A ‘Trust Fund’ or ‘Multi Donor Trust Fund’ (MDTF) is a multi-agency funding mechanism, designed to receive contributions from more than one donor (and often also the recipient government), that is held in trust by an appointed administrative agent. There are many different types of trust fund, operating at a sector-wide, national, regional and global level. This query will focus on national-level trust funds and on those that are focused on delivering long-term development rather than short-term humanitarian issues. Trust Funds are commonly used in fragile states, and represent ‘best practice’ in post-crisis funding, in line with both the Paris Agenda for Aid Effectiveness, and largely also the DAC Principles for Engaging in Fragile States. Trust funds have been utilised to support development objectives in a number of fragile and low-capacity state contexts including Afghanistan, Sudan, Aceh and Nias, Timor Leste, Iraq and the West Bank/Gaza.
