As we draw closer to COP29 in Baku, it is clear that the success of the upcoming climate conference hinges on agreements regarding to finance. The recent SB60 in Bonn saw this critical issue limit or stall the progress of the talks by countries across multiple workstreams, from adaptation to just transition.

While many proposals have been made by different countries and sectors on how to change the climate finance game, they all share the common call of changing the global finance architecture. There is no shortage of funding when it comes to addressing the climate crisis or any other global issue; it is a matter of making it accessible to those who need it the most.

Yet this issue on finance does not just apply to countries, but even to the most vocal critics and advocates for climate action: the non-government organization (NGO) sector. And this is not exclusive to the climate field, either.

‘Practice what you preach’

A study by Development Initiatives reveals the existing inequalities in how NGOs access available funding for humanitarian and development projects. Public donor funding that should be directly channeled to more local and national actors, especially those in developing nations, are instead going to multilateral institutions and international NGOs (INGOs).

In 2022, 61% of the total public international humanitarian assistance go to UN agencies and other multilateral agencies, while only 17% went to NGOs. Only 1.2% of direct funding was given to local and national NGOs, with big INGOs taking much of the support for this sector.

Furthermore, what happens to most of the billions in public donor funding in terms of its recipients and how they are used is unclear. For example, the Development Initiatives report reveals that there are lapses in properly monitoring the humanitarian assistance, whether they were spent by the direct recipient-organizations or granted to local or national groups.

A similar case was observed in climate finance that should be directly provided to indigenous peoples. At COP26, a total of USD1.7 billion was pledged for supporting land rights of indigenous peoples and local communities (IPLCs). While the funders have claimed to have disbursed nearly half of this funding as of last December, IPLCs directly received only 2.1% of it. Instead, 51% ended up with INGOs. 

The significance of empowering local communities, who are frontliners of responding to climate change impacts, keeps being highlighted in political forums and platforms. Yet the reality is multilateral institutions and INGOs either expand their operations to establish presences in other countries or disburse the fund to local or national groups. 

Such groups end up functioning as contractors, while the much-larger organizations take credit for the work. In some cases, INGOs based in developed nations also influence the direction of the domestic-level work based on their own agenda, without accounting for the needs at the national or local scale.

Too often NGOs from developing countries have faced challenges in accessing such sources of support. There exists this longstanding perception of local and national groups lacking the capacity to handle finances or comply with numerous requirements for accessing and reporting the use of funds, especially when compared to INGOs.  

Such perceptions extend to other aspects of climate work in the NGO sector. For instance, IPLC organizations have complained about donors requiring them to build capacity to access support, believing it is an excuse for donors to frame them as incapable of handling money or the forests or lands they are protecting. Some of them also find themselves excluded from discussions about the plans involving their areas or groups.

On another note, the inclusivity of recent climate negotiations has been called into question, with grassroots-level organizations from developing countries often finding themselves lacking funding or badges to attend the conferences. 

Some of them have also found themselves unable to let their voices be heard through the UNFCCC’s nine constituencies allotted for non-government stakeholders, which at times can be dominated by long-running global networks and INGOs. The same set of faces keep having the badges to attend COPs and other key events, acting as ‘gatekeepers’ that prevent others from having a fair chance to participate.  

‘Needs-based’

During recent negotiations, the term “needs-based” has been frequently used as a basis for providing finance and other means of implementation for developing countries in support of their mitigation, adaptation, and loss and damage-related strategies. Yet this must also be applied to directly funding activities of local and national NGOs.

Multilateral institutions and INGOs need to be facilitators that assist domestic-level actors in accessing available means of support. They should avoid passing the burden on local and national NGOs, especially IPLC groups, to conform to bureaucratic guidelines and their own agendas and instead understand what is truly needed by these groups and the areas and communities they are serving.

For instance, the UNFCCC has considered shifting the available badges for accreditation to attend COP29 from NGOs in developed countries to those in developing nations to address inequalities in access. However, this move is likely to backfire, as it fails to acknowledge underlying issues that affect inclusivity. 

First, some youth delegates from developing nations, who need support from NGOs in the developed countries to travel to Baku, might be unable to proceed given their now-limited badges. Second, some developing-country NGOs have been unable to use their badges not due to a lack of interest, but because of the lack of resources to attend.

Reforming the global funding environment for climate, humanitarian, and development assistance must result in a system with mechanisms and financial flows tailored to the needs and concerns of the local and national actors to bring more impactful and sustainable outcomes. It requires multilateral agencies and INGOs to let go of their expansionist, fundraising, growth-driven approach which is eerily similar to current business models that many of them would say as a detriment to global climate action.

For the global NGO sector to achieve success in its climate advocacies, it needs to practice what it preaches.

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