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Humanitarian financing: sources, mechanisms and crisis of the model

  • Page updated onJune 12, 2026
Humanitarian financing
Text and photo: Bruno Abarca

How humanitarian action is funded (where it comes from, where it goes, and how it gets there) determines, to a large extent, the magnitude of the response that can be provided to crises and emergencies. Humanitarian funding mechanisms also largely determine how actions are developed, who implements them and many of the ethical dilemmas they will face.

However, humanitarian funding always falls far short of covering all needs. This problem has worsened since 2023, reaching a catastrophic dimension from 2025 onwards, the year in which cuts to humanitarian action budgets plunged the sector into an unprecedented crisis, from which the channels of humanitarian funding, now severely reduced, have been fundamentally transformed.

Where does the funding for humanitarian action come from?

Most of the humanitarian financing comes from voluntary contributions from donor countries

Traditionally, 80% of humanitarian financing has come from voluntary contributions from donor countries, through their international aid and cooperation agencies. The rest, around 20%, came from private donors: companies, foundations and individuals like you and me.

Among donor countries, there have always been significant disparities. Looking at the distribution of contributions, a few countries stand out above the rest. Between 2020 and 2024, on average, of all public funds for humanitarian crisis response, the United States contributed around 35.8%. They were followed at a considerable distance by Germany (11.6%), the European Commission (8.4%) and other donor countries such as Saudi Arabia (4.9%), the United Kingdom (4.7%), Japan (3.7%) and Sweden (3.1%) (OCHA, n.d.-a).

These contributions nonetheless represent a small percentage of Official Development Assistance (ODA) and an even smaller percentage of the gross domestic product of donor countries (van Teutem & Arriagada, 2025). Specifically, only between 12% and 18% of ODA is typically allocated to humanitarian action. In turn, in 2024, only four countries (Norway, Luxembourg, Sweden and Denmark) dedicated more than 0.7% of their gross domestic product to official development assistance (a voluntary commitment made in the 1970s by donor countries, though never achieved). Other donor countries, such as the United States, devoted barely 0.23% of their gross domestic product to international aid (OECD, n.d.).

ODA as a percentage of GNI
OECD, n.d.

Humanitarian financing increased until the year 2022 and collapsed in 2025

The annual volume of humanitarian financing varies from year to year. In 2016 it stood at around $22.6 billion. Thereafter, this volume increased progressively until 2021, reaching $30.9 billion. Following this, the deteriorating crises in Ukraine, Afghanistan and East Africa resulted in a sharp reversal of the trend. In response to the increased humanitarian needs of the population, annual humanitarian funding reached an all-time high in 2022: $43.3 billion.

This trend, far from being sustained, changed rapidly (Pearson et al., 2025). In 2023 and 2024, humanitarian funding fell to $37.1 billion, and in 2025 it collapsed, dropping to $27.7 billion (OCHA, n.d.-a). This abrupt reduction in global humanitarian action funding was the direct consequence of drastic cuts by several countries, most notably the United States. In just one year, this country went from contributing $14.125 billion to humanitarian action in 2024 to contributing only $3.423 billion in 2025 — a reduction of 75.8%. Other countries also significantly reduced their contributions that same year, including Germany (down 57%), the United Kingdom (down 48%) and France (down 45%) (ALNAP, 2025).

Where does humanitarian funding go?

Donors can choose what their contributions are used for

The Office for the Coordination of Humanitarian Affairs (OCHA) of the United Nations and humanitarian country teams, with the support and participation of all humanitarian actors, publish key documents to guide resource mobilization and the prioritization of available humanitarian funding. These are Humanitarian Needs Overviews and Humanitarian Response Plans, along with their global versions.

Humanitarian donors are free to choose which countries, actors and interventions their contributions are directed towards. Generally, between 50% and 70% of humanitarian funding is allocated to projects aligned with the priorities of Humanitarian Response Plans, developed in a coordinated manner (IECAH & MSF, 2025).

