There have been at least a couple of common refrains on the state of United Nations financing in the last two Financing the UN Development System reports. One is that a major reduction in funding to the UN Development System (UNDS) has been coming the past two or three years. And second, one of the challenges of the report is that a discussion of the current financial situation of the UNDS can only be based on actual expenditures for two years prior so it makes it challenging to gain a more immediate understanding of what the UNDS’ real current and immediate financial situation is.²

Unfortunately, data for this year’s report and drastic decision- making by Member States the first half of 2025 confirms that a decline in UN financing has indeed been a three-year downward trend — if not now a precipitous collapse. This can be seen via three channels.

First, the UN Development System expenditure figures show  that the total financial contributions to the UN development system in 2023 were the lowest volume recorded since 2019.³

Second, preliminary Official Development Assistance (ODA) figures released in April, 2025, by the Development Assistance Committee (DAC) of the Organisation for Economic Cooperation and Development (OECD) show that global aid flows fell sharply in 2024, the first drop in five years.

And third, the incoming US Administration’s elimination of much of USAID, pull-out from the World Health Organization (WHO) and the UN Human Rights Council, and its pause on most assessed and all United States voluntary contributions to the UN as well as 2025 reductions from many other key donors, have left global development cooperation and humanitarian assistance teetering at best, in near free fall at worst. And perhaps few multilateral players feel it more than the development and humanitarian entities of the UN development system, though it will be important to see what happens to the support of the multilateral development banks (MDBs).⁴

After reviewing these trends, continued steep cuts and the on-going UN liquidity crisis, focus will be on the UN80 Initiative and whether possible reforms ‘meet the moment’ of  such unprecedented times while preserving if not strength-ening the unique elements that only UN support can bring.⁵

Documentation for this year’s Operational Activities Segment of the Economic and Social Council (ECOSOC) makes for sobering reading. The total contributions to the UNDS for operational activities in 2023 declined by 16%, or almost US$ 9 billion, as compared with 2022.⁶ Almost 95% of this decline was due to a drop in non-core resources with 5% due to the decline in core resources.

Overall, the core contributions to the UNDS accounted for just 18.8% of the total contributions in 2023, or just 12.7% of all voluntary contributions.⁷ Other measures of ‘quality funding’ also declined with funding to pooled funds totalling US$ 2.8 billion, 13% less than in 2022. After six years of consecutive growth, contributions to Agency thematic funds also declined by 32% to US$ 598 million.⁸ Finally, the UNDS remained highly dependent on a very small number of contributors in 2023 with the top three government contributors, namely the United States, Germany and the United Kingdom, accounting for 48% of all UNDS funding from governments.⁹ In hindsight, a flashing red warning if ever there was one.

Preliminary ODA figures for 2024 indicate that this situation will only worsen for actual 2024 contributions to the UNDS (to be reported in 2026) as ODA provided by DAC member countries in 2024 amounted to US$ 212.1 billion, a 7.1% decline in real terms compared to 2023. Overall, ODA fell in 22 countries in 2024 and rose in just 10.¹⁰

The fall in ODA was largely due to a sharp decline in aid for Ukraine, a significant drop in refugee-related costs within many, but not all, donor countries and reductions in contributions to international organisations and in humanitarian spending overall.

As Matthew Simonds, senior advocacy officer at Eurodad (European network on debt and development) put it: ‘Wealthy countries appear to be making these cuts with a startling degree of short-sightedness and impunity…It is clearer than ever that the way aid is governed is not working and must change’.¹¹

While the exact figure is still a moving target at the time of writing, shortly after inauguration the new United States Administration terminated over 5,000 projects representing 83% of USAID’s spend. As the United States Secretary of State put it: ‘The cancelled contracts spend tens of billions of dollars in ways that did not serve (and in some cases harmed) the core national interest of the  USA’.^{12, 13}

