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norwegian refugee councilBRIDGING THE NEEDS-BASED FUNDING GAP:NGO FIELD PERSPECTIVES
BRIDGING THE NEEDS-BASED FUNDING GAP:NGO FIELD PERSPECTIVESLydia Poole2014Independent study commissioned by NRC
Researched and written by: Lydia PooleLeone, Sudan, South Sudan and Myanmar, and formerly led the Global Humanitarian Assistance programmeEditor: Cherry EkinsEditorial support: Anike Dohertycover and back page photos by: Christian Jepsen, NRCLay-out and graphic design:Disclaimer:represent those of NRC and the contents of this document can under no circumstances be regarded NRC, 2014NRC, 2014)The Norwegian Refugee Councilinternally displaced people worldwide.www.nrc.no.
AcknowledgmentsThis research was conducted by Lydia Poole, with coordination support from Christina Bennettsupport in facilitating the research.Prafulla Mishra, Maggie Sandilands, Pasant Naik, Roel Debruyne and Amelie Gauthier.
FOREWORDemergencies” – Syria, the Central African Republic, the Philippines Haiyan response and South Sudan.by these often protracted crisis. Whilst distinct in their scale, cause and impacts, all require adequatefunding to support humanitarian operations. As a result, in 2014 we will witness the largest humanitarianNGOs are the second recipients of international humanitarian aid globally after multilateral organisations,challenges with accessing timely, predictable and adequate funding, including compliance with donorand in an impartial manner.Bridging the Needs-Based Funding Gap : NGO Field Perspectives”, highlights how donors andmechanisms, and accountability.important report.Jan EgelandSecretary GeneralNRC
CONTENTSExecutive summary . 111. Introduction . 141.1 Methodology .1.2 Situating the commitment .2. The status of needs-based funding for NGOS . 202.1 Bilateral funding. 212.2 Pooled humanitarian funds .3. Wider challenges to needs-based humanitarian financing. 38.4. Conclusions and recommendations . 51Bibliography . 57
Executive summaryneeds assessments and fundraising is an impedimentof donors to fund, on the basis of needs is criticalprotection and assistance in an impartial manner. Theseincluding the Code of Conduct for the Internationallabour among implementing agencies would requireworking according to the principle of subsidiarity.3To ensure that the organisations with the greatestrequired funding, international NGOs will increasinglyHumanitarian Charter and Minimum Standards inHumanitarian Response, the Principles and GoodEuropean Consensus on Humanitarian Aid.1 As front-lineresponders and the interface between the internationalalliances, as well as taking on new responsibilities –including being fund managers in their own right.are made, with the intention of building mechanismsof needs and mechanisms and approaches to enableneeds-based humanitarian funding a reality. In practice,often disproportionate, funding for protracted crises isrespond to new needs and sustain programmes to meetongoing needs.The following are major contributing factors to theAn incoherent division of labourrational choices based on institutional preferences andpriorities, these do not currently add up to coherentto coordinate their actions better,2The four commonly accepted humanitarian principles are humanity,impartiality, neutrality and independence. For a more detaileddiscussion of these principles, how they relate to these codes andframeworks, and challenges to principled humanitarian funding, see12012).community.Humanitarian implementing agencies are in competitionfor limited resources, and the relationship between2Notably the cluster coordination system.3The concept of subsidiarity typically includes the notion that a centralauthority should perform only those tasks which cannot be handled11
Gaps in the evidence baseis the fundamental basis underpinning impartial andproportionate resource allocation. Major progresshas been made by a range of humanitarian actorsneeds – much of it as a result of both pressureAccountability to affected populationsapproaches in an uncoordinated manner. There islittle leadership from clusters on good practices andcommon approaches to accountability, althoughto be accountable, ensuring accountability toearly action and crisis resilience, decision-makerswill increasingly need to shift towards anticipatoryand early-warning information in addition totraditional needs assessments.Balancing competing categories of needsand expanding humanitarian responsibilityThe scope of humanitarian action described in theaddition to responding to immediate material needs,includes humanitarian protection and actions tofacilitate the return to normal lives and livelihoods”.As the scale, ambition