Contributions are not distributed proportionally to the needs of different countries, nor are they sufficient to cover everything required by coordinated plans. In 2024, for example, only 51% of what was requested in these plans was reached, and while countries such as Lebanon, Ukraine and Sudan exceeded 70%, others such as Syria and Ethiopia did not even reach 40%. In 2025, moreover, as a consequence of the drastic fall in humanitarian funding, barely 30% of what was required across the total coordinated humanitarian response plans was achieved (Pearson et al., 2025).

Contributions are sometimes delivered directly to implementing partners selected by donors. In other cases, the international cooperation agencies of donor countries manage open project calls, in which they indicate their priorities, requirements and eligibility criteria. To be able to apply for these calls, humanitarian organisations must assess the needs of the population, identify the actions required to address them and reflect these in the proposal they submit. If they ultimately receive the funding, they must use it for what they had indicated and account for it through reports, in accordance with the donor's regulations. Between 80% and 90% of humanitarian funding is earmarked for exclusive use in predefined projects (Stoddard et al., 2017).

Humanitarian funding also covers indirect costs of the organizations

Most humanitarian funding mechanisms allow a small percentage of the budget to be allocated to cover indirect costs (overheads).

Organisations need this funding to cover structural expenses, address risks or unexpected costs, or prepare to respond to potential crises. The percentage dedicated to indirect costs is usually small and around 5–10%, although this depends on each organisation and the agreements it reaches with donors (Girling-Morris, 2022).

When the organization that receives funding directly (and is responsible for its proper use and accountability) works with other actors who act as implementing partners, the funding of its indirect costs is negotiated between the two parties, donors permitting. On a case-by-case basis, implementing partners may receive additional contributions to cover their indirect costs, share the amount that is available with the main partner, or receive funding for direct costs only.

Of course, whether the funding of humanitarian organizations is direct or indirect matters a great deal. The possibility of covering indirect costs greatly influences the level of autonomy that NGOs are able to develop.

What organisations receive the funds allocated to humanitarian aid?

Although the figure varies each year, in 2024 59% of humanitarian funding was directed directly to a United Nations agency, according to the information available in OCHA's Financial Tracking Service (OCHA, n.d.-a).

Among all United Nations agencies, those that received the most funding were the World Food Programme, UNHCR and UNICEF. Together, the three received that year 75% of the funding directly allocated to United Nations agencies and 44% of total direct global humanitarian funding. It is important to understand that these agencies typically sign contracts with other international and local NGOs, which act as implementing partners and receive a fraction of the funding indirectly.

2004 humanitarian funding by destination organization type
Direct humanitarian funding in 2024 by organisation type. OCHA Financial Tracking Service (OCHA, n.d.-a).

According to this same source, in 2024, 7% of humanitarian funding was directed directly to a Red Cross and Red Crescent organisation. The International Committee of the Red Cross received $1.678 billion, while the various Red Cross and Red Crescent Societies and their International Federation received a combined total of $988 million.

In 2024, international NGOs were the direct recipients of 21% of humanitarian funding (OCHA, n.d.-a):

  • Three international NGOs each received more than $300 million: the Norwegian Refugee Council, Save the Children and the International Rescue Committee.
  • A further 9 international NGOs received between $100 and $250 million: the Danish Refugee Council, Acted, Action Against Hunger International, Mercy Corps, CARE International, Qatar Charity, Solidarités International, Catholic Relief Services and Deutsche Welthungerhilfe.
  • The majority of international NGOs received much smaller contributions.

Local and national NGOs received only 2% of direct humanitarian funding in 2024 (OCHA, n.d.-a). It is estimated that, when both direct and indirect humanitarian funding are taken into account, national and local NGOs received a total of $1.9 billion in 2024, equivalent to 5.1% of all global humanitarian funding (Pearson & Rieger, 2026).

Part of emergency response funding goes to pooled funds managed by OCHA

The pooled humanitarian funds managed by OCHA include the United Nations Central Emergency Response Fund (CERF) and the Country-Based Pooled Funds (CBPFs).

