The first few months of 2026 brought little relief from the massive liquidity crisis facing the United Nations, and still less from the continuing effects of unprecedented cuts in voluntary contributions to the organisation’s development and humanitarian operations.

The recent drop in foreign aid, coupled with reduced multi-lateral core funding and increased earmarked contributions (see Figure 1), is placing substantial strain on the multilateral system as a whole and the UN system in particular. Funding to the UN system had increased steadily for many years,

Humanitarian emergencies are expanding at an unprece-dented rate. By mid-2026, the United Nations’ global appeal had reached a historic US$ 34 billion, reflecting the 252 million people across the world in acute crisis.2 This soaring demand has been driven by the violent conflicts seen in Ukraine and the Middle East, compounded by a series of climate shocks.

In 2025, the Dag Hammarskjöld Foundation (DHF) conducted qualitative research on implementation of the revitalised 2024 UN Funding Compact (FC), finding low awareness and limited progress at the country level.1 In March 2026, DHF launched a further review of country-level implementation in conjunction with the United Nations Development Coordi-nation Office (DCO), with support from the University of Glasgow. The study sought to identify the underlying drivers, disincentives, and enabling factors shaping Member State and UN entity behaviour when it comes to FC implementation.

For many years, the United States’ dominant role in funding the United Nations system has overshadowed the emer­gence of another major donor: the European Union. In 2024, the EU was a larger contributor to the UN system than 26 of its 27 member states; only Germany contributed more.

The United Nations development system is currently confronting widening financing gaps, constrained aid budgets and increasing demands for accountability. Against this backdrop, growing attention is being paid to non-traditional sources of development finance. Among these, restituted assets — resources recovered through corruption cases and used for the benefit of affected populations — represent a significant, yet underutilised, opportunity.

The profound funding crisis currently faced by the United Nations is reflective of a broader erosion of trust in the multilateral order. The crisis, characterised by budget cuts and an over-reliance on unstable funding streams, has been driven by intensifying geopolitical tensions, austerity policies and the rise of populist movements, particularly within key donor countries.