and understanding of20 years, so too has our understanding of whatconstitutes a humanitarian need. The outer limits ofthe responsibility of humanitarian actors to respondHumanitarian needs are likely to continue to rise,and traditional donors are unlikely to be able tokeep pace with the growth in demand for funding.Humanitarian actors will need to negotiateagreements on the limits of responsibility ofto be based on a common commitment to prioritiseon a shared understanding and analysis of risk.lower corporate priority than upward accountability.A renewed collective commitmentto needs-based fundingTo address and correct these challenges, a renewedcommitment by humanitarian organisations anddonors to the principles and practices that arefundamental to operating – and funding – in animpartial manner is suggested.the GHD principles and with reference to subsequentcomplementary sets of principles and commitments,including the Principles of Partnership and IASCcommitments to accountability to affectedpopulations, a robust and principled needs-baseddecision-making process would require humanitarianactors to:coordination, transparency and support toand organisationshumanitarian actionbuild analysis and prioritisation of needs onincluding affected populations, humanitariansupport principled partnerships with implementing12Bridging the needs-based funding gap: NGO field perspectives
organisations rooted in mutual respect anddialoguecapacities which permit timely humanitarianactionto changing needssupport accountability by being more transparentwhich decisions are made, and demanding thesame of partners throughout the programmecyclebuild mechanisms which are enabling and supportbased on the principle of subsidiarityconsider transition, risk reduction and resiliencefrom the outset of a response.Note that more detailed recommendations areincluded in the Recommendations section of theNGOsReduce competition by working more closelytogether and in partnership where possible, inaccordance with the principle of subsidiarity andboards and humanitarian country teams.particularly in remotely managed operations, andfeedback.UN agencies and fund managersof pass-through funding and in particular allowimplementation time frames, according to theDonorsan operational coordination cell within the GHDCommit to publishing policy priorities and criteriafunding decisions transparently and in a timelyfashion.responding agencies, including local and nationalNGOs.Coordinate and streamline due diligencerequirements to lessen the burden of proliferatingEnsure that the criteria against which fundingdecisions are considered in pooled-fundingallocation processes are published transparentlyWork with donors and partners to agree onminimum standards for partner reporting tostreamline requirements across the accountabilitychain.IASC membersEnsure that the unique contribution andappeals, that the consolidated appeals processin funding as a consequence of current appealreforms.populations are built into coordinated needsassessments and decision-making processes.13
1. INTRODUCTIONinternational response architecture and crisisGlobal demographic, economic and climaticchanges indicate that humanitarian needs are likelyto grow in both disbursed small-scale disastersoften struggle to piece together timely, adequatehumanitarian actors respond are also changingand are increasingly likely to be in middle-incomecountries and urban settings,4needs and sustain programmes to meet ongoingneeds. In these areas humanitarian organisationsand their donors can do better.and control international humanitarian action.with the support of the Norwegian Ministry ofof principled humanitarian action in tightly regulatedThe scale of humanitarian action has grown5and the scopecurrent and emerging threats to principled needsbased humanitarian funding, particularly fromand recommends a series of practical measuresmembers and NGOs to strengthen needs-basedfunding.preparedness and building resilience to disasters. Inlight of these changes, the boundaries of principledThe content and emphasis in priority in issuesand, ultimately, determining whose responsibility itis to respond.humanitarian organisations, coordinating actorsand donors responding to humanitarian crises inPakistan, Somalia and South Sudan. The reporttherefore does not claim to represent the concernsThe commitment to respond on the basis ofneeds is a constant work in progress. As frontline responders and the interface between thefront-line agencies.4noted feature of urban areas that distinguishes it from ‘typical’ rural5constant prices).14Bridging the needs-based funding gap: NGO field perspectives
