ICVA and NRC co-publish briefing paper on overheads

BACKGROUND

Localisation is a central commitment of humanitarian reform, intended to make response more efficient, more effective, and more accountable to affected people. As few donors can directly fund a diverse array of local and national actors (LNAs), intermediary funding — through pooled funds, INGOs, and UN agencies — remains an essential channel for supporting this agenda.

The overhead costs that allow intermediaries and their partners to operate safely, accountably, and sustainably remain systematically underfunded across the delivery chain. The IASC's Guidance on the Provision of Overheads to Local and National Partners stresses the importance of full cost coverage for all actors in the delivery chain. However, a recent ODI report documents that despite a proliferation in policy, practice has not caught up — donors continue to restrict overhead funding, and intermediaries are left to subsidise their partners' indirect costs from increasingly stretched budgets. Where subsidy is not affordable, the share of overheads reaching LNAs falls further still.

ICVA's research documents the consequences: intermediaries hold legal and financial liability for the funds they pass on, but with insufficient resources to fulfil the oversight, compliance, and capacity-strengthening responsibilities donors require — leaving both intermediaries and LNAs underfunded for the work they are expected to deliver.

PURPOSE OF THIS BRIEFING NOTE

This briefing, released by ICVA and the Norwegian Refugee Council (NRC), sets out the rationale for why additional, separately budgeted overheads — rather than a split allocation between intermediaries and their local and national partners — are essential to make locally led response viable.

Drawing on existing good practice, it shows how donors can implement additionality, even within existing legal and policy constraints.

🔗 Check out the webpage here: https://www.icvanetwork.org/page/overheads