The development impact of the UNDAF will largely depend on the capacity of the UNCT to optimally finance it. It is highly recommended to prepare an UNDAF financing strategy because it ensures that: UN activities are appropriately costed and resourced; UN resources catalyse larger financial flows to implement the 2030 Agenda; and incentives embedded into UN financing mechanisms promote inter-agency collaboration and coherence. (see UNDAF companion guidance on Shifting from Funding to Financing).

COSTING AND RESOURCING UN ACTIVITIES: Substantial over- or under-budgeting of the UNDAF carries reputational risks. It can be construed as a reflection of poor UNCT planning capacity or limited commitment to transparency and accountability. Most likely, it will affect fund mobilization. Accurately budgeted activities will facilitate resource mobilization for activities to be directly implemented by the UN system.

LEVERAGING: UN resources are generally an extremely small proportion of the overall resources required and available for achieving the SDGs. They are used to leverage much larger public and private financial flows for sustainable development. This ambition demands a paradigm shift from funding to financing in the UNDAF. While the former is centred on resource mobilization to close the funding gap for activities directly implemented by UN agencies, the latter aims at leveraging all existing financial flows and instruments to finance the overall development results to which the UN system contributes. The effectiveness of UN resources in catalysing larger financial flows for sustainable development can be measured through leveraging ratios.

INCENTIVIZING COLLABORATION: Money can be either a unifier or a divider. Collective funding mechanisms tend to incentivize collective action, while ad hoc funding can foster competition. Incentives embedded in different financing strategies and mechanisms should be assessed and aligned with the UNDAF’s objective to foster UN coherence and collaboration for the 2030 Agenda at the country level.

STEP 1: Mapping the financial landscape, including international and national, private and public sources of finance

This first step draws on the assessment of existing development finance flows and mechanisms conducted in the CCA. It enables the UNCT to assess its financing comparative advantages, and identify where the UNDAF could play a strategic role to leverage broader financial flows.

STEP 2: Preparing the Common Budgetary Framework

The multiyear CBF is the consolidated financial framework that reflects agreed costed results of the UNDAF. It lays out the funding gap for the UNDAF and is part of the UNDAF results framework. It shows the best financial estimates for delivery of outputs, planned financial inputs and the funding gap for the entire UNDAF period. It can be operationalized through more detailed annual costed frameworks. The estimated resources column in the UNDAF results matrix consists of an estimation of financial resources, including human capacity, that each UN organization will contribute or mobilize from core (regular) and non-core (other) resources.

Costing budget requirements can be complex and methodologies can vary. To ensure that estimates are realistic, UNDAF funding gaps make reference to historical funding data. It is highly recommended to not budget an UNDAF at over 130 percent of the expenditure of the previous UNDAF unless this increase can be specifically justified. To the extent possible, harmonized methods of estimating available funds are used by different members of the UN system. Consistency needs to be ensured between the UNDAF financing gap and the figures used in respective organizational planning documents. International Aid Transparency Initiative and CEB data can be used to triangulate the information. Within joint work plans, outputs are costed and funding gaps identified based on resources available.

STEP 3: Developing a Financing Strategy to Address the UNDAF Funding Gap

In line with the UNDAF objectives, the third step assesses opportunities for the UN system to:

  • Access additional resources for activities directly implemented by the UN System. These non-core resources to be channeled through the UN system can be both traditional and non-traditional, including foundations, the private sector, emerging donors and innovative financing
  • Sequence/blend its core (regular) and non-core (other) funding with international/national concessional/non-concessional public finance (Multilateral Development Bank, National Development Banks, commercial banks, social impact investors, etc.)
  • Leverage larger resources, which include all public, private, national and international financial flows. Leveraging resources does not focus on bringing non-core resources into the UN or blending them with UN resources but on catalyzing larger public and private investment to achieve the UNDAF development goal.

STEP 4: Design the joint resource mobilization strategy

The new UNDAF guidelines require the implementation of joint work plans through Results Groups. Within each result groups, UNCTs should explore opportunities for joint resource mobilization. The joint resource mobilization strategy will provide a common narrative and allocate responsibilities for fund mobilization efforts. It aims to promote synergies, and avoid duplication of efforts, counter-productive competition among organizations and funding gaps. Regular review enables adjustments to take advantage of new or emerging resource mobilization opportunities. Wherever possible, coordination and periodic reviews should take place through existing mechanisms.

