This second Forest Tenure Funders Group (FTFG) annual report analyzes progress against the five-year, $1.7 billion commitment to the tenure rights and forest guardianship of Indigenous Peoples and local communities (IPs and LCs) in tropical forest countries announced at COP26.

In the 2022 calendar year, FTFG members provided $494 million in pledge-aligned funding, a $172 million increase over 2021 funding. Total spending to date exceeds $815 million—almost half of the pledge total—putting us on track to meet or exceed the pledge commitment. Compared with a historical baseline of $270 million per year (including $140 million from bilateral and philanthropic funders),12 funding for IP and LC tenure rights and forest guardianship is increasing.

Around $8.1 million directly reached IP and LC organizations in 2022. This is slightly more than in 2021 (revised analysis shows we previously overestimated 2021 direct funding; the correct figure is $7.3 million). Still, because other types of funding increased by a larger amount than direct funding did in 2022, the percentage of direct funding decreased from 2.9% to 2.1%. The continuing low level of direct funding is disappointing. This report discusses direct funding obstacles and suggests how donors and IP and LC organizations can partner to overcome them.

There are encouraging signs:

• Private funders are channeling more support directly to IP and LC organizations. In 2022, about 8.5% of philanthropic funding moved directly to IPs and LCs, representing a slight increase from 2021 (and higher than the 1% that moves directly from bilaterals).
• The number of IP and LC organizations receiving direct funding increased from 27 in 2021 to 39 in 2022. › Although data were only available for a subset of grants, about 60% of the analyzed amount reached IP and LC organizations both directly and indirectly, but in ways they still influence and control.
• Pledge signatories’ case studies illustrate increased investment in IP and LC capacity building, new direct grants to IP and LC organizations, and widespread interest in supporting emerging IP- and LC-led funds.