UNRWA’s Resource Mobilization Strategy 2012-2015

Presentation for the Advisory Commission November 2011

Agency response to June AdCom recommendations

• Strategic approach to external relations and communications• Targeted work-plans and targeted marketing tools for each

donor country• Diversification of donor base• Joint exploration with TDs towards establishing new donor

relationships• Emphasis on multi-year agreements with donors• Priority to the General Fund• Establishment of the Private Partnership Unit• Acknowledgment of the role of Representative Offices

Strategic Framework

PAST TRENDSUNRWA’s Resource Mobilization Strategy 2012-2015

Trigger points for donors are dominated by longer-term trends, and punctuated by crises

After 2nd Intifada Geneva conference formalizes a new commitment by donors

Arab Spring

Nahr al-Bared conflict

Gaza war

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Dis-engagement

The average growth rate in GF funding 2000-2010 was equivalent to annual rate of 7.2% compound

Traditional donors share has fallen slightly:

Overall UNRWA is highly dependent on Traditional Donors, but this dependency is slowly reducing

Arab donors have contributed a significant share of UNRWA’s funding, in particular to EA and Projects

PROGRESS IN RESOURCE MOBILIZATION

UNRWA’s Resource Mobilization Strategy 2012-2015

UNRWA has successfully increased funding from Arab donors

While Arab ODA has typically represented between 1.2% and 4.7% of global ODA flows, UNRWA’s overall financing (GF + Projects + Emergency Appeals) is financed to a greater extent by Arab donors – between 1.7% and 10% of UNRWA funding has been from Arab sources.

Spanish National Committee

Over the last 5 years the National Committee has provided €11.2 million in total contributions. 96% of these contributions are derived from Spanish Regional government funds, and the remaining 4% (a total of €473 thousand) were raised from private sources.

… and has shown a very high, and increasing return on investment.

FUNDING NEEDSUNRWA’s Resource Mobilization Strategy 2012-2015

Increases in GF requirements will lead to an increase in funding requirements to a base of $995 million in 2015.

SOURCES OF FUNDINGUNRWA’s Resource Mobilization Strategy 2012-2015

• Traditional Donors will continue to increase funding, but at a significantly lower rate. Given ODA outlook, GF contributions are expected to grow by no more than 2-4% and overall contributions by around 3% a year

Traditional Donors

• UNRWA has decreased its overall dependency on the Traditional Donors from 92% in 2000 to 87% in 2010. In the same time period OECD DAC countries also decreased their share of global ODA from 98% to 95%

• UNRWA has been successful in raising Emergency Appeal funding from outside the Traditional Donor group: during 2009 a relatively modest 74% of contributions came from traditional donors. Globally 95% of humanitarian funding comes from OECD DAC countries

• While the USA’s total contributions to UNRWA have increase by 10.7% per year on average, the US increased total ODA by an average of 13% a year

• Similarly the EU grew ODA by an average of 12%, while contributions to UNRWA grew at the somewhat slower rate of 10.1% per year

• Several of UNRWA’s largest Traditional Donors – such as Sweden, Norway, Netherlands and Denmark are above their target 0.7% ODA/GNI ratio

Non traditional donors

• Dominated by a group of countries that have consistently grown their share of total contributions through donations to the General Fund. They have not contributed significantly to the Emergency Appeals.

• One of the major contributors to this group, Luxembourg, is already above its target ODA / GNA ratio and could be subject to limitations or growth in ODA as a whole.

• This group includes Eastern European countries and several others, who are underperforming as donors and offer the opportunity to diversify the source of income.

• Non-Traditional partners should be managed to increase their growth through diversifying contributions to more donors – while maintaining and growing the current key contributors in this group

Arab donors• Arab donors account for 1% to 5% of global ODA. They typically account for a higher share of UNRWA total funding, especially in crises.• Preference for larger projects and in particular infrastructure programs• A relatively modest share of 2-3% of the GF, but the trend is positive•Saudi Arabia is a dominant force in ODA and Humanitarian Aid, representing 50-94% of aid flows, and an important regional opinion leader

• Given past trends, it is reasonable to expect an increase in the relative contribution of Arab donors toward the GF, while targeting at least a maintenance of their share of Emergency Appeal and Projects

Development Aid from ‘Emerging Markets’• Emerging markets are rapidly increasing aid levels• EM represented 3.7% of total ODA in 2009 but only 0.3% of total

contributions to UNRWA• EM represented 1.2% of global Humanitarian Aid in 2010, whereas

UNRWA received no EA funding from these countries

• Emerging Markets could be developed to provide around 1% of GF, which is a ten-fold increase in nominal levels compared to today

• The full potential of Emerging Markets will only be reflected in the following strategy period

Private Partnerships

• Until recently private sources of funding (philanthropic foundations, corporations, NGOs, HNWIs, individual giving) have not constituted a priority for the Agency

• Private sources presently account for less than 0.1% of GF funding• Study performed of other UN agencies shows that private sources are

increasingly important in securing additional income• Work of the Spanish national committee exemplifies the opportunities

within this field

• Provided investments are made, contributions from private sources can increase substantially and are expected to account for 2% of GF funding in 2015

RESOURCE MOBILIZATION STRATEGY

UNRWA’s Resource Mobilization Strategy 2012-2015

Resource Mobilization Priorities

• In order to promote aid effectiveness and avoid a proliferation of projects, donors are encouraged to give un-earmarked funds.

• Responding to a range of donor priorities UNRWA seeks to maximize the resources available to the Agency by fully utilizing opportunities arising from a variety of donor instruments and bilateral budget lines.

• UNRWA directs its RM efforts first and foremost towards the General Fund. Donors are encouraged to enter into multi-year agreements in order to increase income predictability and reduce recurrent fund raising costs.

• When mobilizing humanitarian funding UNRWA seeks to ensure that minimum needs are met across fields with emergency programs.

• Large reconstruction programs require a targeted RM approach. Efforts are made to secure funding to meet minimum annual operational requirements.

• Discrete projects outside of larger reconstruction programs are funded as opportunities arise, provided they meet quality standards set by the Agency.

Base case requirements for 2012-2015

Base case funding projections for 2012-15

• Rising to $995 million in 2015• Traditional donors account for a declining share of total contributions• This is equivalent to 2% annual growth for the Traditional Donors• The rise in Arab donor contributions is mainly focused on high-visibility

projects such as Gaza reconstruction

General Fund in Base case ($m) to 2015 • Rising to $660m in 2015, declining share of Traditional Donors

from 89% to 84%• This is equivalent to 3.6% annual growth for the Traditional

Donors between 2011 and 2015 • 40% of income growth will come from diversified donor base.

Strategic Framework

Deepen the partnership with Traditional Donors

Diversify donor base

Develop Agency capacity to mobilize resources and manage donor relations

DISCUSSION

UNRWA’s Resource Mobilization Strategy 2012-2015