1. Introduction1.1 METHODOLOGY1.2 Situating the commitmentHumanitarian action undertaken on the basis ofneeds is what separates humanitarian aid fromother forms of aid, and is central to operationalisingin an impartial manner. Impartiality is a coreNGO coordination entities) working in Pakistan,Somalia and South Sudan and in donor capitalsand international coordination hubs.such as the Code of Conduct for the Red Crossand NGOs,6 the Sphere Humanitarian Charterpredefined questions, clustered around thebackdrop of international humanitarian law, whereininclusion, accountability and risk management.7organisations to permit the most candid responses.capitals, financing data analysis and literature6Code of Conduct for the International Red Cross and Red Crescent7of the Red Cross or any other impartial humanitarian organization15
1. IntroductionThe GHD commitment to fund on the basis ofon their socio-economic status and physicalcharacteristics, and it is a commonly acceptedprinciple8 that assessments and response must begood practices which facilitate needs-basedfunding allocations. This includes the need forgood practices outlined also seek to enhance theagencies, notably encouraging donors to reducetherefore represents an important component ofan impartial needs-based approach.approach to allocating funding is left to the discretionapproaches. Indeed, in the ten years since theneeds and on the basis of needs assessments”8to include: unaccompanied minors, the elderly, the mentally and16Bridging the needs-based funding gap: NGO field perspectives
1. Introductiontable 1: Key humanitarian principles, commitments, initiatives and reformsCommitments and principles1991Initiatives and reformsUN General Assembly (GA) Resolution 46/182Strengthening coordination of UN humanitarianemergency assistance. Asserts guidingprinciples, including commitment tohumanitarian ideals of humanity, neutralityand impartiality, and calls for UN to play “acentral and unique role” in providing leadershipCoordinator, provides for establishment of IASCand constitutes consolidated appeals processon-line, real-time database of humanitarianfunding needs and international contributions.It serves to improve resource allocationdecisions and advocacy, by clearly indicatingto what extent populations in crisis receivehumanitarian aid, and in what proportion toneeds.”1992Principles of Conduct for the InternationalRed Cross and Red Crescent Movement and1994agreed by eight of the largest humanitarianagencies.Principle 2: Aid is given regardless of therace, creed or nationality of the recipientsand without adverse distinction of any kind.Aid priorities are calculated on the basis ofneed alone.2000Sphere Humanitarian Charter“Assistance must be provided according to theprinciple of impartiality, which requires that itbe provided solely on the basis of need and inproportion to need.”2003Principles and Good Practice ofHumanitarian Donorship agreed by 17donors (41 signatories in 2013).General Principle 6: Allocate humanitarianfunding in proportion to needs and on thebasis of needs assessments.2004Global NeedsAssessment17
1. IntroductionCommitments and principlesInitiatives and reformsUN GA Resolution 60/124, upgradinga grant element with annual target ceiling of 450 million to “ensure a more predictable andtimely response to humanitarian emergencies,with the objectives of promoting early actionand response to reduce loss of life, enhancingresponse to time-critical requirements andstrengthening core elements of humanitarianresponse in underfunded crises, based on2005in consultation with the affected State asappropriate”.Hyogo Framework for Action 2005–2015:Building the Resilience of Nations andRecommendations for resource mobilisation forimplementation include “Mainstream disasterrisk reduction measures appropriately intomultilateral and bilateral development assistanceprogrammes including those related to povertyreduction, natural resource management,urban development and adaptation to climatechange.”UN GA Resolution A/RES/60/195 endorses200618the “need for the international community tomaintain its focus beyond emergency reliefand to support medium- and long-termrehabilitation, reconstruction and risk reduction,and stresses the importance of implementingprogrammes related to the eradication ofpoverty, sustainable development and disasterrisk reduction management in the mostvulnerable regions, particularly in developingcountries prone to natural disasters”.Bridging the needs-based funding gap: NGO field perspectivespredictability, accountability and partnership.Reform comprised four main pillars: strengthened