The Central Emergency Response Fund (CERF) was established in 1991 and enhanced in 2005 (United Nations, n.d.). It is a global fund managed by the Emergency Relief Coordinator (ERC) to respond rapidly to acute humanitarian crises or to help finance the humanitarian response in emergencies that have not received sufficient funding through other channels. Its initial amount was set at $50 million per year, but has grown progressively to $576 million in 2024. The CERF can only directly fund United Nations agencies, although these can subsequently subcontract international and national NGOs as implementing partners. In fact, around 25% of CERF funding ends up being implemented by local NGOs.

20 Years of CERF – UN Central Emergency Response Fund · By playing, you accept YouTube’s privacy policy · Al reproducir aceptas la política de YouTube

Country-Based Pooled Funds (CBPFs), by contrast, are established when new humanitarian emergencies arise or existing ones deteriorate. They are managed by the country's Humanitarian Coordinator (HC) and are used to fund actions under the country's Humanitarian Response Plan or to respond to unforeseen emergencies (OCHA, n.d.-b). CBPFs operate in more than 20 countries, with a combined total volume that reached a peak of $1.34 billion in 2022, although the figure fell to $871 million in 2025. These funds can directly finance local NGOs without intermediaries (OCHA, 2023). In fact, the percentage of direct funding to local NGOs through these funds has increased from 26.3% in 2020 to 45.5% in 2025 (OCHA, 2025b).

Although traditionally this channel has represented only a small fraction of humanitarian funding, the situation changed drastically in 2026 (OCHA, n.d.-a). Between 2023 and 2025, only five donor countries (the Netherlands, Belgium, the United Kingdom, Ireland and Denmark) channelled more than 20% of their contributions through this route in any of those years. During those years, the United States largely ignored this channel (1.5% of all its funding in 2023 and 0.7% in 2024). However, in 2026, the United States channelled virtually all of its humanitarian funding — greatly reduced compared to previous years — through this route. Donor contributions to these funds have never been earmarked for specific projects or organisations, although the impact that the change in the United States' humanitarian funding strategy may have on this remains unknown (Loy, 2026).

The lack of humanitarian funding, once worrying, is now critical and alarming

Even in the years with the highest funding, it has never been sufficient to cover the humanitarian assistance needs caused by conflicts, natural disasters or forced population displacement (Humanitarian Funding Forecast, 2025). The problem has moreover worsened since 2022 and especially in 2025, with a global humanitarian funding volume similar to that of 2016.

The impact of this funding reduction has been catastrophic, and examples of this are repeated across the globe. In 2025, two famines were declared (for the first time in a century) in Gaza and Sudan, and 25 million more people than the previous year did not receive the humanitarian assistance they needed.

In countries such as Syria, efforts to move from a very prolonged humanitarian crisis to a new phase of reconstruction and recovery were frozen by the lack of funds (Islamic Relief Worldwide, 2025). At the same time, food rations for the Rohingya population in the world's largest refugee camp (Cox's Bazar, in Bangladesh) were cut by more than half (Ahmed & Shaikh Azizur Rahman, 2025).

In Lebanon, UNHCR had to abruptly announce the end of coverage for the hospitalisation costs of refugees who had arrived from Syria (UNHCR, 2025). Another example is humanitarian aid in Mozambique, which was halved between 2024 and 2025, with the population reached by humanitarian action falling by 33% over the same period (OCHA, 2025a).

Regardless of the cuts made by other donor countries, the sudden withdrawal of United States funding has eliminated 40% of international humanitarian aid almost instantaneously. The crisis, however, is not only financial. The Emergency Relief Coordinator himself, Tom Fletcher, speaks of a crisis that is also moral and one of legitimacy in a time of global apathy, brutality, impunity and indifference, which has prompted calls for an ambitious radical reform of the system (the humanitarian reset), an aggressive hyper-prioritisation of needs in the 2026 Global Humanitarian Needs Overview (OCHA, 2025c), and profound changes within humanitarian organisations (MOPAN, 2025).

🧠 Let's pause and reflect

If humanitarian funding is conditioned by the geopolitical interests of those who provide it, can the humanitarian system be truly independent, and how could this structural dependence be reduced?

