Humanitarian Funding Flows
Donors to Humanitarian Crisis Response:
The donors to humanitarian crises response can be grouped into the following major categories:
- Governments (including military and non-military agencies)
- Non-governmental organizations (NGOs)
- International organizations [e.g. United Nations (UN), European Commission (EC), World Bank]
- Recipient community (including diaspora and local community members)
- Private donors (including corporations, foundations, and individuals)
- International Red Cross and Red Crescent Movement (including ICRC, IFRC, national societies, and local branches)1
Governments provide the majority of funding for humanitarian crises, accounting for approximately 74% of total donations.2 In the context of humanitarian donorship, governments are divided into two groups: those who are members of the Organization for Economic Cooperation and Development’s Development Assistance Committee (OECD DAC), and those who are not.
The DAC is comprised of the 24 countries that have the most significant aid programs. The majority of members joined in the 1960s, but countries continue to be added to the group; South Korea joined as recently as 2010. This body brings together senior governmental leadership to coordinate country policies on overseas disaster assistance (ODA), review the effectiveness of members’ humanitarian activities, and collaborate to solve the weaknesses identified.3 Membership is contingent on the size of a country’s aid program; the quality of implementing institutions, policies, and statistical reporting mechanisms; and the openness to DAC recommendations.4 Non-DAC countries are invited to take part in meetings – China, for example, attended the DAC Senior Level Meeting in 2011.
While DAC member countries comprise the majority of the top 15 humanitarian donors (in terms of US$ millions), non-DAC countries now provide up to 12% of official humanitarian funding5 and, non-DAC countries such as Saudi Arabia and the UAE at times exceed DAC country contributions.6 Non-DAC countries provide essential funding, significant expertise, and greater diversity to the Western-dominated “donor club”. However, these countries are not bound by the official DAC funding reporting mechanisms as such, monitoring and measuring non-DAC funding is more difficult – as is overall transparency. Furthermore, their tendency to operate bilaterally and to concentrate funding in local crises exacerbates the broader humanitarian system’s weaknesses in cooperation and global effectiveness.7
Financial coordination across the multiple actors in a humanitarian space is necessary for efficiency and ultimate effectiveness. The Consolidated Appeal Process (CAP) was formulated by UNOCHA in order to address this need for more productive collaboration. A CAP analysis reflects overall needs and strategic plans (including objectives and indicators), covering not only individual agency priorities but also the interactions among them.
To complement the CAP and account for its remaining weaknesses in coordination, there exist multiple pools for international funding allocation. Such pools decrease the volatility of the amount of available funding, ensure that funds reach small and/or low-profile crises, and provide a way for new donor countries to provide support even if they lack the capacity or field presence to administer or monitor humanitarian financing themselves. Of the mechanisms for pooled funds, three of the most notable include:
- Central Emergency Response Fund (CERF): launched in 2006 to provide quickly accessible funds to UN agencies and the International Organization for Migration (IOM). In turn, UN agencies and the IOM can pass on funding to NGOs on the ground. The Emergency Relief Coordinator (ERC) of the UN Office for the Coordination of Humanitarian Assistance (OCHA) administers donations. Three percent of humanitarian funds flow through this pooling program.
- Common Humanitarian Fund (CHF): created in 2006 in order to pool OCHA funds for each country. Country-level pools of funding are overseen by each country’s UN Humanitarian Coordinator and can only be allocated toward projects that further countries’ Common Humanitarian Action Plans (CHAPs) or as emergency response grants. CHFs tend to be larger than ERFs (see below) and are intended to fund the priority projects as outlined in the country CAP.
