The US aid freeze is more than a funding crisis: it is a wake-up call. As donor-dependent systems falter, the global development sector faces a choice: remain fragmented and fragile or shift power and resources to a more resilient, locally-led model.
In some communities, the sound of school bells has been replaced by silence as classrooms sit empty, their doors locked. In others, infrastructure projects that provide clean water, sanitation and hygiene have come to an abrupt halt, leaving entire regions without essential services. Farmers are struggling as funding for climate adaptation and food security programmes is delayed, threatening both livelihoods and local food supplies. Meanwhile, businesses and entrepreneurs who relied on development grants to sustain jobs and economic growth now face uncertainty. At the same time, health clinics that once provided life-saving care are scaling back, reducing access to essential medicines and maternal health services.
These are not distant hypotheticals. They are happening right now, affecting real lives, with real people and real consequences.
The recent US pause in foreign aid disbursements has sent shockwaves through the global development sector, highlighting how fragile the system has become. Overnight, communities have been left in limbo, service providers are struggling to continue their work, and local organisations are facing immense uncertainty. The disruption has raised urgent questions about resilience and sustainability and how we can ensure that development efforts are not so vulnerable to sudden changes such as the USAID ‘stop work’ order.
One leader described the situation as a dam bursting, exposing long-standing cracks in the system. Another warned that the disruption has pushed civil society into survival mode, diverting focus from long-term reform and collective solidarity. This is not just about funding; it is about ensuring that civil society and local actors have the capacity to respond to crises, support vulnerable communities and advocate for sustainable change.
But let us be clear: this moment is not just about one donor or one decision. It has exposed a much deeper problem: a global development system that is overly dependent on external funding and lacks the resilience to withstand shocks. It is a wake-up call, a defining moment in what I described in The Fifth Wave.
Will this be the fire extinguisher that accelerates the collapse of traditional aid models, or will it be the fuel that finally drives long-overdue change? The sector must now decide whether to adapt—or risk irrelevance.
Either the crisis will be the fire extinguisher that accelerates the collapse of INGOs, or it will be the fuel for the sector’s long overdue transformation. If we do not act now, we risk the same fate as the dinosaurs: extinction.
A sector in turmoil: where do we go from here?
The seriousness of this crisis cannot be overstated. INGOs and local organisations are facing unprecedented uncertainty. Media reports from around the world have painted a stark and disturbing picture—of a funding vacuum deep enough to shake the foundations of global development, of geopolitical tremors whose aftershocks could reshape international cooperation for years to come, and of a future where uncertainty is no longer a temporary crisis but the new reality. While we react to the immediate fallout, however, we also need to engage in some wider reflection. How did we get here? What does this moment reveal about the vulnerabilities of our systems? How can we ensure that global development is not a victim of political change? What needs to change for our work to be more sustainable, equitable and resilient?
As a Bambara proverb from Mali wisely puts it:
‘Don’t blame where you fell; blame where you stumbled’.
If we focus only on the immediate loss of funding—where we fell—we miss the point: the system was already broken. INGOs have been stumbling for years, trapped in cycles of dependency, failing to shift power fundamentally. The big question is: will we finally confront where we have stumbled?
Two divergent paths: Fragmentation or unity
The global development sector is at a defining moment. It now faces a crucial choice between two paths.
The first path is fragmentation. If we continue down this path, the crisis will push INGOs to the brink of irrelevance. Many will die badly, collapsing under the weight of their outdated models, unable to adapt to a world that no longer needs them in their current form. A few will die well, making way and creating space for new, more locally rooted structures. Only a handful will successfully transform, but at enormous cost—unravelling entrenched power dynamics, fundamentally rethinking their purpose, and navigating painful disruptions along the way. For more insights, read Barney’s report on the existential funding challenge for northern INGOs.
The second path is unity, but not in the sense of simply working together to preserve the existing system. Instead of fighting for survival, development actors must redefine their role and rebuild the sector from the ground up, putting the people and communities they claim to serve at the centre. It means ensuring people and communities can exercise their rights and lead their development. It also means INGOs must stop centring themselves, stop treating localisation as an optional reform, and actively shift control and resources to local actors.
Transformation is not easy and will be costly. But the alternative—clinging to outdated models—will cost far more. The future of development will not be built by those who try to preserve the past but by those who are courageous enough to dismantle it and reimagine it.
Reimagining global development: Three essential shifts
If we are serious about ensuring that the global development sector survives and transforms into something better, we need to embrace three essential shifts:
First, rethink the funding model. Reliance on a handful of dominant donors from the Global North has created a system that is deeply unstable and vulnerable to political shifts. The future of development must be financed differently. This means moving beyond the traditional model and scaling up investments in public engagement, progressive private sector partnerships and innovative financing mechanisms, including leveraging remittances-worth nearly $50 billion in 2021, ¾ of which flow to low- and middle-income countries (LMICs)-that do not concentrate power in a few donor countries.
