Attachments
Jason Lewin, in his article Philanthropy didn’t understand what it was trying to fix, said. “I have a hunch. With political instability, economic anxiety, and confidence wearing thin, another wave of philanthropic reform is just around the corner. Much of what we promised would work will prove ill-suited for the road ahead. New frameworks will be unveiled. New champions will be picked. Buzzwords—equity, accountability, transformation - will return with new urgency. There will be panels, initiatives, and manifestos, all insisting that this time, the changes will stick.” Lewin was quite prophetic as a call for Humanitarian Reset, in the wake of funding cuts and freezing, came around the same time from Tom Fletcher, UN Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator. Mr Fletcher, while underlining that the humanitarian community faces a profound crisis of legitimacy, morale, and funding, makes a call to fight back, not for systems or institutions, but for the people we serve. He suggested doing this by building fresh arguments and allies, locally and globally and by finding new sources of funding.
The termination of the USAID funding was not an isolated event. On 25 February 2025, the UK Prime Minister announced that the government would “fully fund our increased investment in defence” by reducing aid spending from 0.5% of gross national income (GNI) to 0.3% in 2027.3 Dutch development aid will decline from 0.62% of its GNI to 0.44%. The Dutch Minister for Foreign Trade and Development announced a funding cut of € 2.4 billion from 2027 to give precedence to Dutch interests, i.e., promoting trade, enhancing security and reducing migration. Likewise, the governments of Germany, Switzerland, and Belgium have also announced aid cuts for 2025.
The Grand Bargain ambassadors in a letter dated 27 February 2025, inter alia, said, “we need to address systematic barriers as the humanitarian sector might shrink without the possibility to quickly bounce back at a time that humanitarian needs continue to grow. This means that we will need to work harder to address the financing gap by building new coalitions and stronger partnerships, leveraging innovative solutions and fresh thinking.” The ambassadors expect the donors to take the opportunity to work with humanitarian organisations to mobilise the private sector and philanthropies in their countries to address the funding gap.
The nervousness is palpable among the actors of the ‘aid industry complex’ who hitherto controlled the resources and the reform narrative. However, they resisted meaningful reform as any actual reform might have adversely impacted the mutated colonial edifice and clout of power centres, particularly the control over funding and decision-making platforms. The operational structure of the complex is expensive and competitive. We have humanitarian agencies with over a billion-dollar annual budget and still an unending desire to grow. Deborah Doane says in her book, The INGO Problem: Power, Privilege and Renewal, “Certainly, since the 1990s, INGOs, and to a degree, philanthropy, have been wrapped in a bubble that embraces the idea that bigger is better.”6 She also says, “With more income came the need to have more employees; with more employees came the need to have more income.”
The funding cuts, which might only get worse from here, are not merely a shock but a tectonic
upheaval for a structure that rapidly grew on the commercialised foundation that significantly
monetised and commodified the sector, emulating the commodification of every sector since
the time of the industrial revolution. That’s why the industrialists of the complex are now
talking about ‘resilience’ and ‘bouncing back’, the terms which hitherto were used in the
programmes designed for affected populations, assuming that the communities lacked such
values, when in fact, it is the sector itself that is lacking.
More than the aid cuts, the reasons behind them are worrying. The UK and the Dutch
governments have blatantly admitted that one of the reasons for funding cuts is to increase the
defence budget. Evidently, there is a political economy influencing the decision-making of
donors, and there is a ‘humanitarian economy’ leading to the desperation of the rest.
The civil society has given a lukewarm response so far to the call for the humanitarian reset. A
statement, signed by 26 signatories, says, “However, the humanitarian reset proposed by
Emergency Relief Coordinator Tom Fletcher is not so much a (much-needed) reset as it is a
preliminary starting point. A true reset must lead to more fundamental changes to longstanding
humanitarian power structures that have contributed to exclusion, inefficiency, and a lack of
accountability to crisis-affected people.”
The statement further makes a few recommendations for bringing about fundamental changes
in the humanitarian sector. However, those recommendations may not yield the desired results
as they are also reactive to Western-led reform processes undertaken so far. A true reset cannot
be launched without analysing the historical contexts, including the period of colonisation and
the prevailing colonial matrix of power, which created and now perpetuates the power
imbalances.