As donor budgets shrink and crisis-hit populations face abandonment, IRC charts a data-driven path forward. Through evidence-based targeting, proven innovations, and local partnerships, the organisation demonstrates how strategic action can maximise impact even amid unprecedented cuts.
Humanitarian aid is facing a make-or-break moment. While global needs and extreme poverty are soaring to new highs, traditional donor funding is sharply declining. These aid cuts are forcing donors and policymakers to make tough choices about who receives assistance, and – as ever – people caught in the crosshairs of conflict and climate crises are being hit hardest. The international community now faces a real test. How it navigates this moment will determine whether this new era for aid will bring a new era of suffering for millions of people, or if it will spark the creation of a more impactful, effective and sustainable aid system that is truly fit for the future.
The recent suspension of US foreign assistance has thrown the world’s aid challenges into stark relief, with the alarming humanitarian funding gap of $25 billion in 2024 now set to double.[1]OCHA, Coordinated plans 2024, Financial Tracking Service, https://fts.unocha.org/plans/overview/2024 The US is not alone in cutting critical funding – aid budgets were already shrinking across many EU states, with funding also increasingly redirected towards other priorities such as security, trade or migration control.
In this new era for aid, the international community will need to reconsider where aid is spent, what it is spent on, how it is delivered, and how it is funded. The International Rescue Committee (IRC) has identified five key solutions that must be at the forefront of this process.
Identify and prioritise where needs are the greatest
First, with needs skyrocketing and fewer resources available, it is essential to focus aid on where it’s needed most. If the humanitarian sector is going to prioritise effectively and ensure that communities facing the greatest risks do not fall off the radar, we need to make better use of data and evidence-based approaches.
The IRC has indeed identified five major structural risks that leave countries particularly exposed to the impacts of global foreign aid reductions. In short, these are:
- Exposure to the worst impacts of US aid cuts based on an analysis of US contributions to a country’s Humanitarian Response Plan (HRP) and analysis by the Center for Global Development of countries significantly impacted by USAID cuts;[2]Ian Mitchell and Sam Hughes, “Which Countries Are Most Exposed to US Aid Cuts; And What Other Providers Can Do”, Center for Global Development, 11 February 2025, … Continue reading
- Levels of humanitarian need in a country, as reflected by the HRP;
- Reliance on grant-based Official Development Assistance, based on analysis of countries receiving 90% or more of their ODA in the form of grants;
- Exposure to debt distress and least developed country (LDC) status, according to the UN classification;
- The conflict and climate vulnerability of countries identified by the World Bank as heavily impacted by violent conflict in 2025, or ranking in the bottom 20% of the ND-Gain Index for climate vulnerability.
The IRC’s research suggests that thirteen countries fulfil each of these five risk indices and are likely to be hardest hit by ODA reductions. These are Afghanistan, Burkina Faso, the Central African Republic (CAR), Chad, the Democratic Republic of the Congo (DRC), Ethiopia, Haiti, Mali, Mozambique, Somalia, South Sudan, Sudan, and Yemen.
Despite the severity of the crises they face, the HRPs for these 13 countries were, on average, less than half funded in 2024. They are home to more than 4 in 10 of the people in extreme poverty worldwide, but received less than 10% of global ODA in 2023.
The above analysis not only gives us a strong sense of the geographical spread of ODA cuts, the disproportionate impact on Africa (which accounts for ten out of thirteen of these states), and the risks these countries face, but it provides an invaluable blueprint for action and – importantly – for where to prioritise funding.
In addition to determining the most at-risk countries, any analysis must also consider the common challenges faced across these contexts, including severe food insecurity, childhood malnutrition, increased risks to civilian protection, and widespread violence towards women and girls. These help us to identify the programmatic, funding and policy priorities required to meet the needs of affected communities.
Invest in what works
Secondly, in order to address these deep and cross-cutting crises, the international community needs to invest in the most innovative and impactful programmes, so that we can ensure aid reaches the greatest number of people. Humanitarian agencies have a long track record of delivering proven and cost-effective solutions, even in the most complex settings. By working with a broad range of partners – communities in fragile settings, local civil society, academic institutions, and the private sector – humanitarians have developed innovative interventions that can respond to rapidly changing needs and support the conditions necessary for longer-term development.
For example, working with a consortium of eight NGOs, the IRC has developed and is currently implementing a web-based cost analysis software program called Dioptra.[3]https://www.dioptratool.org This tool is used to calculate the cost of programmes, compare their results to the typical cost of common outputs, and develop strategies to adapt programmes so they are able to deliver greater cost-effectiveness and reach more people.
