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.

On 30 December 2025, following weeks of intense negotiations, the UN General Assembly approved US$ 3.45 billion for the UN regular budget for 2026: a budget cut of 9% (and 21% in post reductions) compared to 2025. Securing these funds, however, has proved difficult. In late January 2026, the UN Secretary-General warned Member States that the organisation faced ‘imminent financial collapse’ due to non-payment of assessed fees, the overwhelming majority of which are owed by the United States.³

The US now owes US$ 2.036 billion in total to the regular budget (including this year’s US$ 767 million), having paid US$ 160 million against its arrears, with a further US$ 1.8 billion owed for peacekeeping operations. A recent diplomatic note indicated that the US aims to ‘pay a significant portion’ of its 2026 dues to the UN’s regular budget ‘on condition that the Secretary-General implements nine “quick win” reforms’.⁴ Making matters worse, the US House Appropriations Committee 2026/27 budget proposal heading to the full House (prior to reconciliation with a Senate budget proposal) envisions a significant share of the proposed US$ 2.69 billion in cuts as coming from the country’s contributions to the UN.⁵

All this comes on top of extraordinary cuts in voluntary development and humanitarian funding to the UN system in 2025.⁶ While the effective closure of USAID led to the biggest reductions, many other major donors either pre-empted this or swiftly followed suit. According to preliminary data released by the Organisation for Economic Co-operation and Development (OECD), Official Development Assistance (ODA) fell by US$ 50 billion in 2025 to US$ 174.3 billion. This 23% decline means ODA has fallen to just two-thirds of its 2023 peak.⁷ This represents the largest annual contraction on record, significantly beyond the projected worst-case scenario for 2025 of a 9–17% drop on top of the 9% decline seen in 2024.⁸

The decline was heavily concentrated among the five largest providers (the United States, Germany, Japan, the United Kingdom, and France), which together accounted for 95.7% of the 2025 fall in Development Assistance Committee (DAC) ODA.⁹ The US aid reductions were responsible for three-quarters of the decline – a drop so large that it saw Germany become the world’s biggest donor despite itself registering a 17.4% drop in aid.¹⁰ OECD- DAC forecasts a further 6.9% decline in ODA for 2026, with the actual figure potentially higher given the turmoil in the Middle East.

The UN development system (UNDS) was hit particularly hard, with core contributions to the UN system declining by 27% in 2025 – the largest annual drop on record. Total contributions to UN operational activities for development (development and humanitarian assistance) fell to US$ 45.2 billion in 2024 – a 17% decline from the 2022 peak – and were projected to fall a further 12% in 2025.¹¹

While many governments are also having to reduce staff at this time, it’s important to look beyond staff cuts to the disproportionate impact the precipitous drops in ODA and UNDS contributions are having on the world’s most vulnerable people. In doing so, the following methodological issues should be borne in mind.

First, the country-level impacts of such drastic aid cuts remain poorly understood – partly because substantive impact monitoring is one of the key capacities affected by the cuts. Second, given the two-year lag in UNDS  expenditure figures, it is not yet possible to discern the full impact on the UNDS’s work. Instead, one needs to look at both broader sectoral impacts and projections made by UN agencies themselves.

Overall, it is important to assess the UNDS funding cuts from a number of perspectives, not least how they affect the people such funds are meant to serve, especially in the poorest countries. Also crucial is the effect on the UNDS’s capacity to perform its various mandates, as well as the consequences for morale among UN staff, including the organisation’s next generation of leaders.

Cuts in ODA in 2025 and 2026 have provoked a cascading crisis, with shrinking humanitarian coverage, a reversal of health gains, weakening gender equality and declining support to climate-vulnerable countries all undermining global stability. While thus far it has been hard to obtain systematic on-the-ground data, this is starting to change, with one example being an Impact Metrics Dashboard developed to help aid organisations visualise the human impact of funding changes.¹³

A recent peer-reviewed study published in The Lancet Global Health by the Barcelona Institute for Global Health highlights the contribution of ODA to global health outcomes. The study found ‘high levels of ODA associated with a 39% reduction in under-five mortality, with particularly strong effects on mortality rates from HIV/AIDS (70%), nutritional deficiencies (56%), malaria (56%), diarrhoeal diseases (55%) and neglected tropical diseases (54%)’.¹⁴ Due to the massive aid cuts made in 2025 and 2026, the study goes on to say: ‘the evidence indicates that an abrupt and severe contraction of this funding could have grave repercussions, potentially resulting in a global death toll approaching – or even exceeding – that of the COVID-19 pandemic’.¹⁵

Drawing on two decades of data from 93 countries, the study models two scenarios: a severe funding contraction that could result in 22.6 million deaths by 2030, and a ‘milder’ scenario that sees a continuation of current downward trends, leading to 9.4 million deaths by 2030, including 2.5 million children under the age of five.¹⁶ Even under the milder scenario, the study’s authors stress that the projected – and avoidable – deaths far exceed baseline trends, representing a major reversal of gains made over the past 20 years, especially in the world’s poorest countries and in critical areas such as child survival.

