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Why pooled fundingPooled 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:
Transparency and agility
A low-cost mechanism that uses UNSDG pre-cleared standard legal templates and MPTF Office online platforms for transparency and management purposes.
Robust theory of change
Stakeholder-led design fully aligned with SDGs.
Center of gravity
Aligns projects and programmes around SDGs, reducing duplication and fragmentation across multiple projects.
Humanitarian-development-peace nexus
Pooled funds provide flexible financing suitable for cross-sector collaboration across the entire nexus.
Innovation
Pooled financing expands the number of partners that contribute to, and implement, funds.
Reform-booster
Fully aligned with the UN reform process to deliver better results through joint action.
New generation of climate funding
Contemporary and innovative financing instruments for climate-focused and conservation action.
Pooled finance and UN reform
Inter-agency pooled funds are a unique tool for delivering joint responses and direct resources to programmes focused on SDG achievement. Both make pooled funds an important part of the current United Nations reform process with inter-agency financing mechanisms for organizational leadership, UN Development System, and Member States to improve support to multi-partner coalitions, so national governments, civil society, and the private sector can actively work together in search of sustainable solutions.
Pooled financing is an effective instrument for improving collaboration and reducing programmatic fragmentation and, as a major tenet of the reform process, covers humanitarian, peace and security, and sustainable development. As the UN centre of expertise on pooled funding, the UN Multi-Partner Trust Fund Office works to improve the quality of investment services for all partners, across the UN broad spectrum of action. 
In May 2018, the UN General Assembly resolution on repositioning the UN development system led to commitments to reduce fragmentation and double inter-agency pooled funds to $3.4 billion US dollars a year by 2023. The United Nations Funding Compact (2019), contains a set of pledges made by the UN and Member States to raise the quality of funding and delivery of development assistance.
The 2020 UN quadrennial comprehensive policy review (QCPR) reiterated the importance of providing flexible non-core funding, giving priority to pooled, thematic, and joint funding mechanisms. The hope is Member States and entities of the United Nations development system will contribute to the full and effective implementation of the Funding Compact and jointly make progress towards compliance with their funding compact commitments to help achieve development results on the ground.
The compact includes specific targets on inter-agency pooled funding where 10% of earmarked resources from Member States are committed to development-related activities, and channeled through inter-agency pooled funds.
The UNSDG established a 15% target for development expenditures via joint activities—along with clear funding frameworks for cooperation and common management structures across pooled funds. Included are promises to double the share of contributions to United Nations pooled funds by 2023 and raise the number of contributors overall (and to two MPTF Office flagship funds, the Joint SDG Fund and Secretary-General’s Peacebuilding Fund, in particular).
United Nations commitments to the compact include increased efficiency and effectiveness in using development-related inter-agency pooled funds. Outcomes that can be achieved by instituting common management features: Critical performance indicators (e.g., coherent theories of change), solid results-based management systems, well-functioning governance bodies, transparency, visibility, and clarified evaluation arrangements.