In early 2025, the global aid landscape was disrupted when the United States government issued an Executive Order drastically cutting or suspending much of USAID’s work. This move slashed approximately $60 billion from U.S. foreign assistance, significantly affecting global humanitarian and development operations. As the U.S. previously accounted for nearly 30% of aid from DAC countries, the sudden withdrawal created widespread uncertainty and funding gaps.
The impact was immediate and severe for international non-governmental organisations (INGOs), many of which lost significant funding and were forced to scale back or halt major programmes. Regional and country offices were closed, and planned expansions were suspended. These cuts also had a cascading effect on local and national organisations, many of which rely on INGOs for funding. Projects were abruptly terminated, staff were laid off, and essential services in health, education, and protection sectors were disrupted, directly affecting millions of vulnerable people.
This crisis is not isolated to the U.S. Other Global North donors also announced reductions to their 2025 aid budgets, with projections for continued decline in the coming years. Western governments began decreasing humanitarian funding as early as 2024, exacerbating pressures across the sector.
The situation prompted a critical examination of how INGOs are responding—particularly regarding their commitments to localisation. The review highlights both commendable and problematic behaviours. While some INGOs demonstrated solidarity through flexible funding, collaborative planning, and support for local fundraising, others withdrew into self-preservation, prioritising institutional survival over partnership obligations.
NEAR identified several positive practices, such as good communication, reallocating resources to local organisations, and joint cost-saving strategies. However, it also noted harmful behaviours including a retreat from public leadership, withdrawal from shared risk, political self-censorship, and silence in the face of growing partner needs.
Four major trends emerged from the INGO response to this funding crisis. First, the commitment to localisation is inconsistent and varies greatly across organisations and contexts. Many positive responses were driven by individuals or specific offices rather than formal institutional policies. Second, there is a troubling lack of transparency, with many INGOs remaining silent or vague about their actions. This undermines accountability and trust.
Third, accountability structures within INGOs continue to prioritise donors over local actors. Rather than demonstrating responsibility to the communities they serve, INGOs often focus on internal management and donor compliance. Finally, the lack of visibility around INGOs’ localisation efforts raises concerns about whether these commitments are being upheld during times of crisis, and what genuine accountability should look like moving forward.