It will also consider pooled financing mechanisms to incentivize collective action and system-wide coherence. The United Nations employs collective finance mechanisms (pooled funds) such as joint programmes, trust funds or thematic funding to reduce aid fragmentation, increase the quality (predictability, timeliness and flexibility) of non-core resources, and incentivize advocacy, policy coherence, capacity development and operational coherence. In 2014, the Multi-Partner Trust Fund Office estimated that pooled funding mechanisms only need to mobilize between 15 percent and 20 percent of the overall non-core funding portfolio to leverage these comparative advantages. For guidance on pooled funding instruments, please visit http://mptf.undp.org/document/templates.


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Silo Fighters Blog

Preparing for the Future(s): Foresight, citizens’ insights and serious games

BY Ana Dautovic, Marija Novkovic | October 20, 2015

Most people feel that the future is linear: if you perform well in school, you’ll get a job; if you work hard, you’ll be promoted; if you save, you’ll be able to live well through your retirement age, et cetera, et cetera. There is a great level of comfort in the IF → THEN causal link because there are fewer variables, fewer elements that could go off the rails. There is more certainty and we feel more in control. However, through Futures Studies there are alternative futures (possible, probable, plausible, and preferred); consequently, there are multiple development pathways. Professor Jim Dator, the pioneer of modern futures studies once said that “the future cannot be predicted because the future does not exist.” Indeed, the last few years brought forward unfathomable changes with deep, far-reaching ramifications. The global financial crisis, earthquakes, tsunamis, volcanic eruptions, nuclear power plant disasters, the rise of extremism, and the ongoing global refugee crisis, to name just a few. The linear path from A (The Past) to B (The Now) to C (The Future) in these occurrences has been more challenging, if not impossible, to pin down. Because of the rapid pace of changes, development organizations are, in fact, asked to be more resilient and more agile so as to navigate uncertainties. We in the UN System in Montenegro were mindful of the fact that the realities of the present day and age require innovation at the highest point of impact – the five-year strategic plan of support to the country. We created a strategy that would infuse our long-term planning with foresight and civic engagement. It consists of three steps. 1. Serious games for empowering new voices in strategic planning Working in Montenegro over the last few years has brought us closer to the country's rising new voices -- a generation witnessing and creating unprecedented changes to the social fabric. Working across think-thanks, academia, statistical office and NGOs, they are disruptive innovators, digital champions and active youth. We engaged them through collaborative workshops, where they learned about foresight, and most importantly, created alternative futures for Montenegro. We are particularly proud to have used a serious game that was custom-made for Montenegro by John A. Sweeney, another member of the Hawaii Research Center for Futures Studies and deputy director of the Center for Postnormal Policy and Futures Studies. The game, beautifully designed to showcase elements of the national costume, served as an enhanced survey tool, prompting the players to ponder on values, challenges, opportunities, stakeholders and actions, which will likely shape the future of the country. 2. Digital engagement fit for the 21st century Civic engagement, particularly through social innovation and online platforms, has been high on UN Montenegro’s agenda. So far, we’ve engaged thousands of Montenegrins and garnered their insights through the massive post-2015 national consultations (12,000 people), the Youth Employment Solutions platform (10,700 people), and uncovered social change heroes through the Open Ideas and Be Responsible campaigns (over 7000 civic reports of informal economy leading to generating public revenue in excess of 1 million EUR). However, public consultations on the next five-year strategic plan of collaboration between the UN and the Government of Montenegro were the new peak we had to conquer. We turned to digital technologies, and moved our serious game into the online space, hoping for a wider outreach. We are both anxious and excited about receiving citizens’ insights into the future! 3. Innovating at the point of strategic prioritization While this summer seemed like one giant roller-coaster journey, we do have few more rides ahead of us! Moving away from traditional planning processes, we are bringing in foresight into strategic planning with the Government. Applying foresight should allow us to unlock a much broader scope of analysis.  We plan to use backcasting, i.e. a forward looking planning process where we start from future(s) scenarios to define programmes that will help make them a reality. This strategic meeting with the government will be as collaborative and hands-on as possible, to inspire everyone to engage more than they would by filling out a survey or validating pre-defined strategic priorities. It will enable considering new horizons of the five-year plan, the integrated nature of sustainable development and human rights, and creating a more resilient society. Thinking critically about preferred futures will lead the way towards creating a more fluid and agile structure so that when challenges arise, we can navigate them. This approach will ultimately promote proactive versus reactive attitudes. In our next blog post, we will share what we have learned so far. Stay tuned, check out the video feature, and join the ride!

