Over 150 unilateral, bilateral and multilateral donors contribute to the financing of FAO's field programmes and projects. In 2008 , the European Comission (EC) was the largest single funding source for FAO's technical and policy asssitance to members, providing some 20% of all funds received (US$ 480 million), followed by Spain (9%), Italy (9%), the Global Environmental Facility (8%), the MDG Fund (5%), Belgium (4%), Germany (4%), Japan (4%), UNDP (4%). The Unilateral Trust Fund (UTF) donors together contributed some 17%, while "other Trust Fund sources"contributed 16% of the total funding available for FAO's development services to members in 2008.
Unilateral donors fund technical assistance projects in their own countries from their own national resources or from loans, credits and grants made by international financing institutions. FAO provides technical expertise and supports leadership and ownership by the recipient country.
In recent years, there has been a major reversal in thinking in terms of what constitutes a classic target group for FAO resources. Donors now emphasize the need to focus on the recipient countries as a funding source as well as on the modality by which funding is allocated.
For bilateral and multilateral donors three distinct funding modalities have emerged. These are:
- centralized, where, following a process of active donor consultation at country-level, funding is determined at the donors’ headquarters;
- decentralized, where the funding decision is taken in the recipient country concerned, with the local donor representative;
- mixed, whereby endorsement by the local donor office in the recipient country concerned is a necessary condition for final approval by the donors' Headquarters.