Out of the ordinary: New approaches to financing NGO-led crisis response mechanisms

Published 24. Jun 2024
This report takes stock of some of the new approaches that NGOs and donors are implementing. It seeks to inform thinking on how to best apply lessons from the eight reviewed mechanisms.

The humanitarian system is facing a growing financing gap with humanitarian response plans receiving only 43 per cent of their funding requirements in 2023, down from 59 per cent in 2022. In 2023, multilateral agencies received 58 per cent of all humanitarian funding inside and outside coordinated appeals – consistent with their share of total funding over the previous decade – compared to 24 per cent received by NGOs.

Against this backdrop, NRC and other frontline responders are trialling – with their donors’ support – new approaches to humanitarian financing. We studied some of these new approaches employed by NGOs and donors to better understand their current and potential role in crisis responses.

The eight mechanisms reviewed include three grant facilities managed by NGOs, one regional, bilateral NGO funding envelope and one internal NGO fund. The study additionally reviewed three consortia, that operate in a specific crisis context. Most of the reviewed mechanisms either already receive, or seek to receive, funding from multiple institutional donors, and range widely in scale, from budgets of USD 3.5 million to over USD 100 million annually.