UN appeals: What does underfunding really mean?

UN-coordinated appeals are a central pillar of the humanitarian response architecture. Each year they bring together hundreds of humanitarian agencies (nearly 800 of them at the last count) to produce the largest combined global request for funding.

But the size of that request is out-pacing funding contributions. In 2018, the appeals called for just under US$25 billion to meet the needs of an estimated 98 million crisis-affected people. This was almost double the amount requested just six years before. Despite major increases in humanitarian assistance, by the end of 2018 there was a record US$10.9 billion shortfall. Funding is under pressure – as the Global Humanitarian Assistance Report 2018 shows, it is failing to keep up with increasing demands, and is distributed unequally, concentrated to a few large crises.

The underfunding problem is not new and is well-recognised by humanitarian agencies and by donors alike. It has prompted much debate and many initiatives to try to fill the gap. Yet, while the scale of underfunding is well-reported, we know considerably less about its impacts. What does a 40% funding gap mean for the provision of assistance to the people who need it? How does money not given translate into response not delivered and into needs not met? Inability to answer these questions fuels ongoing mutual frustration between donors and agencies – donors distrust the numbers behind the appeals, while agencies struggle with shortfalls and compete for funds.

To begin to get beyond this circular crisis of trust, our latest report Underfunded appeals: understanding the consequences, improving the system (commissioned by the Swedish Expert Group for Aid Studies) sought to examine what is known and unknown about the consequences of underfunding – why it is so hard to answer this question and what does this tell us about how the system behind the appeals could improve. We looked in detail at three countries with underfunded appeals of quite different sizes: Chad, Haiti and Somalia.

Faced with shortfalls, humanitarian agencies fundraise, advocate, redistribute if they can, perform “financial gymnastics” and cut back their planned assistance. Reviewing the documents and speaking to humanitarians in each country, we saw that underfunding undermines the localisation, presence and effectiveness of the response. For people affected by crisis, shortfalls erode resilience – pushing people to deplete their resources and so face acute need when the next shock happens. We saw how cuts in food rations increase not only malnutrition, but also threats to protection and security.

While these impacts of underfunding are regularly observed by agencies, they are not systematically reported. The evidence tends to be patchy, illustrative and ad hoc – narrated in the disparate updates, reports, dashboards and reviews which make up each country’s appeals cycle. Although this is arguably unsurprising and understandable – measuring the outcomes of action, let alone inaction, in complex settings is extremely challenging, and all the more so when there is no funding or presence to do so – it is not insurmountable.

This knowledge gap about the realities of the funding shortfall has implications for improving the appeals system: for the way that the requirements are generated, that funding is tracked, and that the response is monitored and reported. The appeals have evolved almost beyond recognition since their inception over a quarter of a century ago, and there are many ongoing efforts to make them smarter and more consistent. But these need to go further – with clearer costings, more consistent revisions, and better monitoring and reporting.

All of these improvements do involve trade-offs – especially when funds are tight – between investing in more coordination or in more response. They will also be meaningless unless they are used – in particular to better and more rationally fund the appeals. So, improvements on the appeal-side must go hand-in-hand with improvements on the donor-side: with greater investments in the flexible and pooled funds that help to meet the worst gaps; and with better donor coordination to avoid the inequities that accumulate from bilateral preferences.

There are, of course, clear limits to what technical fixes can achieve. They neither address the underlying political economy of the humanitarian system nor solve the problem of addressing underlying needs, and they do not help the world to shift from a crisis-based model of funding response to a risk-based model of reducing need. But while the appeals cannot be seen in isolation of the wider aid system, this does not reduce the current critical importance of donors and agencies working together to get them right. For people in need of humanitarian assistance, the stakes are high.

Photo credit: © EU 2012- Photo credits: EC/ECHO/Isabel Coello