Trust funds are financing instruments that accept contributions from one or more donors that are held in trust by the World Bank Group as a trustee and disbursed according to the provisions of the Bank Group’s Administrative Agreement with the donor(s) to each trust fund. Trust funds often create platforms and partnerships for financial, knowledge and other forms of collaboration between the Bank Group, its donors, its client countries, and others at the global, regional, and country levels.
Trust funds combine the advantages of multilateral aid (such as larger geographic presence, economies of scale, lower administrative costs, and proven implementation capacity) with those of bilateral assistance (targeted assistance in areas such as fragile situations where donors have limited or no presence). Trust funds can also bring down transactions costs and reduce the proliferation of bilateral programs. Channeling trust funds through multilateral institutions, like the World Bank Group, can also facilitate the integration of global priorities into country programs.