Another example addresses acute malnutrition that causes two million preventable deaths among children under the age of five every year worldwide. Based on extensive research and with trials across multiple crisis settings, the IRC was able to demonstrate that simplified community-level treatments allow more than 90% of children to recover in just a matter of weeks, at less than 30% of the cost of standard community-based acute malnutrition care.
Our research also revealed that Anticipatory Action approaches not only help mitigate the impacts of climate shocks on livelihoods and food insecurity, but also improve communities’ climate resilience in the long run. They are also likely to be more cost-effective than providing support only after a shock.
Scaling such proven solutions – in combination with renewed investment in research and innovation – can ensure a smaller aid budget is still effectively able to deliver real, measurable impact for the world’s most vulnerable.
Protect access
The countries hit the hardest by the aid cuts also face the greatest humanitarian access barriers. The independent analysis provider ACAPS ranks countries by the barriers to access experienced, and ten of the thirteen countries on our most at-risk list were granted the highest scores.[4]https://www.acaps.org/en These thirteen countries are also among the world’s most dangerous for civilians and aid workers, with almost 200 attacks against aid workers recorded in these states in 2023.
The presence of armed groups and de facto authorities often hinders humanitarian access, while contested state control can leave populations cut off from state-led basic services. According to ICRC estimates, more than 195 million people globally now live under non-state actor control – that figure accounts for more than half of the people in humanitarian need in 2025.
Donor countries should use all diplomatic levers available to protect and expand access to affected communities, while providing financial support to strengthen frontline responders’ access negotiation skills. This is a low-cost and high-impact investment which can help ensure aid reaches those who need it most.
Empower local responders
Another proven way of better reaching communities in need is through partnerships with local actors, including civil society groups, national NGOs, women-led organisations, and local authorities and ministries. Such groups tend to be deeply embedded within their communities – they have a deep understanding of their needs, which is essential to design targeted programmes and make the best use of available resources.
Reforms to empower local actors have been proposed, including through the Grand Bargain. But, so far, these ideas have failed to gain adequate traction, with much aid still subcontracted to local partners through international intermediaries.
While support is still needed in the form of training and technical assistance to local partners, it must not stop there. Given the scale of the current cuts, the humanitarian sector needs to move beyond “quick fixes” that address the inefficiencies in subcontracting, and towards bold, principled transformation that shifts resources and decision-making power to local and national actors.
This moment of reform offers the opportunity to reenvision humanitarian coordination, funding and accountability, and place local actors front and centre – empowering these groups to take decisions over where resources are directed, and to lead on implementation. INGOs and donors should support initiatives such as Pledge for Change[5]https://pledgeforchange2030.org and Global South-led networks like NEAR[6]Network for Empowered Aid Response: https://www.near.ngowhich are valuable allies in the pursuit of this change.
A locally-delivered response is not only more tailored to the needs of affected communities, but it’s often cheaper. Donors and the wider humanitarian sector must seize this opportunity to drive progress toward an aid system centred on locally-led systems change that achieves durable outcomes with and for people impacted by crises.
Unlock smarter funding
Finally, as the amount of global funding available for the world’s most fragile countries is shrinking, it’s essential that we explore the potential for innovative financing solutions. While these will not alone be able to fill the growing funding gaps, they are a vital piece of the puzzle. They can both drive the efficiency and speed of responses, and free up more public grant funding to be directed to the most difficult conflict-affected contexts, where high risks too often limit private investment.
This should include further exploring the idea of “humanitarian debt swaps”, which could help to stem the flow of funds out of the poorest countries in debt payments, instead rerouting them towards humanitarian needs.
Meanwhile, disaster risk financing, such as parametric insurance, can play a role in ensuring funds are available in advance to prepare for and respond to climate hazards. By tying funding to clear risk data, this approach could allow money to flow quickly and predictably to the communities most vulnerable to disasters.
We saw the very concrete impact of such approaches in Ethiopia, Kenya and Somalia, where prolonged periods of drought in 2022 are estimated to have caused 2.7 million children to drop out of school. Partnering with Africa Risk Capacity (ARC) – a hybrid mutual insurer –[7]https://www.arc.int the IRC is implementing a Climate Resilient Education Systems Trial (CREST) in Kenya that harnesses AI-enabled predictive technology and disaster risk finance to ensure children are protected when droughts, extreme heat and floods result in schools’ closure.
In summary, the new era of aid will force the international community to step up and make some difficult decisions. Drastically reduced aid funding will result in many communities around the world going without critical assistance. However, this juncture also offers an opportunity to achieve maximum impact with fewer resources – better targeting aid where it’s most needed, investing in what we know works, empowering local responders, and implementing smarter financing strategies. By acting together, we can ensure this new era does not come at an even higher human cost, but instead paves the way towards a more sustainable humanitarian response and long-term resilience.
Picture credit: ©CICR Miriam Atallah