These projections are reinforced by other research. The Center for Global Development found that US cuts to the World Food Programme’s operations in Yemen alone ended life-saving food assistance to 2.4 million people and halted nutritional care for 100,000 children while many  of the terminated USAID awards had supported an estimated 2.3 million people receiving life-saving anti-retroviral treatment.¹⁷

Data from UN agencies themselves show that the humani-tarian and health sectors – especially in Africa and the Middle East – have been disproportionately affected by the cuts. Global humanitarian funding collapsed by 53% over just three years, from US$ 43.3 billion in 2022 to US$ 20.3 billion in 2025. This contraction – the greatest in a decade – saw funding drop below 2016 levels.¹⁸ As one example, humanitarian aid cuts of US$ 114 million to the gender-based violence (GBV) sector ended access to GBV prevention and response services for over 3 million women and girls caught in humanitarian crises, while ‘also reducing quality of care, decreasing trust in providers, and sending a message of impunity to perpetrators’.¹⁹

At the time of writing, international efforts to curb the latest Ebola outbreak in the Democratic Republic of the Congo are being hampered by the effects of recent aid cuts, which have reduced both surveillance capabilities and the number of medical relief organisations operating in the region.²⁰

Beyond the many lives lost and livelihoods shattered, the cuts are eating into the core capacities and reach of the UN’s development, humanitarian and human rights work, not to mention the organisation’s critical role in the wider multilateral system. As the OECD’s Multilateral Development Finance 2026 report highlights, funding cuts are affecting institutions unevenly, with UN development and humanitarian entities facing sharper contractions.²¹ As just one example, major funding cuts forced the Office of the United Nations High Commissioner for Human Rights (OHCHR) to undertake fewer than half as many human rights monitoring missions in 2025 as it had in 2024; reduce its presence in 17 countries; and cut 300 jobs.

More broadly, the Multilateral Organisation Performance Assessment Network (MOPAN)’s mapping of measures taken by multilateral organisations in response to ODA reductions shows that the UN system experienced an unprecedented and structural contraction in funding, with over three-quarters of UN agencies announcing significant budget shortfalls and rapid cost-cutting measures. Most UN agencies reported that the cuts set out in formal donor notices have been swift and deep – ranging from 11% to 30% for 2025–2027, and in at least one case exceeding 50%.²²

This stark reality has led to staffing and programmatic downsizing and fundamental structural change, all occurring faster than reform processes such as the UN80 Initiative can keep pace with. In effect, this ‘reform by attrition’ means austerity rather than strategy is driving change, with critical UN capacities in normative support, policy, effective oversight and local partnerships ‘being hollowed out just when they are most needed’.²³

The MOPAN mapping reveals not only a liquidity and funding crisis, but a forced structural contraction that is reshaping the multilateral system. In addition to diminishing operational delivery, widespread cuts to core resources are weakening policy work, research and knowledge-management capacities and inhibiting the UN’s vital role in providing thought leadership.²⁴ Should current trajectories persist, the likely outcome is a much more fragmented UN system, with its  legitimacy diminished and its capacity to respond to challenges – whether global or national – substantially weakened.²⁵

In short, the UN system is having to adjust to funding cuts faster than reform processes can deliver real change. Structural reforms are occurring by default rather than by design, driven by financial pressures rather than by strategic vision, with efficiency measures insufficient to absorb current reductions. Such abrupt, uncoordinated cost-cutting across various agencies is skewing priorities towards short-term outputs; inhibiting horizontal collaboration; and undermining oversight and accountability, thereby ultimately putting governance and trust at risk.²⁶

Preserving the multilateral system’s delivery capacity necessitates coordinated action by Member States, both in terms of protecting underlying financial foundations and managing funding cuts in a much more intentional manner. Enhancing the multilateral system’s overall effectiveness also requires multilateral organisations – especially UN entities – to pursue reforms that will both sharpen their development additionality and strengthen system-wide coherence.²⁷

Massive funding cuts, staffing reductions, restructuring and livelihood stress have affected the broader global development and humanitarian ecosystem and are also deeply affecting UN staff through waves of job cuts, hiring freezes, relocations to cheaper duty stations and office closures. Some UN entities have seen significant numbers of talented staff with years of experience walk out the door – often taking critical institutional knowledge with them.

