Pooled funds are Other Resources (OR), comingled with contributions from donors. This modality is administered for a number of countries through direct disbursement to country offices such as thematic funding (Medium-Term Strategic Plan and humanitarian) or via a Joint Programme arrangement using the ‘Administrative Agent’ or ‘Managing Agent’ in a pass-through or pooled joint funding arrangement, respectively. Joint funding such as MDTFs and pooled funds for joint programmes is held in a trust account, which is not recognized as revenue to UNICEF until the funds are disbursed for programmes.
Multi-Donor Trust Funds (MDTFs)
MDTFs are pooled funds. Not all pooled funds, however, are called MDTFs – the differentiation being that an MDTF holds money ‘in trust’. MDTFs are an effective and efficient mechanism for mobilizing financial resources and can establish national ownership of international assistance through proper allocation mechanisms, but they do not replace bilateral funding arrangements.
MDTFs are funding mechanisms by which UNICEF or its partners can do the following:
MDTFs can be established in support of a single programme implemented by multiple organizations (One Funds/United Nations Development Assistance Framework ‘roll-outs’); multiple programmes and interventions in a single country (Common Humanitarian Fund for Sudan; the Lebanon Recovery Fund); or a multi-country, cross-disciplinary set of interventions addressing a common issue (e.g., Avian flu). An MDTF can be administered by a United Nations (UN) agency, which normally allocates to other UN agencies, or by the World Bank, which generally funds governments.
Multi-Donor Trust Funds (MDTF) management
In general, in managing an MDTF, participating UN organizations appoint an Administrative Agent and sign United Nations Development Group (UNDG)-agreed standard agreements for the management of the fund with donors (Standard Administrative Agreement – SAA) and with participating organizations (Memorandum of Understanding – MOU). MDTFs usually use the pass-through fund management modality, in which participating UN organizations receive funds from the Administrative Agent and apply a standard 7 per cent recovery cost and assume full programmatic and financial accountability for the funds received (with the donors involved) while operating under their own individual financial regulations and rules.
The ‘UNDG Guidance Note on Establishing, Managing and Closing Multi-Donor Trust Funds’ provides comprehensive information on the structure, governance and allocation processes.
Pooled funds and MDTFs in UN Joint Programmes
UN Joint Programmes comprise a set of activities in a common work plan and budget, involving two or more UN organizations and national or sub-national partners, aimed at increasing programmatic effectiveness. There are three different fund management options that have been established by the United Nations Development Operations Coordination Office (UNDOCO) to support such programmes: