Published on 24th April 2025
The decisions of the new US administration to freeze aid and abolish USAID has sent shockwaves through the system. USA is the largest bilateral ODA (Official Development Assistance) donor, and this decision is already having significant impact, both within the US (job losses, cutback on domestic programs) and abroad (communities not receiving medical aid, local NGOs having to cease operations, fragile and poor countries expecting significant economic impact).
Other donors have taken similar steps – the Netherlands has cut aid by 30%, redirecting funds to projects that directly contribute to Dutch interests. Belgium cut aid by 25%, while France reduced its budget by 37%. Swedish SIDA has linked its foreign aid strategy closer to Swedish interests and prohibits the use of their funding for political advocacy in ODA countries. Most recently, the UK has decided to reduce foreign aid by 40% while raising defence spending. Germany’s new government might be next in line, having to raise military spending significantly and possibly preparing financially for larger numbers of Ukrainian refugees.
Linking aid cuts to increasing military funding is only one, yet problematic, relationship. We can also see the increasing instrumentalisation of foreign aid to security, external policy, and economic interests of donor countries. Furthermore, the ‘value-based’ or ‘rights-based’ development cooperation is under direct attack by those who are propagating a regressive and chauvinistic world view, in which NGOs and civil society are seen as principal opponents.
Acknowledging that the victims of these developments will be, first and foremost, the poorest and most vulnerable of this world, we also need to understand the long-term impact on the ‘sector’. What do these developments mean for civil society, and for international civil society organisations (ICSOs) in particular?
Three months after the first Executive Orders by President Trump, some consequences can already be drawn.
- It can safely be assumed that globally, there will be less foreign aid available for a long time to come.
- Aid will be more closely linked to geopolitics, global trade relations, security concerns and a few immediate global threats (though the latter might be questionable, thinking of the ambivalent actions towards pandemics). Climate change and biodiversity loss might receive even less attention.
- Aid might be ‘regionalised’, for example, focused on immediate spheres of influence of big donor countries (e.g. US aid may be focused on Central America)
- Aid might be focused on alleviating humanitarian crises, particularly high-profile ones, with a focus on natural disasters rather than conflicts and wars.
- Institutions (the UN, other multilaterals, but also NGOs) will be in defence over their value, legitimacy, effectiveness and the difference they make.
- The ‘localisation’ agenda will get new, unexpected pushes in the direction of cost-cutting, local ownership and local financing/fundraising. This will not just support local actors, and is also meant to sideline strong international and national civil society organisations.
- Recipient countries might take this as a call for greater self-sustainability (positive scenario) or leave the most vulnerable communities behind (negative scenario).
(I)CSOs are in the middle of this. The values on which their work rests are under attack. As visible and politically powerful institutions, they might be singled out by anti-rights actors. Their business models are threatened, particularly those NGOs that take significant government funding. And the legitimacy of international actors is under scrutiny from many sides. The push to ‘localise’ and shift power comes from Southern civil society, and Southern and Northern governments alike.
‘Disrupt and innovate’ has been the slogan of the Centre since its inception. When there’s disruption, and resilience is low, things will have to change. It is clear that there are some fundamental shortcomings in the sector, in spite of the many good deeds that have been delivered through the aid system over the time it has existed. Here are some ideas on how to make use of the crisis.
- Aid flows from North to South increase (or perpetuate) dependency. Can there be more radical support for those who want to overcome such dependency, e.g., by supporting local fundraising, transferring the power of decision-making in project planning, positively sanctioning self-funded initiatives, investing in institution building, and creating solidarity funds?
- (I)NGOs have an overriding concern for their organisational success. Can they develop the ambition (and practice) to work themselves out of the job? What would this mean for defining their leaders’ success?
- Accountability over funds is the holy grail for those who don’t want to shift decision powers. Can we prioritise non-monetary accountability dimensions? And can we lobby donors to adjust their expectations towards less fiscal, but more impact-oriented accountability?
- There is duplication throughout the sector. Should there not be many more mergers, joint back-office functions, combined regional presences, job-share, cross-sectoral collaboration? Can we be more rigorous about the added value provided by individual organisations?
- Social business, social impact investing, and effective philanthropy must not be seen as distinguished from CSO work. Are we intentional enough about such initiatives, and about bringing the corporate world into our ecosystem?
- The international aid system is expensive. Country office structures and expats living and working in the global South are costly; they narrow development spaces for local talents and undermine just tax systems. Can we work more with local staff capacities and service providers?
- In many cases, partners are implementers or sub-contractors. How can partnership relations be redefined and re-lived to change who is in the driver’s seat?
- There’s been more and more calls for system changes, to bring the sector from its head onto its feet. Will leaders (and governors) of civil society organisations take this as a positive challenge? And do they believe in the quest for a change in the international aid system?
The above are just a few areas where more serious discussion and actions are needed. The sector has already developed several promising initiatives, like RINGO, the Pledge for Change, and the Dynamic Accountability Framework, which may need a significant push for commitment. What could other areas be where leaders in the sector invest collectively, to make good use of the crisis at hand? The coming months will no doubt tell the tale.
Picture Credit: ICRC
