There are several types of financing mechanisms that exist both at country level and globally. They have been set up in order to enhance the coordination of funding from a number of different donors and ensure that urgent priority needs are met.
Central Emergency Response Fund
The Central Emergency Response Fund (CERF) is a stand-by fund established by the UN to enable more timely and reliable humanitarian assistance to those affected by natural disasters and armed conflicts. The fund is open to agencies, funds and programmes of the UN system and the International Organisation for Migration (IOM). The CERF is managed by the Emergency Relief Coordinator (ERC) who decides on the allocation of the fund. As the ERC operatres within the Office for Coordination of Humanitarian Affairs (OCHA) this agency is not eligible to apply for grants.
Common Humanitarian Fund
The common humanitarian fund (CHF) is a country level financing mechanism founded on the principles of the Good Humanitarian Donorship (GHD). The main characteristic of the CHF in that the funding received is totally unearmarked. This means that the fund can allocate money on the basis of need rather than donor preference. These needs are identified in the humanitarian action plan. The UNDP assumes the role of administrative Agent for the CHFs and provides support to the humanitarian coordinator.
Emergency response fund
The emergency response fund is another country level financing mechanism which recieves contributions that are unearmarked and pooled. [1] They differ from CHFs in that they provide most of their funding to short-term, small-scale NGO projects. They finance quick response activities for unforseen needs and allow donors to fund a broader range of organisations without the direct grant-making relationship. ERFs are managed in-country by OCHA. ERFs are usually set up at the suggestion of donors and can enable a quick response to sudden emergencies as well as improved preparedness. Their big advantage is that they can enable organisations to start emergency work while waiting for funding from other donors or to provide service continuity when there are gaps in funding from other sources.
Multi-donor Trust Funds
Multi Donor Trust Funds (MDTF) are individually designed country-specific financing mechanisms which receive contributions from more than one donor. These contributions are then pooled and disbursed by an administrator to a number of recipients including government agencies, UN agencies and NGOs, depending on governance and purpose. MDTFs in post crisis situations aim to work to support nationally defined priorities and to coordinate reconstruction and development needs. The objective of the fund is to enhance a country’s national government capacity following a conflict situation. They are designed to enable multilateral funding to flow quickly and coherently in order to meet the special needs of transition situations. MDTFs are also used for humanitarian and development assistance and in post crisis situations. MDTFS are managed by either by the World Bank or UNDG with the role of Administrative Agent normally being fulfilled by UNDP.
In response to growing demand for a mechanism that would assist the peacebuilding process the Peacebuilding Fund (PBF) was established in 2006 by the United Nations (UN). Its objective is to provide assistance to those countries that are recently emerging from conflict and support interventions of direct and immediate relevance to the peacebuilding process. It also aims to contribute towards addressing critical gaps in that process, in particular in areas for which no other funding mechanism is available. The intention is to stabilise and strengthen the government institutions thereby enhancing their capacity to sustain the peace process.
The Peacebuilding Fund disburses money through UN agencies which is then used to fund projects carried out by NGOs, national authorities and UN agencies. The countries in which the fund operates are usually under the review of the Peacebuilding Commission (PBC).The PBC provides policy guidance and advice on the use of the fund in those countries under review and supports the development of integrated strategies for post-conflict peacebuilding and recovery .The Peacebuilding Support Office (PBSO) provides overall direction and guidance on the programme management of the PBF and monitors its operations.