From States to big companies (or how the United Nations is financed).

History of the financiation of the united nations 

The United Nations (UN) is a complex organisation with several budgets funded in different ways. The UN Secretariat General manages a regular budget, another for peace missions, and a third for the UN tribunals: the International Criminal Tribunals for Rwanda and the former Yugoslavia, and the International Residual Mechanism of the International Criminal Tribunals, the successor body to those two courts. 

Within the UN there are specialised agencies such as the WHO, and funds and programmes, such as UNICEF, which have separate budgets.

The UN's regular budget is funded by mandatory contributions and approved by the General Assembly. Until now it was for a two-year period, but since 2020 budgets have become annual. For 2020, the General Assembly approved a budget of more than USD 3 billion. 

The Assembly's Committee on Administrative and Budgetary Questions is in charge of establishing every three years what percentage of the general budget each member state should contribute according to its wealth: the biggest contributor in the 2019-2021 period is the USA, with 22%, followed by China, with 12%, and Japan, with 8.6%.

In addition to the general budget, the UN manages two other budgets: that of peacekeeping missions and that of the international criminal tribunals under the organisation. Both are financed by mandatory contributions from all member states, even if they do not participate in blue helmet missions. 

In the period July 2019 to June 2020, the budget for the thirteen operational peace missions was more than USD 6.5 billion. The budget for the international tribunals for 2020 amounts to $86 million.

Finally, the UN funds, programmes and specialised agencies budget independently. The funds and programmes, such as UNICEF or the United Nations Development Programme (UNDP), are financed through voluntary contributions from states and other donors, such as NGOs, private entities and other organisations. 

The specialised agencies, for their part, are financed by mandatory contributions from member states, calculated in the same way as the regular budget, and voluntary contributions, both from states and other entities.

In the case of the WHO, these contributions are a percentage of a country's gross domestic product, the percentage is agreed by the United Nations General Assembly and is calculated on the basis of the wealth and population of the country. They are approved by Member States every two years at the World Health Assembly. They cover less than 20% of the total budget.  

The remainder of the organisation's funding comes in the form of voluntary contributions, largely from Member States, but also from other UN organisations, intergovernmental organisations, philanthropic foundations, the private sector and other sources. 

These contributions are further classified according to the degree of flexibility WHO has in deciding how to spend these funds. Core voluntary contributions are untied, meaning that WHO has full discretion on how to use them to finance the programme work of the Organization. They represent 3.9% of all voluntary contributions.

Descriptive - analytical section:

Based on the above analysis we can say that since the UN and its partner agencies are entirely dependent on state and other contributions it makes their financial situation precarious.  In a report in May 2020, the Secretary-General warned States that only 43 States had so far paid their assessed contributions in full and that the solvency of the Organisation continues to depend on their meeting their financial obligations in full and on time. 

The regular budget deficit reached $520 million in November 2019, the highest in a decade, putting the organisation's activities at risk. On top of this, the coronavirus pandemic further compromised its budgets, as governments are likely to delay further the payment of their contributions and voluntary contributions are likely to fall.

 On top of this, the coronavirus pandemic further compromised their budgets, as governments are likely to further delay payment of their contributions and voluntary contributions are likely to fall.

As for the WHO, state contributions have declined as an overall percentage of the programme budget and have for years accounted for less than a quarter of the organisation's funding. 

However, these contributions remain a key source of funding for the organisation, providing predictability, helping to minimise dependence on a narrow donor base and allowing resources to be aligned with the programme budget. Turning to the present, the World Health Organisation has been leading the fight against one of the biggest health crises in history for two years. However, it is doing so with a limited budget, especially in terms of its scope to decide how to spend it. When then-president Donald Trump announced in 2020 that he would withdraw the United States from the World Health Organisation, it created instability in the organisation. 

The US was, and still is, one of the main funders of an organisation that looks after the health of the world with less money than most governments. As an example of this, in 2020, the United States contributed $2.3 billion in dues, which is $1 billion more than the next largest contributor and more than the total contributions of 186 member states combined.  The United States is also the largest contributor of voluntary funds to the UN system, providing approximately $7 billion in voluntary contributions each year.

Between 2020 and 2021, the top funder of the WHO was Germany, especially thanks to its voluntary donations. That place used to be occupied by the United States, which moved to third place in the wake of Trump's diplomatic conflict with the entity. 

To the contribution of states to international structures we can add a phenomenon that is growing in the area of human rights, here we refer to the appearance on the scene of philanthropy funds. These are non-profit foundations whose aim is to provide disinterested help to others and make financial contributions to address challenges in the area of human rights. An example of this is the Bill and Melinda Gates Foundation (the world's largest philanthropy fund), which gave $591 million to the WHO, making it its second largest contributor.

Currently, there are hundreds of different funding arrangements between UN entities and corporate actors. System-wide disaggregated information on the quality and quantity of funding from the corporate sector is not available. Several UN funds and agencies list the amounts received from individual corporate donors, and all of them have published best practice examples of partnering with the private sector.

This tendency to partner with business is based on the assumption that the UN and its member states could not solve today's global problems alone. Partnerships with the private sector are seen as pragmatic, solution-oriented, flexible, efficient and non-bureaucratic - attributes that are often lacking in purely intergovernmental projects and processes. 

The continuing financial crisis of the United Nations has been one of the major problems in the history of international organisations, both the UN and WHO have been continually crippled by incessant financial difficulties. Repeated cash emergencies, difficulties in collecting contributions from member states and in paying their debts have become major concerns. The last 20 years have seen significant changes in the engagement between the UN system and the business sector and this can be seen in the rise of private or "philanthropic" funding at the international level. 

Changes in funding practices have profound implications for the international system and sometimes not very good ones. Private funding risks turning UN agencies, funds and programmes into contractors for bilateral or public-private projects, eroding the multilateral character of the system and undermining democratic global governance. Another major problem is that philanthropic foundations, in particular, can have enormous influence on political decision-making and agenda-setting. This is most evident in the case of the Gates Foundation and its role in global health policy, leading to a weakening of the international system.

Personal opinion on how to improve the system

To improve the situation we believe it is extremely important to close the gap between the scale of global problems and the (financial) capacity of the UN and WHO to solve them. They need to reconsider the often unconditional openness of the organisations to the business sector and corporate philanthropy, seeking to reverse the tendency to outsource funding and decision-making to global partnerships outside the UN system.