Brief: Shifting climate adaptation finance to local communities through effective intermediaries

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Introduction

Climate adaptation finance is failing to reach marginalised communities that are most vulnerable to climate impacts – including women, girls and Indigenous Peoples.

This briefing sets out how to direct climate finance, and specifically financing for locally led adaptation (LLA), effectively to local communities and organisations engaged in climate action. It focuses on the role and purpose of intermediary funders to examine the important attributes they need to be effective.

Drawing on the lessons of the Global Alliance for Green and Gender Action, a pioneering alliance channelling climate finance to women-led community-based organisations, the authors see how intermediaries can transform locally driven climate action and invest in long-term capacity building, by getting funds where they are needed most.

The briefing contributes to a further refinement of LLA methodologies and practices to better realise its promise of climate justice.

Adaptation finance and its failure to reach the local level

Despite commitments, climate finance for adaptation largely bypasses local communities. Between 2017 and 2021, only 17% of adaptation funding reached the local level. Just 2.3% of overall climate finance primarily targets gender equality. The climate finance that reaches marginalised communities is even more limited: only 0.22% of climate-related official development assistance reaches women’s rights organisations and less than 1% reaches Indigenous Peoples.

Institutions in the global North still primarily control the allocation and management of adaptation finance, with most funds being channelled through the international development banks such as the World Bank, or the officially recognised entities under the UN Framework Convention for Climate Change (UNFCCC) such as the Green Climate Fund (GCF) and the Adaptation Fund (AF). With their high bureaucratic costs and project-based approaches, these institutions limit accessibility for local actors.

Dedicated women’s, feminist, and socio-environmental funds demonstrate that it is possible to channel finance directly to local communities, though these funds remain under-utilised.

‘Intermediaries’ and their critical role in climate finance

Intermediaries serve as bridges between international funders and local actors, helping mobilize, allocate, and manage climate finance. Intermediary organisations differ in their intent and approach, with significant implications for not only how much funding reaches local organisations, but its quality and accessibility, and where decision- making power lies. Within the international climate finance system, common intermediaries include:

• Multilateral institutions and development banks. These institutions aggregate funding from bilateral funders and channel finance to climate change projects.
• Government-led funds or national intermediaries, including regional and national funds that can access finances from other climate finance sources.
• Civil society organisations, including networks, advocacy organisations and nongovernmental organisations (NGOs) that do regranting and work with local organisations to implement projects.
• Public foundations and funds, which are primarily designed to direct funding to the local level through regranting. The purpose of these organisations is to provide funding to local organisations and movements who are unable or unwilling to access large-scale funding.

Effective intermediaries — lessons from GAGGA

Global Alliance for Green and Gender Action (GAGGA), an alliance of women’s and environmental justice funds and NGOs, provides a pioneering model of how intermediaries can advance LLA. Its funding model transforms restrictive finance into flexible, long-term grants to support women-led, community-based organisations. Lessons from GAGGA highlight seven key attributes of effective intermediaries:

1. Providing core flexible and long-term funding: By offering multi-year, unrestricted grants, intermediaries shift power to local organizations, enabling them to set agendas and implement context-specific solutions.
2. Acting as an advocate: Intermediaries amplify local voices in global policy spaces and influence funders to increase support for women-led and grassroots organisations.
3. Being transparent and mutually accountable: Transparent grant-making processes and participatory decision-making ensure accountability both to funders and to local communities.
4. Embracing risk: By absorbing administrative and compliance burdens, intermediaries redefine risk and make funding more accessible to small organisations.
5. Promoting inclusive spaces: Effective intermediaries facilitate the participation of marginalised groups in decision-making processes, making climate governance more representative.
6. Creating opportunities for shared learning and collaboration: Beyond funding, intermediaries strengthen movements through training, peer-to-peer learning, and collective advocacy.
7. Building sustainability: They foster institutional capacity, strengthen long-term networks, and promote diversified funding sources to sustain local action.

Conclusion

To realize the promise of LLA, international climate funders must reform policies and practices that currently exclude local actors. Effective intermediaries like GAGGA show how finance can be channelled in ways that empower communities, deliver context-specific adaptation, and advance climate justice. Partnerships based on trust, mutual accountability, and inclusivity are essential for ensuring that adaptation finance reaches those who need it most.

Suggested citation

Grutter, N., Moss, L., Aung, M. and Joshi, R. (2025). Shifting climate adaptation finance to local communities through effective intermediaries. IIED, London. Available at https://www.iied.org/22654iied