UNDP enters into several types of agreements with partners depending upon the relationship it intends to establish through such partnerships. There are three major types of agreements that UNDP enters into to formalize partnerships. These are co-financing Agreements, Memoranda of Understanding and Agreements relating to Joint Programming.
UNDP administers two main instruments to receive and manage donor contributions to other resources: cost-sharing and trust funds. In some instances, UNDP signs a Management Service Agreement (MSA) with a donor to receive contributions to deliver management and other support services to recipient governments under a specific programme or project. Cost-sharing is a “co-financing modality under which contributions can be received for specific UNDP programme activities, in line with UNDP policies, aims and activities” When a programme country government or another partner (the latter is also called third-party), such as a donor government, contributes resources to specific UNDP programmes or projects, the arrangement is known as cost-sharing. Government cost-sharing is the modality by which a programme country government allocates some of its own resources (which may include the proceeds of a loan from an International Financial Institution and from other sources channeled through the government's budget) towards a UNDP programme or project. In this context, "the Government" can be the national government as well as any branch of it at the central or local level duly authorized to enter into agreements with UNDP. Third party cost-sharing is the modality by which donor governments and other donors contribute funds to individual UNDP programmes and projects. While those funds are usually co-mingled with funds from UNDP to cover the costs of a given set of project outputs, there are many instances where a donor or a group of donors cover the full costs of a programme or project, without UNDP having to contribute any of its own resources - this scenario is referred to as 100% cost-sharing.
A Memorandum of Understanding, referred to as MOU, may be entered into between the UNDP and other entities, acting as development partners, for the purpose of declaring the parties’ intention and commitment to work together in pursuit of a range of common goals.
A joint programme is a set of activities contained in a common work plan and related budget, involving two or more UN organizations and (sub-) national partners.
In the context of growing efforts of the UN system towards enhanced coherence and efficiency at the country level and increasing joint UN activities, the United Nations Development Programme (UNDP) is often called upon to play the role of Administrative Agent for Multi-Donor Trust Funds (MDTFs) established by the UN system, national authorities and donors fund management mechanism.