Designed to exclude: what pooled funds reveal about localisation in practice

Pooled funds and flexible grant frameworks are being positioned as a route to more locally owned humanitarian financing. The theory is to aggregate resources from multiple donors, reduce transaction costs, and create pathways for smaller, community-rooted organisations to access funding they cannot reach through bilateral grants alone. While this is being carried out, the success of this practice, and for whom it is successful, are questions yet to be examined.

Refugee-led organisations (RLOs; and this includes refugee-led initiatives) and community-based organisations (CBOs) are a necessity. This article evaluates what actually happens when these organisations and communities try to access, manage and report on pooled funds – the practical reality, the friction, and the moments where the system helps them and where it fails them.

In the Asia-Pacific context, the vast majority of countries have no functioning national asylum framework. Legal protection is extremely precarious. The organisations and initiatives engaged with displaced communities are often found to be informal and largely invisible to the formal funding architecture. The current environment of the contraction of international humanitarian funding – significant cuts from major donors, scaling back across large international non-governmental organisations (INGOs) and United Nations (UN) agencies – makes this more urgent.

The Asia Pacific Refugee Rights Network (APRRN) continues to work as an intermediary between large international donors and very small, often unregistered, community-led organisations in a number of countries in the region. What follows draws upon that experience to examine three questions:

• How do RLOs find a way in?
• After they receive funding, how do they manage it?
• What does the experience of reporting and accounting reveal about the mechanisms and their design; that is, who are they targeting?

Accessing funding: less an administrative and more of a political question

Most pooled-fund mechanisms require applicants to be formally registered with national authorities. In much of the Asia-Pacific region, this is a condition that many community-rooted RLOs and CBOs simply cannot meet – not because they are disorganised or unaccountable, but because formal registration is legally unavailable to them. For example, in Bangladesh, refugees face legal restrictions that prevent them from formal employment and bar them from opening bank accounts – the same policy and legal environment makes it impossible for RLOs and CBOs to register as formal organisations.

Organisations run by refugees in a country with no asylum system – and in which the term ‘refugee’ does not register with policy- and decision-makers as they simply do not ‘exist’ as a legal identity – are built and reliant on deep community roots, years of operational experience and genuine accountability to the people they serve. Yet, these organisations are ineligible for a grant that requires a registration certificate they cannot obtain.

In the Asia-Pacific region, most RLOs and CBOs access pooled funding through intermediaries only, with just a handful in direct partnership with funders, and only after they have been introduced by intermediaries. APRRN regularly operates as such an intermediary – acting as the accountable entity on grants while sub-granting to unregistered community groups. This only works where the upstream grant agreement explicitly permits it, which in turn requires deliberate negotiation at the design stage.

At the proposal design stage, APRRN makes an explicit case to the donor for this model of implementation – drawing on previous impact stories and documented examples of community-led delivery to demonstrate both its track record and the value of routing funds through RLOs and CBOs. This creates the opening to negotiate grant agreement language that expressly permits sub-granting to unregistered groups. Without this groundwork being laid early, such flexibility is rarely offered by default.

Managing: what stewardship looks like on the ground

APRRN has taken on a role as intermediary – sitting between large international donors or INGOs and very small, often unregistered, community-level organisations. Once an organisation has accessed funding, the nature of the challenge shifts. The concern shifts to managing or using the funds responsibly while implementing the activities promised under the grant.

Sub-granting, or channelling funds from larger grant mechanisms to smaller organisations, is time-consuming and can be frustrating. But it is also a workable solution, and ends up filling a gap in the current funding architecture. Large donors are often unable to contract directly with unregistered organisations or groups with no formal grant-management history. APRRN undertakes this work and continues to learn how to respond to the challenges of this evolving funding architecture by consistently asking its partners how best to improve by minimising bureaucracy, while maintaining accountability.

In practice, APRRN absorbs the most burdensome administrative work on behalf of its partners – including proposal writing, the time-consuming task of transferring of funds to designated individuals, donor reporting, and negotiating the modalities of the grant agreement. This ensures that RLOs and CBOs are not gatekept from funding by administrative capacity they have not yet had the opportunity to build. At the sub-granting and implementation stage, bureaucracy is further reduced by designing activities in close collaboration with RLOs and CBOs in a way that aligns with their existing capacities and strengthens them institutionally, rather than imposing external frameworks that create compliance burdens without adding value. Accountability, in this model, is maintained not through heavy reporting requirements but through consistent and trust-based communication – regular exchanges between APRRN staff and RLO and CBO members to surface both progress and challenges. This ongoing dialogue creates an environment where issues are identified and addressed early, and where partners feel supported rather than monitored.

Trust in both directions

The starting point is trust – and trust has to run both ways. Smaller organisations need to trust that APRRN is not simply another layer of bureaucracy between them and the resources they need, that we will advocate with and for them rather than manage them, and that we will not disappear after a grant cycle ends. Organisations trusting the intermediaries will take this opportunity to raise problems early and seek help when they need it. Also, they will share the successes in addition to the challenges.