Of the US$ 223.23 billion in total ODA from DAC members in 2023, the United States contributed US$ 64.7 billion – or almost 30% of the whole total. Hence, such a deep cut has been both devastating globally as well as on the United Nations as a good portion of what was cut were earmarked contributions to UN life-saving humanitarian work. In addition, the fiscal year 2026 discretionary budget request submitted to the US Senate’s Committee on Appro-pri ations for debate shows a ‘pause’ in most United States assessed and all voluntary contributions to the UN and other international organisations including for the UN Regular Budget (UN Secretariat operations), UNESCO and the World Health Organization (WHO); if enacted as proposed this would lead to a US$ 1.7 billion cut from the 2025 level.¹⁴

Further proposed cuts in the White House 2026 budget sub-mission include: (1) US$ 1.6 billion less for UN international peacekeeping activities; (2) US$ 3.2 billion less for international disaster assistance, migration and refugee assistance and international humanitarian assistance; and (3) US$ 6.2 billion less for global health programs and family planning, most of which is implemented though UN bodies.¹⁵ The budget proposal also eliminates all United States contributions to the Global Environment Facility (GEF) and to the International Fund for Agricultural Development (IFAD).¹⁶

While there is the challenge of a lag when assessing real-time UNDS resource availability, there is no such lag on human lives when aid cuts are so severe. ‘It seemed to be an attack on countries’ one UN agency employee told Devex, with all those working in the same crisis-affected countries receiving cancellations at the same time.¹⁷

These are just two examples of many: cuts to aid budgets are threatening to undermine years of progress in reducing the number of women dying during pregnancy and child-birth; such maternal deaths declined by 40% between 2000 and 2023 but now may go into reverse.¹⁸ Funding from the United States made up over 50% of all global ODA for 17 key areas in 2023, including malaria control, tuberculosis programmes and narcotics control.¹⁹

Importantly, while the massive cut through the effective elimination of USAID was the deepest, many European DAC donors are also significantly cutting ODA for three primary reasons: contracting economies, security threats along borders and increased populism. As the OECD DAC Chair Carsten Staur said: ‘It is regrettable that ODA decreased in 2024 after five years of continuous growth. It’s even more concerning that some of the major donors have signalled further, and quite significant, decreases over the coming years’.²⁰

The Netherlands, which had an ODA budget of US$ 7.4 billion in 2023, is planning to reduce ODA by € 300 million in 2025, € 500 million in 2026 and € 2.4 billion in 2027.²¹ France’s new finance bill for 2025 includes a US$ 2.2 billion reduction to its ODA allocation; aid is projected to fall by 11% next year. Meanwhile Finland announced that it would reduce its ODA budget by 25% between 2024 and 2027 while Belgium is also cutting its foreign aid over the next five years.²²
As highlighted in the 2024 Financing the UN Development System report, in some countries it is a political struggle between two targets – increasing defence spending to at least 2% of gross national income (GNI) versus maintaining or moving towards 0.7% in development assistance.²³

While preliminary 2024 figures show ODA virtually unchanged at 0.33% of DAC members combined GNI with now just four countries meeting the 0.7% ODA target, three European countries chose defence over development in 2025. The most striking ‘tale of two targets’ was the incoming United Kingdom Labour government’s decision to increase defence spending to 2.5% of the gross domestic product (GDP) by 2027 by reducing the aid budget by GB£ 6 billion per annum, thereby lowering the UK’s ODA from 0.5% to 0.3% of GNI. As one of only two countries over the last five years to have met both their aid and defence spending targets, the decision was not only a loss of agenda-setting power but also set a dangerous precedent at the worst possible time.²⁴

Switzerland also cut its 2025 foreign aid budget by SFR 110 million and will cut another SFR 326 million in development cooperation from 2026 to 2028 in favour of greater military spending.²⁵ Germany’s 2025 budget cut both BMZ (Federal Ministry for Economic Cooperation and Development), its development ministry, and the German Foreign Office, by 8% or US$ 1.8 billion.²⁶ Unlike others, this was not directly in favour of defence spending as Germany also announced a change in its Constitution that will enable increased defence spending, enacting a major change in policy.

That said, it is also very important to highlight the few positive outliers – most notably Norway which is still leading the way with 1% of its GNI allocation to development cooperation. Denmark, Ireland, Italy, Japan and South Korea are also all expected to slightly increase their ODA funding in 2025.

