Towards managed decline - bracing for sustained and continued cuts

Signals from major humanitarian donors indicate an even tougher 2026. The US government’s priorities remain uncertain. US funding overall is expected to be significantly reduced next year. The fiscal year 2026 State, Foreign Operations, and Related Programs (SFOPS) funding bill includes the creation of a new US International Humanitarian Assistance account. This has a budget request of US $5 billion, 42% lower than the budget approved for humanitarian aid in 2025 (US Department of State, 2025).

Meanwhile, funding cuts among European donors are set to take effect from 2026 as governments prioritise spending on defence and shift their aid focus to domestic priorities. Germany cut its humanitarian aid budget by almost half in 2025 and at that lower level in 2026.^[1] The United Kingdom (UK) is tapering off its official development assistance (ODA) from 0.5% to 0.3% of gross national income (GNI) by 2027, with an expected cut of around £4.5 billion in 2026, following cuts of around £500 million in 2025; France cut its ODA budget by EUR 2.3 billion in 2024/20255 with expected further cuts of EUR 700 million in 2026 (Donor Tracker, 2025). Sweden, the Netherlands and Belgium are also enacting cuts. Canada also recently announced new cuts from 2026 of CAD 2.7 billion over the next four years (Zimonjic, 2025).

Some exceptional funding measures were put in place in 2025. Sweden and Switzerland front-loaded allocations from emergency response or reserve funds to maintain programming following USAID cuts. Some larger INGOs called on their funding reserves to keep responses open and avoid immediate lay-offs. Such measures are unlikely to be repeated as donors and partners look to consolidate reserves and regularise their expenditures in line with revised budgets.

Looking ahead, organisations are anticipating the reality of the reduced funding prospects and adjusting their planning accordingly. Some are using the moment for strategic reflection about their role and focus. One staffer observed: ‘US govt cuts were overnight and poorly managed – that was the most problematic part of it. That’s different to Germany, Netherlands and UK. There are ways to manage that differently.’

The Emergency Relief Coordinator’s March 2025 Reset message set out a call for cooperation in the face of collective scarcity. It notes that the IASC had ‘agreed to be ruthless in eliminating turf wars, and challenging our organisations to work genuinely together’ (OCHA, 2025e). There are some location-specific examples of operational inter-agency collaboration and resource sharing to maintain critical service delivery (ALNAP, 2025a). Yet the wider picture is of reduced collaboration, including reduced participation in cluster coordination mechanisms, and increased competition for funding. One LNA representative observed: ‘UN agencies are openly fighting. What does prioritisation mean when UN agencies are in an open bid for survival?’ UN agencies plan to issue their own separate appeals documents for 2026, setting out a wider scope of needs and ambition than that included within the hyper-prioritised HNRPs.

Localisation progress was affected by the competition for funds. A NEAR review on the impacts of the aid cuts highlights some good practice from international organisations, amid a general trend of retreat from leadership on localisation (NEAR, 2025).^[2] Sources suggest that many LNAs are losing connection with the international system for a variety of reasons: some because they face closure, some because they have been excluded as coordination capacity diminishes, while others are intentionally distancing themselves. One source referred to ‘a huge rupture in trust’ and diminishing expectations of the UN-coordinated system: ‘let them do their thing, we’ll get on with ours. What has their prioritisation got to do with us?’