1. IntroductionPrinciples of Partnership, a “statement ofPlatform, intended to bring together UN andnon-UN humanitarian organisations on anequal footing. Participating organisationscommit to build partnerships based on equality,transparency, a result-oriented approach,responsibility and complementarity.European Consensus on Humanitarian Aid2007action, common principles and good practiceand establishing a common framework fordelivery. Includes:Point 8: The objective of EU humanitarianaid is to provide a needs-based emergencyresponse aimed at preserving life, preventingand alleviating human suffering andmaintaining human dignity wherever the needarises if governments and local actors areoverwhelmed, unable or unwilling to act.Point 13: Impartiality denotes that humanitarianaid must be provided solely on the basis ofneed, without discrimination between or withinIASC Transformative Agenda continues UNon:needs assessment, informationmanagement, planning, monitoring andevaluation2011results, based on a performance frameworklinked to the strategic plancommunities.IASC Commitments to Accountabilityto Affected Populations agreed by IASCPopulations, including commitments ondesign, monitoring and evaluation.Reform of UN CAP initiated as part of IASC2013separation of needs analysis, strategicplanning and fundraising elements.19
2. The status of needs-basedfunding for NGOSFigure 1: First-level recipients of international humanitarian aid, 2007–2011Source: Development Initiatives, based on OECD-DAC and OCHA FTS dataFigure 2: Major sources of humanitarian funding for NGOs in 2011Private fundingUSD 5.2bnBilateralfundingUSD 2.6bnCERF,USD 59ERFs,USD 53CHFs,USD 177Fundingvia UNagencies:UnknownFunding via pooled humanitarianfunds USD 290mSource: Based on OCHA FTS and OECD-DAC data, UN CERF annual analysis of implementing partner sub-grants and research carried out by DevelopmentInitiatives into private funding for humanitarian action. Note that the volumes of humanitarian funds sub-granted to NGOs from UN agencies are not published publicly.20Bridging the needs-based funding gap: NGO field perspectives
2. The status of needs-based funding for NGOsand programming across a proliferation of fundingmechanisms, each with different applicationrequirements, policy priorities and preferences.faced by NGOs in securing funds to respond tohumanitarian needs across their major fundingsources.2.1 Bilateral fundingneeds remains a major challenge for operationalNGOs.The single most important source of funds forthe majority of NGOs is bilateral funding fromECHO. The disproportionate allocation of bilateralResponse in the early stages of a crisis cangains.9rights to assistance. This is perhaps the largestunaddressed area of reform in the internationalhumanitarian architecture.approaches and mechanisms during the lastet al., 2012a). The continued practice of appealingfor funds reinforces this tendency towards gearingup responses based on late indicators of need,funding in accordance with their commitments to thefunding mechanisms. There is still a long way to go,particularly but not only in protracted crises,which account for the majority of internationalthe majority of bilateral funding, and into the fundspassed on to intermediary partners.recipients” of such aid.10 In the words of one NGOfor early action would result from more predictablethe funding for operational humanitarian agencies9A recent study found that early action resulted in a mean reduction10more years.21
2. The status of needs-based funding for NGOsgrowing reporting requirements and controls, and2012). There is also a risk that trends towardsreduce the capacity of humanitarian actors to reachpopulations most at risk.donors to prioritise the needs of particular criseson the basis of public opinion, historic ties or linksinclude responding in crises where a donor hasBurden sharingand a proportionate responseThe majority of the NGOs consulted in Pakistan,Somalia and South Sudan considered that fundingmanner, particularly for those donor agencies whichwhere domestic public support for humanitarianaid is lower.appeals for the occupied Palestinian territories andthen withdraws or reduces its support,11 it may beHaiti’s appeal requirements were met in 2011, andof requirements.Coordination among donors remains a majorneeds-based response. While operationalthe requirement to coordinate their actions,11coordination has taken place.The commitment to fund on the basis of needs22Bridging the needs-based funding gap: NGO field perspectives
