The North Atlantic Council oversees the common funding processes, which are governed by the Resource Policy and Planning Board, the Budget Committee and the Investment Committee.They also collectively decide on the resource planning figures for the medium term.

NATO common funding is underpinned by strong governance mechanisms, with Allies collectively deciding what is eligible for common funding and how much can be spent each year.

Programmes and initiatives can also be jointly funded, which means that the participating countries can identify the priorities and the funding arrangements, while NATO provides political oversight.

NATO has three principal common-funded budgets: the civil budget (funding NATO Headquarters), the military budget (funding the NATO Command Structure) and the NATO Security Investment Programme (funding military infrastructure and capabilities).

This is the principle of common funding and it demonstrates burden-sharing in action. All Allies contribute to funding NATO using an agreed cost share formula derived from the Gross National Income of member countries.Direct contributions finance NATO's budgets, programmes and capabilities in support of objectives, priorities and activities that serve the interests of the Alliance as a whole – and cannot reasonably be borne by any single member – such as Alliance operations and missions or NATO-wide air defence or command and control systems.These include the forces and capabilities held by each member country, which can be provided to NATO for deterrence and defence activities and military operations. National (or indirect) contributions are the largest component of NATO funding and are borne by individual member countries.

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