(Illustration by Maria Carluccio)
On July 1, 2025, the United States Agency for International Development (USAID) effectively ceased operations. With it went 83 percent of US assistance programs—over 5,300 projects. A study in The Lancet estimates that these cuts will cause 14 million preventable deaths by 2030.
But USAID’s elimination is just the most dramatic example of a broader trend in development aid. In 2025, the United Kingdom cut humanitarian assistance by 40 percent. Germany slashed its humanitarian-aid budget by 47 percent. The humanitarian system’s own 2025 targets make the gap explicit: Of 305 million people in acute need globally, the system aims to reach only 190 million—leaving 115 million without assistance.
For local humanitarian organizations, the question isn’t survival—they’ve endured far worse and will persist as they always have. The question is whether they can maintain the scale, capacity, and systematic impact they’ve built over the past three decades—since large-scale bilateral donor funding took hold in the 1990s—or whether they’ll revert to pre-donor-funding levels, serving a fraction of the people they currently reach.
Fortunately, alternative funding exists at scales that could match or exceed traditional aid, and funders actively want to support local humanitarian work. However, the infrastructure to connect local organizations to these funders does not exist. As a result, local organizations can’t reach these funders, and these funders can’t identify or vet local organizations.
As cofounders of The Aid Cloud, a new accountability-infrastructure platform for local organizations to obtain funding from private sources, we are beginning to address this gap. But more is urgently needed to ensure that local organizations around the world can access the resources they need to serve their communities.
The Infrastructure Gap
The Grand Bargain that UN agencies, major donor governments, and aid organizations struck in 2016 promised 25 percent of humanitarian funding directly to local organizations by 2020. But by 2023, only 2 to 4.5 percent reached them directly. This is not because the sector lacked political will—the commitments were real—but because the infrastructure that existed was built for bilateral donors, not for the private funding sources that could replace them.
The humanitarian sector was constructed on a foundation of bilateral requirements imposed by donor countries that included annual project cycles, narrative reports, and financial accountability focused on expenditure tracking. To rebuild the sector will require a different architecture.
Three major funding streams exist beyond traditional bilateral donors, each with budgets that exceed most humanitarian appeals.
First, corporate environmental, social, and governance (ESG) and sustainability spending was expected to exceed $158 billion in business services globally in 2025. While not all of this is available for humanitarian purposes, companies increasingly seek authentic local impact and want credible pathways to fund grassroots work directly.
Second, individual philanthropy represents a growing force. Millions of people want to support humanitarian work but seek emotional connection to what they fund and tangible evidence of impact.
Third, foundation funding continues to flow, with major foundations actively seeking to support local organizations that demonstrate sustainable business models.
These aren’t theoretical funding sources. Corporate ESG budgets and foundation grants are operational pools of money actively seeking impact. Individual philanthropy, while more diffuse, is growing steadily in scale and sophistication. But there’s no mechanism connecting any of them to local organizations.
And building such a mechanism will require adjusting to different needs.
Corporate funders need quarterly metrics aligned with environmental, social, and governance (ESG) reporting cycles and impact documentation formatted for investor relations. An annual narrative report satisfies USAID compliance but means nothing to a corporate social responsibility (CSR) officer preparing quarterly board materials. Individual donors want emotional connection and tangible outputs they can see and share.
The lack of infrastructure meeting these needs creates a two-way barrier: Local organizations can’t present themselves in formats these funders understand, while corporate funders, in turn, can’t identify credible local partners. Individual donors don’t know which organizations exist or how to support them directly. Both sides want to connect, but no infrastructure exists to facilitate the transaction.
What if local organizations could access infrastructure purpose-built for corporate and private funders? This infrastructure would need financial systems handling multiple funder types simultaneously—corporate ESG, individual contributions, foundation grants—each requiring different reporting formats and timelines. It would require accountability frameworks delivering corporate quarterly metrics, individual donor storytelling, and humanitarian principle compliance as parallel requirements, not competing priorities.
Critically, infrastructure must embed ethical safeguards protecting local autonomy: Local organizations would decide which partnerships align with their values, maintain veto power over how their communities are represented, and retain authority over programmatic decisions regardless of funder type.
Risk management through portfolio design would allow projects to launch at minimum funding thresholds and scale based on demand, protecting local organizations from implementation failure while preserving flexibility to maximize impact.
