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Grand Bargain: Reform or business as usual?

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Location: Global

What we know: Inadequate resources are a severe and increasing constraint on humanitarian action in the face of increasing emergencies due to conflicts, natural disasters and disease.

What this article adds: The ‘Grand Bargain’ is a package of reforms to humanitarian funding launched in May 2016 at the World Humanitarian Summit. It comprises 51 ‘commitments’ to make emergency aid finance more efficient and effective, endorsed by 34 agencies. It requires innovation, greater efficiencies, more resources and enhanced collaboration between existing and new partners. It is estimated to produce annual savings of US$1 billion within five years (5% of current spending). Both opportunities and limitations have been raised.

Introduction

The ‘Grand Bargain’ is the name given to a package of reforms to humanitarian funding, launched in May 2016 at the World Humanitarian Summit. A group of 34 representatives of donors and aid agencies (which together provide the ‘lion’s share’ of global emergency aid funding) produced 51 ‘commitments’ to make emergency aid finance more efficient and effective. The Grand Bargain is presented as a collective action to address the shortcomings of under-resourced humanitarian response which requires innovation, greater efficiencies, more resources and enhanced collaboration between existing and new partners across the humanitarian ‘ecosystem’. It identifies a need to move from the present supply-driven model dominated by aid providers to a demand-driven model more responsive to the people being assisted. Commitments are packaged under ten measures/areas for reform. It is estimated that the Grand Bargain agreement will produce annual savings of US$1 billion within five years, which equates with 5% of current spending.

A recent IRIN¹ report suggests the package has had a mixed reception. Some, like Dutch development minister Lilianne Ploumen, feel the bureaucracies involved did well to agree on so much in a few short months, given the complexities of budgeting and contracting emergency aid. Others point to a lack of more specific actions tied into timelines and targets: “It could be the Grand Bargain for business-as-usual unless there are more specific actions” (Christina Bennett, Overseas Development Institute). The author of the review outlines some opportunities and limitations around the ten key areas of reform, including:

1. Greater transparency
The pledge is to “publish timely, transparent, harmonised and open high-quality data on humanitarian funding within two years”. The International Aid Transparency Initiative (IATI) data model is likely to be the agreed format. Several major donors already publish at least some of their information in this format, which should help accountability both upwards to the donor and downwards to aid recipients.   

2. More support and funding tools for local and national responders
Only 0.4% of emergency funding currently goes directly to local and national operators, so the target of 25% by 2020 is high. Southern NGOs will likely receive more funding, on better terms, but will not easily ‘shake off’ the sub-contracting relationship with the United Nations (UN) agencies and large, international, non-governmental organisations (NGOs).

3. Increase the use and coordination of cash-based programming

There are no firm targets for the expanded use of cash, despite studies saying it is now beyond question that it works². According to the author, the Grand Bargain text is contradictory: it claims that “using cash helps deliver greater choice and empowerment to affected people and strengthens local markets, but remains underutilised”, while at the same time calling for further research to better understand its risks and benefits.

4. Reduce duplication and management costs with periodic functional reviews
The agreement states that “reducing management costs depends upon reducing donors and aid organisations’ individual reporting requirements and oversight mechanisms”. There is tension between donors wanting their grantees to trim costs, and recipient aid agencies blaming donor bureaucracy for adding to those costs. Donors should ‘harmonise’ boilerplate grant agreements. Aid agencies should commit to being more open about their real costs “by the end of 2017” and meanwhile find savings from sharing costs such as transport, logistics, information technology (IT) and insurance.

5.  Improve joint and impartial needs assessments
Significant efforts have been made to strengthen the quality and coordination of humanitarian needs assessments used for strategic decision-making, but critics claim that aid agencies too often get to define the scale of the problem, pick where they wish to intervene and set their price tag. The Grand Bargain tackles only a part of the problem of overlapping and duplicative assessments; donors and aid agencies are to “provide a single, comprehensive, cross-sectoral, methodologically sound and impartial overall assessment of needs for each crisis to inform strategic decisions on how to respond and fund thereby reducing the number of assessments.” De-linking assessment from response, for example by commissioning independent assessments, was proposed in earlier drafts but not included in the final text.

