Project based costing

• Provides overview of response capacity, and early identification of possible gaps and duplications.
• Allows financial tracking of response (projects requirements vs funding received in FTS). 
• Visibility to partners (appealing agencies listed in HRP and FTS).
• Match between partners’ financial asks and HRP costing.
• Possibility to prioritize projects during an emergency.
• Possibility to link directly to humanitarian pooled funds (facilitating submission process for partners).
• Provides higher transparency of process through the project Review Committee that would include various actors (including NNGOs).
• Allows the FSC teams to better understand partners' capacity/strategies.

• Overall cluster/sector financial requirements reflect capacities of appealing agencies, which can be much lower than needs in some cases (though this could be considered appropriate to avoid unrealistic plans).
• Disconnect between targets and financial requirements if former is not defined based on submitted projects.
• Partners have to submit one (or more) projects to be part of the HRP , and the process takes longer time because it includes projects' submission/revision/clearance. Some partners may not be willing to engage / be excluded if timing not convenient / they do not see benefit of itthis can lead to an underestimated plan
• Information (“transparency”) on cost breakdown could be less visiblethis can lead to a risk of budget overinflating or under estimation (impacting quality standards). The FSC needs to check information / ensure agency capacity.
• Lengthy process to review all projects – vetting done with FSC committee when possible.

Unit based costing

• Financial requirement is directly linked to needs.
• Allows partners to focus on strategic decisions of the planning process.
• Once unit costs are calculated, easy to put in place, e.g. also for revisions / rapid onset emergencies
• FSCXXXXXXXXXXXXXX partners do not have to submit project sheets, nor be involved in lengthy vetting process

• Lengthy process to get full endorsement from partners on set of activities and average costs which might require regular review and updating (as a result of fluctuating needs and/or prices).
• Partners may not be willing to share their unit costs.
• Support costs can vary considerably between geographic areas but also due to agency capacity.
• Costing of complementary activities may be overlookedthis can have an impact on programme quality.
• High difference in costing among agencies (UN vs INGOs vs NNGOs)i.e. partners’ financial asks may not be fully reflected in HRP costing.
• Certain level of funding may not translate into the expected levels of achievements if actual costs of operations differ from HRP costing.
• Inability to conduct detailed financial tracking at project / partner level in FTS (as no projects are submitted on HPC).
• Reduced partners’ visibility (no list of partners in HRP and FTS).
• Less information for coordination team on planned interventions and potential gaps / duplications.
• Less direct engagement of partners with clusters (more with donors).

Mixed/Hybrid approach

Same as unit based:

• Financial requirement is directly linked to needs.
• Allows partners to focus on strategic decisions of the planning process. 
• Once unit costs are calculated, easy to put in place, e.g. also for revisions / rapid onset emergencies.

Same as project based:

• Provides overview of response capacity, and early identification of possible gaps and duplications.
• Visibility to partners.

Same as unit based:

• Lengthy process to get full endorsement from partners on set of activities and average costs.
• Difference in costing among agencies (UN vs INGOs vs NNGOs)i.e. partners’ financial asks may not be fully reflected in HRP costing.
• Inability to conduct detailed financial tracking at project / partner level in FTS.