Cost efficiency matters. Traditional INGO intermediation typically requires 45 to 55 percent for operations and indirect costs based on actual organizational budgets. Infrastructure-as-a-service—shared technology platforms that organizations use without building their own systems—reduces this cost to approximately 30 percent through shared technology and consolidated financial management. For a $100,000 project, a savings of $15,000 to $25,000 means more reaching direct humanitarian assistance. Across a portfolio of 30 projects, an additional $450,000 to $750,000 in direct aid results.
This infrastructure must function as a marketplace—a platform where local organizations present their projects, funders discover organizations aligned with their priorities, and transactions occur transparently. The marketplace model solves the two-way barrier problem: Local organizations gain visibility to funders who couldn’t previously find them, while funders gain access to vetted local partners they couldn’t previously identify.
Testing the New Model
We are testing this infrastructure right now through The Aid Cloud’s first connector partner: Story of Helping has built a marketplace with 22 projects from 15 local organizations across all states and regions of Myanmar, including projects along the Thailand-Myanmar border and the India-Myanmar border. The marketplace launched publicly in February 2026 as a proof of concept for the infrastructure-as-a-service model.
Story of Helping gives supporters a tangible product—a documentary photo book dedicated to a single humanitarian project—while routing their purchase directly to fund that local organization’s work. Supporters preorder these books at $180 each. Each book documents one specific project, so supporters know exactly where their money goes. These orders are purchases—not donations—of high-quality keepsakes documenting real work. Projects target $100,000 through preorders, launching implementation once they reach 50 percent ($50,000 minimum) and scaling based on actual supporter demand.
The Aid Cloud infrastructure provides professional financial management—creating local organization accounts, processing payments directly to suppliers, tracking budgets in real time, and maintaining humanitarian accountability standards. Local organizations maintain complete programmatic control, making all implementation decisions. The infrastructure handles financial systems, vendor coordination, and budget tracking—i.e., infrastructure services, not programmatic oversight.
Beyond implementation budgets, organizations receive 10 percent of project funds as discretionary income during implementation, plus 50 percent of book profits beyond production costs for future use. This policy creates sustainable revenue streams that don’t require perpetual proposal cycles.
For corporate funders, the model offers documentary book sets for employee recognition, marketing assets for brand channels, and ESG documentation tailored for reporting needs—all funding projects that local organizations designed and control.
The infrastructure is designed for multiple connectors—i.e., organizations that use the shared systems to support local groups in their sectors or regions. Story of Helping serves humanitarian work broadly; future connectors might specialize in water and sanitation, health systems, education, or agricultural development. A water-focused connector can partner with water-technology companies whose ESG goals align with water and sanitation hygiene (WASH) outcomes. The Aid Cloud is already in discussions with a potential connector partner in Ukraine, demonstrating the model’s applicability beyond a single context. As more connectors join, the shared marketplace creates network effects: Supporters discover projects across all connectors, aggregated data reveal cost benchmarks, and the infrastructure becomes more valuable for everyone.
The infrastructure is designed for replicability—additional connectors can specialize by sector or region, each building on shared systems while developing domain-specific expertise that benefits local organizations in their networks.
This is just one solution, and it won’t work everywhere. But it is a form of infrastructure being tested with real organizations, real funding, and real accountability right now, when local organizations can’t wait for traditional systems to adapt. Localization isn’t just about funding—it’s about power and decision-making. When local organizations control program design, retain narrative authority, and choose partnerships strategically rather than out of financial necessity, they exercise genuine local leadership regardless of whether funding comes from USAID, corporate ESG budgets, or individual donors.
Supporters of the traditional humanitarian system might question whether accessing corporate funding or individual philanthropy compromises humanitarian principles. These concerns are legitimate only if we ignore infrastructure design. Infrastructure can embed protections: local organizations choosing partnerships, maintaining veto power over narrative, controlling programmatic decisions, and declining funding that compromises principles.
More fundamentally, infrastructure that incorporates diverse funding sources may advance localization better than nine years of Grand Bargain commitments did. When local organizations can access funding from multiple sources, they’re not dependent on any single donor’s priorities. That’s more sustainable autonomy than traditional aid ever provided.
The current plunge in governmental aid will cause terrible disruption and suffering. Traditional donor funding may never return to 2023 levels. But we must turn this moment into opportunity for developing a new system. Corporate ESG spending and individual philanthropy will continue growing. The question is whether we’ll build infrastructure enabling local organizations to access these sources.
Read more stories by N Hlaing & Jose Ravano.