ReliefWeb

A reference tool for policymakers and practitioners to enhance the efficiency and effectiveness of programming

Introduction

Background and purpose

Discussions during the September 2019 ‘Progress Acceleration Workshop – Enhanced Quality Funding through Reduced Earmarking, Multi-year Planning and Multi-year Funding’ highlighted the need to collate and share evidence on the ways in which donors and recipients provide and use funding to better meet humanitarian needs.1 This report seeks to fill this evidence gap by providing a catalogue of funding mechanisms identified by donors and recipients as providing ‘quality funding’ for humanitarian response. The focus of this report is primarily on humanitarian funding mechanisms, though individual examples might support a broader crisis response across the humanitarian and development nexus.

The aim of this report is to provide a reference tool for policymakers and practitioners, both Grand Bargain signatories and non-signatories, with examples of the manner and form in which funding is and could be provided to enhance the efficiency and effectiveness of programming. It is not intended as an exhaustive survey of quality funding practices but as an initial, indicative summary of approaches to quality funding that can be added to.

Properties of quality funding

For the purposes of this report, Development Initiatives (DI) and the Norwegian Refugee Council (NRC) did not attempt to conceive a formal, technical definition of ‘quality funding’. Rather, we sought to collate examples of funding mechanisms or arrangements that were perceived by donors and recipients to enhance the efficiency and effectiveness of responses and in so doing to identify the properties cited as contributing to the quality of this funding.
These properties included but were not limited to the funding duration and level of earmarking. Commonly cited properties that are referenced as contributing to the ‘quality’ of funding include:

• Funding duration: Captures the timeframe of the funding received and/or disbursed by a funding mechanism. Used to assess whether associated funding can be considered as multi-year, that is with a duration of 24 months or more based on the start and end dates of the original funding agreement.2 • Earmarking: The degree of earmarking of funding received and/or disbursed by a funding mechanism. Earmarking can occur at different levels geographically and thematically. A summary of different types of earmarking is set out in the annex to the Grand Bargain document.

• Flexibility to adapt: Relevant to funding with any degree of earmarking, this captures the ease and speed with which implementers are able to move funding between budget lines, geographical borders or years. Key informant interviews have identified this as an important property to enable flexibility of funding despite relatively tight levels of earmarking.

• Reporting requirements: This refers to the frequency and extent of reporting on funding received or disbursed by the funding mechanism. Although the Grand Bargain workstream to ‘Harmonise and simplify reporting requirements’ focuses on this issue, humanitarian actors in this and past research frequently identified reporting as another dimension of quality for their funding.

• Manner and timeliness of disbursement: This captures the timing of disbursements in the funding process to assess how quickly funding was disbursed after signing an agreement, in which intervals, at what stage of the funding cycle and whether it was disbursed up front or in arrears. Where information is available, it includes an indicative range of funding volume associated with a funding mechanism.

• Accessibility: This includes a description of which implementing organisations were able to access the funding, in terms of their type (NGO (non-governmental organisation), UN, Red Cross) or size.

• Other funding conditions: This aspect captures other conditions on funding from or to the listed mechanisms that are not captured by the properties listed above, for instance restrictions on passing on funding or targets to be reached for a portion of the funding to be released.

Information on the properties outlined above is included for each funding mechanism only where available, and not all properties are relevant to all catalogue entries or best practice examples.

In recognition that the purpose of quality funding mechanisms ultimately is an improved humanitarian response with better outcomes for affected populations, we also requested information on cost-efficiency and effectiveness associated with the listed catalogue entries. It should be noted that this catalogue is largely descriptive and not evaluative, although we attempted to provide a balanced view of both challenges and benefits for each funding mechanism. The advantages, challenges and lessons described are based on user experiences drawn from written feedback and interviews. We referenced published material, where available, to substantiate this feedback. A selection of publicly accessible in-depth evaluations and further literature on the included entries is included in Annex 1.