Social media platforms such as LinkedIn are awash with stories of prematurely curtailed UN careers and the financial and professional insecurity this brings. In many cases, abolished staff positions may have to be replaced by more precarious non-staff arrangements and consultancies.

Given that just 4% of UN staff were aged 30 years or younger in 2024, a particular concern is what the organisation’s future senior leadership will look like 15 years from now.²⁸ According to MOPAN’s mapping exercise, only two UN agencies reported undertaking reductions in senior positions, which implies the job losses are concentrated in more junior roles. Nevertheless, some entities claimed to be prioritising junior and younger staff, which will hopefully guard against the future diminishment of the UN’s capabilities, innovation and leadership.²⁹

If the UN is to emerge from this funding crisis as a more efficient, effective body, it is critically important that UN reform succeeds. Given this, there are a number of broad policy avenues that Member States should pursue.

First, the renewed focus on the convening power of the so-called ‘middle powers’ should be stepped up in the context of the UN80 reform initiative’s Workstream 3, with a view to supporting and protecting key elements of the UNDS’s work, especially its unique normative functions and life-saving humanitarian work. In that context, to be able to move far-reaching reform forward successfully, especially in terms of deeper reform of the UNDS, the onus is on Member States to build ‘coalitions for change’ across regional groupings. As a recent op-ed in Devex highlights, ‘reform proposals that originate from middle powers, especially when crafted across North–South or East–West lines, stand a better chance of surviving political headwinds. They are influential without being dominant, pragmatic rather than ideological and deeply invested in multilateral institutions even as they push to reform them’.³⁰

Hence, middle powers – South and North – should as a matter of urgency push for senior political discussions on the importance of the UN’s role in development in key forums, including at the G20, where to date only multilateral development bank reform has featured. The scale of the challenge faced is exemplified by the fact that the UN’s role in development was barely mentioned, if at all, at the recent OECD Conference on the Future of International Development Cooperation. Priority also needs to be given to building a more strategic, complementary relationship between the UN and the European Union.

Second, Member States should press for any proposed reforms to be as ‘evidence-based’ as possible, drawing on recommendations from UN system-wide evaluations and analytical work and institutional assessments by MOPAN. In particular, MOPAN’s thematic insights briefs on the UN80 Initiative and its assessments of UN entities can support Member States in formulating a more strategic approach to delivering on the UN80 Initiative.

Third, Member States need to reflect on the fact that, ultimately, they get the UNDS they fund – and that after years of increasingly earmarked projectisation of UN multilateral support, it should come as no surprise that the UNDS is as fragmented as it is. Put bluntly, the inefficiency for which Member States criticise the UN is at least partly the result of their own funding practices.³¹

Fragmentation also applies to donor funding practices. Hence, it’s increasingly important that middle powers take a hard, critical look at their current funding practices.  As one example, Germany is below average in its share of international finance that is allocated multilaterally.  As one recent policy paper argues, this should be reversed for several reasons: Independent assessments find multilateral organisations to be highly effective; surveys of the German public indicate that multilateral organisations generate high levels of trust; and, crucially, the international system is more vulnerable than ever in light of the cuts outlined above.³²

Of particular importance is increasing the share of flexible, predictable resources to the fullest extent possible. Evidence has shown that multi-year flexible funding streams enable better planning and allow UN organisations to sustain key advisory and coordination functions, including during crises. This type of funding is therefore becoming ever more essential in stemming the erosion of core functions tied to overall effectiveness (whether normative work or oversight and evaluation). In line with this, donors need to provide more stable core and thematic funding to UN organisations if they are to properly fulfil their multilateral mandates.

While the Funding Compact is the current agreed funding reform framework in place during this time of crisis, it’s clear that whatever comes next must be more strategic, better owned by Member States, and have a stronger focus on compliance. A clear element missing at present is a transparent donor code of conduct and league table, which would show where contributing countries stand relative to commitments made. It would also appear to be past time for a robust independent evaluation of the performance of both contributing countries and the UNDS in implementing the current Funding Compact.

Critically, donors must strive to ensure earmarked funds reinforce collectively agreed results at the country or global level, rather than be restricted to tightly earmarked standalone projects. As such, funding decisions should be clearly informed by UN Cooperation Frameworks and Humanitarian Response Plans based on joint assessments of needs. Increasing the share of funding channelled through pooled funds tied to multi-agency outcomes in key thematic areas would provide additional incentives for collaboration towards shared outcomes, based on comparative advantage.

