1. UNRWA’s Resource Mobilization Strategy 2012-2015 A preview offered to the Sub-Committee Meeting 2 November

2. SITUATION ANALYSIS UNRWA’s Resource Mobilization Strategy 2012-2015

3. Uncertainty in the global economic outlook The global economic outlook is uncertain Regional political instability adds to the risks to UNRWA’s need for and access to funding. ODA growth is expected to fall over the next three years to about 2%, which may affect the contributions from Traditional Donors which contribute 87% of all funding Longer term: – Inevitability of the rising economic power of BRICS and other emerging economies

4. Trigger points for donors are dominated by longer-term trends, and punctuated by crises After 2 nd Intifada Geneva conference formalizes a new commitment by donors Arab Spring Nahr al- Bared conflict Gaza war ? Dis- engagement

5. Overall UNRWA is highly dependent on Traditional Donors, but this dependency is slowly reducing

6. Arab donors have contributed a significant share of UNRWA’s funding, in particular to EA and Projects

7. The average growth rate in GF funding 2000-2010 was equivalent to annual rate of 7.2% compound Traditional donors share has fallen slightly:

8. Contributions from traditional donors toward the Emergency Appeals peaked at $244 million in 2009 The share of traditional donors in the EA has been more variable than the other portals: at periods outside of emergencies it is typically above 90%. Arab Partners have responded to Emergency Appeals in 2002, 2005 and 2008/9. Non Traditional Donors also contributed additional funding to the EA.

9. PROGRESS IN RESOURCE MOBILIZATION UNRWA’s Resource Mobilization Strategy 2012-2015

10. UNRWA has successfully increased funding from Arab donors While Arab ODA has typically represented between 1.2% and 4.7% of global ODA flows, UNRWA’s overall financing (GF + Projects + Emergency Appeals) is financed to a greater extent by Arab donors – between 1.7% and 10% of UNRWA funding has been from Arab sources.

11. Spanish National Committee Over the last 5 years the National Committee has provided €11.2 million in total contributions. 96% of these contributions are derived from Spanish Regional government funds, and the remaining 4% (a total of €473 thousand) were raised from private sources.

12. … and has shown a very high, and increasing return on investment.

13. PROJECTED SOURCES OF FUNDING UNRWA’s Resource Mobilization Strategy 2012-2015

14. Overall Contributions to UNRWA’s Regular Budget has grown at 7.2% a year which is in line with ODA growth. ODA to Occupied Palestine has grown more than the global average: in constant dollar terms ODA to the region grew by around 13% a year between 2000 and 2008. Emergency Appeals account for 20% or more of the Agency’s funding, while only 9% of total ODA is Humanitarian Aid. OECD DAC is warning that growth in ODA is expected to slow to an annual 2% increase over the next 3 years.

15. ODA / GNI (2010) (OECD DAC)

16. Traditional Donors UNRWA has decreased its overall dependency on the Traditional Donors from 92% in 2000 to 87% in 2010. In the same time period OECD DAC countries also decreased their share of global ODA from 98% to 95%. UNRWA has been successful in raising Emergency Appeal funding from outside the Traditional Donor group: during 2009 a relatively modest 74% of contributions came from traditional donors. Globally 95% of humanitarian funding comes from OECD DAC countries. While the USA’s total contributions to UNRWA have increase by 10.7% per year on average, the US increased total ODA by an average of 13% a year. Similarly the EU grew ODA by an average of 12%, while contributions to UNRWA grew at the somewhat slower rate of 10.1% per year. Several of UNRWA’s largest Traditional Donors – such as Sweden, Norway, Netherlands and Denmark are above their target 0.7% ODA/GNI ratio.

17. Arab donors Arab donors account for 1% to 5% of global ODA. They typically account for a higher share of UNRWA total funding, especially in crises. Preference for larger projects and in particular infrastructure programs A relatively modest share of 2-3% of the GF, but the trend is positive Saudi Arabia is a dominant force in ODA and Humanitarian Aid, representing 50-94% of aid flows, and an important regional opinion leader

18. Development Aid from ‘Emerging Markets’ Emerging markets are rapidly increasing aid levels EM represented 3.7% of total ODA in 2009 but only 0.3% of total contributions to UNRWA EM represented 1.2% of global Humanitarian Aid in 2010, whereas UNRWA received no EA funding from these countries.

19. Non traditional donors Dominated by a group of countries that have consistently grown their share of total contributions through donations to the General Fund. They have not contributed significantly to the Emergency Appeals. One of the major contributors to this group, Luxembourg, is already above its target ODA / GNA ration and could be subject to limitations or growth in ODA as a whole. This group includes Eastern European countries and several others, who are underperforming as donors and offer the opportunity to diversify the source of income.

20. FUNDING NEEDS UNRWA’s Resource Mobilization Strategy 2012-2015

21. Increases in GF requirements will lead to an increase in funding requirements to a base of $995 million in 2015.

22. RESOURCE MOBILIZATION STRATEGY UNRWA’s Resource Mobilization Strategy 2012-2015

23. Resource Mobilization Priorities In order to promote aid effectiveness and avoid a proliferation of projects, donors are encouraged to give un-earmarked funds. Responding to a range of donor priorities UNRWA seeks to maximize the resources available to the Agency by fully utilizing opportunities arising from a variety of donor instruments and bilateral budget lines. UNRWA directs its RM efforts first and foremost towards the General Fund. Donors are encouraged to enter into multi-year agreements in order to increase income predictability and reduce recurrent fund raising costs. When mobilizing humanitarian funding UNRWA seeks to ensure that minimum needs are met across fields with emergency programs. Large reconstruction programs require a targeted RM approach. Efforts are made to secure funding to meet minimum annual operational requirements. Discrete projects outside of larger reconstruction programs are funded as opportunities arise, provided they meet quality standards set by the Agency.

24. Funding assumptions per donor category Traditional Donors will continue to increase funding, but at a significantly lower rate. Given ODA outlook, GF contributions are expected to grow by no more than 2-4% and overall contributions by around 3% a year. Given past trends, it is reasonable to expect an increase in the relative contribution of Arab donors toward the GF, while targeting at least a maintenance of their share of Emergency Appeal and Projects Non-Traditional partners should be managed to increase their growth through diversifying contributions to more donors – while maintaining and growing the current key contributors in this group Emerging Markets could be developed to provide around 1% of GF Provided investments are made, contributions from private sources can increase substantially (but from a very low base).

25. Base case funding projections for 2012-2015

26. Base case funding projections for 2012-15 Rising to $995 million in 2015 Traditional donors account for a declining share of total contributions This is equivalent to 2% annual growth for the Traditional Donors The rise in Arab donor contributions is mainly focused on high-visibility projects such as Gaza reconstruction

27. General Fund in Base case ($m) to 2015 Rising to $660m in 2015, declining share of Traditional Donors from 89% to 84% This is equivalent to 3.6% annual growth for the Traditional Donors between 2011 and 2015 40% of income growth will come from diversified donor base.

28. Strategic Framework

29. Deepen the partnership with Traditional Donors

30. Diversify donor base

31. Develop Agency capacity to mobilize resources and manage donor relations

32. DISCUSSION UNRWA’s Resource Mobilization Strategy 2012-2015