Proven practices we can learn from and build on:
- Community-based savings groups: Across Africa, Rotating Savings and Credit Associations (ROSCAs)—known as tontines in West Africa or stokvels in South Africa—have provided grassroots financing for decades. These self-managed groups pool resources, offering an alternative to donor-driven microfinance and reducing dependency on external funding. INGOs must collaborate with and support local actors to scale up these self-sustaining, locally-led financial models.
- South-South philanthropy and domestic resource mobilisation: Emerging philanthropic ecosystems in India, Brazil, Kenya, and South Africa demonstrate that Global South nations are not just aid recipients but also key funding actors. The Indian NGO GiveIndia and the African Philanthropy Network (APN) are paving the way for homegrown, long-term funding solutions that challenge the donor-recipient model.
- Social enterprises and locally owned revenue streams: In Rwanda, the social enterprise Inkomoko provides refugee-led businesses with capital and mentoring, proving that economic empowerment does not have to depend on international aid but can be locally generated. INGOs should invest in sustainable business models that allow communities to take ownership of development financing.
Second, move localisation from rhetoric to reality. Localisation needs to move beyond donor-driven politics and become an operational reality. As my colleague, Evelien (Eve) van Roemburg, argues in Localisation in Name Only, the current crisis has exposed how fragile these commitments have been. We need to break down the bureaucratic barriers that keep resources concentrated in INGOs and truly devolve funding and leadership to local actors who are best placed to drive development with and for their people.
Proven practices we can learn from and build on:
- Pledge for Change: A growing coalition of Global South and Global North organisations committed to transforming power dynamics in global development. The Pledge for Change challenges INGOs to move beyond rhetoric and take concrete steps toward shifting power, leadership and resources to local actors.
- ASAL Humanitarian Network (Kenya): This coalition of over 30 local and national organisations in Kenya’s arid and semi-arid lands (ASAL Network) is an example of how locally-led response mechanisms can enhance disaster preparedness and response. Supported by Oxfam and others, the network is demonstrating that when national actors take the lead, humanitarian response is more agile, relevant, and rooted in local realities.
- Decolonising aid by changing hiring and governance models: INGOs must hand over leadership roles to national staff. The West Africa Civil Society Institute (WACSI) promotes local leadership across NGOs in West Africa, demonstrating how INGOs can move from control to enabling roles. INGOs should invest in national staff leadership development rather than defaulting to expatriate hiring models.
Finally, strengthen collaboration and resilient networks. Development actors must stop competing for funding and influence and instead create resilient, interconnected networks that share resources and knowledge. As official development assistance (ODA) declines, the pot of available funding is shrinking, increasing the risk of unhealthy competition for limited resources. The sector needs to shift from a mindset of scarcity and competition to one of abundance and collaboration.
The future of global development cannot be built on organisations fighting over shrinking resources but on shared responsibility, collective impact and sustainable partnerships that amplify rather than fragment efforts.
Proven practices we can learn from and build on:
- RINGO (Reimagining INGOs): A systems-change initiative designed to fundamentally transform the role of INGOs in the development and humanitarian sector. RINGO is working on rethinking governance, funding flows, and power structures to create a more equitable global system. INGOs should engage with and learn from this process to transition from dominance to partnership in the development ecosystem.
- South-South knowledge sharing: The ResilientAfrica Network (RAN), based at Makerere University, Uganda, brings together 20 universities across Africa to co-design community-driven resilience solutions, proving that academic institutions in the Global South can lead development innovation.
- Collaborative policy-making for climate justice: The Climate and Development Knowledge Network (CDKN) works across Africa, Asia, and Latin America to bridge the gap between research and policy-making, proving that knowledge-sharing networks can influence policy in meaningful ways. INGOs should amplify these networks rather than dictate agendas from the outside.
The USAID crisis is more than a funding crisis: it is a defining moment for the global development sector. We can either cling to outdated, donor-dependent models and risk becoming obsolete, or we can rise to the challenge and transform the sector into one that is truly equitable, resilient, decolonial, and locally-led. The choice is not just about survival; it is about relevance and the future of global solidarity.
As Adam Grant reminds us:
“Personality is how you respond on a typical day. Character is how you show up on your worst day. It’s easy to demonstrate fairness, integrity, and generosity when things are going well. The real question is whether you stand by those values when the deck is stacked against you.”
Right now, the deck is stacked against the sector. Funding is shrinking, political pressures are mounting, calls for decolonisation and shifting power are growing louder, and the very foundations of global development and international cooperation are being shaken. The question is: Will the sector come together and show character?
Source: This article was originally written by Adama Coulibaly for Positive Minds