2. The status of needs-based funding for NGOsFigure 3: Proportion of total official humanitarian aid provided by the leading ten bilateraldonors, 2008–2012All other donors; 19%United States; 32%France; 3%Italy; 3%Japan; 4%Norway; 4%Netherlands; 4%Sweden; 5%Germany; 6%EU Institutions; 13%United Kingdom; 8%Source: Development Initiatives based on OECD-DAC data.choices of donors do not add up to coherentand mechanisms to which they entrust responsibilityfor impartial needs-based funding decisions. In2012, 10 per cent of the total funds recorded fromCERF, the International Committee of the Redchannel a proportion of their funds as unearmarkedor lightly earmarked contributions to organisationsDisaster Relief Emergency Fund.23
2. The status of needs-based funding for NGOsFigure 4: Unearmarked or lightly earmarked funding channelled to organisations, agenciesand funds with global reach, 2012 17.1bn 1.7bnInternational humanitarianresponse 422mCERF 228mICRC 1.1bnUN agencies 20mIFRC DREFSource: Development Initiatives based on OECD-DAC and OCHA FTS; UN CERF; IFRC and ICRC annual reports. Note that unearmarked funds for UN agenciespreferences and practices of the bilateral fundingdecisions taken by donors. And there is a clear gapmechanisms for NGOs – funds channelled indirectly12The broader and fundamental problem is a lack ofcoordination and burden sharing among donors.While like-minded donors may coordinate theirfunding intentions, perhaps in response to theannual CAP launch, and for major new crises”donor performance against its principles notes,made in isolation – there is no forum to discussdonor funding intentions and there are noAddressing the gap in donor coordination ought tobe the core business of the GHD group. According12It should be noted that ECHO is the recipient of unearmarked fundscontributions from member states are based on assessed contributionsmechanisms described. ECHO funding constituted nearly 10 per centfunding was allocated to international NGOs.24Bridging the needs-based funding gap: NGO field perspectives
2. The status of needs-based funding for NGOsBalancing flexibility,consolidation and controlto follow conscientious needs-based approaches.Donors with an in-country presence, in particular,case study 1Examples of donor practices to facilitateanalysis/prioritisation of needs,flexibility and timelinessmultilateral partners in their needs analysis andprioritisation, and are developing mechanismsand funding approaches designed to facilitateZealand and Norway hold regular structuredand informal dialogues with their majorrisks that concentrating bilateral funding within asmaller pool of partners and crises may not alwaysensure that funding is directed to those best ableto respond to needs and could contribute to ashrinking of humanitarian response capacity insome of the hardest-to-reach areas.Sweden and the UK have rapid-response anddraw-down agreements with pre-accreditedpartners, allowing rapid agreement anddisbursement of funds.Spain and Sweden increasingly use multiannual partnership agreements, and anumber of donors also have partnershippermit an adjustment of activities and budgetswithin pre-agreed parameters when pre-agreedthresholds of needs are breached.1313in approach, when certain conditions are met.” It is worth noting that25
2. The status of needs-based funding for NGOsPerceptions of resource scarcity in relation tobeen consolidating their portfolios, reducing thenumber of countries they support with bilateralorganisation. Large NGOs were far less likely tosources. The ten NGOs and NGO networks withworked in only ten countries, down from nearlyreduced its list of humanitarian partner countriesDenmark, Ireland, Norway and Sweden, compareddonors are also reducing the number of partnerNGOs.14 Smaller organisations reported beingobliged to respond to donor priorities and chasein longer-term strategic relationships with a limitednumber of accredited and trusted partners. As onecontinue to work the way we did ten years agowhen we had hundreds of NGO partners, it’s justnot practical”.apart from reducing transaction costs for donors,including greater potential for programming at scalethrough larger partners and greater opportunitiesfor meaningful dialogue between donors and aselect number of trusted partners. Consolidation,funding.number of countries cannot yet be determined,but there is a risk that smaller crises in particulartheir desire to consolidate.being competed out of the market.14Outcomes, with additional research drawn from NGO annual reportsdonor websites and direct correspondence with donors.26Bridging the needs-based funding gap: NGO field perspectives
