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Pooled funding - What is it and WhyWhat is an inter-agency pooled fund?
The United Nations adopted the official definition of pooled funds from the Financing and Budgeting Network in June 2015. It has since been integrated into UNSDG guidelines and UN data standards for system-wide financial reporting.
A UN inter-agency pooled fund has three distinct functional areas.
Design and administration: Pooled funds support a clearly defined programmatic purpose and results framework, and rely on contributions from more than one contributor. Financing gets blended, instead of earmarked, prior to being allocated to a specific UN organization or held by a UN fund administrator.
Joint governance and/or fund operations: A UN-led governance mechanism decides on project/programmatic allocations, taking into account a fund's programmatic purpose and results framework.
Fund implementation: Implementation of fund activities is (fully or largely) entrusted to UN organizations that assume programmatic and financial accountability for resources received.
The firewall and clear delimitation of different roles is key to the effective functioning of pooled funds.
Governance and Management
Effective governance and management arrangements are crucial for attaining results. A robust and agile management architecture is central to transparent and accountable decision-making on resource allocation, monitoring, and reporting.
It also changes the nature of risks and risk-taking: In a pooled fund model, stakeholders collectively have time to put mitigation measures in place.
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The governance and management architecture of each pooled fund administered by the MPTF Office includes:
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A Steering Committee to set the fund strategic direction, make resource allocation decisions, and monitor progress toward achieving transformative change. Typically, Steering Committee representatives come from government, central implementing partners (including the United Nations, national entities, civil society), and contributors.
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A Secretariat ('Convening Agency' in a joint programme) provides technical and administrative support to the Steering Committee and handles day-to-day operations of the fund. Members of the Secretariat often appraise funding proposals, and take on coordination, report consolidation, and monitoring and evaluation functions.
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Participating Organizations handle project implementation and cover UN agencies, government entities, and international financial institutions.
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The MPTF Office, as the Administrative Agent (AA), takes on fund design and administration. Primary administrative functions include receiving and administering contributions for transfer to Participating Organizations (as per Steering Committee instructions), as well as financial and performance reporting. The Office uses standard United Nations legal agreements to establish and operationalize pooled funds to increase speed and reduce transaction costs.
The MPTF Office places importance on the design of governance architecture across its portfolio of trust funds and supports smooth fund governance with secretariat support tools and services.
Our transparency-first approach and commitment to the highest transparency standards contribute to mutual accountability amongst partners. To access specifics on governance arrangements for individual pooled funds, visit the governance section.
Why Pooled Funding
Because success requires solid, flexible, robust, transparent, and reliable financing, inter-agency pooled funds are critical for financing development and humanitarian action. Pooled funds deliver on SDG promises and fine tune how the UN fulfils its mandate.
They also bring the United Nations together by strengthening coherence, reducing fragmentation, broadening donor bases, spreading risk sharing across partners, and making it easier to tackle multi-dimensional challenges with comprehensive and innovative solutions. The advantages of pooled financing are:
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