Local funding flows and leadership: recent trends in 10 major humanitarian responses

Five years after the major humanitarian donors and INGOs signed the Grand Bargain committing to increasing funding for local actors, Local2Global Protection (L2GP) has analysed data on funding flows and leadership in humanitarian coordination. This article presents an overview of the findings from 10 country contexts (Iraq, Jordan, Lebanon, Nigeria, occupied Palestinian territories (oPt), Somalia, South Sudan, Sudan, Syria and Ukraine) between 2016 and 2019, looking at direct funding to local and national actors, trends in spending since 2016, the use of country-based pooled funds (CBPFs) and indirect funding. 1. Detailed country briefs for each humanitarian response, including notes on methodology, were published by L2GP in 2020 and 2021, and can be found here: www.local2global.info/research. This overview suggests that there is still a considerable gap between policy and practice when it comes to the Grand Bargain commitments on funding: in 2019, according to OCHA’s Financial Tracking Service (FTS), nearly $10 billion was allocated in these countries, representing almost 40% of the global humanitarian funding budget. Of this, less than $200 million, or 1.9% of funding, went to national and local actors. Meaningful changes in direct funding to local and national NGOs or representation in humanitarian leadership structures are not yet recorded. Tracking and analysing humanitarian funding flows and humanitarian leadership structures will be key to inform the debate on localisation, track change and hold the humanitarian community to its commitments.  

Direct funding

The amount of direct funding accessible to local and national humanitarian actors varies both in terms of the share of total reported funding and absolute amounts across the 10 countries studied. Jordan and Lebanon, where national governments play a large role in humanitarian action, have the highest amounts going to local actors, both in absolute terms and as a proportion of humanitarian funding. Most of this goes to the national governments of each country. In all other countries examined, local funding reported in FTS was mainly received by local and national NGOs.

Local and national actors in Lebanon and Jordan received around $40 million in 2019, or 4% and 6% of total reported funding in each country, respectively. The oPt was the only other context where local actors received more than 4% of total funding. Local actors in Syria, South Sudan and Somalia all received between $20–30 million per country, but this accounts for only slightly more than 2% of the total humanitarian response in South Sudan and Somalia and less than 1% in Syria. Local and national actors in the remaining countries received under $10 million, less than 1% of each country’s total humanitarian funding in 2019.

Looking at the longitudinal data from 2016–2019, in some cases funding to local actors did increase significantly (oPt, Somalia), while for others (Lebanon, South Sudan, Jordan) flows remained overall constant, albeit with some fluctuations over the years. In other cases, notably Iraq and Sudan, funding to local and national actors actually decreased. Direct funding to local and national actors represents such a small proportion of total humanitarian funding that a single grant can create a significant shift upwards, before funding reverts to typical levels the following year. Four years into the Grand Bargain, 2019 funding patterns showed no clear upward trend in direct funding to local and national humanitarian actors.

Pooled funds

Country-based pooled funds play a major role in funding local and national NGOs in all of the focus countries. In all but one they are the single largest provider of direct 2. The term ‘direct’ refers to funds allocated without an operational intermediary. While CBPFs receive their funding from government donors they have no programmatic operations, unlike many UN agencies and INGOs, and their sole purpose is to provide funding.  funds to local and national NGOs. In six out of the 10, CBPFs provide more direct funding to local and national NGOs than all other donors combined (2019 data).

Globally between 2016 and 2019, CBPFs increased their combined funding to national NGOs (NNGOs) from 18.4% to 24.8%, which is also reflected in the increase in NNGO funding shares in Nigeria, oPt, Somalia and South Sudan. In Lebanon and Jordan, CBPF allocations to NNGOs have remained more-or-less constant, while in Sudan, Iraq and Syria, CBPF funding shares to NNGOs decreased between 2016 and 2019. While it is clear that there is an overall upward trend in CBPF funding to local and national NGOs, it is equally clear that there are considerable variations between countries.

Indirect funding

Indirect funding 3. ‘Indirect funding’ here refers to donor funding transferred to an implementing agency through an intermediary organisation such as a UN agency, an INGO or a member of the Red Cross Red Crescent family. accounts for a large proportion of funds allocated to local and national actors. Despite the importance of indirect funding, and Grand Bargain commitments to transparency, comprehensive data on funding flows from/through the UN and INGOs to local and national actors remains difficult to source and monitor. For this research, only global-level data for a handful of major organisations could be analysed. To their credit UNHCR, UNICEF, ICRC and UNRWA publish this type of data, and together these agencies accounted for more than 30% of global humanitarian funding in 2019. INGO signatories to the Charter4Change also publish specific data on this type of funding. While lack of a more complete dataset on indirect funding limits analysis, the data available clearly demonstrates that indirect funding accounts for a considerably larger share of local and national humanitarian funding than direct funding.

Of UNHCR, UNICEF, ICRC and UNWRA’s combined expenditure, 16.1% was sub-granted to local and national NGOs, as well as local and national government actors. Longitudinal trends between 2016 and 2019 show a slight increase in the proportion of combined funding going to local and national actors. Over this period funding to local and national actors on average increased by 2.2 percentage points, from 13.9% in 2016 to 16.1% in 2019.

Calculating indirect funding flows to local actors

A closer look at figures on funding to local and national humanitarian actors shows how some organisations and donors have used different methods to calculate their proportion of funding to local actors. This means that figures cannot be compared across different organisations, and that it is not possible to provide an exact measure of how different organisations and donors are performing against the 25% commitment in the Grand Bargain. In addition, some organisations changed their calculation methods between 2016 and 2019. The lack of an agreed method of calculating the share of funding to local and national actors means that a great deal of uncertainty and confusion remains regarding what has actually been achieved in terms of reaching the Grand Bargain commitments.