In practice, this trust manifests itself in the candour that RLOs and CBOs bring to regular check-ins with APRRN. Partners have raised a range of challenges through these conversations – from shifts in camp policies that affect programme delivery, to legal barriers constraining their work, to internal capacity gaps caused by circumstances outside their control, such as the sudden loss of a key team member. Where APRRN is able to work with our partners – whether by advocating with authorities, adjusting workplans, or providing direct organisational support – it does. Where the challenges are systemic and beyond immediate resolution, naming them openly serves an important purpose: it informs APRRN’s broader advocacy and ensures that grant reporting reflects ground realities rather than a curated version of success. This two-way honesty, about both achievements and setbacks, is itself a measure of the relationship working as intended.

Building this kind of trust takes time, across several grant cycles. It involves sustained engagement, honesty about limitations and challenges, and a willingness to accept uncertainty rather than defaulting to rigid systems that exclude the very organisations that donors are meant to support.

Accountability that fits the context

One of the most consistent tensions is reconciling the accountability requirements of donors – which are often designed for large, institutionalised organisations – with the realities of small community groups. A reporting template that takes a communications team three days to complete is not a minor inconvenience for an organisation run by a small team of refugee leaders and volunteers. It poses a barrier.

APRRN has worked to develop what might be called conflict-sensitive compliance: an approach to accountability that takes seriously the real-world conditions in which partner organisations operate. This entails simplified reporting focusing on what actually happened and what was learned, flexible timelines and regular check-ins to talk through challenges rather than waiting for a formal deadline to flag them. This does not mean abandoning accountability, but designing accountability systems that serve the relationship rather than replacing it.

For example, APRRN developed its own reporting format for sub-granted projects – one that deliberately moves away from the donor-facing compliance language that smaller organisations often find alienating. The format combines narrative and financial reporting, but is structured around what actually happened, what was learned and what challenges were encountered – rather than simply whether activities were delivered on time and on budget. Critically, it creates explicit space and ownership for partners to flag sensitive issues they may not feel comfortable raising in a formal donor report, including operational difficulties, protection concerns, or contextual shifts that affect implementation. It also invites partners to document the solutions they find, recognising that problem-solving in constrained environments is itself a form of organisational learning worth capturing.

The result is a reporting process that functions less as an audit and more as a structured conversation, one that helps APRRN identify where urgent support is needed while giving RLOs and CBOs a genuine voice in how their work is understood and represented.

Another illustration of this comes from APRRN’s sub-granting experience with a youth organisation in Bangladesh working on an access-to-education project for women and young girls. Early in the project, the organisation raised in a check-in conversation that some parents were hesitant about enrolling their daughters in literacy sessions – unconvinced of their value or uncertain about safety. Rather than allowing this to affect attendance figures and only surface in a final report, the team worked through it together. APRRN and the team at the organisation agreed that a community conversation – bringing together families already engaged in the project alongside those who were ambivalent – might shift perspectives more effectively than individual outreach. They also proposed assigning a companion to accompany girls commuting to classes, directly addressing parental concerns about safety. Both measures were put in place. The results were telling: attendance grew, and parents who had initially hesitated became some of the programme’s strongest advocates. As one parent shared after their daughter completed the sessions: ‘I did not think this would be helpful for us, but now I see what it has given her’.

This kind of exchange – candid, timely and grounded in trust – is precisely what standard reporting formats are not designed to capture, and it is what APRRN’s approach is designed to protect.

What enables honest reporting

Honest and useful reporting from RLOs and CBOs tends to emerge from genuine trust in the relationship and simplified formats, alongside a clear sense that the reporting will actually be used; that someone will read it, respond to it, and allow it to shape future decisions. Accountability systems need to be designed with the organisation and the relationship in mind, not with the audit trail as the primary output.

Diversity of funding matters

Another lesson is the importance of diversity of funding streams, both for APRRN as an intermediary, and for the organisations we partner with and support. Dependence on a single donor or a single type of funding is a structural vulnerability. When that source shifts – as has happened for the past year across the sector – organisations with no alternative collapse, as many have already. Building a more resilient funding base, including through pooled funds, smaller local donors and flexible mechanisms, is good financial management, but also a lifeline.

Conclusion

The experiences of accessing, managing and reporting on pooled funds point clearly to the fact that the barriers faced by RLOs and CBOs are not incidental features of an otherwise functional system. They are political choices and they are structural – built into mechanisms not designed with these organisations in mind, and which reproduce their own exclusions unless actively disrupted. 

The enabling conditions for success are also well understood – trusted intermediaries, simplified systems, relational accountability and genuine capacity support. None of this is new knowledge. The gap is not between knowing what works and not knowing. It is between knowing and consistently doing, at the level of mechanism design, donor policy and institutional practice.

Shifting power in the humanitarian sector does not happen overnight. The language changes faster than the practice. But the experiences described here point clearly enough at what needs to change – and that the organisations that have lived them are ready for a different kind of conversation.

Amrita Paul is Programme Officer at the Asia Pacific Refugee Rights Network. She focuses on access to justice frameworks, protection of detained refugees and asylum seekers in non-signatory states, and ensuring effective legal aid for foreign nationals across the region.

This article draws on the collective experience of APRRN’s sub-granting work and the generosity of the RLOs and CBOs who have shared their learning along the way. The author also wishes to thank Hafsar Tameesuddin and Klaus Dik Nielsen for their input, support and feedback throughout the process.