How Should the United Nations Respond to Its Funding Crisis?

By Felix Dodds and Chris Spence  | Originally published here on Inter Press Service

While it may be difficult and painful, the UN Secretary-General is right to embrace change, believe Prof. Felix Dodds and Chris Spence

The world needs the UN, now more than ever. But we have also experienced firsthand how maddeningly inefficient and bureaucratic it can be. No wonder some critics want to defund it, the authors argue. Credit: United Nations

SAN FRANCISCO, California / APEX, North Carolina, US, May 16 2025 (IPS) - The United Nations has been called many things in its time:

• A champion of human rights.
• The world’s peacekeeper and provider of disaster relief.
• A leader on climate change, sustainable development, cutting poverty, and combating disease.
• The world’s single most important organization.

 But also:

• Bureaucratic.
• Byzantine.
• Disorganized.
• Duplicative.
• Fragmented.
• Frustrating.

Which is it?

The correct answer is, probably both. In our opinion, the UN is essential. Its role over the past 80 years has been critical in so many ways. As we argue in our books, Heroes of Environmental Diplomacy (2022) and Environmental Lobbying at the United Nations (2025) the world needs the UN, now more than ever.

But we have also experienced firsthand how maddeningly inefficient and bureaucratic it can be. No wonder some critics want to defund it.

Unlike some previous efforts at UN reform that have petered out—often because governments and various UN entities could not agree on their implementation—this time the UN seems to have no choice but to adapt. For the first time in its history, funding is likely to fall. The years of growth are clearly over. Budgets will soon need to be cut. Already, funding shortfalls are starting to bite

One of the problems for the United Nations has been the expectations surrounding it. With every new global challenge—from decolonization to climate change—the organization’s mandate has grown.

The United Nations feels both too big and too small. After ongoing budgetary growth for the best part of 80 years, it is sufficiently big that many expect it to be able to deal with anything that comes its way. The UN system as a whole has revenue of more than US$74 billion—bigger than many countries. However, the UN’s regular (core) budget is relatively small: $3.72 billion for 2025. What’s more, it has generally only gone up by the cost of inflation for the last thirty years.

Where does the rest of the money go? A lot is dedicated to helping developing countries with their humanitarian, development, and environmental work. In addition, there is a peacekeeping budget that pays for UN peacekeeping forces. This budget is currently $5.6 billion.

Another expense relates to UN programmes focusing on specific topics, such as development (UNDP), environmental protection (UNEP), or humanitarian aid (UNHCR).

These programmes are funded through voluntary contributions from governments, and are managed through the specific UN programme’s dedicated governing bodies. UN agencies are also technically separate from the “core” UN; they select their own leaders and have their own governing bodies.

 Cuts Are Coming

Together, these many UN entities undertake a lot of activities. They also cost a lot. Now, however, many governments are reducing their aid budgets and several, including the US, are making wholesale cuts to their UN funding. This means change is coming whether the organization likes it or not.

Unlike some previous efforts at UN reform that have petered out—often because governments and various UN entities could not agree on their implementation—this time the UN seems to have no choice but to adapt. For the first time in its history, funding is likely to fall. The years of growth are clearly over. Budgets will soon need to be cut. Already, funding shortfalls are starting to bite.

UN member states (that is, governments) are assessed for annual UN “contributions” based on a formula that considers their national income and various other factors. But what if governments don’t pay what they owe?

By April 30, 2025, unpaid “assessments” (money owed to the UN by individual countries) stood at US$2.4 billion, with the US owing $1.5 billion, China around $600 million, and Russia more than $70 million. On top of that, the peacekeeping budget was $2.7 billion in arrears. In 2024, 41 countries did not pay their mandated contributions.

In March 2025, UN Secretary-General António Guterres launched “UN80”, a review that seeks to make sure the institution continues to be fit-for-purpose as it looks towards a financially-straightened future. So far, everything seems to be on the table: his review is examining operational efficiency, how the organization’s key tasks or missions are implemented, and major structural reforms.

The Secretary-General has acknowledged criticism about major overlaps between UN agencies and programmes, as well as inefficiencies, spiraling costs, fragmentation, outdated working methods, and the rapid growth in high-level managerial and executive jobs within the system.

He is considering major changes, such as merging multiple departments, agencies and groups into a much smaller number that would each cover a major area like Peace and Security, Humanitarian Affairs, Human Rights, and Sustainable Development.

Currently, many entities have overlapping responsibilities in each of these areas and there are literally dozens of different groups active in each one.

Such mergers seem sensible and long overdue. Internally, it will likely cause a lot of anguish and stress among staff, since it will certainly result in layoffs. This must be undertaken with a pro-staff approach; many who work for the UN have devoted their lives to the organization, and any staff changes should try to respect their service.

Sadly, the cuts in funding mean a certain level of job losses are inevitable. That said, we believe it is far better for the UN to take on the challenge intentionally and with the clear goal of improving the organization’s efficiency and impact, than for it to adopt a “defensive” posture and resist change while funding falls anyway.

Are there ways some cuts could be offset by finding additional ways to fund the UN and its various activities? While these are unlikely in the short term, it is worth actively considering what new income streams might be possible and how they could play a role in funding new or existing mandates. In future, any new activity or mandate being considered by the UN should certainly include a clearly-funded budget.

A Sustainable United Nations?

A major lens we would like to see applied to any reform is judging the UN’s activities by its areas of comparative advantage. What are activities the UN does better than anyone else? Conversely, in what areas does the UN underperform, or even duplicate, others? Are there areas the UN adds so little value that it should exit altogether? UN leadership will need to be clear-eyed about the realities of this as they look at the changes needed.

