Aid Modalities ~ Annex 1 | Table 1

INTERNATIONAL POOLED FUNDS

Funds pooled at the international, regional level to support a particular theme, purpose, or country via the work of a range of agencies and allocations

Aid modality characteristics

General

· Managed at a multilateral level

· Funds are pooled and allocated using a common framework

· Attribution of development results will be at a more strategic level

· Should be of a transitional nature so development of national capacities and management systems is key

Partnership and governance

· Agreed multilateral governance structure on which NZ would normally be represented

· Policy dialogue involving donors, multilaterals, developing country governments and NGOs

· Will normally be housed with a coordinating agency with whom NZAID will likely hold an existing relationship or membership

· Strong delegation of administration to the agency managing the fund

Design and accountabilities

· A credible strategic plan

· Design ensures processes that emphasise national government policy directions

· Funding provided directly into a central multilateral account

· Use multilateral agency’s own performance frameworks and through governance mechanisms

Advantages

Risks

· Can provide for high level funding which allows for strategic assessment, alignment, prioritisation, coordination, M&E and for gaps to be filled

· Harmonisation due to pooling, single system, efficient decision making

· Can allow for transparent, rapid, flexible and predicable responses if sufficient delegation by donors to the fund and to the field

· Often an easy “sell” to the public and an effective tool for attracting resources

· Can be poorly aligned to country plans, establish parallel governance, delivery and accountability mechanisms and weaken country systems, ownership and accountability

· Can suffer single issue vision and draw resources away from integrated approaches

· Can result in the honey pot syndrome for new actors to access funding

· Need to ensure that NGOs do not get sidelined

· Processes can be time-consuming

When to use:

Where the issue and response requires strong international cooperation

· Where the fund responds to a global issue

· Where there are multiple multilateral response agencies and such a fund can promote a common engagement framework, agreed division or responsibilities, and demand driven agency responses.

Where, for country-focussed pooled funds, pooling cannot occur at national level

· When, recipient government systems are too weak for a shift to budget support to address the issue or where the recipient government is not an NZAID bilateral partner.

· Where there are high risks to be managed

Where the fund design addresses inherent weaknesses of vertical funds

· Fund processes promote collaboration among multilateral agencies

· Fund design works with and aligns to structures and processes at the national and sectoral level

· Fund design actively promotes integrated responses