The landscape of international development funding is undergoing a seismic shift. Government cuts to official development assistance (ODA) are creating critical gaps across the global development sector, from the dismantling of USAID to substantial budget reductions by traditional leading donors like the United Kingdom and Sweden.
In this challenging environment, private philanthropy faces a pivotal moment. How can foundations effectively respond to this uncertainty while continuing to drive meaningful impact?
A new reality for global development
The UN has acknowledged that the world is not on track to achieve the Sustainable Development Goals (SDGs), with the OECD estimating an annual financing gap of US$4 trillion and rising. While many have called for private philanthropy to step up, the reality is that foundations cannot bridge this emerging financial chasm alone.
As Elizabeth Ames, CEO of Atalanta, notes: "Individual foundations and donors risk being caught between the growing narrative that development spending fails to deliver and a sense of betrayal among funding recipients when urgent investment needs cannot be met."
Practical steps forward
Based on insights gathered from leaders at private foundations and NGOs, experienced politicians, and senior diplomats across our network, Atalanta has identified six key actions that philanthropic leaders should take:
1. Acknowledge what is happening
Be transparent with your team, grantees, and stakeholders about the challenges ahead. Demonstrate empathy and provide clear, consistent communication both publicly and privately.
2. Maintain a long-term strategy
Resist the temptation to abandon your long-term vision in favour of short-term wins. Meaningful, systemic impact requires an enduring commitment underpinned by a clear mission.
3. Communicate your funding priorities
Reduce waste by clearly articulating what you do—and do not—fund. Consider adapting your funding processes to make them less time-intensive for potential grantees.
4. Catalyse new partnerships
Think creatively about new partners and partnership models. From impact investment to public-private-philanthropic partnerships (PPPPs), philanthropy can unlock new sources of investment and mobilise private capital.
5. Generate, collect, and share evidence of impact
Invest in strong monitoring, evaluation, and learning processes. Share impact data to build trust with stakeholders and the wider public, tangibly demonstrating how development spending is changing lives.
6. Reclaim the narrative
Shift the focus from waste, crisis, and cuts to the tangible, life-changing impact of development funding. Use data, storytelling, and advocacy to reinforce its value and necessity.
Shaping what comes next
While the global development sector faces significant challenges, this moment offers private philanthropy an opportunity to drive meaningful change. By implementing these six steps, private foundations can help the sector reclaim the narrative and shape a more sustainable, resilient, and impactful future.