One area in which we believe the UN excels is in coordinating international action on topics that go beyond national boundaries. This includes sustainable development and major environmental crises like climate change, pollution, and biodiversity loss. As we argue in our books and previous articles, the UN’s convening power has made a huge difference in trying to tackle these complex, global challenges.

Even here, however, improvements can be made. For instance, might it be possible to consolidate the many UN entities dealing with issues of sustainable development and the environment? Currently, there are several dozen, including DESA, FAO, IFAD, UNDRR, UNDP, UNESCO, UN-Habitat, UNIDO, and many others.

At this point, it may be easier for the UN Secretary-General to start by reforming the UN secretariats and programmes rather than the UN “agencies” (such as FAO, ILO, UNESCO, and WHO). This is because UN agencies often have wider mandates, more complex structures, greater autonomy, and longstanding support from vested interests. So, it may be more practical to start with parts of the system that can be easier to change and rationalize.

In addition to potential consolidation, are there savings to be had by shifting to lower cost centers? This could include building up UN headquarters in places like Nairobi, where UNEP and UN-Habitat are located, and which is more affordable than, say, Geneva or New York.

Shifting programmatic work to the UN regional commission headquarters in places like Chile, Ethiopia, and Thailand may also save money. In Europe, it may be worth considering whether there are less expensive options than Geneva or Paris (both in the top ten cities globally for costs), compared with, say, Bonn, where the UN’s climate secretariat, the UN Convention to Combat Desertification and some smaller UN bodies such as UN Volunteers, are located.

Even within specific areas like the UN’s climate change work, there are multiple mandates, overlaps, and ongoing questions. Should the UN’s climate secretariat in Bonn be brought under the umbrella of the UN Environment Programme, for instance?

The UNFCCC has a policy-making mandate, but can the scope and scale of the UN negotiations on climate change be pared back, especially now we are supposed to be largely finished with negotiations and focused on implementation?

For instance, could we change how the annual UN climate summits (also known as “COPs”) are organized, so that the “Blue Zone”, which is the UN-controlled area set aside for diplomatic negotiations, incorporates the Action Agenda of Implementation, a voluntary initiative launched in 2021 that includes a broader group of stakeholders. This might be more inclusive, and could help us move away from the technical, government-to-government negotiations that we are supposed to have largely concluded by now.

The UN climate treaty (UNFCCC) is also the only so-called “Rio” treaty (the others deal with biodiversity and desertification) not under UNEP’s purview. Bringing the UNFCCC under UNEP would enable better coordination between the Rio Conventions and move towards the clustering of environmental conventions. This was actually proposed as far back as the 2002 World Summit on Sustainable Development.

UNEP has prior experience in working to better coordinate among different environmental treaties: it oversaw the clustering of the various chemical-related conventions and the beginning of the clustering of the biodiversity-related treaties, too. If UNEP was empowered to coordinate the chemicals, biodiversity and climate conventions, it could save funds and ensure better and more effective delivery.

Elsewhere, what about merging UNAIDS (the UN program on HIV/AIDS) within a large body, like the World Health Organization or UN Development Programme? A fit with the WHO seems particularly logical to us. Should UN Women and the UN Population Fund (UNFPA) also join together? Again, this may bring internal difficulties, but in times of financial duress it seems worthy of consideration.

The idea of better coordination between UNEP and UN-Habitat on sustainable urban development also seems rational. Could this be taken a step further into a merger? UN-Habitat was once part of UNDP, but nowadays it focuses a lot on sustainable development at the local level. This is an important task, but can it have the impact it needs as a smallish, standalone programme, or would it be better off inside a bigger entity?

Making the SDGs Sustainable

Although this review doesn’t seem to be focused on the bodies that govern UN entities, we would like to see a review in this area. Perhaps the new UN Secretary-General, who is due to be named in 2026 and start work in 2027, could look at these bodies as a part of a high-level panel? Such an outcome could be part of the review of the Sustainable Development Agenda, which is slated to start in 2027 in the lead-up to the Sustainable Development Goals (SDG) Summit in 2030.

There are also questions to be asked about whether the UN High-Level Political Forum is fit for purpose? As the UN’s chief platform for monitoring and assessing implementation of the SDGs, the HLPF seems to have lost political support over the past few years.

In part, this is because its policymaking is predominantly done before the “main event” in July, meaning stakeholders have great difficulty attending and engaging with government delegates while the detailed work is being done.

Before the HLPF was established in 2013, the previous UN body responsible for sustainable development was the UN Commission on Sustainable Development (CSD). Its preparatory policymaking occurred over two weeks every February or March, before it met again in April, May, or June to finalize policy. It had an approach of reviewing the implementation and the policy year, centered on developing recommendations and strategies to overcome challenges.

Perhaps this model might be a better one? Or perhaps a Council of the UN General Assembly similar to the Human Rights Council should be considered? This may be too “in the weeds” for the Secretary-General’s UN80 review to take on, but the process of reviewing the 2030 Agenda for Sustainable Development in the coming years should certainly look at these two options.

In the meantime, we hope the UN Secretary-General will use this moment of financial duress as an opportunity to revitalize the organization, take the hard decisions needed, and leave the UN leaner, more effective, and more fit-for-purpose when he departs in late 2026 than when he took on the role back in 2017. In this increasingly complex and insecure world, a leaner, more focused and politically-supported UN can and should take a leading role not only in addressing key challenges in the years ahead, but in pursuing its long-term vision of a more sustainable, just and fair world for all.

 

Prof. Felix Dodds and Chris Spence have participated in UN negotiations on the environment and sustainable development since the 1990s. They co-edited Heroes of Environmental Diplomacy: Profiles in Courage (Routledge, 2022). Their next book, Environmental Lobbying at the United Nations: A Guide to Protecting Our Planet, is scheduled for release in June 2025.