Moreover, given how much UN humanitarian assistance has been slashed, coupled with tensions in some donor  capitals between UN development support and humanitarian assistance, priority should be given to greater coherence and effectiveness in complex settings. UN80’s Shared Platform Initiative is key in this respect, as it helps UN Resident and Humanitarian Coordinators bring teams  together around shared priorities, performance expectations and accountability, rather than working in parallel.³³

While reversing existing trends will be extremely difficult in the short term, it’s critical that major donors to the UNDS – as well as Member States more broadly – do what they can now to ensure that better-quality funding that can incentivise real change is also on the table in this fundamental discussion on the future of the United Nations.

Fourth, and closely linked to the above point, is the pressing need for UNDS governance reform. The only UNDS reform proposed by the UN Secretary-General in 2017 not supported by Member States was the establishment of a joint board of the New York-based entities in order to provide coordinated oversight and governance. Overall governance of the UNDS has declined significantly since then. A recent study by Cepei in collaboration with the German Institute of Development and Sustainability (IDOS) concludes that governance of the UNDS suffers from a ‘triple disconnect’: 1) although formal authority resides with governance bodies, real influence is often exercised via informal mechanisms; 2) financial control rests in the hands of a few major donors providing largely earmarked contributions, with just 12% core voluntary funding subject to board oversight; and 3) the countries most affected by UN development work have only a very limited voice globally.³⁴

As the UN Secretary-General highlights in his 2026 QCPR Report: ‘I reiterate the validity of a singular Board which takes into account the unique needs of each entity, enables missions to participate equally irrespective of their size, and better facilitates alignment with General Assembly and ECOSOC decisions. Informed Executive Board oversight continues to be crucial for overseeing the necessary changes to align incentives with the guidance given by the General Assembly and the Council’.35

Fifth, more broadly, there needs to be greater, and much  more effective, domestic discourse on how much govern-ments actually spend on development assistance. A recent survey commissioned by France as part of its G7 presidency shows that respondents in G7 countries believe that nearly 20% of their country’s national budget is spent on ODA, when in fact the figure is less than 1%.36 Governments and  development advocates therefore need to present the public with a much clearer picture of not only the real volume of assistance, but the impact it has on recipients. This includes highlighting the negative health and livelihood consequences of the dramatic cuts currently taking place. Here, too, evidence captured by MOPAN assessments, as well as broader, independent evaluations of where the UNDS  is making a real difference, need to be made more accessible.

Sixth, even before the extraordinary funding cuts of the past two years, many have called for a new ethos and narrative reframing global development cooperation and humanitarian response. This focus has not just been about replacing aid lost but rethinking the system with calls for renewed focus on localisation and shifting towards genuinely mutual interests and greater global public investment.

This reflective focus has led to a myriad of initiatives reimagining global development cooperation including – to name but a few – the Accra Reset; the World Economic Forum’s Global Future Council on Reimagining Aid; the philanthropy-driven Commission on the Future of Development Cooperation; the OECD Conference on the Future of International Development Cooperation; the Global Partnership Conference in London; and the South–North Commission on Development announced by Germany. While timely, these should be brought together in a coherent, dynamic framework as soon as possible – and with a fresh, compelling narrative.

Seventh, it is important to broaden this reframing in a politically astute way – especially given that much money is there but it is now being spent very, very differently. As recent data released by the Stockholm International Peace Research Institute (SIPRI) highlights, global military spending reached US$ 2.887 trillion in 2025 – the highest ever.³⁷ This figure is only likely to rise given the additional conflicts that have erupted since then and, most decisively, with NATO Allies agreeing to raise defence spending from 2% of GDP to a whopping 5% of GDP annually by 2035.

Both of these figures – US$ 2.887 trillion and 5% of GDP on defence spending – are huge numbers. If one compares them to the 2025 ODA figure of US$ 174.3 billion, this works out to more than US$ 16 spent on military expenditure for every US$ 1 spent on aid. In today’s ‘ruptured’ international order, many countries have real security concerns – this is unassailable. But is it really possible to justify this 16:1 spending ratio?

True human security will only come from also investing in  development and diplomacy, not just defence. In the afore-men tioned G7 survey, 78% of respondents saw international cooperation policy as ‘a long-term investment because the  world is interconnected’.³⁸ But that argument – and effective advocacy around it – needs to be much more politically compelling if it is to secure a rebalancing of spending priorities. As Ingrid-Gabriela Hoven, Managing Director of  Germany’s development agency GIZ, said on the sidelines of this year’s Munich Security Conference, ‘more than ever,  development in the DDD (defence–diplomacy–develop-ment) nexus should be uplifted in the debate. But it is not’.³⁹