2. The status of needs-based funding for NGOsThe ability of organisations to manage riskSomalia and the occupied Palestinian territories,risk-management assurances is a key criteria indonor funding allocation decisions.Failing to ensure appropriate targeting and controlof projects, suspension of programmes, planningand programme design not according to needs,as well as the slowing of project implementation”including compromising respect for humanitarianprinciples and causing considerable reputationaldamage to humanitarian actors.15 Gains fromThe growing burden of controls – and particularlycounterterrorism measures – represents aenabling organisations to detect problems earlyand adjust programming accordingly.whom it may be risky or costly to assist, and toimplement programmes where results cannot beeasily measured.challenges to needs-based approaches. Theseimpacting on the ability of responding agenciesto select partners and target populations on thebasis of needs.161516only allowed to work with a small number of municipalities in the27
2. The status of needs-based funding for NGOscase study 2of 2011, when only 13 per cent was allocatedManaging fiduciary risk in Somaliathe United States whose funding allocationswere uncharacteristically low in the early partIn 2010 and 2011, donor anxiety aroundpossible diversion of resources, combinedwith diminished access, contributed to thethe clear evidence of growing humanitarianneed. Government measures to manage therisk of diversion include legislation sanctioningpossible diversion of humanitarian resourcesquarters of each year (upwards of 85 per centin 2009, 2010 and 2012), with the exceptiondonor to Somalia, also exhibited an unusuallylate allocation of funds that year. It is worthnoting, however, that some major donors wereconvinced by the evidence and not all wereconstrained by counterterrorism legislation.Recognising the severity of the crisis andthe compelling case for response, the UKaccept the risks of operating in the worstIndependent Commissionfor Aid Impact, 2012a).Figure 5: Share of total humanitarian funding allocations from the US governmentallocated by quarterSource: OCHA FTS.28Bridging the needs-based funding gap: NGO field perspectives
2. The status of needs-based funding for NGOsdatabase holds assessment information onreluctance to scale up cash-based responsesin 2011.In the wake of the famine, donors andprojects are indeed taking place as agreed.include the following.Risk management in cash programmingCash-based programmes were held to a higherwhich has stimulated NGOs to identify beststrengthening the legal basis of their contractualto NGOs.Common Humanitarian Fund “risk-basedmanagement”managing risk and strengthening accountability.The Cash Consortium has been instrumentalcontrol-based to a risk-based managementrisks for beneficiaries. The consortium haspublished and updated a set of risk analysis andmanagement guidelines.assessment to become eligible for CHF funds. TheCash-based agencies are also working withcompanies to strengthen accountabilityand traceability, including through tripartitereconciliation and encouraging companies tomay be required to report with greater frequency,disbursements on the basis of demonstrating thedetection of fraud at the point of distribution.The Risk Management Unit for Somaliadonors and other stakeholders to managepartners. Organisations are assessed against the29
2. The status of needs-based funding for NGOsOther enhanced accountability and riskmanagement measures in operation in SomaliaSeparation of reporting lines between monitoringand programme teams.Triangulation with other agencies working in thesame geographical area.Centralisation of procurement, award ofprogramme outputs by mobile phone, whichaccountability mechanisms, there is no guaranteetriangulation in addition to enhanced internalaccountability measures was frequently notedby humanitarian actors consulted. The idea of amooted by both donors and NGOs.17Prior internal organisational agreement onby programme staff and sustained by theorganisation if necessary, under differentresponse scenarios.1730Bridging the needs-based funding gap: NGO field perspectivesIn June 201 the Somalia CHF also set up a call centre to obtain
2. The status of needs-based funding for NGOsWhile NGOs consulted uniformly supportedmanagement practices, they also felt that theadditional funds for less well-funded emergencies19on to them. There remains a lack of clarity – andsometimes misunderstandings on the part ofagencies, the timeliness of CERF disbursementsCERF funds after disbursement to the primary20acceptable distribution of risk. NGOs are unclearas to what measures would satisfy donor duediligence and risk management requirements andwe need to work together on this”.2.2 Pooled humanitarian fundssupplying injections of rapid-response funds andsupplementary grants for underfunded crises andsectors.cent of total international humanitarian funding in201218humanitarian
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