After the Funding Cliff: Glide, don’t Crash

Guest blog by  Oli Brown and Esther Waters-Crane originally published here.

2025—with its perfect storm of Trump 2.0 and the failure of the international community to halt the on-going devastation in Ukraine, Sudan and Gaza—tore at the fragile fabric of international cooperation and the rules-based order perhaps more than any other time since the collapse of the League of Nations. The first week of 2026, with the US’s regime change in Venezuela – an intervention which is widely being seen as illegal under international law – continues the theme.

The surge in right-wing populism, the return of zero-sum geopolitics, and Europe’s rush to rearm against Russian aggression have driven steep funding cuts for international development and humanitarian organizations. The dissolution of USAID under Trump was emblematic, but all major donors retrenched. Global overseas development aid has fallen by 20% since 2023, at a time when humanitarian need has never been greater.

The impact on international organizations has been devastating. The UN is facing a $500 million shortfall in its regular budget and is planning for 20% job losses across the board. Humanitarian organizations have been amongst the hardest hit. The UN’s Refugee agency, UNHCR, lost around 25% of its staff in 2025 alone, with WFP, the agency responsible for preventing famine and hunger announcing a 30% fall in its staff by the end 2026. Both organizations saw their overall funding fall by roughly 40%.

But staffing cuts are only part of the damage. The real cost is borne by the people who need help most—and are no longer receiving it. Communities devastated by conflict and natural disasters. People trapped in long-running emergencies that donors have abandoned. When suffering in places like the Democratic Republic of Congo and Chad slips from headlines, funding disappears with it. Humanitarian agencies had been able to continue supporting forgotten crises by relying on flexible funding when earmarked aid dried up. Now that funding is vanishing too. The system is losing its defining advantage: the ability to rapidly move money, people, and services to those most neglected.

And the trend looks set to continue in 2026 as major donor countries pivot funding towards the security sector and defence, and cherry pick projects and crises according to domestic priorities. The response from those international organizations that we (the authors) have spent much of our careers working in has been predictable: hand wringing, redoubled efforts to secure quality funding from once reliable donors, and bleak warnings about the devastating impacts on the hundreds of millions of people who rely on humanitarian aid for protection and food. 

Most organizations have been trying to ride it out, while making desperate efforts to cut costs in the hope that somehow things will, eventually, return to normal: from hiring freezes, travel bans, to halting the escalators in the UN’s Geneva Palais des Nations to save electricity costs. UN 80, a year-long event to mark eight decades of the post-World War II multilateral system, was originally supposed to be a celebration of everything that has been built over the past fourth fifths of a century but celebration seems far from anyone’s mind. Wide reaching UN 80 reforms pledge to make the  UN more effective and efficient, and are in the pipeline. But with dramatic funding cuts biting now, can organizations afford to wait?  

The truth is that blanket cost cutting and searching for elusive efficiency gains simply don’t touch the sides of this. Too many organizations are retrenching, not retooling, defending, not rethinking. Even where widespread layoffs are taking place, the organizational instinct is to downsize business-as-usual, and retain the staff that have been there the longest, who typically have cast-iron contracts which are expensive to break. They are also often the staff most resistant to new ways of doing things.

Ultimately organizations don’t fail because their funding drops, they fail because they misdiagnose what the drop means. The past year has been nothing short of organizational trauma that throws the mission, morale and legitimacy of the entire international system into question. Organizations need to anticipate the second order effects of the funding cliff: such as the flight of key talent and the capability losses in the organization, but also the third order effects: the risk of strategic drift as they dance to donor wishes, the collapse of informal coordination systems, and reputational damage. 

We (two long-time strategic planners in the UN system) have watched how a variety of organizations have been dealing with these tumultuous times. From our (admittedly biased) vantage point, we draw a few lessons from those organizations that seem to be riding out these currently choppy waters.

First, is that organizations should treat this as a structural inflection point, not just a passing budgetary challenge. Linear fixes (hiring freezes, travel bans etc) are not enough. Leaders (and planners) need to prepare for the after, not just for temporary survival. The international system needs to envision a new, leaner, normal. The mantra of ‘doing more with less’ has- rightfully- long been abandoned. ‘Doing better, with less’ is the mantra that now needs adopting. 

This leads to the second point. Organizations should focus on their “offer”: their core mandate, their central reason to exist. This means reaffirming their purpose and bravely stepping back from activities that others do better. Protecting mission critical capabilities, not institutional legacies or embedded organizational structures. Cutting evenly—20% off everything—is straightforward. But it swerves messy and delicate choices about reprioritization and restructure. About changes at the very core of institutional operating models. And across-the-board cuts destroy institutional memory, field-level capacity and the quiet coordination roles that keep systems working. Cutting strategically, on the other hand, is hard. It means restructuring around functions and outcomes, not departments, personalities and grades. And it requires looking at an organization’s operating model from a systems perspective. 

Third, there has never been a more urgent moment to confront overlap and duplication across the international system. If there is any silver lining it is that these resource-scarce times provide an opportunity to simplify systems, kill off duplicate supply chains and parallel initiatives. The smartest organizations will not wait. They will exit areas where others perform better, pool operations, align behind a single voice, and leverage private-sector capabilities. They will make bold, structural choices—following the lead of pioneers like Save the Children, which recently stepped away from seeking UNOCHA-managed emergency funding to create space for local and national actors. Serious localization in action.

Fourth, narrative management is as critical as financial management. The stories people tell themselves shape behaviour faster than any restructuring plan. This means addressing the human impact directly and early – unacknowledged fear turns into disengagement and resistance. This is important externally to keep trust of donors and beneficiaries, and also internally. In times of uncertainty, people don’t wait for facts, they fill the vacuum with meaning. Successful change requires honest conversations about the trade-offs.  

Fifth, this is where leadership is tested. Leaders do not need all the answers—but they must provide presence, empathy, and predictability. Above all, they must have the courage to convene people: to reaffirm institutional purpose, deepen collaboration, and set out strategic plans that articulate a clear vision for a leaner, more effective organization—rather than defaulting to aspirational loose and unachievable strategies: which are no more than word soup. Leaders must frame the moment honestly, authoring a shared narrative that explains what happened, what is changing, what still matters, and why. People can deal with bad news better than they can tolerate ambiguity or silence.

Last–and with apologies for the plug–sometimes an outside eye and a neutral stance can help (feel free to get in touch!). Massive funding loss exposes what an organization truly values—its people, its mission, and its willingness to confront reality. Change management in this context is not about managing decline, but choosing what remains worth protecting.