While philanthropic foundations can’t fill the huge gap, the recent announcement by Bill Gates that the Gates Foundation will double its spend to US$ 200 billion over the next 20 years is a huge shot-in-the arm for global health and development.
Overall, the European Union and EU Members States are the world’s leading donors providing 42% of global ODA between 2022 and 2023.²⁷ Those days seem gone for now, as many European countries shift from more traditional ODA to this new emphasis on defence and engagement with the private sector.

While some DAC members are yet to announce their 2025 contributions, as of mid-May, 2025, donortracker.org, a central source of information on the largest OECD DAC donor countries, projected that ODA from the 17 largest DAC donors in 2025 will fall by at least US$ 31 billion.²⁸ If the various ODA-related cuts in the proposed overall 2026 US State Department budget are also enacted by Congress, then the total size of cuts will exceed US$ 40 billion.

The humanitarian sector in particular is facing an unprecedented funding crisis which, as outlined above, is overwhelmingly, but not only, due to the termination of over 80% of USAID’s programmes. The impact is immediate – and devastating. According to an analysis by the Swedish International Development Cooperation Agency (SIDA), there are now at least 36 million people without urgent humanitarian support.²⁹ As the UN Emergency Relief Coordinator Tom Fletcher warned at the end of April 2025 ‘cutting funding for those in greatest need is not something to boast about – the impact of aid cuts is that millions die’.³⁰ Such huge reductions in aid are also leading to a rise in the outbreak of diseases like meningitis A, yellow fever and measles that vaccines had nearly wiped out. As Tedros Adhanom Ghebreyesus, Director-General of the WHO put it, ‘funding cuts to global health have put these hard-won gains in jeopardy’.³¹

Concomitant with the devastating impact on human lives is the huge impact on both the reach and capacities of UN humanitarian entities including the International Organization for Migration (IOM), the UN High Comm-issioner for Refugees (UNHCR), UNICEF and the World Food Programme (WFP). Shortly after the reduction came into effect, WFP indicated it would be cutting 25% to 30% of its workforce – that is up to six thousand jobs in the up-coming year as the US provided some 46% of WFP’s 2024 budget, necessitating WFP prioritising its more limited resources on critical programmes.^32,33

UNHCR similarly indicated that its headquarters and regional bureaux would be downsized with more than a 30% overall reduction in costs; revised spending authority for operations is also being reduced by 23% with priority on country activities where UNHCR can be most impactful.³⁴

Although UNICEF had not yet publicly announced its planned reductions at time of writing, the IOM also announced cuts of up to 6,000 staff and OCHA 20% of its staff while the US cut US$ 377 million in funding for the United Nations Population Fund (UNFPA).³⁵

In large part due to its high dependence on US funding, UNAIDS also recently announced the need to cut its staff by more than 50% over time while significantly scaling back its country presence.³⁶ With regard to the WHO, while the US pull-out will only formally take root in 2026, other cuts in ODA support to the WHO as well as non-payment of US assessed contributions for 2024 and 2025 which were agreed before the pullout mean the organisation faces a shortfall of 25%. The concomitant reductions will similarly be higher at WHO headquarters with 76 departments being cut down to 34 and the members of the management committee reduced from 12 to 7.³⁷ In 2024, the US was the Office of the High Commissioner for Human Rights’ largest donor, providing 13% of its voluntary contributions.³⁸

Even before this year of extraordinary cuts, there have been many calls for a new ethos and narrative reframing global development and humanitarian cooperation. This focus has not just been about replacing aid lost but rethinking the system with calls for decolonisation, renewed focus on localisation and local leadership and shifting from a ‘charity’ framework to one of real mutual interest among Member States and greater global public investment.

