Development Cooperation and Civil Societies Under the Squeeze of Funding Crisis and Political Change

03.06.2025 (Modified 03.06.2025)

The field of development cooperation and humanitarian aid is undergoing a profound transformation. The United States’ decision to freeze USAID funding is just one part of a larger global shift where long-term development, human rights, and support for civil societies are being sidelined. At the same time, increasingly visible anti-rights rhetoric—promoted by figures like Donald Trump—challenges the entire international human rights system. This article examines the situation internationally, through the lens of KIOS grantees, and from Finland’s perspective—and asks what we all should do.

USAID Freeze and Global Impacts

The operations of the U.S. Agency for International Development (USAID) have been effectively frozen since early 2025. USAID’s website remains offline to this day. In many countries, this freeze has led to funding interruptions for critical programmes, particularly in human rights work, HIV/AIDS prevention, gender-based violence prevention, and mental health services.

The impacts have been significant for both local communities and organisations. Many communities have lost essential services, and local organisations have had to lay off staff. The severity of the situation became apparent quickly for example in Nepal, where nearly 90% of the national HIV programme and related health services relied on USAID funding.

U.S. foreign policy has traditionally relied on “soft power”—influence built through cooperation, development aid, and value-based leadership. Now, this power is being eroded, and other countries have either followed suit or begun preparing for the worst. Support for human rights and democracy is taking a backseat—replaced by domestic political interests and short-term security goals.

Broader Shift in Development Policy

Development is not only a concern for the United States. European countries have also moved away from comprehensive, preventive, and long-term development policies. In many cases, funding is now directed toward security, defence, immigration control, or economic interests.

This shift particularly affects organisations doing crucial human rights work, as funding moves away from long-term efforts. Dutch funding cuts have hit programmes promoting LGBTIQA+ rights the hardest, with their operational conditions deteriorating rapidly. Major EU countries like Belgium, Germany, and France have, among others, significantly reduced their development cooperation budgets compared to previous years, impacting the global civil society sector broadly.

This is not, however, just a funding issue—it threatens the stability of the entire international rules-based system and the continuity of international cooperation. When support for development cooperation and human rights work is overshadowed by more immediate crises, the often long-term but crucial work that builds a more sustainable future is lost. The existence of many smaller actors is now at risk—and their disappearance would mean the silencing of entire communities’ voices at the grassroots level: precisely where change begins and where civil society’s role is most vital.

KIOS Grantee Context and Impacts

Funding freezes and global changes in foreign and development policy have directly affected the organisations supported by KIOS around the world. Our grantees’ messages indicate that the impacts are particularly felt in the most vulnerable communities—those whose lives are concretely supported and given hope by civil society organisations’ work.

In Uganda, several member organisations of the Uganda Consortium on Corporate Accountability (UCCA) have had to suspend their programme activities due to halted funding. Staff have transitioned to unpaid volunteer work, reflecting the organisations’ commitment but also their vulnerability. The suspension of programmes has had significant effects on communities already on the margins of society, for whom these organisations have been a vital support.

In Kenya, the situation has rapidly become concerning. The so-called Kaluma Bill, named after Member of Parliament George Peter Kaluma, seeks to criminalise LGBTIQA+ individuals more broadly. Such legislation deeply threatens the human rights of sexual and gender minorities. Several HIV and gender-based violence prevention services have been discontinued. For example, in the Busia region, the transgender community has lost access to essential health services, and many organisations are left without the tools to respond to the community’s crisis.

In Nepal, our grantee Samari Utthan Sewa (SUS), has reported a deep crisis. Several LGBTQIA+ community members have lost their jobs and access to essential support services. Many have turned to prostitution or left to seek work in India, often at the risk of exploitation. The situation has worsened as even basic healthcare services and contraceptives have become scarce. Particularly vulnerable are Dalits within the rainbow community—those who are marginalised among the marginalised.

In Sri Lanka, KIOS grantee The Social Architects (TSA), experienced a significant portion of its funding base disappearing virtually overnight. “The entire community’s trust was lost,” says the organisation’s executive director, Sherine, describing a situation where three major donors withdrew simultaneously, and community members had to be informed that vital activities, such as psychosocial support for victims of war, would no longer continue. Although the country’s new administration has brought hopes for change, the situation has not yet stabilised. At the same time, social tensions are rising, and the human rights situation is deteriorating.

Messages from our grantees indicate that the effects of the withdrawal of international funding are not remaining at an abstract level—they are directly visible in people’s daily lives, health, safety, and future opportunities.

Global Shifts Echo in Finland

We cannot examine Finnish society in isolation from global events. Cuts to development cooperation funding—and the political decisions behind them—reflect back on us, weakening both global influence and domestic democracy. The Finnish government has now, for the third time during its current term, reduced the development cooperation budget—this time by €120 million. This undermines Finland’s commitment to international agreements and erodes the rules-based global order.

These decisions do not only affect international development cooperation—they also have a direct impact on Finnish society by limiting the operational capacity of organisations, reducing resources for volunteer work, and narrowing opportunities for civic participation. This threatens pluralism and community spirit in Finland and weakens our ability to contribute to global challenges. That’s why it is crucial that we find sustainable and just solutions together—solutions that safeguard both domestic and international development and the strengthening of democracy.

Cooperation Under Pressure

The human rights field has changed rapidly—and dramatically. Our partners, and we at KIOS as well, are now adapting to a new era: one in which we fight for human rights without the previous levels of support and protection. Many once-reliable resources and funding channels have disappeared or become politicised.

In difficult conditions, the importance of collaboration becomes even more apparent. While connections between organisations haven’t always been seamless, the current situation has made it possible to strengthen relationships and build a shared sense of purpose.

KIOS continues to support its partners in these exceptional circumstances. Funding cuts, tightening legislation, and growing societal instability have placed many actors under pressure—but human rights work has not stopped. On the contrary, the need for it is greater than ever.

KIOS stands—and will continue to stand—on the side of human rights. We amplify the voices that others try to silence—and we make sure they are heard. “Together we are stronger and can achieve more. Now is the time to focus on what matters and support one another’s work,” says KIOS Executive Director Kim Remitz.

The Time to Defend Human Rights Is Now

The world is changing and, unfortunately, more and more often in a direction that restricts human rights and democracy. Now, more than ever, we need defenders of civil society and human rights—those who speak out, support the vulnerable, and help build the future.

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