Nairobi — The United States has signed a new pact with the United Nations shifting how Washington finances humanitarian operation by scrapping fragmented project-based grants in favour of country-level policy frameworks designed to anchor a new $2 billion pooled aid package.
Under a Memorandum of Understanding (MOU) with the UN Office for the Coordination of Humanitarian Affairs (OCHA), future US humanitarian funding will be channelled through flexible, country- and crisis-level pooled funds administered by OCHA.
The, the State Department said on Monday would end decades of earmarked, projectised financing that it blamed for duplication, high overheads and weak accountability.
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Washington said the shift will nearly double the life-saving impact of each dollar spent by consolidating planning, procurement and delivery across UN agencies and implementing partners, while sharply cutting administrative costs embedded in the legacy system.
The model is underpinned by an initial $2 billion US “anchor” commitment for 2026, expected to support tens of millions of people across dozens of crisis-affected countries and generate almost $1.9 billion in savings for US taxpayers through efficiency gains and reduced duplication.
OCHA reform
The agreement aligns with OCHA’s Humanitarian Reset agenda and introduces stricter oversight, performance measurement and financial transparency.
It also signals deeper structural consolidation across the UN humanitarian system, as Washington pushes back against what it has described as bureaucratic sprawl and ideological drift.
The funding overhaul comes as the United States — the UN’s largest humanitarian donor — recalibrates its engagement with multilateral agencies amid growing concern that annual voluntary contributions, estimated at $8-10 billion, have expanded without commensurate improvements in outcomes or efficiency.
Under the new framework, US funding will be tightly prioritised toward core life-saving activities, remain fully flexible across UN and non-UN partners, and be governed by country-level policy agreements aligned with US strategic interests and donor burden-sharing, rather than individual agency projects.
UN humanitarian chief Tom Fletcher welcomed the deal, calling it “a powerful act of leadership and generosity that will help save millions of lives,” while US officials framed the agreement as a decisive reset of UN humanitarian financing.
“Today’s agreement ushers in a new era of UN humanitarian action and U.S. leadership in the UN system,” said Jeremy Lewin.
More aid
US Ambassador to the UN Michael Waltz added that the new approach should “deliver more aid with fewer tax dollars, providing focused, results-driven assistance aligned with US foreign policy.”
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For African countries, which account for a significant share of global humanitarian needs, the shift could prove transformative.
States grappling with drought, food insecurity, displacement and conflict are expected to benefit from faster disbursement, greater flexibility and reduced competition among agencies for earmarked project funding.
By consolidating resources at the country and crisis level, the model is designed to prioritise the most acute needs rather than donor-driven projects, while strengthening coordination between UN agencies, NGOs and national governments.
In Kenya, where humanitarian funding supports drought response, refugee operations in Dadaab and Kakuma, and climate-related resilience programmes, the pooled funding approach could stabilise aid flows amid tightening global budgets and improve coordination across the Horn of Africa.
However, Kenyan authorities and other African governments may face heightened scrutiny, as tighter donor oversight links future funding more explicitly to performance, transparency and measurable outcomes.
The agreement comes amid deepening financial strain across the UN system.
In 2025, funding pressures forced sharp cutbacks across humanitarian, peacekeeping and development operations, while the UN’s 2026 humanitarian appeal was launched at roughly half the size of its 2025 target, underscoring the urgency behind Washington’s push for reform.
