Donor Climate Funding and Indigenous Peoples and Local Communities’ Rights

Donor Climate Funding and Indigenous Peoples and Local Communities’ Rights

April 16, 2021

There is well-established and ever-mounting evidence that Indigenous Peoples and Local Communities (IPLCs) with strong rights to manage forests contribute significantly to climate change mitigation and biodiversity preservation. IPLCs are essential partners in tackling climate change. Yet their lands and rights are under increasing threat. 

This week, the Rainforest Foundation Norway released a new study investigating the scale and effectiveness of donor funding to support IPLCs’ tenure rights and forest management in tropical countries. Indufor led the research and report writing.  


The study mapped official development assistance (ODA) by using transaction data reported to the International Aid Transparency Initiative (IATI) from bilateral, multilateral, and private foundation donors to map funding flows for IPLC land tenure and forest management. The IATI data was supplemented with externally scraped data to fill reporting gaps where required. The study found 10,294 transactions that were classified as relevant to IPLC tenure and forest management in tropical countries. A representative set of project budgets were assessed along direct and indirect support to Indigenous Peoples and local communities to improve estimates. 

Photo by Johan Wildhagen

In addition, the study draws on responses to an online survey by 42 key informants from 18 countries representing a range of organizations including IPOs, NGOs, and donors engaged in funding IPLC tenure and forest, to draw insights into funding gaps and opportunities, barriers, trends, lessons, and outlook on funding for IPLC tenure. 

Key Findings

Finding 1: The overall funding to IPLCs tenure rights and forest management in tropical countries is low. 

  • Between 2011 and 2020, IPLCs tenure rights and forest management received on average $270 million per year. The disbursements have been stable after an increase from 2011 to 2012. The signing of the Paris Agreement in 2015 did not lead to an increase in funding. 
  • This figure equals less than 5 percent of total official development aid (ODA) for General Environmental Protection and less than 1 percent of ODA for climate mitigation and adaptation in the same period. 
  • 11 percent of the IPLC support was targeted to land tenure recognition projects. 

Figure 1: Donor Disbursements to IPLC Tenure and Forest Management Projects in Tropical Forested Countries, US$, 2011-2020

Finding 2: Relatively few donors prioritize IPLC tenure and forest management. 

  • Norway and the United States are the largest contributors in absolute terms, with Germany, UK and Sweden also providing substantial contributions. 
  • Norway supports IPLC tenure and forest management at a higher level than its peers in Germany and the UK. Norway contributed more of its support directly to NGOs, while Germany and UK directed a larger portion of the support to governments and multilateral institutions. 
  • Multilateral institutions have disbursed approximately $1.3 billion to IPLC tenure and forest management projects. More than half of all the funds disbursed flowed through only five multilateral institutions. 
  • Private foundations have contributed a small (3 percent of the total), but crucial, share of the total disbursements, by making direct, flexible, and less bureaucratic grants to IPLC organizations. 

Figure 2: Total IPLC Tenure and Forest Management Disbursements by Bilateral Group, US$

Finding 3: A small share of the support reaches Indigenous peoples and local communities’ organizations. 

  • Many of the projects identified are large projects implemented by intermediary organizations rather than IPLC organizations. 
  • Beyond the multilateral institutions, the top 10 intermediaries for the largest donors include a mix of large international NGOs, UN agencies and consulting companies—not IPLC organizations. 
  • Only about 17 percent of the projects identified included the name of an IPLC organization in the project implementation description, amounting to $46.3 million per year on average. 
  • The FCPF Readiness Fund has disbursed just $6.7 million (1.4 percent) of its funding to Indigenous People and CSO capacity building programs since its inception. 75 percent of disbursements from the more specialized Tenure Facility have gone directly to IPLC-led projects and project support. 

Figure 3: Total IPLC Tenure and Forest Management Disbursements by Country

Actions to improve land and ecosystem management and protection through nature-based solutions (NBS) are gaining increased attention as solutions to the climate and biodiversity crises. The largest potential for emissions reductions from NBS comes from protecting and restoring tropical forests. 

With the key role of IPLCs in effectively protecting and sustainably managing tropical forests, practitioners and funders of nature-based solutions must work with IPLCs in ways that strengthen rather than undermine their land rights, economic security, and wellbeing. Decision-makers must put rights, and especially IPLC rights, at the center of nature-based solutions. That includes significantly increasing support for IPLCs, both financially and politically, to enable them to enjoy secure land tenure over their customary lands and to continue to manage their land and forests sustainably. 

The report includes recommendations for donors, tropical forest country governments, NGO intermediaries, and IPLC organizations on increasing the scale of funding for IPLC tenure and forest management, and the share of this that reaches IPLC organizations. To do this effectively, all actors in the funding chain must build on lessons learned from the past decade and amplify their operations to more strategically and effectively channel funding from donors to the IPLCs that ultimately make the difference. 

Download the report “Falling short” here

Indufor is a global leader in Natural Resources Management, Investment Advisory, and Strategic Industrial Development consulting. We support our customers to compete and sustainably grow in international markets. Indufor has offices in Finland, New Zealand, Australia, the United States, and China. We have over 43 years of experience in more than 100 countries. Our services support our clients to make the world more sustainable and greener.

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