Navigating the Evolving Funding Landscape: Strategies for INGOs

A Complex and Shifting Landscape 

The global development sector is facing a convergence of historic challenges that have slowed progress toward the 2030 Sustainable Development Goals (SDGs). Since 2020, disruptions such as the COVID-19 pandemic, the climate crisis, geopolitical instability, and demographic shifts have exacerbated the situation. The effects are widespread, leading to heightened humanitarian needs, financial shortfalls, and evolving funding priorities. 

Technology presents both a challenge and an opportunity. Artificial intelligence, engineering biology, and renewable energy innovations can accelerate SDG progress. However, the widening digital divide and the increasing role of cyberattacks in misinformation and conflict present significant risks. In global health, scientific breakthroughs, such as mRNA vaccine technology, demonstrate the potential for transformative impact. 

Humanitarian needs are at their highest since 1945, with 360 million people requiring assistance in 2023—double the number from five years prior. Meanwhile, the financing gap to meet SDG targets continues to widen. The Organisation for Economic Co-operation and Development (OECD) estimates that an additional $3.9 trillion annually is needed beyond initial projections. Climate financing alone highlights the shortfall, with just $120 billion available against the estimated $1 trillion required to transition the Global South to climate-resilient, net-zero economies. 

Funding Challenges and Shifts 

The traditional donor-recipient funding model is under increasing strain due to inefficiencies, bureaucratic hurdles, and policy inconsistencies. Mistrust in existing frameworks pushes the need for more sustainable models. Meanwhile, governments are prioritising domestic agendas over international aid. Recent funding freezes, such as the United States Agency for International Development (USAID) merger with the US Department of State, have disrupted humanitarian programs.  

Similarly, due to the Russian security threat, various European governments are cutting global development aid to reinforce national security budgets. The United Kingdom increased its defence spending to 2.7% of GDP, funded by cuts to Britain’s international aid budget. The Dutch government stopped funding all global development aid projects related to women’s rights, gender equality, vocational and higher education, and sports and culture, with significant cuts to also be made to support climate initiatives, civil society and multilateral cooperation.  

Finally, the traditional donor-recipient model in the global development sector is ineffective due to a combination of factors: over-planning, bureaucracies, unkept promises, underperformance, policy incoherence, corruption, and rigid frameworks. These issues create mistrust and necessitate a shift to a long-term, return-on-investment model for funding frameworks. 

Amid these shifts, funding trends are evolving: 

• Proliferation of Donors: Countries like Ethiopia now engage with over 250 donor agencies, placing administrative burdens on recipient nations. 

• Fragmented Transactions: Aid is increasingly distributed through numerous small projects, raising transaction costs. 

• Earmarked Funding: Donors are prioritising specific projects, limiting the potential for financial leverage through multilateral banks. 

• Bypassing National Budgets: A significant portion of aid flows through NGOs instead of national governments, reducing alignment with country-led strategies. 
  
  

Rethinking Funding Models 

Despite these challenges, multilateral development banks (MDBs) and development finance institutions (DFIs) are stepping up with innovative approaches. Implementing the G20 Review of MDB Capital Adequacy Frameworks could unlock an additional $300–400 billion over the next decade through guarantees, operational reforms, and private capital mobilisation. The World Bank’s recent decision to lower its equity-to-loan ratio exemplifies this shift toward maximising financial resources. 

New funding sources are also emerging: 

• Institutional Assets Mobilisation: Low- and middle-income countries hold an estimated $1.4 trillion in institutional assets that can be redirected toward development financing. 

• Local Capital Market Growth: Initiatives like Financial Sector Deepening Africa (FSD Africa) are strengthening financial ecosystems, facilitating green bonds and sustainable investments. 

• Innovative Financing Mechanisms: Instruments like the International Finance Facility for Immunisation (IFFIm) accelerate funding flows for health initiatives by leveraging future donor commitments. 

• Public-Private Partnerships: Matching funds, such as The Gavi Matching Fund, create synergy between governmental and corporate contributions, fostering sustainability and innovation. 

• Remittances: At $650 billion annually, remittances represent a significant funding source for developing economies. Reducing transaction costs could unlock further development resources. 

The Growing Demand for Fundraising Leadership 

As the funding landscape shifts, INGOs increasingly seek leaders who can navigate new fundraising realities. The demand for fundraising professionals at the Director and C-suite levels is rising, with a premium placed on those who can: 

• Diversify income streams beyond traditional bilateral funding. 

• Build strategic, relationship-driven fundraising approaches. 

• Engage with corporate and philanthropic partners. 

• Understand digital and data-driven fundraising strategies. 

• Leverage strong regional networks to mobilise local funding. 

SRI Executive Search's experience shows that organisations face considerable challenges when recruiting for these roles. These include the need for a greater candidate supply to meet the growing demand, high turnover and retention issues, misalignment of desired and existing skills, and the need for local talent with the required skills. These challenges require a search partner like SRI Executive with a deep and diverse network across the global and local markets covering both organisations that are active donors in the global development sector and those seeking to raise funds.  

With our deep knowledge of development organisations and their preferred interaction paths and styles for fundraising, we can adequately screen candidates for funding roles. This provides our client organisations with absolute confidence that they will find the right candidates in alignment with their mission, leadership style, and fundraising philosophy. Our vast network has allowed us to introduce candidates to hundreds of organisations with the right skills and donor relationships whilst aligning those candidates with those organisation’s specific missions. Our extensive local networks across over 22 global metropolitan areas also give us access to passive candidates who may not be actively looking, allowing us to tap into candidates who understand in-depth the specific local market, their differentiated funding landscapes, and the type of fundraising talent organisations require.  

