencies. Challenges remain, however, in reporting and tracking, including in the response to the Covid-19 (coronavirus) pandemic.

As total humanitarian assistance increased in 2018, channels of delivery remained largely the same as in 2017. The majority of government assistance continued to be directed to multilateral organisations, while private donors channelled most of their assistance to non-governmental organisations (NGOs). This trend appears to have continued in the initial response to the Covid-19 pandemic, with most government funding to date directed to multilateral organisations (see Chapter 4, Figure 4.6).

Funding is often passed to one or more intermediaries before reaching a crisis location. Beyond funding to first-level recipients, there continues to be a lack of data on subsequent transactions (see Chapter 4, Box 4.4, How can data on funding be traced from donor to final recipient?).

• In 2018, governments directed almost two thirds (US$15.6 billion, 62%) of their humanitarian assistance to multilateral organisations. This is a decrease as a proportion of total assistance from 63% in 2017, but an increase in volume from US$14.6 billion. This proportion has remained relatively steady over the last five years, ranging between 58% in 2015 and 64% in 2014. By volume, this amount has increased each year from US$11.6 billion in 2014.
• Governments directed 16% (US$4.1 billion) of their humanitarian assistance to NGOs in 2018. This proportion decreased from 20% (US$4.6 billion) in 2017.
• The bulk of international assistance from private donors was directed to NGOs in 2018, with 89% (US$5.3 billion) of private funding received by NGOs. Private contributions comprised over half of the total funding to NGOs in 2018, with 56% of humanitarian assistance received by NGOs coming from private donors.
• International humanitarian assistance from private donors to multilateral organisations grew from US$467 million in 2017 to US$551 million in 2018. This represented a slight growth in the proportion of private donor funding going to multilateral organisations, from 8% in 2017 to 9% in 2018.

Funding to NGOs from all donors as a proportion of total international humanitarian assistance decreased from 35% in 2017 to 30% in 2018.

The Grand Bargain set a 2020 target of at least 25% of international humanitarian assistance being passed to local and national actors as directly as possible.^[1] This was followed by a subsequent agreement that this should relate to funding passing directly, and indirectly, through one intermediary.^[2] Reporting of indirect funding, however, continues to be partial and incomplete.

Where comprehensive data is available on direct funding, it shows two consecutive years of small increases in 2017 and 2018. In 2019, there was a decrease in assistance sent directly to local and national actors as a proportion of all international humanitarian assistance. Absolute volumes sent directly to local and national actors also dropped significantly in 2019, down 30% from 2016 when the Grand Bargain target was set.

• International humanitarian assistance sent directly to local and national actors as a proportion of all international humanitarian assistance decreased in 2019, with 2.1% (US$444 million) directed to local and national actors, decreasing from 3.5% (US$782 million) in 2018.
• National governments continued to receive the majority of direct funding to local and national actors in 2019, although this decreased in percentage terms from previous years. The proportion of direct funding to local and national actors that was passed to national governments dropped to 72% (US$318 million) in 2019, from 81% (US$634 million) in 2018. This reduction was largely due to a 65% decrease in funding received by the Yemeni government, dropping from US$470 million in 2018 to US$163 million in 2019.
• Local and national NGOs received 25% of international humanitarian assistance provided directly to local and national actors in 2019. This was a significant increase from 17% in 2018, and markedly up from 12% in 2016. The increase in the proportion of funding that local and national NGOs received in 2019 was not, however, due to increased funding, but rather was driven by the decrease in funding received by national governments.
• The volume of funding received by local and national NGOs decreased from US$134 million in 2018 to US$110 million in 2019. This drop is largely accounted for by a fall in funding to local NGOs from US$33 million in 2018 to US$5 million in 2019.
• The majority of the remaining 3.7% of international humanitarian assistance provided directly to local and national actors was directed to National Societies of the International Red Cross and Red Crescent Movement (3.5%).

UN and NGO pooled funds combine contributions from different donors to enable rapid and strategic humanitarian responses. The pooled funds provide flexible funding that can be used where the need is greatest. Since 2013, total funding to UN pooled funds has more than doubled. As a proportion of total public contributions, however, funding to pooled funds has shown a slower increase over the same period.

