UNDP Structured
Funding Dialogue

OutlineODA context
Legacy effects of COVID-19,
conflicts, and climate change
are impeding global economic
recoveryWith the war in Ukraine
continuing, other ongoingcrises could become
peripheral, increasing the gap
in financing humanitarian anddevelopment needs

Recent policy shifts on aid
budgets, security, and national
interest influence how ODA
gets allocated, channeled, andprioritized

In 2022, ODA reached $204
billion, 13.6% higher than theprevious year (the increase
was mainly due to $29.3
billion (14.4% of total ODA)
spent to cover in-donor
refugee costs)

UN Development System Financing context
STRENGTHS
Adequately funded, the UNDS
is an unparalleled multilateralplatform to advance reform
and the SDGs.

Funding Compact 2.0 offers an
opportunity for ambitious andmeasurable indicators forstronger accountability andcommitment from Member
States and the UNDS.

OPPORTUNITIESWEAKNESSES
Growing pressure on ODA andincreased earmarked funding
compound an alreadychallenging operationallandscape for UNDS.

Declining core, heavy relianceon project-based funding and ahandful of donors risk
fundamentally changing theorganizational character ofUNDS entities.

THREATS2022 Financial Performance$4.8 billion in programme delivery- the highest in a decade$5.3 billion in total revenue,
including voluntary
contributions, a decrease of 6%
from 2021

Core contributions
decreased by 9% to $591
million from $648 million
in 2021$24.4 million in efficiency
gains mostly from
implementation of UNSDG
business operations strategy

Increased allocations
to programmes to 69%
of regular resourcesfrom 66% in 2021

91 cents of every dollar
spent went toprogrammes; every coredollar spent on
programmes leveraged$10 in other resources
Received a 17th consecutive
unqualified audit opinion andbalanced the institutional
budget for the 6th year in a row

2022 Funding Highlights$US in millions

$5.5b

$5.3b

$5b
$427

$464

$696

$4.9b

$362

Thematic funds
$221

$648
$591

$616
$992
$1,176$862$790

Ø Core contributions of $591 million were 9% lower
than in 2021.

$885$1,126$1,124

Reimbursable
supportservices
United Nations
pooled funds
Regularresources$1,299

Ø 10 partners increased their core contributions and 6partners signed new multi-year agreements bringing thetotal to 9.
Ø Most funding streams were down in 2022 except forthematic funds and 3rd party cost sharing.
Ø Contributions to thematic funds (funding windows)
increased by 42% to $119 million.

Vertical funds$2,142$2,072$1,685$1,919Government
financingThird party cost
sharing

20192020

2021

2022

Ø Third-party cost sharing increased by 14% and accounts
for 39% of total contributions.
Ø Government financing amounted to $1.1 billion,
exceeding the planned contribution estimate for 2022.
Ø Contributions to local office costs (GLOC) amounted to$29 million in 2022.

Core contributors

Progress on Funding
Compact commitments
100%11171780%
6760%

40%

20%

2111

Member Statescommitments 2021

Member Statescommitments 20220%

Full or rapid progress

UNDP commitments 2021 UNDP commitments 2022

In progress

Stalled or slow progress

SYSTEM-WIDE
Increased competition
over flexible funding
Perceived inefficiencies in
implementing organizations
Lack of diversification ofcore donors
Donors’ concerns regarding
accountability, reporting andvisibility requirements
Supply & demand problem:
agencies chasing projectfunding for survival

INSTITUTIONALECONOMIC
Oscillations in GNI andeconomic downturns

POLITICALPolitical accountability
towards constituencies

Volatility in markets andcurrency fluctuations
Domestic budget constraints
Donors’ economic interests
vis a vis development goals

Trust deficit and skepticism
toward multilateralism
Lack of awareness on theneed for sustained investments
to address systemic issues

PERCEPTION

Political dynamics of donor
institutions overseeing ODA
Political choice to prioritizecore for other multilateral
institutions over the UNDS

Policy gap between
donor and organization

Decline incore funding
to UN(DP)

Choice of loans modality
over grants
Prioritization of new
emergencies over long term
development issues

POLICY

Factors
contributing
to the decline
in corefunding

Consequences of reduced core funding
Undermining the drive to end
extreme poverty

Increased competition,
misalignment between funding
and results
Earmarking encourages competition, whereresource mobilization becomes driven not bymandate, but rather by funding opportunities(MOPAN 2020)

23

Less ability to leverage
partnerships and resourcesCore resources remain critical to design andpilot innovative programmes that can be scaled
up and generate additional funding fromdonors, IFIs, private sector.

A cut in core funding will hit the most vulnerable
hardest, making it difficult to implement programs
and initiatives aimed at eradicating poverty,
improving livelihoods, and achieving the SDGs

14

5

Slow and ineffective crisis
response
Without adequate levels of core funding, the UN
system will face challenges in being present on
the ground before, during, and afteremergencies.

Less funding to bolster
oversight functions
Core funding helps UN agencies to meet thehighest standards in transparency, oversight,evaluation, and accountability

Ways toaddress thedecline inflexible
fundingAction
byUNDPand theUNDS

Accelerated Core action
Diversifying core
Engaging New Strategic Partners
Thematic Funding Windows
Innovative Digital Partnerships

ActionbyMemberStatesRenew and demonstrate political commitment through core
support
Provide multi-year funding commitments
Support advocacy efforts
Enhance policy coherence
Engage in funding dialogue and seek solutions

Partners At Core campaign in Action