Cross-cutting teams in humanitarian organizations have been disproportionately affected due to the loss of indirect cost rates associated with U.S. foreign assistance projects. Without full funding, expert teams focused on accountability, safeguarding, and monitoring and evaluation have been slashed or greatly reduced due to aid cuts.
Date: 3/26
Region: Global
Country: Global
Topic: Economy & Livelihoods
Policy Lens: Economic & Trade Interests
Entry Type: Secondary Effect
Additional Context: The U.S. government was one of few donors that paid indirect costs for the full range of services required for effective project implementation. Although some organizations continue to receive funding for projects through donors such as the U.N., European countries, and philanthropic organizations, many have struggled to retain funds to hold on to cross-cutting expertise.
Devex Researcher Note: The U.S. government's usage of a Negotiated Indirect Cost Rate Allowance, or NICRA, is unique in the humanitarian and development system. Other funders have much stricter indirect cost allowances that do not fully fund the range of related expenses. U.S. NICRAs were often between 10 and 30%, whereas the four U.N. agencies with indirect cost policies range from a strict 4% (the U.N. Refugee Agency) to 12% (the U.N. Population Fund) rate. Other bilateral donors average around 7%.
The source has requested to remain anonymous.