• UN pooled funds received a record level of funding of US$1,869 million in 2019, an almost 25% increase from US$1,498 million in 2018. This was the sixth consecutive year of growth in contributions to UN pooled funds.
• The rise in 2019 was largely due to a 55% increase in funding to the Central Emergency Response Fund (CERF). Funding to the CERF grew from US$555 million in 2018 to US$860 million in 2019, making 2019 the fourth consecutive year of growth in funding to the CERF.
• Funding to country-based pooled funds (CBPFs) increased by only 7% in 2019, from US$942 million in 2018 to US$1,009 million. This was the smallest yearly increase in funding to CBPFs since 2013.
• In the 2010–2019 period, funding to UN pooled funds more than doubled, from US$827 million to US$1,869 million. As a proportion of total public contributions, funding provided to pooled funds notably increased in 2019 to 8.1%, up from 5.9% in 2018. Proportionally, the total public contributions to international humanitarian assistance that this represents had ranged between only 5.0% and 6.6% since 2010.

A small group of country donors is responsible for the majority of contributions to UN pooled funds.

• Five countries provided almost 75% of total contributions in 2019: the UK (US$357 million), Germany (US$173 million), Sweden (US$96 million), the Netherlands (US$64 million) and Belgium (US$50 million).
• In 2019, the UK increased its funding to the CERF by US$290 million. This more than tripled its previous year’s contribution, from US$114 million in 2018 to US$404 million in 2019. This increased contribution drove the overall increase in funding to the CERF in 2019.

UN-managed CBPFs respond to needs in specific country contexts. The funds are managed in-country and allocated to a range of implementing partners. NGOs receive more than two thirds of the funding allocated from CBPFs, and CBPFs are the largest single source of direct funding to local and national NGOs.

• Total allocations from UN CBPFs increased by 24% in 2019 to US$1,040 million. Since 2015, allocations from CBPFs have more than doubled, from US$516 million.
• Four CBPFs accounted for half of the CBPF allocations in 2019: Yemen (23%, US$244 million), Syria Cross-border (11%, US$118 million), South Sudan (7.8%, US$82 million) and Iraq (7.6%, US$79 million).
• NGOs received US$741 million (71% of total CBPF funding) in 2019, up from US$567 million (68%) in 2018. Since 2017, the volume of funding allocated to NGOs has increased year on year: rising 0.4% in 2017 and 15% in 2018.
• Of CBPF funding allocated to NGOs in 2019, 65% (US$483 million) was directed to international NGOs and 35% (US$258 million) to local and national NGOs.

CBPFs are an important source of funding for many local and national actors, with significant proportions of CBPF funding allocated to them. Despite this positive trend, funding to CBPFs remains only a small part of total humanitarian assistance, representing just 4% of total public donor contributions in 2019. This indicates that CBPFs are only part of the solution to passing more funding to local and national actors.

• Local and national NGOs are receiving an increasing share of the total allocations from CBPFs. In 2019, local and national NGOs received 25% of the total funding from CBPFs, rising each year since 2015 when local and national NGOs received a 15% share.
• This growth was largely driven by five CBPFs allocating increasing proportions to local and national NGOs: the occupied Palestinian territory Humanitarian Fund (a 738% increase in the 2016–2019 period), the Somalia Humanitarian Fund (628%), the South Sudan Humanitarian Fund (172%), the Yemen Humanitarian Fund (170%) and the Democratic Republic of the Congo Humanitarian Fund (74%).
• The proportion of allocations made to local and national actors varies between CBPFs. In 2019, the Iraq Humanitarian Fund allocated 0.9% (US$0.6 million) of its funding to local and national NGOs, while the occupied Palestinian territory Humanitarian Fund allocated 36.9% (US$6.2 million) of funds to local and national NGOs. The Somalia and South Sudan Humanitarian Funds also allocated around one third of their disbursements to local and national actors in 2019, allocating 34.4% (US$15.0 million) and 32.1% (US$23.4 million), respectively.
• The Yemen Humanitarian Fund allocated US$46.2 million to local and national NGOs in 2019 (19.2% of the fund’s total allocations), the largest volume of any CBPF.
• The volume of allocations from CBPFs to UN agencies increased by 11% in 2019 to reach US$286 million, rising from US$259 million in 2018. The total proportion of CBPF allocations directed to UN agencies has been consistently decreasing, however, dropping from 38% in 2015 to 28% in 2019.

‘Quality funding’ encompasses a range of properties that are valuable to different actors in different circumstances, and can include financing that is multi-year, unearmarked or otherwise flexible. The Grand Bargain set specific targets on multi-year and unearmarked funding; however, reporting and tracking progress against these aims remains challenging (see Box 3.2, What progress has been made on how multi-year funding and unearmarked funding is reported?).

