Myth to Reality: What is the Potential of Innovative Financing for Localisation

The humanitarian sector is witnessing a surge of interest in “innovative financing” as traditional grant funding contracts. The Grand Bargain has successfully launched an Innovative Finance Community of Practice, and courses on humanitarian innovative finance are experiencing unprecedented demand.

Yet the gap between the promise of innovative financing and its practical application – particularly for local and national NGOs (L/NNGOs) operating in fragile and conflict-affected contexts – remains wide. As international grant financing continues to shrink, the question of whether innovative financing can serve as a genuine alternative – or whether it remains an aspiration largely inaccessible to those who need it most – is key.

This session aimed to move beyond theory and examine what is actually working, for whom, and under what conditions. It explored how L/NNGOs can successfully benefit from innovative financing and what role international actors, donors, and the private sector can play in enabling this shift.