The humanitarian sector is at a turning point: A New Era of Humanitarian Financing
Liana Ghukasyan, Special Advisor to IFRC President

The humanitarian sector is at a turning point.

The recent cuts in foreign aid—most notably from the United States, but also from other traditional donors—have sent shockwaves through the global aid system. Every organization is scrambling to figure out how to survive, but this is not just an issue of one organization or even a few. This is a sector-wide crisis, and unless we act collectively, the humanitarian ecosystem as we know will cease to exist.

For too long, humanitarian financing has been built on a model that heavily dependent on a small group of donor governments. Now, that model is cracking under the weight of political shifts, economic pressures, and competing priorities. The question is no longer just about how organizations will manage their budgets in 2025 or 2026, but rather how humanitarian action will be financed in the years to come.

The response cannot be business as usual. It requires new leadership, new thinking, and a fundamental reimagining of how aid is funded and delivered.

The Unravelling of the Traditional Aid System

For decades, the United States has been the single largest donor to humanitarian response efforts. In 2023, it contributed approximately $9.5 billion, making up nearly 40% of global humanitarian funding. The European Commission and Germany followed as the next largest donors, each providing over $2 billion. Other key donors—the UK, Japan, Norway, Canada, France, and Sweden—have also played significant roles in sustaining global relief operations.

However, 2025 has ushered in a seismic shift. The United States administration’s recent decision to freeze all foreign aid programs has brought immediate and far-reaching consequences.

The consequences are already visible:

Crises with no safety net: Millions of people in conflict zones, including Syria, Sudan, and Afghanistan, are now at risk as funding dries up for lifesaving food, healthcare, and shelter.

A shift in global power dynamics: With Western donors stepping back, China, the Gulf states, and private philanthropists are stepping in. This is a potential geopolitical reordering of humanitarian assistance. 

Survival mode for humanitarian organizations: From the UN system to NGOs, humanitarian organizations are now scrambling for alternative funding sources. But the problem is deeper than just securing more money—it is about redefining the entire financial architecture of humanitarian aid.

Why This is a Sectoral Crisis, Not Just an Organizational One

What we are witnessing is not just a short-term funding gap, but the unravelling of a system that was on fragile footing. The humanitarian sector has long known that overreliance on a few large donors is a weakness, yet efforts to diversify funding have been slow and fragmented.

Now, every organization is trying to figure out how to stay afloat. Some are cutting staff, others are reducing programs, and many are looking desperately for new revenue streams. But these individual survival strategies miss the bigger picture: this is not just an issue of financial sustainability for one organization—it is a crisis for the entire sector.

What is needed now is leadership—not just to manage the crisis, but to bring humanitarian actors together to chart a new way forward. This is not a time for siloed, competitive responses. This is a moment for collective action.

Rethinking Humanitarian Financing

The future of humanitarian financing must be built on new principles and mechanisms that ensure long-term stability, reduced political vulnerability, and stronger local capacities. Here’s what needs to change:

1. Diversify Funding Sources—Beyond Traditional Donors

Humanitarian organizations must reduce their dependence on government funding. This means:

• Tapping into private sector partnerships: Companies like Google and Amazon already invest in disaster response. What if they became long-term partners rather than crisis-driven donors?
• Leveraging climate financing: With climate change fuelling disasters, humanitarian aid must align with climate adaptation funds, many of which remain untapped.
• Expanding Islamic social financing: Tools like Zakat and Waqf could become powerful, sustainable funding mechanisms.

2. Build More Flexible, Unrestricted Funding Pools

Currently, much of humanitarian funding is earmarked, meaning organizations are restricted in how they can use the money.

The sector must push for:

• More pooled funding mechanisms that allow for strategic, long-term planning.
• New financial instruments, such as social impact bonds, that align donor contributions with measurable humanitarian outcomes.

3. Strengthen Local and Regional Humanitarian Funding

The international system has been slow to shift power to local actors. Yet local organizations are often the first responders in crises.

Future financing must:

• Increase direct funding to local and national NGOs rather than funnelling resources through large organizations.
• Encourage regional humanitarian funds, such as Africa’s growing disaster response financing mechanisms.

4. Mobilize a Global Advocacy Movement for Aid

The withdrawal of traditional donors is a political decision—and political decisions can be influenced. Humanitarians must become stronger advocates for sustainable financing, making the case that humanitarian aid is not charity—it is a global stability investment.

We are in the midst of a paradigm shift. This is the beginning of a new era, and the sector must now forge a new path. This will not happen by accident. It requires bold leadership, collective action, and a willingness to challenge old assumptions.

The worst response we could have right now is to act as if this is just another funding shortfall. It’s not. This is the moment where we should reimagine humanitarian financing for the future.

The humanitarian sector is at a turning point: A New Era of Humanitarian Financing
Liana Ghukasyan, Special Advisor to IFRC President