So this is what financial dependency looks like.
US President Donald Trump’s aid cuts have brought US-funded programmes to a standstill around the globe, and exposed the humanitarian system’s extreme dependence on voluntary contributions from a small pool of mainly Western donors.
The top three donors contributed 62% of public humanitarian funding in 2023 – a fragile foundation for a system that grapples with perennially high needs. The US alone kicked in about 43%.
Diversifying your income makes basic economic sense. Everyone knows the maxim, “don’t put all your eggs in one basket”, after all.
Trump has shown how a single government donor can turn off the tap, and leave an entire aid system – and the people who depend on that aid – in disarray.
Other governments are cutting aid as well. The humanitarian community has difficult questions to answer in the coming weeks: No matter what happens, humanitarians will have to prioritise scarce funding, choose who goes without aid, and drastically reform how they work.
But how did the system get here? Which sectors and ongoing responses face the most pressure in the coming weeks?
A closer look at the numbers show the perils of donor concentration – and points to why a more resilient donor base can actually lead to more overall funding.
The trend: Growing dependence
A decade-long look at humanitarian funding figures illustrates the obvious: The system has a mammoth reliance on its top donors, especially the US.
This dependence has grown over the last decade. The US accounted for 43% of government donor funding to the humanitarian system in 2023, up from about 39% a decade earlier.
As emergency aid needs soared, the humanitarian system grew to absorb the money donors made available. But this growth was fed by funding from a relatively small cast of donors.
What’s most at risk?
The US funding freeze cuts across the entire humanitarian system. But some individual sectors are more vulnerable than others.
The numbers show that 11 out of 16 humanitarian sectors are highly dependent, where the top three donors constitute more than half of donor funding.
For one of the most dependent sectors – food security – the World Food Programme is the lead agency in the cluster-based system, and also receives the most funding. This is unsurprising given what has traditionally been strong bipartisan support for food security in the US. In theory, that support still exists. But the rushed dismantling of the US aid agency, USAID, suggests nothing should be taken for granted.
The less dependent sectors may have more flexibility, but they still rely significantly on the US and top donors.
Though funding for gender-based violence may be less concentrated, the US kicks in a significant portion of funding. The biggest recipient of funding for preventing and protecting against gender-based violence programmes is the UN Population Fund or UNFPA – a clear Trump target.
Similarly, though funding for the health, shelter, and child protection sectors is relatively diverse compared to other sectors, any loss in US funding is still damaging.
However, sectors with relatively wide donor bases may be more equipped to pick themselves back up after the rug is pulled out from underneath.
Where is most dependent?
Donor dependency can be mapped.
From 2022 to 2024, UN-backed humanitarian response plans in Latin America tend to be the most reliant on just a few donors.
For the response plans for Guatemala, El Salvador, Honduras, and a regional plan for Venezuela, the top three donors account for more than 80% of the funding. A regional refugee response plan for South Sudan rounds out this list of extreme dependence.
In each of these five responses, the US is responsible for more than 68% of the funding.
It is also notable that 18 contexts receive more than half their funding from the US, placing them at particular risk.
This includes responses for the Democratic Republic of the Congo, where the M23 conflict has displaced hundreds of thousands of people in recent weeks. It also includes Sudan, where the UN just launched appeals totalling $6 billion – and where the US alone has contributed 45-56% of appeal funding in recent years.
Trump and his allies have said that future US funding will be tied to so-called “America First” objectives.
Trump may be more explicit about his intentions than most, but donor governments have always linked their funding to their political priorities – whether it be foreign policy goals or domestic objectives.
Many humanitarians, in turn, stress that independence is a core principle that underpins their work. Considering today’s upheaval, it’s easy to see how the humanitarian system’s deep financial reliance on the US and other donors compromises its independence.
The link between diversification, resilience, and more money
The numbers show that response plans with a wider donor base tend to be better funded.
On average, response plans that were more dependent on their top three donors reached only 44% of their funding requirements, while less dependent ones achieved 59%.
In other words, more diversity means more money.
This should be obvious, of course: More potential donors means more potential funding. But it underscores why donor diversity is so crucial: It makes for a more resilient system tomorrow, and a better funded system today.
The future
Humanitarians have always known their dependence was a weakness, but diversifying the funding base has never been the top priority.
Instead, humanitarian talking points tend to have focused on a handful of priorities: funding gaps, better quality funding, and locally driven aid among them.
Now, big agencies and actors that operate at a systems level need to consider funding dependence as the existential threat that it is, and integrate this deep into their planning.
In the future, the humanitarian system may be revamped, reshaped, or remade into something entirely different.
Its strategy must go beyond simply finding more funding, or more quality funding, or more localised funding. It also needs to find more diversified funding.
Resilience is always an afterthought until a crisis hits. Now the humanitarian system itself is in crisis. Funding diversification is no longer a luxury, but a matter of survival.
Edited by Irwin Loy.
