For its 2025 annual retreat, the Global Cities Hub convened cities, regions and IOs to reflect on a topic with growing relevance: the role of cities and regions as emerging donors to international organizations (IOs).
While there is abundant literature, data and policy debate on State’s donorship, subnational donorship remains a largely under-researched, under-discussed topic. Only a limited number of local and regional governments (LRGs) currently provide funding to IOs for development cooperation or humanitarian action. LRGs have often preferred to support local NGOs that are closely connected to their communities and local economic ecosystems.
Yet, all LRG representatives participating in the retreat are already engaged as multilateral donors. Therefore, the retreat offered better understanding of subnational multilateral donorship: its incentives and challenges, whether and how it should grow, and how LRGs might engage more strategically with IOs.
LRGs were invited to reflect on the objectives or strategies that guide their collaboration with and contributions to IOs in these areas. The participants mentioned most often UNICEF, UNDP, UN Habitat, WHO, UNHCR, OHCHR, sporadically OCHA, ILO, ITU, OIM, ICRC, FAO, UNEP, as well as in specific context OIF, UNESCO, UNRWA, WFP, OCDE, Council of Europe. In many cases, funding decisions are primarily demand-driven rather than guided by a defined strategic vision. Several funding modalities were identified:
- Project-based funding
- Core funding (rare, mostly in emergency contexts)
- Funding to IOs as implementing partners for bilateral project designed by LRGs
- Contributions to trust funds or pooled funds managed by IOs.
- Provision of in-kind expertise
Incentives and narrative: Motivations for LRG engagement in development cooperation and humanitarian response vary significantly depending on local context. Some participants referred to a desire to “give back,” reflecting past support they had received, while others pointed to soft power, reputation, or political leadership. At the same time, several LRGs underlined the difficulty to convince local constituencies of the benefits of funding IOs. In some contexts, public opinion or politicians question the legitimacy of LRGs engagement in international development and humanitarian action.
Constraints in engaging with the UN: Many LRGs highlighted challenges linked to UN administrative requirements, particularly high overhead costs and complex procedures. Competition among IOs was also cited as a factor complicating funding decisions. Moreover, LRGs noted the lack of clarity regarding how they can formally engage with the UN system, given their absence of official status.
Legislative frameworks: Several LRGs operate within formal legislative frameworks that set specific targets for development cooperation.
Relationship with national authorities: Some participants described challenges stemming from the absence of formalized exchange mechanisms with national administrations. Some LRGs emphasized their distinct added value as subnational donors, particularly their agility and ability to take swift decisions. They expressed reluctance “to fill in the gaps” and compensate for national budget cuts but rather look for impact and innovation.
IOs participating in the retreat could introduce themselves and highlight relevant activities and programmes for LRGs
OECD presented valuable statistical data on Decentralized Development Cooperation (DDC) (i.e. international development cooperation led by LRGs). Over the past decade, DDC has increased significantly. The list of top IOs beneficiaries echoed the LRGs’ deliberations: OIF, UNICEF and UNRWA are the three top recipients. From a thematic perspective, climate resilience and poverty reduction are most appealing to LRGs.
UNEP presented the current state of thinking on “overshoot” (this refers to global warming overshoot, where temperatures exceed the 1.5°C Paris Agreement goal, due to ongoing emissions) and the strategy of shifting to a whole-of-society approach, based on the success of the multistakeholder nature of the Montreal protocol to protect the ozone layer. UNEP aims for cooperation with cities on high impact areas, such as built environment, energy transition, urban cooling, food waste reduction, and freshwater management.
UNDP explained the specificities of a program helping city-to-city cooperation initiated and financed by States. This program aims to promote collaboration at the local level to complement country level relations. Talking about the incentives of cities participating in the program, UNDP referred to international visibility and local pride in collaborating with the UN.
UN-Habitat works with cities in different formats. One of the most promising modalities seems to be the trilateral cooperation when an LRG finances a program in another LRG, involving UN-Habitat as implementing partner. UN-Habitat can offer on the one hand the technical expertise and on the other hand the “international validation” of the project.
OCHA reminded that the global humanitarian appeal is merely 23% funded as of today. New donors are encouraged to join the global efforts to provide immediate support to those in need due to disasters or conflicts. For that purpose, OCHA’s managed pooled funds are allocating joint resources in a quick, effective and financially efficient manner. OCHA is capable of mobilizing and deploying financial aid within hours following a crisis and its administrative overhead cost is only 3%. OCHA also underlined that its partners on the ground are carefully selected and regularly monitored. This offers a guarantee to donors.
The following appealing value propositions of IOs were identified during the discussion:
- Legitimacy and international recognition of LRG’s financial contributions to IOs;
- Belonging to an exclusive group of actors, alongside States ;
- Benefiting from the holistic approach of the IOs, both thematically and geographically;
- IO’s accountability mechanisms are solid; therefore, they can guarantee the proper use of taxpayers’ money;
- Through the convening power of IOs, donors can gain science-based knowledge and information;
- IOs offer solid technical expertise and a “most trusted pair of hands” on the ground.
The retreat exposed that LRGs face growing expectations from the international system on three fronts. They are now expected to: a) support States in achieving the SDGs by 2030; b) provide local knowledge and best practices on a vast array of topics addressed at the international level, and; c) contribute financially to IOs in a context of States declining multilateral budget. It highlighted that some LRGs provide funding to IOs with or without seeking a stronger role in multilateral policymaking. They support multilateral cooperation and humanitarian action by principle, while also finance concrete development-like projects which offer the possibility to maximize local impact. The Global Cities Hub remains committed to offer space to discuss further the overarching dynamics of subnational donorship.