There has been growing consensus amongst donors that multi-year funding is a critical tool for improving the allocation and effectiveness of humanitarian aid to protracted crises. A number of donors have developed mechanisms to allocate funding in these contexts on a multi-year basis, channelling funding directly to NGOs, the UN and other multilateral agencies, and to country-level humanitarian response or emergency relief funds.
Multi-year funding is seen as useful because it:
- increases predictability
- provides partners with greater flexibility
- incurs lower operational costs
- allows donors and their partners to develop more strategic partnerships.
Several donors, including DFID, the Canadian International Development Agency (CIDA) and the Swedish International Development Cooperation Agency (SIDA), are in the process of expanding (or have been advised to expand) multi-annual funding mechanisms.