New research by ODI Global outlines pathway to close social protection gaps in countries facing overlapping vulnerabilities from poverty, climate change and conflict

London, United Kingdom, December 18, 2025 – ODI Global, a leading independent think tank, launched a report this week proposing a “virtual financing mechanism” for social protection that could replicate the benefits of successful global health funds without creating a new institution. The report identifies the Global Alliance against Hunger and Poverty as the most effective platform to host and operationalise such a mechanism, building on its country-led approach and growing membership. 

The report, titled Building Equitable Social Protection Systems for a Sustainable Development Goal Recovery: The Case for a Global ‘Virtual Financing’ Mechanism, was launched at a high-level event in London, bringing together senior policymakers, multilateral institutions, and country representatives to discuss how to accelerate progress towards universal social protection coverage by 2030.

Commissioned by the UK’s Foreign, Commonwealth and Development Office through the Social Protection Technical Assistance, Advice and Resources (STAAR) facility, the research was developed with support from the Global Alliance. It delivers on a commitment made by Alliance members at last July’s Fourth International Conference on Financing for Development (FfD4), where they launched the “Building better integrated finance for SDG 1 and 2” initiative under the Sevilla Platform for Action.

A fragmented system under strain

According to the report, approximately USD 20 billion in international finance flows to social protection each year, split roughly equally between development and humanitarian assistance. However, these financing streams operate with different objectives, planning cycles, and delivery modalities, limiting their combined efficiency.

Humanitarian cash and voucher assistance, while directed towards predictable protracted crises, is mobilized annually with limited certainty and often delivered outside national systems. Development finance is generally more predictable, but frequently involves multiple donors pursuing separate agendas. Climate finance, meanwhile, remains largely disconnected from social protection.

This fragmentation is most acute in 29 countries facing overlapping vulnerabilities from protracted humanitarian crises, climate shocks, and fragility, conflict and violence (FCV) – precisely where social protection coverage is lowest. In these countries, fewer than one in five people are covered by social protection programmes, with median coverage at just 11%.

The report argues that a virtual financing mechanism could coordinate support across the humanitarian-development divide, and mobilize climate finance for social protection, without the transaction costs and protracted negotiations required to establish a new multilateral entity.

Global Alliance positioned to lead

Building on discussions at the First Leaders’ Meeting of the Global Alliance in Doha last month, where leaders explored the contours of integrated financing mechanisms, the report identifies the Alliance as a suitable platform to interface with such a virtual mechanism. The Alliance’s focus on country-led programmes, mandate to matchmake partnerships around national plans through its Fast-Track Initiative, and inclusive governance structure spanning donor and developing countries, partners and organizations position it to support more coordinated financing approaches.

Speaking at the launch event, Renato Domith Godinho, Director of the Global Alliance Support Mechanism, emphasized the pragmatic approach needed: “Despite growing consensus that social protection programmes can be the vehicle to deliver humanitarian, development and climate resilience outcomes together, there is a lack of practical mechanisms to coordinate this in delivery. What we need are systems that focus the conversation and action around country-led programmes at national scale – programmes built on evidence-based, scalable systems.”

“The Fast-Track Initiative represents our first approach to this coordination challenge, interfacing with over 200 Alliance members to support country plans, one by one” Godinho continued. “But we have learned that inertia, misaligned processes and timelines, and organizational structures not built to work across systems create real costs and complexity. A more systematic mechanism – one that is voluntary, discussed through inclusive processes, and provides clear financial incentives aligned internationally – could match the countries’ own resources, leadership and commitment to scale social protection coverage.” 

Key findings underscore urgency 

The report highlights several trends:

• Progress towards eliminating extreme poverty and hunger by 2030 has slowed dramatically, with almost half the world’s extreme poor now living in FCV-affected states

• Aid cuts threaten to reduce social protection financing by USD 500 million or more, with humanitarian cash and voucher assistance already falling from USD 10.6 billion in 2022 to USD 8.2 billion in 2024

• Expanding social protection coverage to 50% in the 29 most vulnerable countries would extend coverage to an additional 311 million people 

• Climate finance, which reached USD 22 billion for adaptation in 2024, currently plays a negligible role in social protection, with only USD 186 million committed in 2022-2023

The report urges the creation of a virtual mechanism under the Global Alliance, backed by financing commitments linked to global outcome targets to bridge the humanitarian-development divide through joint planning. It also urges the integration of climate finance into national social protection planning, building on the Belém Declaration on Hunger, Poverty, and Human-Centred Climate Action adopted at COP30.

From inclusive dialogue to coordinated delivery 

The report comes after countries announced concrete multi-partner implementation plans for large-scale national programmes in Doha. To date, the Global Alliance’s Fast-Track Initiative has validated 9 country pre-plans and received over 85 Expressions of Interest from international financial institutions, bilateral donors, UN agencies, and philanthropies. 

The virtual financing mechanism proposed in this report – or any related new mechanism agreed among relevant actors – can build on this foundation while expanding capacity to coordinate across humanitarian, development, and climate finance streams.

Full report available

The complete report, Building Equitable Social Protection Systems for a Sustainable Development Goal Recovery: The Case for a Global ‘Virtual Financing’ Mechanism, is available at socialprotection.org and through the STAAR facility.

About ODI Global 

ODI Global is one of the world’s leading independent think tanks on international development and humanitarian issues. Through research, convening, and influencing, ODI works to unlock solutions to the world’s biggest challenges.

Media contact: [email protected]

About the Global Alliance against Hunger and Poverty 

Launched at the G20 Summit in Brazil on November 18, 2024, the Global Alliance against Hunger and Poverty has grown to over 200 members, including more than 100 countries, the African Union, European Union, 24 international organizations, 9 international financial institutions, and over 30 philanthropic and non-governmental organizations. The Alliance aims to accelerate progress toward SDGs 1 and 2 through providing coordinated support from its members towards national, large-scale evidence-based policies and programs.

Media contact: [email protected]

About the STAAR Facility

The STAAR (Social Protection Technical Assistance, Advice and Resources) facility, implemented by DAI Global UK Ltd and funded by the UK Foreign, Commonwealth and Development Office, provides technical support to strengthen social protection systems globally.