In 2017 important progress was made by the workstream on agreeing a baseline for measuring progress; identifying shared needs and concerns between donors and aid organisations (through a workshop hosted by the co-conveners, Sweden and ICRC, in May 2017); and understanding different interpretations of what counts as ‘flexible’ funding and where it occurs in the funding chain (through a survey conducted by the co-conveners).
There is also agreement among participating signatories that the target of 30% of unearmarked or softly earmarked contributions by 2020 may need further qualification (ICRC and Sweden, 2017).
However, there is a consensus at political level to recognise that that more flexible funding increases predictability, enables more timely needs-based responses and provides for a more equitable distribution of resources (see also Poole and Mowjee, 2017). However, it is unclear whether the 30% target will be reached by 2020, or how progress against it will be assessed since it is an aggregate figure (signatories have been asked to provide proportional figures).
Overall, progress in this workstream has been moderate. A small group of donors has increased their share of unearmarked or softly earmarked funding. Political and practical constraints prevent other donors from doing likewise, and few aid organisations reported efforts to enhance the quality of their reporting and the visibility given to the unearmarked funding they receive.
As referred to in the ODI Independent report, GB signatories felt that the lack of system-wide progress on earmarking was in large part due to a lack of trust. This, some argued, can only be tackled by increasing accountability and transparency on all sides, including better-quality reporting by aid organisations on the demonstrable impact and added value of unearmarked funding.
Therefore, it is crucial for NGOs to further demonstrate why un-earmarked funding is an added value for quality aid delivery and that more flexibility to adapt to changing humanitarian context is crucial to reach effectiveness of aid delivery. Moreover, NGOs should also further promote what they are already doing in terms of transparency and accountability to encourage donors to fill their side of the quid pro quo. Future discussion on how to report on unearmarked and softly earmarked funding should also be connected to work on simplified and harmonized reporting.
It would be important for NGOs to build on evidence base and impact of un-earmark funding to use it as lessons learned and good practice for donors not yet engaged. Thus, aid organisations already receiving un-earmark funding should collect evidence and share with donors about its benefits.
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