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The 'Grand Bargain' reached at the World Humanitarian Summit

Donors and aid organisations have agreed on an historic bargain to strengthen humanitarian financing and localise aid.

Wednesday May 25, 2016

Vanuatu Red Cross volunteer
The Grand Bargain enables greater investment in local humanitarian agencies and their volunteer networks. Photo: Vanuatu Red Cross

The International Red Cross and Red Crescent Movement welcomed the signing of the 'Grand Bargain' at the World Humanitarian Summit: an important way to achieve better outcomes for people in need by improving humanitarian financing.

The Grand Bargain commits donors and aid organisations to providing 25 per cent of global humanitarian funding to local and national responders by 2020, along with more un-earmarked money, and increased multi-year funding to ensure greater predictability and continuity in humanitarian response, among other commitments.

"The Grand Bargain means that humanitarian financing will better respond to needs on the ground," said Elhadj As Sy, Secretary General of the International Federation of Red Cross and Red Crescent Societies.  

"The Grand Bargain is a recognition that humanitarian solutions can start and end with local communities supported by local organisations such as National Red Cross and Red Crescent Societies. Local people walk the first and last mile to serve those in their communities most in need."  

Peter Maurer, President of the International Committee of the Red Cross, said: "The Grand Bargain is not a panacea for all the problems in the humanitarian ecosystem, but it will help make sure money is put to optimal use and, crucially, help to raise new funds.  

"The commitment by donors to provide more un-earmarked funding and impose fewer restrictions will allow us to better carry out our humanitarian activities in conflict zones out of the media spotlight, for which we receive little designated funding." 

Other important Grand Bargain reforms include:

  • increased investment in the capacity and leadership of local organisations
  • agreement by donors to reduce restrictions on funding and improve coherence
  • a commitment to increase cash-based assistance to affected people
  • a global target to ensure that 30 per cent of humanitarian funding is un-earmarked or softly earmarked by 2020.  

What this means for Red Cross

"Australian Red Cross warmly welcomes the commitment to improve the way humanitarian work is funded," said Peter Walton, Director of International Programs.  

"Giving priority to local organisations and taking a longer-term view that allows for predictability and better planning will enable the global community to mitigate the impact of humanitarian crises, reduce suffering and ultimately save lives. "  

With a global reach and a local presence in 190 countries, Red Cross is well placed to ensure humanitarian funding delivers the right outcomes. The Movement will now establish a new investment mechanism to strengthen the skills and widen the reach of its National Societies and their 17 million volunteers.  

The Movement will also invest in innovative approaches to aid: from cash-based programming to the use of forecast-based financing to release funds in advance of a disaster.  

More about the World Humanitarian Summit.