Public Sector Alliances and Resource Mobilization

Pooled funding and trust funds

Pooled funding
Multi-Donor Trust Funds (MDTFs)
Multi-Donor Trust Funds (MDTFs) management
Pooled funding and MDTFs in United Nations Joint Programmes

Pooled funding

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.

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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:

  1. receive and pool contributions from more than one donor;
  2. hold the funds in trust (i.e., not considered revenue to UNICEF);
  3. allocate funds through a designated governance structure; and
  4. disburse funds through an Administrative Agent/Fund Manager to a number of recipients/ participating organizations.

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.

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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.

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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:

  1. Pooled fund management – UN agencies (including donors, if applicable) work with one or more common national partners to achieve a common result as set out in the Joint Programme Document. One agency will be appointed the Managing Agent, who will implement the programme with national partners on behalf of UN agencies (and donors) that pool their funds centrally to the Managing Agent.
  2. Pass-through fund management – UN agencies work with one or more national partners to achieve a common result, as set out in the Joint Programme Document. One UN agency is appointed the Administrative Agent. Donors channel the funds through the Administrative Agent, while participating UN agencies maintain financial and programmatic accountability to the donors for specific components of the programme for which they have received funds.
    For information about the Multi-Partner Trust Fund Office (MPTFO) Administered MDTFs and a complete overview of transfers to UNICEF specifically, please see the MDTF Gateway.

  3. Parallel fund management – UN agencies work with different government partners to achieve a common result, as set out in the Joint Programme Document. There is neither a transfer of funds between the participating UN agencies nor a MOU between the participating UN agencies since bilateral agreements between donors and individual agencies are used.

Click on the links for more information on UNDG Joint Programmes and standard UNDG templates (SAA, MOUs for pass-through and managing agent functions).

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