The ICRC’s funding and spending

What is the budget of the ICRC?

The overall budget of the ICRC for 2015 stands at 1.76 billion Swiss Francs (1.85 billion USD). This amount is divided into a budget for headquarters (CHF 199.9 million) and field operations (CHF 1,562.5 million). Ten years ago, the budget was just over 1 billion. For the past ten years it has grown constantly due to the ever-growing humanitarian needs in the conflict-affected countries. In fact, the field budget has increased by more than 55% since then while the HQ budget has grown by just 31.4%, which is an increase of less than one third. In short, the ICRC does its utmost to put its resources at the service of people.

Who funds the ICRC?

The ICRC is funded by voluntary contributions from the States party to the Geneva Conventions (governments), national Red Cross and Red Crescent Societies, supranational organizations (such as the European Commission) and public and private sources. Governments are our main donors: on average during the past five years, they contributed about 84% of the budget. But contributions remain voluntary and there is no guarantee that such contributions will last into the long-term.

How does the ICRC calculate how much money it needs?

The ICRC budget is calculated based on three factors: the humanitarian needs of the communities affected, our ability to deliver aid and protection to those communities, and a realistic assessment of what can actually be implemented.

Taken together these three factors have tended to produce highly accurate operational plans and budgets: during the last ten years, the ICRC has averaged around a 90% implementation rate of its projected budget. Our operational budget has been on the increase during the past few years. This year (2015), we have a budget that is more than 25% bigger than last year's.

Are you seeking to diversify your funding?

The ICRC has a funding strategy for 2012-2020. In that strategy, we address the need to diversify our funding, which is something we are working on. In light of the ever-growing humanitarian needs of communities affected by conflict, and the fact that we work in proximity with those same communities, our need for funding is also gradually increasing. As part of our funding strategy, the ICRC is exploring new avenues to reinforce the support from traditional donor States and to diversify our sources of funding by engaging with emerging States and some key areas of the private sector.

How does the ICRC engage with donors?

We have been working hard on expanding our donor base, because more than 90% of our contributions for the field come from a group of only 18 principal donors, which each contribute more than 10 million Swiss Francs annually. This is known as the ICRC's Donor Support Group.

The ICRC has worked on strengthening not only its political and operational dialogue with a number of emerging donors, but also the dialogue surrounding fundraising. We have been seeking ways to engage with them on different topics and contexts of interests where they could support our operations.

How do you inform donors about the work of the ICRC?

We provide standard financial and narrative reporting on how we use the funds we receive. For instance, we produce mid-term and annual reports. We invite key donors to participate in two field trips a year where they can become more familiar with the ICRC's operations and challenges. Their feedback from such trips is very important for us. We also give our donors update reports on operational or thematic issues that might interest them.

How do you reassure your donors that their contributions are well spent?

ICRC expenditure is audited by an internationally-recognised firm employing stringent and recognised IFRS (International Financial Reporting Standards) accounting standards. We have set up a system of internal and external audits whereby all key financial figures and procedures are checked.

The external auditors' assessment is published every year and shared with donors. Funding and expenditure details are made public in the ICRC's Annual Report, with key indicators showing what we have achieved in the field.

Moreover, the ICRC has always been open to donors who wish to carry out their specific audits, whether in the field or at headquarters. This is part of our policy of being open with donors.

With some donor governments, you are signing multi-year funding agreements. Is that common practice?

Agreements are based on countries' requirements and policies and we are also keen to have predictability in our funding. We regularly discuss this matter with key donors. This helps ensure that we can respond flexibly, especially to unexpected crises.

How do national Red Cross and Red Crescent organizations contribute to your operations?

National Societies contribute to ICRC operations in several ways: for instance, by supporting health activities, providing staff or contributing to specific activities in a country. National Societies together support about 3% of the ICRC's operations.

How does the ICRC fund its emergency operations?

In an emergency, timing is everything. The capacity to mobilize and deliver resources in the very early hours of a conflict can make all the difference for those in need. Governments often need time to free those resources. It is therefore vital that the ICRC have the ability to take operational – and financial – decisions during the first phase of the response. In order to do that, we must be able to pre-fund operations, by which we mean committing resources before any funding is explicitly available.

We are able to do this by using special funds that are not earmarked, which means they do not have to be used for a specific region, country or programme, thus giving us maximum flexibility in how we use them. We also use other funds that we have built up over 30 years, known in financial terms as 'reserves,' or 'equity.'

When urgent needs arise we will commit these reserves – which would cover approximately two months of ICRC operations – until donor funds for that emergency become available. It is this flexibility and this rapid response that enable the ICRC to make a real difference on the ground.

The reserves are important not only for pre-funding operations but also for covering deficits that we may face at the end of the year. Despite managing our finances prudently, we will have to tap into our reserves this year, although we do hope to further increase our income from donors.

Is your independence compromised by the fact that the bulk of the ICRC's funding comes from a small group of major donors?

The ICRC only accepts funds from those who respect the ICRC's independence and impartiality of action. This means that contributions will be used to respond to humanitarian needs on the ground – as they are assessed by the ICRC. In other words, we will not accept donations that are very tightly earmarked and that would breach the principles of independence and impartiality. The ICRC welcomes financial support from any new donors.

That said, the ICRC's relations with its donors are not limited to financial matters. We also engage States on issues such as the protection of people affected by armed conflict and other situations of violence and on the implementation of international humanitarian law.