UNDP's funding channels
At approximately US$5 billion annually, donor contributions to UNDP represent about one-fifth of all contributions to the United Nations development system. These contributions are provided as either core resources—also known as regular resources—or non-core resources.
1. Core Resources
Regular resources provides for the most effective delivery of transformational results. This helps UNDP support the most vulnerable, promotes equity and enables the prompt response to crises. It also promotes coherence, accountability, transparency and quality assurance of the UN development system.
2. Thematic Funds
Thematic Funds are pooled funds that help UNDP achieve the targets outlined in its strategic plan. These funds contain monitoring and reporting mechanisms to support results- based management.
Thematic funds give UNDP flexibility to respond to country needs more effectively. They also facilitate longer term planning, sustainability and savings in transaction costs.
3. UN Pooled Funds
Sometimes, donors will pool money to support a particular project or programme. UN pooled funds range from those managed by the UN Secretariat (such as OCHA’s Central Emergency Response Fund) to UNDP-administered Multi-Donor Trust Funds (MDTFs) and Joint Programmes (JPs). UNDP plays a role in designing, administering and implementing pooled funds.
UNDP takes its ethical responsibilities seriously. To prevent any conflict of interest, UNDP has created mechanisms to separate its roles in administering and implementing pooled funds. The UNDP Multi-Partner Trust Fund Office (MPTF) is the specialized unit dealing with pooled fund design and administration.
On average UNDP receives, as implementer, around one-third of the funding disbursed by MDTFs and JPs administered by the MPTF Office.
4. Earmarked Funds
Designated to specific programmes and projects, earmarked funds can be assigned at the global, regional and—most commonly—country levels.
Governments can contribute to UNDP programmes or projects in their own countries; this arrangement is called Government Cost-Sharing. These domestic resources are used for development projects that are in line with both National Development Plans and UNDP’s Strategic Plan.
5. Vertical Funds
Vertical funds are created in response to high-visibility, single-issue advocacy campaigns and to tackle specific development issues. They are frequently administered by the World Bank. Their Boards or Steering Committees decide on funding portfolios and allocation criteria and are assisted by independent Secretariats.
The main Vertical Funds UNDP works with are:
UNDP has partnered with the Global Fund to Fight AIDS, Tuberculosis and Malaria since 2003, supporting programmes in countries with limited ability to receive and manage this kind of fund.
Global Environment Facility
The Global Environment Facility (GEF) is a vertical fund focused on global environmental issues. As a GEF implementing agency since 1992, UNDP supports countries to secure GEF resources and to meet global environmental obligations. UNDP offers integrated technical services for countries, including assistance on eligibility assessment, programme formulation, mobilization of co-financing, implementation oversight, and knowledge and results management.
Multilateral Fund for the Implementation of the Montreal Protocol
The Multilateral Fund was established by the Second Meeting of the Parties to the Montreal Protocol and began operations in 1991. UNDP, as an implementing agency of the Fund, supports investment projects, demonstration projects that test approaches to development challenges, and provides technical assistance and feasibility studies.