- Emergency Response Funds (ERFs): first implemented in 1997 in Angola to provide rapidly available funds for unforeseen humanitarian needs. Funds are made available to UN agencies and NGOs primarily for emergency response and, to a lesser extent, for emergency preparedness. The size of the funded projects are generally smaller than CHFs, with grants amounting to $100,000-$700,000.8 In 2012, there were 13 countries with ERF programs in place.9
General Trends and Challenges:
Humanitarian funding flows are anything but constant, with variables ranging from funding source, amount, and destination of allocation. Of these variables, a few trends stand out in recent years:
- The field of humanitarian donors is becoming more diverse. Non-DAC countries’ foreign disaster assistance (including humanitarian and general development assistance) doubled between 2006 and 2009, rising from $4.6 to $10.4 billion; from 2000 to 2010, humanitarian assistance funding rose from $34.7 million to $622.5 million. Some of the increase can be attributed simply to the fact that non-DAC donors are reporting more than they did previously: in recent years, a broader array of countries – in particular, the “Arab countries”, i.e., Saudi Arabia, Kuwait, and the UAE – are reporting their contribution levels to the OECD DAC database, and with greater transparency as well. [The same trend of increased voluntary reporting could apply to the data presented by the UNOCHA Financial Tracking Service (FTS), too.]10 Whether the reports have increased due to higher contribution levels or greater voluntary reporting, this data indicates greater general involvement in the global humanitarian system.
- Humanitarian funding continues to increase, both in absolute numbers and as a percentage of total income throughout the world. However, major gaps persist. In 2009 and 2010, total humanitarian funding increased even despite global austerity measures: controlling for the spike of funding for the Haiti earthquake response, flows increased by an average of 1% during that time period. Between 2001 and 2010, data also shows a clear increase in contributions as a percentage of global GDP. DAC donor governments continue to supply the greatest volume of aid, although non-DAC donors, private donors, and pooled funds are rising. Even with the increases in absolute funding, however, humanitarian actors continue to report insufficient funding for their operations.11 In fact, in 2011 the percentage of funding needs reported in CAP appeals that remained unfulfilled was the highest (at 38%) of any year since 2001.12
- Distribution remains an issue. Humanitarian funding is disproportionately distributed, not only geographically but spatially as well. Geographically, areas of geopolitical concern continue to receive the bulk of international attention, while the securitization of humanitarian assistance exacerbates the political complexities tied to aid provision. On the basis of humanitarian sectors, issues such as “mine action”, education, and protection remain underfunded, and the comparison between funding for food aid versus livelihood assistance is especially striking.13 Sectors that do not fit squarely into the UN cluster system divisions report that funding is hard to attract and remains ad hoc.
The maintenance of the core humanitarian tenets of impartiality and neutrality is a constant challenge. New developments such as the greater diversity of humanitarian donors and securitization of humanitarian funding will surely change the nature of humanitarian funding from its historical norm. As with most elements of the complex humanitarian system, humanitarian funding flows are volatile. Future variations will necessitate the evolution of the humanitarian structure and the adaptation of its constituent elements.
1 "Map of Aid Players.” Global Humanitarian Assistance, 2010.
2 Global Humanitarian Assistance. “Workstream: Governments.”
3“Inside the DAC: A Guide to the OECD Development Assistance Committee 2009-2010.” OECD, 2010.
5 Peter Walker and Kevin Pepper.“The State of Humanitarian Funding.” FMR 29, Forced Migration Review Online, 2007.
6 Kerry Smith, “Non-DAC Donors and Humanitarian Aid: Shifting Structures
7 Adele Harmer and Lin Cotterrell, “Diversity in Donorship: The Changing Landscape of Official Humanitarian Aid.”HPG Research Report 20, Humanitarian Policy Group, 2005.
8“Emergency Response Funds (ERFs).” Global Humanitarian Assistance, 2011.
9 Financial Tracking Service. “Pooled Funds.” Accessed February, 2013
10 Kerry Smith, “Non-DAC Donors and Humanitarian Aid: Shifting Structures, Changing Trends.”
11Glyn Taylor et al.“State of the Humanitarian System.” ALNAP, 2012.
12 “GHA Report 2012.” Global Humanitarian Assistance, 2012.
13Glyn Taylor et al. “State of the Humanitarian System.”