We were recently approached by the Telegraph about the impact of USAID cuts on charitable fundraising.
When President Trump announced his plan last year to cut around 83% of grants administered by the United States Agency for International Development (USAID), fundraisers had to respond quickly to bridge the funding gap. One year on, the Telegraph approached us to understand how charities were diversifying income streams and what this could mean for the future of International Aid Funding.
You can read the article here.
Conversations with affected charities revealed the extent to which these cuts had both immediate and long-term implications. Many organisations felt the impact of them almost overnight, having to diversify into other income streams. Nevertheless, many found themselves having to reduce their geographic footprint and exit some countries altogether.
The effects have also extended beyond the immediate reduction in USAID support. In what many charities describe as a “domino effect,” other major governments – including the UK and Germany – have reduced their international development spending. This has placed further pressure on international NGOs and local partners, all of whom are now competing for a smaller pool of funding.
How charities chose to diversify depended on their existing fundraising mix. Whilst some started to develop more individual giving campaigns, others focused more on high value relationships with philanthropists and corporates.
Similarly, some charities have started exploring new funding models in social innovation. These approaches include social enterprises, blended finance, and other models designed to generate sustainable income alongside traditional grant funding.
Amidst an uncertain funding landscape, international aid charities are conscious that the demand for their services will continue to rise. Climate change, political instability, and war will only increase the need for humanitarian assistance. It therefore remains essential that fundraisers have the tools and resources they need to address long-term funding gaps and develop new innovative ways to generate income.