Data from UNHCR provides an illustration of this. In its 2020 Global Report, UNHCR reported that it had reached the 25% local funding target by calculating the amount of funding transferred to local and national actors as a percentage of its programme expenditure in 2019. Had UNHCR calculated the percentage against the organisation’s total expenditure (as it did in 2015 and 2016),  the percentage of funding going to local actors in 2019 would have been 17% 4. (pp.23 and 35), total expenditure: $4,415 million; total to local and national responders: $752.6 million. .  This method of calculating the percentage of funding transferred to local and national actors was adopted by more than 30 INGO signatories to the Charter4Change movement in 2015 and has been used in their annual reporting ever since. Moving forward, it is crucial that a uniform and transparent way of calculating these percentages, and thus delivery against commitments, is used by all signatories to the Grand Bargain.

Funding gaps

The gap between funding requested and funding received is a well-noted and major issue for most humanitarian responses. Within this it is important to consider the ratio of funds requested to those received by organisation type. National NGOs receive a much smaller share of funding requested than INGOs and UN agencies. Figure 5 shows an analysis of OCHA FTS data that demonstrates that, for each of the 10 countries analysed, funding gaps for UN agencies and INGOs are smaller than for NNGOs. While NNGOs appealed for much smaller dollar amounts in Humanitarian Response Plans (HRPs), the proportion of funding received compared to funding requested is significantly lower, amounting to less than 50% of the requested funding in most countries. National NGOs’ appeals receive less funding than UN agencies and INGOs in all countries studied except oPt. 

Comparing funding gaps with levels of direct funding for these 10 countries, we can see that larger funding gaps correlate with lower direct funding flows and vice-versa (Figure 6). This correlation may indicate that NNGOs in countries receiving smaller proportions of overall funds face greater issues fundraising.

Cluster membership and leadership

The final area examined was local and national participation in humanitarian leadership, particularly in clusters. Most clusters globally report on leadership functions at a national and sub-national level, as well as releasing detailed information on membership by organisation type. The overall picture is of a humanitarian coordination system where local and national NGOs form a large part of the membership, but very rarely hold any leadership positions.

UN agencies dominate cluster leadership at both national and local level for most of the countries studied. INGOs are represented in cluster leadership positions, both nationally and sub-nationally, and hold approximately 20% and 30% of these leadership positions, respectively. National NGOs dominate cluster membership in most countries, but their representation in leadership roles is very limited. In one of the countries studied, South Sudan, they hold two cluster leadership positions at the national level; in the other nine they hold none. At the sub-national level NNGOs hold less than 25% of cluster leadership positions.

Conclusion

Despite commitments made in the Grand Bargain to ensure that local and national actors receive 25% of humanitarian funding, local and national actors in the countries studied receive less than 10% of total funding. In eight of the 10 the proportion of funding transferred directly to local actors was less than 3%. In some cases it was lower in 2019 than when commitments were made in 2016. Overall, most direct funding comes from CBPFs. Although these funds represent only a small share of total humanitarian funding they were the largest source of direct funding in nine out of the 10 countries studied, and the trend shows the proportion allocated to local actors is increasing. However, at present the proportion of humanitarian funding going to CBPFs is so small that CBPF funding to local and national NGOs could double and still remain within single figures as a proportion of global humanitarian funding.

The most important international source of funding for local and national actors is indirect funding from UN agencies, INGOs and other international humanitarian actors. These funding streams are considerably harder to track. Increasing clarity and transparency in reporting on indirect funding to local humanitarian response should be a priority to fulfil the Grand Bargain commitments on localisation and transparency. Although indirect funding can allow for flexibility and can be allocated on the basis of assessments by local partners, there is considerable risk that such streams relegate local and national actors to the role of subcontractor responsible for delivering on the programme goals of the funding agency.

Analysing the gaps between funding requested and funding received, it appears that even though local and national NGOs typically launched considerably smaller appeals under HRPs compared to all other types of organisation, they receive the smallest proportion of those appeals. This not only hinders their ability to implement programmes, but also suggests that HRPs are a much better ‘deal’ for those with institutional power, leverage and access to the structures where final decisions are made than those on the periphery.

This gap in power is further illustrated by examining country-level leadership positions by organisation type. Cluster leadership positions at national level remain dominated by UN agencies and to a smaller extent INGOs and national government agencies – even though cluster membership is dominated by national NGOs in most of the focus countries. Local and national NGOs fare somewhat better when it comes to leadership positions in sub-national clusters. Still, national actors are significantly under-represented in most of the countries studied.

Our hope is that this analysis will inspire informed debate at both national and global levels on how to increase funding for local and national NGOs and opportunities for them to assume decision-making roles within the humanitarian system. Our findings suggest that power imbalances are structural and run through all aspects studied in this research, making them harder to address. Further research is needed on the barriers to increasing the power of local and national actors and their access to funding. But to move from what seems to be a general agreement in policy on the need to strengthen local humanitarian action to real change in practice, much more must be done. This study clearly shows that international and multilateral actors have not yet let go of either funding or leadership. The question why that is still the case has yet to be answered.

Christan Els is an independent consultant (christian@els.consulting). Henrik Fröjmark is a Humanitarian Policy Adviser at Act Church of Sweden and co-founder of Local2Global Protection (Henrik.frojmark@svenskakyrkan.se).