Our ability to provide impactful executive search services for fundraising roles goes beyond fundraising-only roles. The more private-sector members recruited to a C-suite or Board, the easier it is for an organisation to incorporate new and traditionally private-sector working methods on fundraising, for example. Hiring a CEO who appreciates innovative approaches and will promote organisational change is essential to the quality of fundraising roles at lower seniority levels. SRI Executive has placed hundreds of C-suite roles and Board members globally, following a rigorous search process which looks at candidates holistically across skills, experience, social traits, motivations, strengths and weaknesses and their appreciation and understanding of the importance of new funding models. Change starts at the top, and we support organisations in driving that change.  

Strategic and Organisational Adaptation 

The changing funding landscape also necessitates both a strategic and organisational development response. Strategy is a matter of choices and trade-offs which position your organisation in the external context. When that changes, your strategy must adjust. SRI’s Consulting Practice prides itself in delivering costed, implementable strategies to hundreds of global organisations. Whilst we encourage organisations to examine their vision, mission and strategic goals, we ensure this is firmly grounded in a realistic implementation plan. That way, from day one, the leaders we work with know which steps they need to take to realise their strategy, which can be summarised as the following: 

• Strategy Development and Review: reviewing relevance, purpose, and strategic fit. Funders are in a buyer's market in an era of enhanced competition and reduced funding. Therefore, organisations need to be clear about what they do—and don’t. They must also be prepared to collaborate and partner to ensure they can systematically approach development problems. 

• Strategy implementation: A strategy is a start, but on its own, it is useless. Organisations must have a clear implementation plan, which helps them understand the costs, capabilities and capacities needed to achieve it. A well-developed implementation plan helps leaders signal to donors that they are a sound investment and ready to go. It also helps leaders understand what types of funding fits their strategy. For example, the key to your strategy might be working with micro-entrepreneurs, but your biggest donor has a low-risk appetite and too much compliance to do so. 

• Donor mapping and engagement strategies: By trying to be relevant to all donors, you are relevant to none. Whereas yesteryear donors have bureaucratic, open tendering processes to award funding, there are new breeds of donors who are using nimble but selective funding mechanisms. For example, McKenzie Scott used Bridgespan Group to help her award billions of unrestricted funding to various organisations. Criteria like female leadership and lived experience of the issues their organisations were addressing were used to shortlist, followed by a rapid due diligence process. After which, millions flowed to specific organisations with no strings attached. As the flow of ODA reduces, organisations need to go outside their typical donor base – and even donors. Partnerships with commercial companies can provide strong strategic alignment and sustainability. For example, Sightsavers’  RAAHI National Truckers’ Eye Health Programme involved multiple private sector partners in India – all with a mutual interest in truck drivers' eyesight. 

At SRI Executive, we take various approaches to donor mapping to ensure organisations identify and prioritise the funders (both donors and commercial) most likely to provide funding. For example, for a global research institution, we used the TAM-SAM-SOM Approach to accurately size the institution’s total addressable market (TAM) market. We then rationalised this based on the market they could realistically serve (SAM) and which donors they could obtain (SOM). In just two years, this institution has managed to double its funding. This approach was pioneered by entrepreneurs, whose lack of time and urgent need to secure financing may resonate with INGO leaders. 

Creating donor engagement strategies is the final step in taking advantage of opportunities in the new funding landscape. These strategies include high-level engagement actions, key interests, communications, and positioning. Leaders working on a compelling strategy, backed by a costed implementation plan and traction with donors, must also consider the organisational transformation needed to remain effective in the changing funding landscape. We have supported organisations’ business development strategies from initial research to implementation and training workshops in local offices, encouraging whole-of-organisation approaches to fundraising and donor engagement while incorporating structural, strategic and cultural change.  

New funders place new demands on INGOs. Whereas a large, institutional donor like USAID had onerous compliance requirements (which created a cottage industry of training and support), newer donors may forgo the typical reporting requirements but make more frequent – often unpredictable – requests. For example, upon learning that an INGO had site-level data across its global network, one foundation asked if this complete data set could be shared the following week! Their expectations were based on their experience in the private sector, with more resources for quality data and stronger management information systems. 

Beyond strategy, organisations must also evolve structurally: 

• Organisational Design: Shifting from compliance-heavy structures to agile teams that manage corporate and philanthropic relationships. 

• Operating Models: Exploring hybrid funding models integrating commercial and philanthropic capital, such as social business ventures and carbon credit financing. 

• Mergers & Alliances: Strategic partnerships can enhance operational efficiency, diversify funding sources, and drive systemic change. 

Whatever your organisational response, it is essential to analyse the options – what is the cost and benefit of change versus the expense and risk of doing nothing? Once a decision is made, organisational change should be well-planned, well-communicated and well-supported to ensure success. Too many good intentions become nightmares because of a lack of management and communication. 

Embracing Change for Long-Term Success 

Adaptation is no longer optional. INGOs must cultivate resilience by embracing innovation, forging new partnerships, and equipping leadership teams with the skills needed for a rapidly changing environment. Whether your organisation is exploring new funding avenues, restructuring leadership, or refining its strategy, SRI Executive will support you through this transformation. 

Whether you’re seeking to attract new talent, adapt your organisation, or strategise for the future, we are happy to have an exploratory conversation to hear more.