Tracking humanitarian funding to local actors: what we’ve learnt

Six years ago, donors committed to increasing the levels of funding to local and national actors at the forefront of humanitarian response. Locally-led humanitarian action is well understood to be more effective, more cost-efficient and more ethical – putting decision-making power closest to those affected by crisis. Recent events such as the flooding in Pakistan and the war in Ukraine show that the need to properly resource and support local actors is more vital than ever, but donors and intermediary organisations are failing in their responsibilities in this area.

Progress on meeting targets to increase direct (or ‘as direct as possible’) funding to local actors has been disappointingly slow, but also frustratingly hard to unpack and analyse with a lack of readily available data. This blog draws on learning from recent research into funding flows for the Syrian refugee response to local actors in Türkiye (carried out in partnership with the Refugee Council of Türkiye (TMK)), and from our work as a technical advisor to the ongoing Grand Bargain caucus on Funding for Localisation.

1. Transparency around where funding is channelled remains critically important, but elusive.

The system requires basic transparency around where donors provide humanitarian funding and how this is channelled through different actors. This is critical for two main reasons: most importantly, this data informs coordination, targeting and accountability within a regional, country or subnational response. Our recent work with TMK helps fill this data gap within the Syrian refugee response in Türkiye. Secondly, data is essential for accountability. It is not currently possible to effectively monitor progress against the commitments made by donors and international organisations to increase funding to local actors.

2. Poor reporting means it’s still not possible to track funding to local actors using only publicly accessible data.

To understand how much funding reaches local actors, data on two types of funding flows is needed: funding which is directly given by donors to local actors, and funding which passes to local actors through one or more intermediary organisation (including UN agencies and international non-governmental organisations (INGOs)). The main platforms for tracking ‘real-time’ humanitarian funding – including UN OCHA’s Financial Tracking Service (FTS) and the International Aid Transparency Initiative (IATI) – have the functionality to track both types of funding. However, the flows are not being adequately reported by donors and intermediary organisations. The data available is therefore inconsistent, incomplete, and sometimes unreliable (for example, in our research tracking funding flows to Türkiye, we found that just 0.3% of the funding we collected directly from intermediary organisations was captured on FTS). These funding platforms are also complex; quantifying funding flows to local actors using their data requires fairly advanced data analysis skills.

3. As a result, tracking funding to local actors is difficult, time-intensive and complex, even within individual agencies.

The lack of reliable publicly available data means that tracking funding flows to local actors is nearly impossible without directly collecting data from individual organisations. We undertook this exercise in Türkiye, which enabled us to map funding flows for the Syrian refugee response for two years (see Figure 1). However, this doesn't give a complete picture and is time-consuming – data must first be tracked down and then reconciled to avoid double-counting – and is not a substitute for regular transparent reporting. While it provides a static snapshot of funding which is useful to a particular context, scaling up or making comparisons with other similar studies are difficult.

Our recent work with the Grand Bargain caucus has also highlighted that individual agencies, including donors and intermediaries, don’t always have systems in place that collate data on their own funding flows. There’s an especially big data gap around how funding passes through intermediaries, which means donors are not able to properly estimate how much of their funding ultimately reaches local actors.

Figure 1: Total grant funding to Türkiye for the Syrian refugee response, by first- and second-level recipients (volumes), 2019–2020 aggregate

Chart showing overall picture of funding flows for the Syrian refugee response

4. Definitions matter and hold back more consistent and granular reporting.

The IASC and Grand Bargain have agreed definitions of who ‘counts’ as a local actor. However, international organisations continue to use different definitions in their own internal tracking, as do funding platforms such as FTS and the OECD DAC’s Creditor Reporting System (CRS). This creates inconsistencies in the data and limits comparability. Ambiguity around counting funding to national organisations with international affiliations or international organisations with national registrations as ‘local’ also erodes trust in the spirit of the localisation commitments.

Currently there is no way to comprehensively quantify how much funding reaches local actors, let alone how much reaches key sub-groups, for example women-led and women’s rights organisations and refugee-led organisations. This is partly because there is no agreed definition for these different categories. However, this type of data is critical to better understand the accessibility and reach of international funding. For example, in our Türkiye research, we found that 82% of total funding for the Syrian refugee response in 2019 and 2020 was ultimately channelled to local and national actors (LNAs) (mainly indirectly) – however, just 5% was provided to local or national non-governmental organisations (L/NNGOs) and less than 0.2% reached women’s organisations or refugee-led organisations.

Donors and international organisations must live up to commitments made in 2016 to both increase funding to local actors and increase transparency around funding. The ongoing Grand Bargain localisation caucus provides an opportunity to agree practical, impactful commitments to provide more funding for local actors. This must re-energise and stimulate much-needed change beyond the caucus with donors and intermediaries across the humanitarian system.