Executive summary
Pooled funding mechanisms have been recognised as an important tool to help shift decision-making closer to communities affected by humanitarian crises, and help deliver on the commitment to increase funding to local and national actors for the purpose of greater flexibility, efficiency and timeliness of humanitarian responses. Many donor governments, in line with their Grand Bargain commitments, prioritise the UN Office for the Coordination of Humanitarian Affairs (OCHA)’s country-based pooled funds (CBPFs) as an opportunity to channel funds to local partners when direct funding mechanisms, or relationships with local actors, can be deemed too difficult.
Despite the Grand Bargain commitments to allocate 25% of total funds directly to local and national organisations, originally pledged by 2020, little is documented from the perspective of local and national non-governmental organisations (NGOs) on their experience of working with pooled funds.
The British Red Cross, in coordination with the International Federation of Red Cross and Red Crescent Societies (IFRC), commissioned a review of the IFRC-Disaster Response Emergency Fund (IFRC-DREF) pooled funding mechanism. This was designed to contribute findings, lessons and recommendations
on the extent to which the IFRC-DREF mechanism enables National Societies to locally prepare and lead responses with ‘as-direct-as-possible’ funding. It also aims to capture findings from the NS own engagement with the IFRC-DREF to further strengthen, empower and position the IFRC to champion the IFRC-DREF internally and externally with key stakeholders. The IFRC has determined guiding principles for localisation aims of the IFRC-DREF, which are addressed throughout the review.
The IFRC-DREF has enabled assistance to over 230 million people affected by disasters and humanitarian crises and allocated more than 630 million Swiss francs (CHF) to address the needs of affected communities. As a further example of the reach of the IFRC-DREF, 90 NS were supported in 2023 to develop greater anticipation and response to disasters, with IFRC allocating CHF 74.2 million.
By channelling funds through member National Red Cross and Red Crescent Societies, the IFRC-DREF aims to promote community ownership, local leadership and participation in decision-making processes, leading to more effective and sustainable humanitarian responses. However, several challenges remain for the IFRC-DREF, which this review seeks to address to better understand the opportunities and barriers NS face through a localisation lens.
The review found the IFRC is delivering on its commitment to provide quality funding through the IFRC-DREF to local actors, i.e, its member National Red Cross and Red Crescent Societies: the IFRC has reported that 83% of IFRC-DREF funding is provided directly to NS, surpassing the commitment
of 25% under the Grand Bargain localisation marker. The decision to increase the IFRC-DREF funding ceiling, aligned to a severity categorisation of an emergency, demonstrates significant commitment to provide both quality and flexible funding to NS.
The review identified that the IFRC is making a significant positive contribution to coherent and predictable access to the IFRC-DREF: this includes flexibility offered by the IFRC through its strategic ambition under the IFRC-DREF ‘Evolution’ to ensure a responsive and accessible fund. This is demonstrated through the following examples:
simplified assessment procedures, a move to electronic application approvals, ongoing dissemination and training on new or modified ways of working and decentralisation of IFRC-DREF functions.
Considerable improvements have been made by the IFRC to drive efficiencies through fund management and performance analysis, through introducing new management and reporting tools. IFRC-DREF reporting requirements are light for NS, in comparison to other pooled funds, though financial reconciliation and long-standing queries on cost eligibility remain time-consuming and the main contributors to systemic late reporting by NS to the IFRC. On occasion, this reduces the overall efficiency of a response due to additional IFRC staff time to follow up.
The integration of the Anticipatory Pillar within the IFRC-DREF allows NS access to two funding mechanisms coordinated through one fund. The IFRC-DREF Evolution offers greater flexibility to NS to respond to context-specific needs. The IFRC brokered an insurance mechanism to enable expanded reach of the IFRC-DREF for NS responses and the anticipatory action integration. An insurance mechanism provides a crucial safety net for the fund, ensuring response funding remains available even during periods of high or unexpected demand through effective risk transfer. The review further identified that the IFRC has made progress in using the IFRC-DREF in areas which generally remain under-supported in the humanitarian sector, such as disease outbreaks, tackling epidemics and support for civil unrest, demonstrating an additional added value of making efficient and flexible resources available to NS to respond to localised emergencies.
Key informants interviewed as part of the review voiced strong support that funding contributions to the IFRC-DREF remain as flexible as possible and focused on NS being able to prioritise a response to emergencies using the IFRC-DREF, as opposed to expanding the eligible use of the fund too broadly, or beyond the two pillars. The IFRC-DREF Evolution and strong organisational commitment to expand the volume of IFRC-DREF funding – as well as its coverage – is an opportunity to now strengthen impact reporting, including engagement with communities to demonstrate IFRC’s people-centred approach, which has received less consistent attention.
