Hidden Money: Growth of Multiple Sector Funding11 min read

Most of the humanitarian funding recorded in OCHA’s Financial Tracking Service (FTS) is attributed to one sector. This might be Health, or Nutrition, or Water, Sanitation and Hygiene (WASH), or one of the many other sectors. But there’s a growing trend of humanitarian funding going to multiple sectors. This could be Health and Nutrition, or Food Security and Protection and WASH, or any other combination. In 2020, multiple sector funding totalled $1.6bn, equivalent to 8% of all funding to response plans. That’s a lot of money. That’s roughly equivalent to the GDP of Antigua and Barbuda.

On the FTS website, these projects are classified under a mysterious category that can easily get missed, called ‘Multiple Sector (shared)’. For reference, in the FTS database they are labelled as, for example “Child Protection | Education”. But because we cannot disaggregate this into Child Protection and Education funding, the funding gets lost in this category.

You can definitely argue that classifying funding as multiple sector is fine, as it reflects the interdependencies in our work across sectors. And actually multiple sector funding is a good thing as it might show, for example, that we are mainstreaming Protection into other sectors or working more collaboratively.

If that’s the case – great. But then our sector ‘funding requirements’ (that’s the ‘we need this much money as a sector to meet humanitarian needs’) don’t really mean much, as we’re excluding the multiple sector funding that is going to that sector.

Alternatively, you can argue that we should be able to disaggregate the funding into individual sectors, and therefore attribute it to each sector’s funding requirement. The downside to that, however, is that whilst the ‘quantitative’ bit in the brain wants to put things into boxes to manipulate the data, the real world is messy and drawing a line between what funding goes to Health versus Protection may be more difficult in reality.

We’re going to dive into the world of the multiple sector (shared) funding. How has it increased over time? Which sectors are quoted most often in multiple sector funding? And can we estimate how much of a sector’s funding is “hidden”?

Let’s be clear what we’re talking about first

We’re looking at all funding to all response plans (whether Humanitarian Response Plans, Flash Appeals, Regional Response Plans, the Rohingya JRP, the DPRK Needs and Priorities, or any other response plan). This is because we want to examine funding going to an identified humanitarian need. We can’t be sure that funding outside the response plan is within the scope of the humanitarian emergencies that have been identified in each year.

We’re also excluding pledges. The FTS Glossary notes that a Pledge is a “non-binding announcement of an intended contribution or allocation by the donor….The information is reported to us directly by donors and agencies and may or may not include verbal commitments made at pledging conferences”. Pledges don’t equal real-life funding, and we’ll therefore exclude them.

It’s really important as well to say that we’re not talking about funding in FTS which has ‘Multi-sector’ as the sector. As the FTS glossary notes, “‘Multi-sector’ refers to projects and activities with no one dominant sector and often applies to UNHCR assistance for refugees”. This is different from a multiple sector project, which is tagged as having two or more sectors, for example: “Child Protection | Education”. We’re going to be looking into the latter, not the former.

We’ll also be talking about “funding flows” below. It sounds techy, but just think of a funding flow as a single humanitarian project – a single record of funding to a specific place, time and sector.

The rise of multiple sector interventions

Since 2014, the number of multiple sector ‘funding flows’ has increased a lot. In 2014, there was only one funding flow that was multiple sector – by 2020, this had increased to 1069 multiple sector funding flows.

Growth in the number of multiple sector funding flows is particularly high in recent years, especially in comparison to the number of single sector funding flows. In 2020, the number of multiple sector funding flows increased 72% compared to 2019, whereas the number of single sector funding flows only increased by 12%.

This difference in growth of single and multiple sector flows has led to an increase in the proportion of multiple sector funding flows. In 2020, they accounted for 9% of all funding to response plans, up from 0% in 2016.

The rise in the value of multiple sector interventions

It doesn’t take a Ministry of Finance official to work out that if the number of multiple sector interventions increases, so does the value of multiple sector interventions. The three most recent years have seen growth of 1%, 38%, and 48% in the value of multiple sector funding.

Single sector funding has, however, stagnated in recent years. Growth of -8%, -1% and -1% since 2018 is pretty anaemic. In fact, there’s a very good argument, at the macro level, that the increases in humanitarian funding in recent years are wholly as a result of multiple sector funding flows. It may be different when we drill down into certain sectors, of course.

This growth has led to a situation where multiple sector funding, once negligible in 2016, totalled $1.6bn in 2020. Thus by 2020, 8% of all humanitarian funding to response plans was multiple sector.

And that’s important as, although we know where the money is going, we don’t really know what’s happening with that money. When a sector might say we’re 10%, or 25%, or 50% short of the funding requirement, if we don’t consider multiple sector funding, how do we really know the extent of the shortfall?

Which sectors feature heavily in Multiple Sector funding?

Looking just at data from 2020, we’ve counted up every time a sector has been mentioned as one component of a multiple sector funding flow. The sector most often noted is WASH (494 times, or 17% of all cases), followed by Protection (470 times, or 16% of all cases), followed by Health (443 times, or 15% of all cases). Together, these three sectors account for nearly half of all instances.

Side note here: if you were to include the Protection Areas of Responsibility (Child Protection, Gender Based Violence, Housing Land and Property, and Mine Action, as well as General Protection), these would together sum to 30% of all instances.

At the other end of the spectrum, some sectors very rarely feature. Agriculture, COVID-19, Emergency Telecommunications, Housing Land and Property, Logistics, and ‘Other’ each account for less than 1% of all cases.

We’ve also examined the most common combinations of sectors in multiple sector funding flows. By some way, Health and Nutrition, and Health and WASH, are the two most common combinations of multiple sector projects. Similar to the observation above, WASH, Health and Protection all feature heavily.

