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Funding gaps are growing while key policies to improve aid have slowed as money is concentrated in the same hands, a new analysis warns, ahead of upcoming meetings meant to kickstart stalled reforms.
The new report from UK-based analysts Development Initiatives offers a snapshot of a fragile system stretched thin: The global system is waist-deep in emergency responses that last years longer than they used to, while reforms meant to make the sector more nimble and equitable are at a standstill.
The findings add more data points to long-standing trends and problems seen across the sector: deep budget cuts, the dominance of a few donors and big international aid agencies, and slow change. Among the new indicators:
- The humanitarian system saw its widest funding gap on record in 2023. UN-backed appeals were 45% funded, compared with about 59% on average in previous years.
- These big gaps are likely the norm. This year’s responses are projected to be less than half funded.
- Progress on key commitments to improve aid has been minimal, or slowed to a crawl. Funding to local aid stands at around 4.4%, well short of years-old targets; money for anticipatory action, often said to retune humanitarian responses for climate change, is less than 1% of the system; the growth of cash aid has stalled.
“What we see is that the resources that are going into the system are starting to decrease and are projected to drop quite significantly,” Niklas Rieger, the report’s co-author and Development Initiatives’ crisis and humanitarian co-lead, said in an interview.
This means “tough choices lie ahead”, he added, while the sector’s moves to shift power and become more efficient and effective “will become more urgent as the years go by, and the more the funding gap grows”.
The report is released as representatives from dozens of humanitarian organisations, including big UN agencies and networks of local organisations, are set to meet in Geneva next week to piece together the next steps for the sector’s so-called Grand Bargain commitments. The once-sprawling reform package, first passed in 2016, has been slimmed down to focus on making aid more locally driven, improving accountability to people who use aid, and improving the quality of funding.
Here are a few topline takeaways from the new data:
The sector is bogged down in responses that last years
Humanitarians are spending most of their money and energy on long-term crises – a stark change from a decade ago.
Some 91% of funds requested for UN-coordinated emergency appeals this year are for protracted crises – where there have been responses for five straight years or longer. It was only 29% in 2014.
“The growth in funding needed for protracted crises is a significant driver of the growing funding gap,” the report’s authors write.
This demands more predictable multi-year funding, and more attention paid to longer-term development aid and the root causes of crises, analysts say. But development aid is often the first to be cut when crises spiral, and broader calls to make the different corners of the aid sector more cohesive have fallen flat.
Local aid funding nudges forward… a little bit
There has been “little tangible change” on promises to fund locally driven aid and fix power imbalances.
The donors and aid groups that signed on to the Grand Bargain gave only 4.4% of their funding to local humanitarian actors in 2023, the report’s authors say. Only 0.6% of this went directly to local humanitarians – as opposed to passing through intermediaries, for example. Donors originally promised to target 25% of their funding to local humanitarians.
More donors and big aid agencies, meanwhile, are creating policies to improve the quality of funding – giving or sharing overhead costs that help local organisations survive, for example.
But money tells only part of the story for reforms that were aimed at shifting power and levelling a historically unbalanced system. Progress on localisation is “patchy”, the report warns: “A new and realistic conversation is needed about what continues to hamper meaningful progress on the localisation imperative”.
Key reforms keep money concentrated in the same hands
The global system has promised to make aid more locally driven, but its other reforms may be deepening international dominance.
For example, the sector has moved toward giving cash as aid rather than goods (some 23% of total humanitarian assistance is in the form of cash or vouchers). And it’s promised to better predict and respond to emergencies before they spiral – a broad doctrine known as anticipatory action.
But UN agencies dominate what’s known as cash and voucher assistance; the report’s authors say that local organisations appeared to deliver only 2.1% of trackable cash.
Anticipatory action appears to be following a similarly skewed path: Only 12% of funding available for active anticipatory action projects seems to involve local humanitarian organisations, and this is usually as a sub-contracted implementing partner, rather than designing and leading.
Local humanitarians have long said that the global system doesn’t trust them to lead, and this hesitancy can be especially clear around cash aid projects.
Cash aid may be stalling (growing just one percentage point over 2022 figures), and anticipatory action is still tiny, representing less than 1% of total trackable assistance. Further growth may come from genuine inclusion of local humanitarians, but the numbers suggest that the system is maintaining the status quo.
It’s easier to ace a test when you grade yourself
How much funding goes to local aid? It depends who you ask.
The report’s authors say that about 4.4% of total verifiable funding from Grand Bargain signatories went to local aid actors.
But some aid agencies say they’re giving far larger amounts – according to the “self-reports” of so-called Grand Bargain intermediaries. These intermediaries are usually UN agencies and international NGOs that receive donor funding, take a cut, then pass it along to local humanitarian groups. Local humanitarian leaders often say international agencies dilute the definition of what counts as local – trying to include affiliated organisations and country offices, for example. When including these self-reports, local aid funding rises to 25%.
But Development Initiatives say these self-reports aren’t independently scrutnised, are impossible to verify, and seem to contradict available evidence from trackable data and local organisations themselves.
Edited by Andrew Gully.