Research published in 2020 by Development Initiatives, Multi-year humanitarian funding: global baselines and trends,^[3] found that funding identified by 11 donors as multi-year had grown each year since 2016, both by volume and as a proportion of total humanitarian contributions.

Signatories to the Grand Bargain committed to “achieve a global target of 30% of humanitarian contributions that is non-earmarked or softly earmarked by 2020.”^[4] Data collected from nine UN agencies indicates that unearmarked funding as a proportion of total funding has decreased steadily since 2015. The volume of unearmarked funding increased between 2015 and 2018, before dropping in 2019 to below-2015 levels.

• Between 2015 and 2019, unearmarked funding to the nine UN agencies decreased by US$140 million. The amount of unearmarked funding as a proportion of total funding decreased each year, from 20% in 2015 to 14% in 2019.
• The drop in the proportion of unearmarked funding in 2019 was driven by a 30% increase (US$1.7 billion) of earmarked funding to the World Food Programme (WFP), rising from US$5.7 billion in 2018 to US$7.3 billion in 2019.
• Only three of the UN agencies saw reductions in the amount of unearmarked funding between 2015 and 2019: the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) (a decrease of US$190 million, 24%), the UN International Children’s Emergency Fund (a decrease of US$66 million, 31%), and the UN High Commissioner for Refugees (a decrease of US$22 million, 2%).
• The three UN agencies receiving the largest volumes of unearmarked funding in 2019 were the UN High Commissioner for Refugees (US$1,280 million), UNRWA (US$596 million) and WFP (US$298 million).
• Five UN agencies saw an increase in unearmarked funding across the 2015–2019 period. The largest increases were to the WFP (an increase of US$60 million), the World Health Organization (an increase of US$32 million), and the UN Development Programme (an increase of US$21 million).
• Between 2015 and 2019, earmarked funding grew significantly, with the nine UN agencies reporting a cumulative increase of US$5.4 billion (an increase of 51%).

Humanitarian assistance provided as cash or vouchers can offer greater flexibility and choice to beneficiaries, compared with assistance provided as in-kind goods. Cash can empower recipients and help strengthen local markets. In the Grand Bargain, signatories agreed to “increase the use and coordination of cash-based programming”,^[9] yet challenges remain in the reporting and tracking of the use of humanitarian cash and voucher assistance (CVA).

Available data (see Box 3.3, The potential of cash in responding to the Covid-19 pandemic) shows that the rate of growth of humanitarian CVA volumes continued uninterrupted in 2019, representing an increasing share of humanitarian assistance globally.

• Both the volume of funding transferred to beneficiaries and the programming costs of humanitarian CVA increased significantly in 2019, to US$4.3 billion (up 21%) and US$5.6 billion (up 20%) respectively from the previous year.
• As in 2018, this increase was primarily driven by increases in CVA volumes for UN agencies. This uneven growth across organisation types means the UN further accounted for almost two thirds (62%) of transfers to beneficiaries in 2019, compared with 53% in 2017. The WFP alone accounted for 38% of the humanitarian CVA transferred to beneficiaries in 2019 globally.
• All three organisation types (UN agencies, NGOs and the International Red Cross and Red Crescent Movement), however, increased their volumes of humanitarian CVA transferred to beneficiaries in 2019, by 25%, 21% and 12% respectively.

This growth in volume has outpaced humanitarian assistance more widely, such that humanitarian CVA has an increasing share of total humanitarian assistance.

• According to approximate estimates, CVA programming costs accounted for around 18% of total international humanitarian assistance in 2019, up from 14% in 2017 and 2018.
• This, however, is a comparison between inputs to, and outputs of, the international humanitarian system that are collected from two very different sources: donor data for international humanitarian assistance and implementing organisation data. A lack of reporting to interagency tracking platforms on how assistance reaches affected populations – in the form of services, cash and vouchers or in-kind assistance – means there is no data in between what donors contribute to humanitarian responses and how implementing organisations deliver assistance.
• The estimated percentage of humanitarian CVA transferred in the form of cash increased slightly from 2018 to 2019, from 74% to 75%. This slight growth follows a period of sustained increases in the use of cash assistance, with the proportion of cash used in humanitarian CVA rising from 55% in 2015 to 74% in 2018.