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- Official development assistance fell by 23.1% in 2025, the largest annual drop on record, with a further 5.8% fall projected for 2026.
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- UK public giving fell to GBP 14 billion in 2025, and around six million fewer people give than in 2016, while demand on charities keeps rising.
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- Philanthropy cannot replace public funding.
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- Giving well now depends as much on how you give as on what you give: clear purpose, clear decision rights, proportionate evidence and honest learning.
The decline in public funding for global good poses difficult questions for donors. The response needs to address how giving happens, as well as how much giving happens. Global aid fell by 23.1 per cent in 2025, the largest annual drop on record. Development assistance(ODA) from OECD donor governments (Development Assistance Committee (DAC) members) and associates totalled USD 174.3 billion, down from USD 215.1 billion in 2024, and a further fall is projected for 2026.(1)
Germany, the United States, the United Kingdom, Japan and France accounted for 95.7 per cent of the decline, with the United States alone driving three-quarters of it.(1) At the same time, need remains acute, driven by overlapping crises, food insecurity, displacement and pressure on public services.(2–5)
Private giving is under pressure too. The British public gave an estimated GBP 14 billion in 2025, down from GBP 15.4 billion in 2024, and around six million fewer people in the UK gave to charity than in 2016, according to the Charities Aid Foundation.(6) In the United States, 73% of nonprofit leaders surveyed by the Center for Effective Philanthropy (CEP) report rising demand and growing financial uncertainty.(7)[3]
Why this matters now
When public money retreats and the pool of everyday givers contracts, each philanthropic decision carries more weight – and the question of how to give well becomes harder to answer.
In practice, this could mean: responding to an urgent funding gap, or protecting a longer-term strategy? Spread resources widely, or concentrate them? Ask grantees for more evidence when they have less capacity to produce it? These choices were always part of giving; what has changed is the jeopardy in not getting them right.
Why more giving isn’t the whole answer
First, philanthropy cannot replace what governments withdraw. Urban Institute analysis found that government grants reported by US nonprofits totalled at least USD 240 billion each year from
2021 to 2023, more than double recent estimates of foundation giving.(8) Some funders have responded to the gap that has emerged: the MacArthur Foundation raised its payout to at least 6% of its endowment for 2025 and 2026 and urged peers to follow, while stating plainly that private dollars cannot replace public funding.(9)
Second, well-intentioned money can still be poorly matched to the problem or arrive at the wrong time. Money spent without clarity is money another need does not receive.
Donors are asked to be strategic and trusting, evidence-informed and proportionate, quick and patient. These tensions cannot be solved with slogans; they call for a more deliberate way of making decisions.
A better way of working
Much donor advice focuses on what to fund and why. Strategy matters, but the quality of giving is also shaped by how decisions are made and executed: who is involved, what evidence is used, how quickly funding moves, how relationships are handled and how learning changes the next decision. Many donors have clear values but a much less explicit way of turning them into repeatable decisions.
Discipline can sit alongside trust. CEP’s three-year study of MacKenzie Scott’s large, unrestricted gifts to more than 2,000 organisations found most recipients reported stronger long-term financial sustainability and, two years on, held twice as many months of reserves as comparable nonprofits.(11) The lesson is not that every donor should make unrestricted eight-figure gifts, but that discipline need not burden grantees with more process. It can sit earlier: in the choice of organisations, the clarity of decisions, the quality of relationships and the honesty of learning.
Closing reflection
The case for effective philanthropy is as compelling as it has ever been, and the pressure on it looks set to continue. In that context, giving well is not only a question of scale. It is a question of how well each decision is made.
A useful next step is modest: look at your last three giving decisions. Who was involved, what information was used, how long did they take, and what happened afterwards? The gap between how giving is intended to work and how it actually works is often the most useful place to begin.
References
1. A historic decline in foreign aid: Preliminary 2025 ODA data [Internet]. OECD; 2026 [cited 2026 Jul 03]. Available from: https://www.oecd.org/en/data/insights/data-explainers/2026/04/a-historic-decline-in-foreign-aid-preliminary-2025-oda-data.html
2. OECD. ODA projections for 2026 and the near‑term: Implications for vulnerable countries and sectors. OECD Policy Briefs. 2026 Jun 18. doi:10.1787/d7c74fa2-en
3. FAO, WFP, Global Network Against Food Crises (GNAFC). Global Report on Food Crises (GRFC) 2026 | World Food Programme [Internet]. 2026 [cited 2026 Jul 03]. Available from: https://www.wfp.org/publications/global-report-food-crises-grfc doi:10.4060/cd9424en
4. United Nations High Commissioner for Refugees. Global Trends: Forced displacement in 2025 [Internet]. United Nations High Commissioner for Refugees; 2026 Jun [cited 2026 Jul 07]. p. 54. Available from: https://www.unhcr.org/media/global-trends-2025-report
5. GOV.UK [Internet]. [cited 2026 Jul 07]. Charities supporting three times as many people with essential aid, research finds, as sector faces increased financial pressure. Available from: https://www.gov.uk/government/news/charities-supporting-three-times-as-many-people-with-essential-aid-research-finds-as-sector-faces-increased-financial-pressure
6. Amount donated by British public falls for first time in five years [Internet]. [cited 2026 Jul 04]. Available from: https://www.cafonline.org/home/about-us/press-office/amount-donated-by-british-public-falls-for-first-time-in-five-years
7. Grundhoefer S, Arrillaga ES, Buteau E. State of Nonprofits 2026: What Funders Need to Know [Internet]. CENTER FOR EFFECTIVE PHILANTHROPY; 2026. p. 32. Available from: https://cep.org/wp-content/uploads/2026/05/CEP_State_of_Nonprofits_2026_FNL.pdf
8. Poongundranar T, Lecy J, Tomasko L, Harrison T, Martin H, Marconi R, et al. What Is the Financial Risk of Nonprofits Losing Government Grants? [Internet]. Urban Institute; 2026 Mar [cited 2026 Jul 07]. Available from: https://www.urban.org/research/publication/what-financial-risk-nonprofits-losing-government-grants
9. MacArthur Foundtion. MacArthur Foundtion [Internet]. MacArthur Foundtion; [cited 2026 Jul 04]. Transparency for Accountability: Our 2025 Payout Surpassed Set it at Six. Available from: https://www.macfound.org/press/perspectives/transparency-for-accountability-our-2025-payout-surpassed-set-it-at-six
10. Berman MA, Karibi-Whyte R, Tarasov O. The Philanthropy Framework [Internet]. Rockefeller Philanthropy Advisors; 2019 [cited 2026 Jul 08]. p. 29. Available from: https://www.rockpa.org/philanthropy-framework/
11. Arrillaga ES, Buteau E, Im C, Grundhoefer S. Breaking the Mold: The Transformative Effect of MacKenzie Scott’s Big Gifts [Internet]. CENTER FOR EFFECTIVE PHILANTHROPY; 2025 [cited 2026 Jul 03]. p. 60. Available from: https://cep.org/report-backpacks/breaking-the-mold-the-transformative-effect-of-mackenzie-scotts-big-gifts/