Silo Fighters Blog

Now is the best time to embrace the futures: SDGs success depends on strategic foresight

BY Cat Tully | September 28, 2016

2016 is a unique, exciting time for the global development agenda. The Sustainable Development Goals (SDGs) are now underway and UN country teams face the huge task of implementing them. So, who will get the best outcomes by 2030? My money is on countries that use strategic foresight. This blog will explain why, and how. Foresight Foresight is a form of strategic planning that enables us to think about futures*. We will never have hard data about what might happen in years to come, but in a volatile and rapidly changing world foresight can provide us with principles for understanding complexity, building resilience and setting direction. Foresight is essential to achieving development goals because it enables us to implement policies based on a thorough and informed approach, as opposed to a set of assumptions. Foresight and the UN As the SDG agenda fires up, we embark on an entirely new policymaking approach, and UN country teams have the exciting opportunity to become leaders in the field of emergent strategic planning. This positions the UN in a unique, if not daunting role: to support communities and countries globally to implement strategic foresight. So how do we begin? Foresight is not something that can be added on top of existing structures; it can’t be thrown in as a tick-box exercise. If we want robust development policies, the UN must embed foresight within UNDAF processes. This requires gradual, structural change in order to be successful. First and foremost, decision makers must make sure processes are emergent. This means that they are participative, with governments acting as facilitators of other actors, as opposed to top-down controllers. In general, there are five key principles of emergent strategic planning that stand any organisation in good stead: Examine the strategic context. Analyse trends and drivers of possible futures contexts, along different time horizons, e.g. one year, five years and 15 years, so it can inform but not be captured by budget and operational planning decisions. Openly engage with a wide set of views. Seek the opinions of the public, especially vulnerable and extremely poor citizens (i.e. the key “beneficiaries” of development policy design). Look at a set of issues with multiple lenses. Diversity and alternative perspectives are important for understanding and identifying weak signals, as well as developing common knowledge and ownership. Identify possible futures and trends. This includes trends that are desired or otherwise, that can be highlighted either through complete pictures of scenarios or snapshots. Build on policy implications. Reviewing what genuine strategic alternatives look like, and enabling resilience as well as pushing for desired outcomes. Being emergent is vital. In our uncertain world where we face big, long-term threats like climate change, traditional policymaking and government structures fall short. The role of government is shifting and in order to effectively plan for the future in a strategic way, governments must move from being commanding controllers to “system stewards”.** The UN plays a key role in making this happen. System stewards facilitate a network of multiple actors with different perspectives: they guide an emergent, inclusive policy-planning process, which effectively plans for and responds to opportunities and risks. System stewardship is the only sustainable alternative to the traditional command-and-control government structure that currently fails to deliver for citizens. The role of the UN in transforming government The SDGs actually mandate the UN to transform the role of government in this way: SDG 16 demands “effective, accountable and inclusive institutions”. This is effectively describing a system stewardship model, but as you can imagine, this won’t happen automatically. Governments must first build the capacity to use strategic foresight to take the longer-term into account, and the UN is in the perfect position to help make this happen. If implemented properly, SDG 16 has the exciting potential to transform the role of government for the long-term. System stewardship will enable governments to navigate an increasingly complex world, whilst keeping citizens at the centre of processes and long-term plans that genuinely work. Ultimately, the success of the SDGs depends on our ability to start using foresight as soon as possible. The UN must seize this intervention point to strengthen governments as stewards, and ensure wider participation is integrated into strategic planning processes. Foresight resources Everything in this blog comes from a recent guide on how the UN Development Assistance Frameworks process can make better use of foresight. It was informed by consultations with development professionals (both within and outside the UN) and provides tools for improving processes and introducing strategic foresight into UNDAF. The guide also includes examples of foresight and other public sector innovations to improve multi-year strategic planning, as well as case studies from UN in-country teams (Laos, Montenegro and Rwanda) who have begun to apply foresight to their UNDAF planning process. To discover how to apply foresight, and to access a list of practical resources, download the guide here. *We speak of “futures” in the plural, because there are many different alternatives for where the world might be in the next five, ten or 50 years. **See Tully, C. Stewardship of the Future. Using Strategic Foresight in 21st Century Governance.  2015.