Whilst Health and Nutrition was also the top combination in 2019, the second most common combination in 2020 (Health and WASH) was only the 6th highest combination in 2019. Health and WASH increased from only 16 instances in 2019, to 90 instances in 2020. For reference, the equivalent figures for Health and Nutrition are an increase from 80 to 95 instances. The huge increase in Health and WASH interventions may reflect ‘the year of COVID’, and the immediate and necessary interventions to respond to the pandemic.

Breaking down the problem

Speak to an economist and they would say that one feature of money is its divisibility. In other words, you can break down a dollar into cents, or a big lump of gold into smaller lumps of gold. You can’t break down an animal, like a cow, into smaller lumps of animal that are still functional though. Hence, the usefulness of money.

Anyway, I digress. The problem we have with the humanitarian funding data is that we have $1.6bn worth of animal, not of dollars or gold. Sure, we measure it in dollars in the database, but we can’t break it down any further into different parts. We don’t know how much went to Education, or to Nutrition, or to Child Protection, because FTS doesn’t allow multiple sector funding to be broken down.

But is there a way we can estimate how much went to each sector? We’ve analysed the data, and come up with a ‘quick and dirty’ workaround.

We have the total value of the funding, and the sectors involved in the project. So we’re going to assume that:

• If it’s a 2 sector project, each sector got 50% of funding
• If it’s a 3 sector project, each sector got 33% of funding
• If it’s a 4 sector project, each sector got 25% of funding
• And so on…

Whether or not this is a reasonable assumption is up for debate, but it’s the best method we have. We don’t have disaggregated data, and it doesn’t seem unreasonable to take this methodology in lieu of any other data on how things are split across sectors.

We can then estimate per funding flow how much went to each sector. These are the results.

As per the above, WASH, Health, and Protection are the sectors with the largest amount of hidden money. WASH is estimated to have $289m missing, whereas Health is estimated to have $263m missing, and Protection has an estimated $232m missing. Together, these make up nearly half of all the estimated hidden money.

These amounts are significant, but how significant are they to the sectors themselves? To know this, we need to look at how much funding they received through ‘single sector funding’. Remember, that’s when funding is logged as just going to one sector.

We can see that whilst Health has $262m missing, it’s actually not that much comparative to the rest of their funding, about 16%. Compare this to WASH, however, and 32% of their total estimated funding could be hidden in the multiple sector bucket.

Therefore, we’ve also estimated the percentage of a sector’s total funding that is hidden in the multiple sector bucket.

Protection and the Protection AoRs are heavily affected by this. In fact, 100% of the Housing Land and Property funding is hidden, and an estimated 40% of Mine Action funding is hidden. 32% of Gender Based Violence funding is estimated to be hidden, as well as 31% of Protection, and 26% of Child Protection.

This might not be a bad thing in itself, and may speak to the integration of Protection into other sectors. But it does mean that this funding isn’t visible unless someone is going into the analysis like this.

Other sectors with a large amount of estimated hidden funding include WASH (32%), Shelter and NFI (29%), and Camp Coordination and Camp Management (28%).

Hide (the money), and Seek (a solution)

We know one thing for sure, and we have uncertainty over another thing. What we know for sure is that multiple sector funding is increasing year-on-year, both in value and the number of funding flows. What we’re unsure about, is how much of that is going to each sector. Without the ability to disaggregate the funding into constituent parts, e.g. the Health part vs. the Nutrition part, it’s hard to know exactly how much funding is hidden per sector.

At the start of this piece, we asked: does it make more sense to just have a broad multiple sector bucket, as this reflects the multidisciplinary and complex nature of our work? We would therefore have to accept that we won’t be able to attribute money to each sector. Or does it make more sense to break the funding down into each constituent part, even though sometimes it’s difficult to draw the line between sectors?

On balance, the second argument makes more sense. Sure there are attribution problems. Is that dollar on capacity development a Health dollar or a Protection dollar? But the alternative is that we don’t know how much goes to each sector, we don’t know how much funding each sector is receiving, and our arguments on advocating more funding are a bit more difficult as no one really knows what’s going on.

The Protection Cluster and AoRs, WASH Cluster, Shelter and NFI Cluster, and CCCM cluster could think of worse ways to spend their advocacy time than joining forces to advocate the disaggregation of multiple sector funding into its different parts.

Otherwise, multiple sector funding might grow… and grow… and grow. Our funding data may decline in quality. And the arguments we use in our advocacy efforts become more hollow. Surely better quality data is in everyone interests?

Caveats, Sources and Credits

Numbers on this story may differ from numbers on the ‘Sector’ pages. This is not an error, but simply due to different data extraction dates from FTS.

Header Photo: “Money, get away!” by kiki follettosa is licensed under CC BY-NC-SA 2.0

FTS. 2020 Appeals. https://fts.unocha.org/appeals/overview/2020

FTS. Glossary. https://fts.unocha.org/glossary

FTS. Data Search. All funding to 2014 Response Plans. Retrieved from here

FTS. Data Search. All funding to 2015 Response Plans. Retrieved from here

FTS. Data Search. All funding to 2016 Response Plans. Retrieved from here

FTS. Data Search. All funding to 2017 Response Plans. Retrieved from here

FTS. Data Search. All funding to 2018 Response Plans. Retrieved from here

FTS. Data Search. All funding to 2019 Response Plans. Retrieved from here

FTS. Data Search. All funding to 2020 Response Plans. Retrieved from here

World Bank. Data. GDP (current US$). Retrieved from: https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?most_recent_value_desc=false