This reflective focus has led to a plethora of initiatives ranging from ODI Global’s dialogue series on ‘donors in a post-aid world’ to renewed calls for a second North-South (Brandt) Commission or a second Pearson Commission on International Development.³⁹ As ODI Global’s NiIima Gulrajani put it, ‘what is really needed is an independent commission on the future of the international aid system that can forge a new political consensus on the rationale for development cooperation while also articulating a vision for a post-aid world many are now demanding’.⁴⁰

Given the tumultuous change underway, especially in the UN system, when reimagining future global development and humanitarian cooperation it will be important to be clear what are truly the unique elements of UN engagement – its normative standards, convening power and universal legitimacy and reach – and ensure that these are preserved to the greatest extent possible.

On top of unprecedented cuts to voluntary ODA contri-butions to the UN’s humanitarian and development operations, and the ‘pause’ in the US’s obligations to the 2025 UN’s regular (assessed budget), this year is also marked by the increasingly alarming liquidity crisis facing the UN Secretariat. According to The Economist, internal modelling shows that without significant reductions in UN Secretariat operations, the year-end cash deficit will be short US$ 1.1 billion, effectively meaning the UN Secretariat would be without enough money to pay staff and expenses by September 2025.⁴¹

The situation is exacerbated by significantly delayed payments by both the United States and China, which each pay 22% and 20% respectively of the regular assessed budget as well as by arcane UN regular budget rules which currently rebate unspent money to Member States to offset future fees. Hence, late payers not only force the UN to underspend in the current year but also rob the organisation of future funds.⁴² This dire fiscal situation will deteriorate even further if the current US Administration indeed refuses to pay anything in 2025. The US currently has arrears of US$ 3 billion that is still short of its US$ 4.5 billion limit.

It was in this overall fiscal context, exacerbated by the intensification of multipolar global challenges and the unprecedented decline in financial support to the multilateral system, that the UN Secretary-General (UNSG) launched the UN80 Initiative in mid-March 2025 to better respond and strengthen the effectiveness, efficiency and accountability of the UN.⁴³ A UN80 Task Force comprising Heads of UN Secretariat Departments and UN entities was appointed to develop proposals for consideration in three areas: (1) efficiencies and improvements that can be achieved within current arrangements; (2) mandates implementation review; and (3) structural changes and programme alignment within the UN system.

For the UN to emerge as a more efficient, leaner and more effective body, it is critically important that the UN80 Part Two — The big picture: International flows Initiative succeeds. To do so, though, a number of important measures need to be taken.

First, the challenges to be tackled in the first workstream must go significantly beyond ‘efficiencies’ to address the significant critical liquidity challenges described above; besides an anticipated significant freeze in posts, options to consolidate management and operational support functions will need to be developed as well as relocating many functions, structures and posts to more cost-effective locations like Bonn or Nairobi. A massive budget crisis is brewing. Not only do the United States and China need to both pay and pay earlier, Member States also need to step up and reform the regular budget rules.⁴⁴

Second, success will depend not only on abolishing redundant or duplicative functions, addressing immediate and medium-term cost considerations and minimising the negative impact on forward-facing engagement with Member States, it will also entail significant and concerted engagement with Member States and staff at large, especially in New York and Geneva.
Third, as the second workstream ‘mandates implementation review’ is about how the UN system implements the 3,919 mandate documents entrusted to it by Member States and not about revisiting the mandates themselves, it will be important that this piece both helps rationalise, and very quickly merges, with the third workstream ‘structural changes and programme realignment within the UN System’ which in many ways is most important if the UN is to address major inefficiencies from overlapping programmes and agencies. 

At a 12 May 2025 briefing on UN80 to all Members States, the UN Secretary-General indicated that he has established seven clusters under the overall UN80 Task Force to determine how to advance efficiencies, reduce duplication and potentially merge some elements.⁴⁵

The seven clusters and the lead coordinating entities for each are: (1) Peace and Security – coordinated by United Nations Department of Political and Peacebuilding Affairs (DPPA), Department of Peacekeeping Operations (DPO), Office of Counter-Terrorism (OCT) and the Office for Disarmament Affairs (ODA); (2) Development in the Secretariat – Department of Economic and Social Affairs (DESA), Trade and Development (UNCTAD), Senior Advisor on Africa and UNEP; (3) Development in the UN System – UNDP, United Nations Office for Project Services (UNOPS), UNICEF and the Development Coordination Office (DCO); (4) Humanitarian – Emergency Relief Coordinator, WFP, UNICEF, IOM; (5) Human Rights – OHCHR; (6) Training and Research – United Nations University (UNU) and United Nations Institute for Training and Research (UNITAR); as well as (7) Specialised Agencies – International Telecommunication Union (ITU) and the International Labour Organization (ILO).

