Common Humanitarian Fund: a path to a more efficient funding?
After Consolidated Appeal Process (CAP) was established in 1992 with the principle aim of raising funds for humanitarian action, as well as for planning, implementing and monitoring activities of aid organization in a specific country or region, it soon became obvious that it lacked strategic planning when allocating funds and the donors were therefore only committed to certain projects. The sum of their individual choices weren’t necessarily adding up to a coherent and rationale approach to a certain crisis and, in addition, the Humanitarian Coordinator (HC; appointed by the United Nations Emergency Relief Coordinator, the senior-most United Nations official in a country experiencing a humanitarian emergency) had little influence over these resource allocations.
The problem of this structural flaw in the funding process was addressed in 2006 when a reform introduced the Common Humanitarian Fund (CHF). The CHFs provide funds against the CAP, and allow the HC to determine resource allocation, working closely with the aid organizations. The common fund is intended to ensure that humanitarian funds flow toward strategic priorities in the field, through quick and flexible channels. An intended strength of the common fund is a donor commitment to provide initial funding at the beginning of the year, potentially a significant step toward improving the timeliness and predictability of humanitarian financing.
CHF, one of the three main pooled funds used for Humanitarian Financing, also maintains an emergency reserve (approximately 10%) to be used in case of unplanned emergency needs outside the CAP. The CHFs are pools of un-earmarked funds made available at the country level for UN agencies and NGOs that have taken part in the CAP. The first CHF was established in the Democratic Republic of the Congo (DRC) in 2006, followed closely by one in Sudan a few months later, and the Central African Republic (CAR) in 2008. In addition to these 3 countries currently CHFs exist also in Somalia.
2011 Evaluation of the Common Humanitarian Fund
The evaluation, undertaken by the Office for the Coordination of Humanitarian Affairs (OCHA), was done for CAR, DRC and Sudan, since in Somalia the CHF was launched only in June 2010. The visits of the three countries mainly involved semi-structured interviews, focus group meetings, project reviews and a few project visits. The key objective of the evaluation was to answer the question “‘how, and to what extent has the CHF contributed to improvements in the humanitarian community’s ability to address critical humanitarian needs in a timely and effective manner?”
Conclusions of the evaluation
In relation to operational impact, the conclusion is that the CHF has indeed been successful in fulfilling this objective. Probably the strongest impacts are visible where HC’s have made strategic use of the Emergency Reserve. There has been a more mixed impact on the cluster system where the competition for CHF funding often poses major challenges for cluster leads and co-leads, and the transfer of responsibilities to clusters has not yet been matched by a transfer of human and financial resources to enable them to discharge these responsibilities.
In relation to operational effectiveness and coherence a key feature of the CHF is that it is work in progress, and in all three countries there have been significant improvements made to the allocation and disbursement of grants since 2007. There is improved complementarity and coherence between donors (including donors not funding the CHF), although overall prioritization between clusters is still problematic and requires strong humanitarian leadership. This seems to be due to the lack of basic feedback caused by the lack of monitoring and evaluation. The use of the CHF Emergency Reserve has allowed for rapid crisis response, especially in the DRC, but for normal CHF allocations through the clusters, though timeliness has improved, the funds often arrive too late in the calendar year, and the time in which these funds have to be spent is then often too short.
As regards relevance/appropriateness and quality, the process by which the CHF is allocated between different regions of both Sudan and DRC is highly contested, and sometimes seen as arbitrary. (The situation in CAR is very different, as the funding for the CHF has declined to only $6million in 2010, enough to finance only 25 new projects.). Clusters are still seen as dominated by their lead UN Agency, and NGOs still feel that allocations of the CHF favor both these cluster leads and a small number of large International Non Governmental Organizations.
All in all, according to the evaluation report a far tighter monitoring is needed to ensure the technical quality of CHF projects and a greater attention to sustainability is needed where the same needs come up for funding every year. Given an ever-increasing volume of workload and the fall in donor funding for the CHF in terms of efficiency the efforts should be focused rather than widened in its scope.
Recommendations for future action
Recommendations have been made for all the actors included in the process of implementation CHFs. For donors, they go in direction of the need to become more engaged in the short term to support OCHA in particular in those areas where progress has so far been limited – especially the need for adequate financial incentives for OCHA to run the CHF effectively, more appropriate management arrangements for NGO recipients, and improved monitoring and evaluation. They should also provide multi-year commitments in order to minimize insecurity and allocate funds before the start of the calendar year.
According the evaluation report the OCHA itself should make the successful management of funds like the CHF a far higher corporate priority. It should also provide better technical support for thematic evaluations and, together with other UN agents, make space for a much closer coordination between the different funds and recommend projects that do no meet CHF criteria for other funds. The report also recommends the United Nations Development Programme (UNDP) to reduce the Management Agent fee (from 7 to 5 per cent) thus allowing for the money saved to be used for improving monitoring throughout the CHF. One possible solution is that the OCHA would take over the role of the Management Agent. Furthermore, they recommend that the CHF allocations should be for a maximum of 12 months from the payment of the first installment, as opposed to calendar year funding currently in place.
Other recommendations include unifying monitoring requirements currently in use by different UN Agencies, improved self-monitoring of OCHA and provision of more senior OCHA staff in each country.
This is a nonprofit explanation.