piggy bank on a lifebuoy (Photo by iStock/Sezeryadigar)

This is the second article in an SSIR series authored by T. Alexander Puutio and other global development experts and leaders on how the sector can chart a path forward in the face of government pullbacks. See “Development in Retreat?” for an introduction to the series.

The perfect storm that’s currently battering global development—a combination of retreating donor governments, rising geopolitical headwinds, and public fatigue with nonprofits—has been beyond any single agency’s control. And yet it reveals the cracks we’ve learned to tolerate for too long. Before we can rebuild, we must own how our systems slipped into complacency, and we must learn from sectors that routinely weather disruption, from fast-pivoting startups to the emergency response teams that must redesign protocols after every crisis.

For years, the development community has learned to congratulate itself on heroic outputs—vaccines delivered, wells dug, and schools opened—while ignoring the sluggish machinery behind the scenes. Layers of headquarters, regional hubs, and country offices multiplied until decision-making could often feel more like the function of postal forwarding officers than problem solvers. The "searchers" that economist William Easterly so desperately wants us to empower have been replaced almost entirely by "planners." But well-intentioned programs could live on because they pleased donors, preserved jobs, or fit legacy missions (even as local partners signaled that needs changed or perhaps were never adequately met to begin with).

Bloat thrives in the absence of hard feedback loops. When a project underperformed, the default fix has long been an extension, a rebrand, or a bigger grant. We could assure ourselves that if someone on the ground is better off, then the model must be working. We hire external consultants to do impact evaluations and feed them just enough work to make them grow dependent on us being happy return customers. But all the post-hoc rationalization masks a harsher truth: When accountability is diluted across dozens of actors and hidden under a veneer of poorly tested results, real responsibility evaporates.

The pandemic and the recent donor pullback tore the cover off that illusion. Empty field offices, duplicated supply chains, and half-measured impact data suddenly look untenable when measured against collapsing budgets. The wake-up call is loud: Good intentions are not a performance metric, and "good enough" is neither good nor enough.

Markets Remember What We Forgot

Even though social impact programs are not meant to turn profits, they can't ignore the economics of value creation. Business discipline isn't the enemy of social mission: It's the infrastructure that ensures resources reach those who need them most. After all, in competitive markets, firms survive by converting resources into outcomes customers pay for, and inefficiency is punished quickly. Development organizations face no such price signal, such that too many organizations exist, quite literally, until funders become embarrassed enough to say no.

This void can be filled, but only with deliberate substitutes that must learn from what works where the market signals resonate loud and clear. This means:

1. Comfort with understanding comparable unit costs. Private companies know what it costs to acquire a customer or ship a product. We should know the real cost per vaccinated child or per learner achieving literacy, and we should publish it for others to benchmark against. More than just an act of transparency, this act of shared responsibility to become more efficient, over time, will ultimately help more people with the same resources.

2. Truly independent verification. Audited financials are mandatory in finance as well as in nonprofits, but impact audits are not. Yet third-party impact audits could become equally standardized for grants above a certain threshold.

3. Sunset clauses. While investors are intimate with the benefits of stop-loss rules, we should also ensure that programs that miss agreed milestones either pivot or close, not because we've given up on the mission, but because we're committed to finding better ways to achieve it.

Without these tools, philanthropies drift toward "good-enough charity": organizations optimized for perpetuation rather than progress. With them, a different culture can emerge, one that treats scarce resources with the same rigor a CFO brings to a balance sheet, ensuring every dollar maximizes social return rather than institutional comfort.

Building the Pathway to an Accountability Culture

Structural incentives rarely change behavior unless they combine with psychology: Measurement stops being a compliance chore when it becomes the very reason to turn up for work. That shift begins with the courage to design from zero. Each time a grant cycle ends, teams set aside the legacy plan and ask afresh: which problem still needs solving, who is best placed to solve it now, and which activities should disappear because others already meet the need? This reset would prevent programs from coasting on yesterday’s relevance, particularly when community needs inevitably evolve.

We must also borrow the operational discipline that keeps private-sector engines lean. Agile sprints, rapid-cycle A/B tests, and pooled supply chains are techniques perfected in software and manufacturing, and they translate cleanly to social projects. A nutrition initiative, for instance, can test delivery routes weekly, double down on what delivers calories fastest, and abandon dead ends (instead of clinging to a five-year blueprint drafted in a boardroom).

Finally, the sector must treat evidence as shared capital. Imagine grants that release their final tranche only after methods, raw results, and lessons learned appear in an open database: Reputation would grow in lockstep with transparency. When organizations earn credit for disclosing their data, the field’s collective learning curve rises, such that every subsequent experiment can begin smarter than the last. None of this demands sacrificing mission for margin. It asks us to honor mission by managing resources as if lives depend on them. They do! “Competition" doesn’t stem from other nonprofits as much as it does from the persistence of poverty, disease, and inequality.

Where to Start?

Consider adopting a "blow-it-up" review: When your next project turns five, set aside a single day to redraw it from a blank sheet of paper. Estimate what the work would cost if launched today, who else might deliver the same outcome more efficiently, and which activities the team would simply drop. Any redesign that cuts spending by a third or doubles reach should become the new benchmark. Couple this with pay-for-confidence budgets, where innovation money unlocks only when pilots hit pre-agreed indicators, and a rule that every grant pre-fund at least 5 percent for independent evaluation and open dissemination. Suddenly, our whole sector begins to look more like the disciplined laboratories that drive private-sector R&D than a protected enclave.

This is the next chapter for global development, organizations that are simultaneously more business-minded and mission-driven than ever before. Repair means abandoning complacency, borrowing the rigor that competitive markets demand, and judging our work by the clarity of its results rather than the comfort of our intentions. From handwringing over broken models, we must begin building lean and accountable engines of social progress that treat every resource as sacred. Getting our act together is the price of relevance in a world that still needs every ounce of our effort.

Read the rest of the series so far:

Read more stories by Sarah Holloway & T. Alexander Puutio.