Municipal Finance Op-Ed

Philanthropy Can Better Support the Youngest Migrants and Refugees by Investing in Cities (Inside Philanthropy)

This article first appeared on Inside Philanthropy’s website. MMC engages in content partnerships with several organizations, and cross-posting does not indicate an endorsement or agreement.

Worldwide, more than 36 million children were forced to move due to conflict by the end of 2021 and over 50 million children were displaced due to climate change by the end of 2019. With 70% of the world’s displaced seeking refuge in urban areas, more and more children are looking to cities as a space for safety, development and learning. 

Mayors around the world are taking action. For example, Mayor Daniel Quintero of Medellín, Colombia, is providing Venezuelan families at risk of homelessness with temporary housing and shared daycares, and Mayor Giuseppe Sala of Milan, Italy, partnered with the third sector to create a center for unaccompanied migrant minors. 

But cities often have limited access to the finance they need to do this work at scale. By investing directly in city governments and their local partners, the philanthropic community can fill this gap and better support the world’s youngest migrants and refugees. 

City governments face systemic barriers to access finance. Locally, cities have limited channels for raising their own revenues. At the national level, central governments often limit cities’ international borrowing ability and give highly restricted, non-discretionary cash transfers that hamstring local innovation. Internationally, most financial investment institutions require national sovereign guarantees or high levels of credit worthiness that cities — especially those in low-income countries — rarely have. 

Cities’ access to international humanitarian funding is also limited. In 2020, only 3.1% of total international humanitarian assistance was given to local and national actors, including cities — the target was 25%

While systemic change doesn’t happen overnight, the philanthropic community can be a role model and start investing in cities now. Take the Conrad N. Hilton Foundation, for example, which is aiming to grant 25% of its new global funding portfolio to local actors, including city governments, over the coming years.

Working toward this target, the foundation joined other like-minded donors — the Bernard van Leer Foundation, Open Society Foundations, the IKEA Foundation, and the Robert Bosch Stiftung — in investing in the Mayors Migration Council’s Global Cities Fund for Migrants and Refugees (GCF), a nimble instrument created to quickly drive international funding to city governments often disregarded by traditional donors. By channeling a small amount of money to city grantees, it allows cities to implement ideas of their own design while building their case for further, larger investment.

For many philanthropic actors, shifting funding to cities will likely require a shift in protocol. The standard approach of overly stringent due diligence and evaluation requirements for often short-term grants to international NGOs won’t effectively support cities. They need to be replaced by long-term, flexible funding that embeds city-led solutions into local governance and service delivery. This can be a difficult shift for risk-averse philanthropies, but the GCF serves to bridge the gap, paving the way for a transition to direct funding and partnerships in the future.

The Colombian city of Barranquilla — one of the GCF’s inaugural grantees supported by the Open Society Foundations — highlights what is possible. The city used a GCF grant of $174,000 to create an Opportunities Center that connected over 100 refugees, migrants and internally displaced people to the formal labor market. Using this as a proof case, the city independently unlocked an additional $1 million investment from the Hilton Foundation to expand the center.

With a pipeline of 28 city grantees helping thousands of people around the world, the GCF is driving international donors to a marketplace of city-led, city-designed and city-owned solutions that can have greater impact at a lower cost than international NGOs, while strengthening local capacity and engaging affected communities. 

But for every Barranquilla, there are dozens of other cities that need support. Recent displacement crises have only exacerbated this need; there are 2 million Ukrainian refugee children, most of whom are seeking refuge in Polish and other European cities, and over 3 million Afghan refugee children seeking refuge in Pakistani and Iranian cities.

Philanthropy is well positioned to shift more of its funding from large international NGOs to city governments and their community-based partners. We invite more donors to join the marketplace and fund more cities directly in support of the world’s migrants and refugees, especially the youngest among them.

Peter Laugharn is CEO of the Conrad N. Hilton Foundation. Vittoria Zanuso is Executive Director of the Mayors Migration Council.


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