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When only a few cents on the dollar are channelled to those closest to a crisis, we should stop calling that a failure. It is a system succeeding at what it was built to do.
The recent allocation of $2 billion in US funding through UN pooled funds made this painfully clear. The vast majority was given to UN agencies and international NGOs, despite widespread commitments to shift power and localise aid. In Bangladesh, not a single taka went directly to a local organisation. An explanation given in some of the 18 countries where funding was available: Six-month delivery timelines mandated by the US are too short, and local organisations are too risky.
Local actors feel frustrated. International humanitarian groups only seem interested in “localisation” when there’s no money. When there’s $2 billion on the table, the system returns to normal.
Bangladesh holds an example of a different approach. Before we get to that, we need to understand why the UN pooled funds excluded local groups, and why the humanitarian system is so resistant to change.
Power and process
The problem begins long before a funding round opens. The pooled funds – known as country-based pooled funds – are run by the UN’s humanitarian coordination body, OCHA.
To qualify as a partner, an organisation must clear a 39-item checklist and submit up to 15 organisational policies, regardless of whether it is applying for $300,000 or $3 million. The system applies the same benchmarking, safeguarding, and selection criteria to a small community-based NGO as it does to a large international agency. BRAC is a 50-year-old NGO and the lead agency responding to the Rohingya refugee crisis in Cox’s Bazar. Our application to register for the UN pooled fund lasted nearly two months.
Imagine what the process is like for smaller community organisations. They simply do not have the administrative capacity, legal teams, or institutional memory to meet these requirements – especially since international aid groups frequently poach top staff when they find new funding. Most may never make it through the door.
Those who do will be up against organisations that have spent years inside the machinery, learning its language and its unwritten rules. The same names get funded across responses, not always because they are closest to affected communities, but because they know how the game is scored. Before the few qualifying Bangladeshi organisations first attended consultations for the US funding in February, some international agencies had already begun preparing proposals. We have created a system in which local NGOs are asked to compete under rules that were never designed for them.
“What’s the point?” a colleague at a local organisation said to me after a recent meeting. “I joined the meeting, and I have to say yes.”
Power imbalances also shape these spaces. Advisory boards for OCHA’s country-based pooled funds include representatives from local NGOs, international NGOs, and UN agencies. But local NGOs get nearly all of their funding through the UN and INGOs – their financial viability depends on them. In many cases, participation becomes an act of agreement rather than an act of influence.
“What’s the point?” a colleague at a local organisation said to me after a recent meeting. “I joined the meeting, and I have to say yes.”
Language barriers further this power imbalance. Bangla is my country’s national language; coordination meetings are in English.
Moving forward
Syria is often raised as a counterexample of how UN pooled funds can localise aid. During its strongest years, the Syria Cross-Border Humanitarian Fund channelled 70% of its money to Syrian NGOs. Impressive, but the reason it worked was not enlightened design. UN agencies and INGOs simply could not operate in opposition-controlled northwest Syria. Local actors were not chosen because the system had evolved; they were chosen because they were the only options left. Syria shows the system localises only when it runs out of alternatives.
Bangladesh has tested a different model, and the results deserve attention. BRAC backstops a pooled fund supported by Global Affairs Canada and the Australian Department of Foreign Affairs and Trade. BRAC took on the compliance burden rather than passing it down the chain, conducted briefing meetings for local NGOs in Bangla, and provided coaching so that smaller organisations could meet the required standards without bearing the full cost themselves. BRAC does not implement projects under the fund – meaning we’re not competing with grantees.
Local organisations are not weak. They understand the context, they are embedded in communities, and they can deliver when properly supported – even in challenging six-month timeframes.
The results are concrete. In the WASH (water, sanitation, and hygiene) sector, we found that operational costs were more than 40% lower than comparable delivery by a UN agency, according to sector figures shared with us. Delivery was faster. Accountability did not slip.
That difference is efficiency in an era of hyper-prioritisation and deep cuts. It is the price of layers of overhead the system has quietly normalised and stopped questioning.
Local organisations are not weak. They understand the context, they are embedded in communities, and they can deliver when properly supported – even in challenging six-month timeframes.
There are specific tools that actually shift resources: direct grant windows for national NGOs, compliance frameworks that scale with grant size, allocation targets with teeth, and simplified registration that reflects local realities rather than international benchmarking. The same logic of positive discrimination we already apply to support minority communities must be extended to smaller NGOs.
The next test is coming soon. The US and OCHA have announced an additional $1.8 billion for the pooled funds. They’re also asking other donors to give their money through the same funds. UN pooled funds could become the global humanitarian system’s primary channel for distributing scarce resources.
It’s critical to get this right. This is not about one organisation, one country, or any single fund, but the immediate future of humanitarian response in a transactional world.
Donor funding is shrinking, especially for long-term crises like the Rohingya refugee response. All organisations working in Cox’s Bazar know we are staring at a funding abyss in the coming years. International organisations will eventually leave if the funding isn’t there.
Donors, fund managers like OCHA, and intermediary agencies have a choice. Reinforce the status quo or fix pooled funds, genuinely shift power, and help build a sustainable local response system.