6. A participation revolution: include people receiving aid in making the decisions which affect their lives

The end customers of aid often have little choice or influence in the services they get, and feedback mechanisms so far have had little impact in changing programme delivery. The agreement invokes two different sets of guidelines for this, the Core Humanitarian Standard and the Inter-Agency Standing Committee (IASC) Commitments to Accountability to Affected Populations. Donors will have to agree that programmes can change as a result of community feedback, while aid agencies have to show how they incorporate it into their programmes.

7. Increase collaborative, humanitarian, multi-year planning and funding
Aid agencies often find themselves presenting similar programmes to donors year after year that have no longer-term goals; a process that wastes time and effort. Most humanitarian finding is issued on a 12-month cycle. The Grand Bargain target is for five countries to trial multi-year planning and funding by the end of 2017.

8. Reduce the earmarking of donor contributions
Donors typically earmark funds to specific projects, but this can become wasteful and encourage micro-management. The Grand Bargain suggests that various types of pooled funding mechanisms will expand; e.g. the UN’s Central Emergency Response Fund (CERF) is likely to rise to US$1 billion a year³ . The goal to reduce earmarking is worded without much promise of enforceability: “The aim is to achieve a global target of 30% of humanitarian contributions that are non-earmarked or softly earmarked by 2020.” Measurable progress on this will depend heavily on classifications of earmarking.

9. Harmonise and simplify reporting requirements
The text puts more onus on the donors: “simplify and harmonise reporting requirements by the end of 2018 by reducing [their] volume, jointly deciding on common terminology, identifying core requirements and developing a common report structure”.

10. Enhance engagement between humanitarian and development actors
Combining emergency and development funds and agendas is a hot topic. The text addresses this: ‘it is about working collaboratively across institutional boundaries on the basis of comparative advantage”. The general intent is broad: “use existing resources and capabilities better to shrink humanitarian needs over the long term with the view of contributing to the outcomes of the Sustainable Development Goals (SDGs)”. This will need to be the focus not only of aid organisations and donors, but also of national governments at all levels and civil society and the private sector.

Conclusion

According to the author, two of the ten areas covered – transparency and funding of local and national aid agencies – have gone further than others. On transparency, the Grand Bargain ‘group’ committed to publish their financial data in a common open format within two years. Major reform on cash-based aid and needs assessments did not materialise.

The following donors and aid organisations endorse the Grand Bargain:

Australia, Belgium, Bulgaria, Canada, Czech Republic, Denmark, European Commission, Germany, Italy, Japan, Luxembourg, The Netherlands, Norway, Poland, Sweden, Switzerland, United Kingdom, United States of America

Food and Agriculture Organization of the United Nations (FAO), InterAction, International Committee of the Red Cross (ICRC), International Council of Voluntary Agencies (ICVA), International Federation of Red Cross and Red Crescent Societies (IFRC), International Organization for Migration (IOM), Steering Committee for Humanitarian Response (SCHR), United Nations Children’s Fund (UNICEF), United Nations Development Programme (UNDP), United Nations Entity for Gender Equality and the Empowerment of Women (UN Women), United Nations High Commissioner for Refugees (UNHCR), United Nations Population Fund (UNFPA), United Nations Office for the Coordination of Humanitarian Affairs (OCHA), United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), World Bank, World Food Programme (WFP)

The World Health Organization (WHO) will lead a discussion on the Grand Bargain commitments with its Member States.

Reference this page

ENN (). Grand Bargain: Reform or business as usual?. Field Exchange 53, November 2016. p51. www.ennonline.net/fex/53/grandbargain

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