UNRWA ’ s Resource Mobilization Strategy 2012-2015

1. UNRWA’s Resource Mobilization Strategy 2012-2015 Presentation for the Advisory Commission November 2011

2. Agency response to June AdCom recommendations • Strategic approach to external relations and communications • Targeted work-plans and targeted marketing tools for each donor country • Diversification of donor base • Joint exploration with TDs towards establishing new donor relationships • Emphasis on multi-year agreements with donors • Priority to the General Fund • Establishment of the Private Partnership Unit • Acknowledgment of the role of Representative Offices

3. Strategic Framework

4. UNRWA’s Resource Mobilization Strategy 2012-2015 PAST TRENDS

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

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

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

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

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

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

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

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

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 • 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

17. 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 ratio 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. • 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

18. 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 • 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

19. 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 • Emerging Markets could be developed to provide around 1% of GF, which is a ten-fold increase in nominal levels compared to today • The full potential of Emerging Markets will only be reflected in the following strategy period

20. Private Partnerships • Provided investments are made, contributions from private sources can increase substantially and are expected to account for 2% of GF funding in 2015 Until recently private sources of funding (philanthropic foundations, corporations, NGOs, HNWIs, individual giving) have not constituted a priority for the Agency Private sources presently account for less than 0.1% of GF funding Study performed of other UN agencies shows that private sources are increasingly important in securing additional income Work of the Spanish national committee exemplifies the opportunities within this field

21. UNRWA’s Resource Mobilization Strategy 2012-2015 Resource Mobilization Strategy

22. 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.

23. Base case requirements for 2012-2015

24. 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

25. 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.

26. Strategic Framework

27. Deepen the partnership with Traditional Donors

28. Diversify donor base

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

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