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The 2025 humanitarian funding crisis has exposed other major chronic weaknesses in the model

This is not solely a matter of reduced funds. The critical widening of the gap between humanitarian needs and the money available to address them has made evident important flaws and limitations in the humanitarian funding model, its architecture and its mechanisms. This has been the case despite the multiple recommendations (Norwegian Refugee Council, 2024) and reforms proposed over the years (Grand Bargain Caucus on Quality Funding, 2022).

Humanitarian funding has always been rigid and highly fragmented

Fragmentation of the system is a reality. Each donor country has its own mechanisms, procedures, priorities and deadlines for humanitarian funding. In addition, most calls for funding are for rapid response or have annual cycles and are tightly bounded to specific priorities, sectors, objectives and actions, defined in projects.

In most cases, the percentage of multi-year funding received by humanitarian organisations does not exceed 20% of their total (and is lower for NGOs and national and local actors). This generates a heavy workload devoted to proposal writing (of which only a portion is ultimately funded) and leaves little flexibility to plan coherent programmes in protracted humanitarian crises or to adapt a project to a changing reality (International Rescue Committee, 2020).

Humanitarian financing is unevenly distributed

On the one hand, and despite the humanitarian system's efforts to improve its coordination and the prioritization of needs-based humanitarian responses, donors continue to make a large part of their contributions according to geopolitical interests. Strategic alliances, cultural proximity or national security priorities of the most powerful governments dominate funding decisions, over humanitarian imperative and needs analyses.

On the other hand, the model prioritizes direct funding to large humanitarian actors, mainly UN agencies, ahead of international NGOs, and far ahead of national and local NGOs. This generates great inefficiencies and limits the autonomy and capacity of local NGOs, which barely manage to obtain funding indirectly, by being contracted as implementing partners. As a result, many local NGOs find it extremely difficult to sustain their basic structure, maintain the necessary capacity to identify and formulate new projects, and be able to continue competing in the next round of funding.

Previous humanitarian reforms have not achieved the changes that the model required

Both the Good Humanitarian Donorship Initiative of 2003 (Good Humanitarian Donorship, 2018) and the Grand Bargain of 2016 and its successive updates proposed reforms that have not been effectively implemented. These include increasing multi-year funding, unearmarked funding and direct, quality funding directed to national and local actors. The need to improve transparency, accountability and the traceability of aid was also highlighted (Development Initiatives & OCHA, 2017).

However, progress has been slow and incomplete (Swithern, 2024). Some donors have increased multi-year funding, but its availability (particularly for local NGOs) remained limited even before the 2025 crisis. Likewise, improving the flexibility of aid remains an unfinished task.

These commitments were not met at the level expected in a decade of progressive increase in humanitarian funding. Now that the scenario has changed with a drastic reduction of funds and a hyper-prioritization of the most acute emergencies, priorities for new reforms also seem to have changed. Localization and strengthening and investing in Country-Based Pooled Funds seem to be key to the new agenda, as well as reducing duplication and bureaucracy, but multi-year funding takes a back seat.

At the same time, in the face of insufficient humanitarian funding, humanitarian actors are exploring alternative humanitarian financing mechanisms. These include debt-based options, loans and guarantees, which open up new possibilities, although there is skepticism about their potential and success is by no means guaranteed.

Are there innovative alternatives to traditional humanitarian funding models?

The problems of the humanitarian funding model did not emerge in 2025 but had already been studied and analysed for years (ODI, 2024). In parallel, efforts have been made to move towards new alternatives and their small-scale application. These include mainly impact funds (Farber et al., 2024), insurance-based models, crowdfunding and the application of global public-private funds for humanitarian action (Chapagain, 2023), as well as approaches to alternative donors beyond traditional Western donors, or with new narratives and messages (Pearson, 2024).

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However, none of these alternatives seems sufficient or truly alternative. Many are difficult to scale, and others are complex and remain out of reach for small and medium-sized organisations. Above all, they continue to depend on the voluntary contributions of public and private donors rather than on mandatory contributions, a far more reliable foundation.

References

Humanitarian system

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How to cite this page

Abarca, B. (June 12, 2026). Humanitarian financing: sources, mechanisms & crisis of the model. Salud Everywhere. https://saludeverywhere.com/en/humanitarian-aid-and-international-development/humanitarian-financing/

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