The charity's research reveals that, between 2005 and 2009, major donors delivered an annual average of only 0.6 percent ($73.3 million) of the estimated $11.8 billion required each year to expand key nutrition support to all those who need it in the 36 countries where most hungry people live.
"Without increased investment for nutrition, undernutrition rates will continue to increase in sub-Saharan Africa and remain high in southern Asia," the report notes.
There are more than 3.5 million maternal and child deaths each year related to undernutrition, it adds. Insufficient consumption of calories and nutrients also contributes to disease and disability, and prevents children from growing and developing properly.
Donors covered by the analysis – which include North American and European governments, the U.N. Children's Fund (UNICEF) and the Bill & Melinda Gates Foundation – failed to honour 11 percent of their nutrition commitments, the report finds.
"The funds that are being invested in nutrition are only delivering some interventions, to some of those in need, some of the time, greatly undermining the principles of aid effectiveness," Sandra Mutuma, Action Against Hunger’s senior nutrition adviser, said in a statement.
"If international donors are committed to scaling up nutrition interventions, they must act now and provide adequate funds to meet what is required," she added.
Despite the still inadequate levels of financing, the report notes that "an encouraging trend is emerging" as investments in nutrition aid are starting to increase.
"World leaders are beginning to acknowledge that committing funds to nutrition is one of the most cost-effective investments that can be made to improve maternal and child health as well as to stimulate development in poorer countries," it says.
The report examines levels of investment in so-called "direct nutrition interventions", which encompass promoting hygiene and breastfeeding, boosting intake of vitamins and minerals, and feeding malnourished children with special foods. These have the biggest potential for reducing child mortality and diseases linked to undernutrition, according to Action Against Hunger.
Indirect nutrition activities, on the other hand, are broader and address the underlying causes of undernutrition, including the availability of food and quality of water and sanitation.
The research – which analysed aid data gathered by the Organisation for Economic Cooperation and Development (OECD) – finds that comprehensive programmes delivering a full package of direct nutrition interventions receive only 2 percent of total funding for nutrition.
And most nutrition activities are carried out through the health sector or in response to humanitarian crises, the report says.
"Few are delivered through development programmes indicating the reactive, short-term and unpredictable nature of aid for nutrition," it notes.
The report also says there is a "major lack of transparency" in nutrition aid, with much of the relevant data inaccessible due to poor reporting by donors, and calls for improvements to aid reporting systems.
It makes the case for an independent, comprehensive annual review of investments in nutrition so that donors can be monitored and held accountable for commitments they make.
(Editing by Rebekah Curtis)