Fourth, it will be key that there is a ‘form follows function’ focus, especially regarding preserving unique core functions of the UN such as its normative role. While there is much talk of going ‘back to basics’, in a world beset by backsliding on basic human rights, gender equality and long agreed principles of international humanitarian law, and where polycrisis is the ‘new norm’, embracing inter-connectedness would appear to be the way forward rather than retreating back into ‘peace and security’ silos. It is also of concern that there is no mention at all of gender equality and/or women’s rights or how it will be addressed across the clusters. 

Fifth, while it’s important that top UN leadership is both proposing, as well as overseeing, the development and interrogation of more radical changes, it will be critical that there is also top external input so as to build on best practices of organisational reform and digitisation that may not be available internally. It will also be key to maximise the wealth of analytical material available including cross-cutting thematic and functional insights from various assessments by the Multilateral Organization Performance Assessment Network (MOPAN) to cite just one example.

From a change management perspective, it’s critical that potential conflicts of interests interfering with strategic design and clear decision-making are minimised. This would appear to be a real risk if it’s the Executive Heads of the UN entities concerned that need to come together to make strategic and difficult choices. Hence, it would seem to make sense to also involve skilled external facilitators for critical decision-making periods during cluster work. What’s more, top leadership will also need to simultaneously focus on continuous engagement, not only with Member States to build ownership of reform proposals, but also with UN staff associations and staff at large at a time of such tumultuous change.

Sixth, to be able to move far-reaching reform forward successfully, extensive consultations will not only need to be done with Member States; the onus is also on Member States themselves to build ‘coalitions for change’ amongst different country groupings and between major players in both the global South and North. 

This is especially the case for more deeper reform of the UN Development System. As the internal memo reported by Reuters outlined ‘the progressive proliferation of agencies, funds, and programmes has led to a fragmented development system, with overlapping mandates, inefficient use of resources and inconsistent delivery of services’.⁴⁶

Also absent from the discussion to this point is the important role UN Resident Coordinators and UN Country Teams play at country level and what impact a pared down UN would have on facilitating the work of the World Bank, multilateral development banks (MDBs) and the International Monetary Fund (IMF) and helping drive overall development effectiveness.
Seventh, as in any major reform, it is critically important to anticipate any unintended consequences to the extent possible. This is especially the case if cuts are done quickly and reactively rather than strategically; it’s hard to rebuild what’s been jettisoned. While there are clearly real efficiencies to be gained in mergers and reallocations, there is a lot to lose as well if the capacity and reach of the system is radically downgraded.

As Pascale Baeriswyl, Switzerland’s Permanent Represen-tative to the UN put it in response to the Secretary-General’s May 12, 2025 briefing: ‘The envisaged reform measures must… be targeted and proportionate. We need to create a shared strategic vision because otherwise we risk that we engage in widespread short-term cuts without strategic vision’.⁴⁷

Finally, in that context, it will be important to ensure greater strategic alignment between significant reduction plans of individual UN Agencies, Funds and Programmes (AFPs) like WFP or UNICEF, whose leaders have had to be fiscally and managerially responsible especially given the massive humanitarian cuts, and the more centralised approach of the UN80 Initiative. 

Member States also have a real leadership role to play here in terms of governance of the UN System. Although UN Funds and Programmes are scheduled to present their new Strategic Plans 2026-2029 to their respective Executive Boards in September 2025, it would seem to be premature until there is clearer alignment on overall reform proposals for change. Hence, Member States represented in UN Executive Boards should consider extending the current Strategic Plans until early 2026. These are truly extraordinary times for the UN and governance structures need to respond responsibly as well.