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May 25, 2016

Aid Summit Produces 'Grand Bargain' to Cut Overhead Costs

Meeting in Turkey this week at the World Humanitarian Summit, governments and aid groups reached agreement on a "grand bargain" to reduce relief groups' administrative spending by about $1 billion a year and ensure more donor money reaches people in crisis, reports the Thomson Reuters Foundation. Twenty donor countries, the European Union, and 16 United Nations and charitable relief agencies signed on to the pact, among them the U.S. government and the Red Cross.

The deal is aimed at shrinking an estimated $15 billion annual gap in funding to tackle humanitarian crises. Among other things, signatories pledged to better fund programs that provide long-term rather than just emergency relief; simplify systems for distributing donor money and tracking spending; and provide 25 percent of aid funds directly to local and national organizations by 2020, a tenfold increase.

"I expect more resources in the hands of people in need and the humanitarian workers on the front line [who] are risking their lives to help them," said E.U. budget chief Kristalina Georgieva, who shepherded the bargain. "I expect less to be spent in the back room in transactions that do not help us get help to the people."