Humanitarian action in an era of shrinking ODA

Introduction

Every year, World Humanitarian Day recognises the people who support communities through conflict, disaster and displacement. It is also an opportunity to look at the system that makes this work possible.

The need for international financing for humanitarian assistance is at a historic high, driven by compounding crises, including prolonged conflicts and climate-related disasters. At the same time, the development finance and architecture to respond is under unprecedented pressure: 2025 and 2026 have seen a 33% reduction in international humanitarian aid, even after accounting for limited restoration of US money to humanitarian agencies in 2026. The Humanitarian Reset, the UN response to the cuts, has forced painful discussions around hyper-prioritization, with many geographies and families losing international humanitarian aid. The UN has accordingly reduced populations targeted for assistance from over US$300 million in recent years to US$87 million in 2026. The human cost of this dual pressure falls hardest on those that are most vulnerable.

What is humanitarian funding and how does the system work?

Humanitarian ODA funds efforts to save lives, alleviate suffering and protect human dignity during emergencies, including through health interventions. The system is decentralized: sovereign donor governments independently decide where, how much and through which channels to provide funding, based on political priorities, instional mandates and parliamentary appropriations. They channel funds directly through bilateral arrangements, including via government agencies, NGOs and, occasionally, recipient governments, or indirectly through earmarked contributions to multilateral organisations. In 2024, bilateral channels accounted for 80% of humanitarian ODA while multilateral organisations provided US$7.4 billion, although much multilateral financing from development banks such as IDA and IBRD supports recovery and resilience through concessional loans rather than direct emergency relief. By contrast, UN agencies such as UNHCR and CERF provide grant-based assistance to affected populations. UN OCHA managed pooled funds, including CERF, have expanded, but remain a small share of overall humanitarian financing and have not fundamentally changed its decentralized character.

Humanitarian coordination is stronger at country level than at global level. UN OCHA’s cluster system groups humanitarian actors across 15 technical sectors and designates lead agencies, while humanitarian country teams prepare costed humanitarian response plans based on needs assessments. These arrangements clarify what assistance is required, but not who should fund it or at what level. Clusters coordinate action rather than control funding, and donors are not required to fund through cluster leads or to prioritise the largest or most urgent gaps. Although there has been a long-standing push to direct more funding to local NGOs, most international humanitarian finance still flows through UN and other international partners, which implement programmes themselves or contract domestic organisations. The result is a coordinated but fragmented funding system in which some crises and sectors attract substantial support while others remain chronically underfunded.

Has humanitarian funding remained stable as a share of ODA?

According to OECD data, bilateral humanitarian ODA from DAC members has remained broadly stable over the past decade, consistently representing around 14% of bilateral ODA. In absolute terms, it has fluctuated between a low of US$18.3 billion in 2015 and a high of US$30.2 billion in 2023, with the latter driven primarily by the acute donor response to the full-scale Russian invasion of Ukraine. By 2024, it had returned to US$26.1 billion, equivalent to 12% of bilateral ODA.

Among DAC members in 2024, the US provided the largest volume of bilateral humanitarian with US$13.1 billion, more than all other DAC members combined (and slightly above its average disbursement of US$10.9bn over the last 10 years). Other major donors include the EU Institutions (with an average of US$2.8 billion between 2015 and 2024), Germany (with an average of US$2.6 billion), the UK (with an average of US$1.9 billion), and Norway (with an average of US$0.6 billion).

The relative stability of humanitarian ODA as a share of bilateral ODA, consistently between 12% and 15% over the period 2015 to 2024, shows that humanitarian spending has broadly kept pace with overall ODA trajectories, rather than surging in response to crises. It suggests that, on aggregate, donors’ bilateral humanitarian funding has broadly represented a zero-sum game, with increases in humanitarian funding in response to one crisis being largely offset by direct or indirect decreases in humanitarian funding elsewhere. The onset of the Ukraine crisis in 2022, for example, triggered a year-on-year increase in bilateral humanitarian ODA of almost US$2 billion, however, as a share of bilateral ODA humanitarian funding dropped by 2pp, meaning that the Ukraine response was likely largely absorbed within broader ODA growth.

Humanitarian recipient patterns have shifted over time as different emergencies escalate and recede. Bilateral humanitarian ODA to Ukraine, for example, rose from 0.3% of all bilateral ODA provided by DAC members in 2021 (around US$146 million) to more than 10% in 2022 (around US$2.9 billon) in response to the conflict. A similar, though more measured, pattern can be seen in the West Bank and Gaza Strip, as well as in Sudan following escalations in the subsequent years, while funding for the Syrian Arab Republic has generally followed a downward trajectory.

What are the trade-off risks with other development priorities?

Humanitarian assistance is considered ODA when it meets the rules established by the OECD DAC. In broad terms, this means that the funding comes from official sources and aims primarily to promote the economic development and welfare of eligible developing countries. Humanitarian grants and contributions to eligible countries can therefore count as ODA.

However, humanitarian funding and ODA are not interchangeable terms. Some humanitarian financing comes from sources that are not considered to be ODA, and, of course, not all ODA is considered to be humanitarian (although humanitarian funding can and does often contribute to broader development priorities, such as health, water and sanitation, etc.). The distinction between humanitarian ODA and ODA to other priorities is especially important as ODA budgets decline, and individual donors have to make choices between different sectors, forms of assistance and recipients. As the overall budget contracts, protecting or increasing one area of spending can leave less room for others, creating trade-offs between urgent humanitarian response and longer-term development priorities.

As humanitarian needs rise, there is a risk that funding becomes concentrated in the most visible or geopolitically prominent crises. If humanitarian budgets are protected while the overall ODA envelope shrinks, other development priorities may face reductions as fewer resources remain for programmes outside of active conflict or crisis settings.

Recent decisions and budget signals from several donors illustrate this tension:

• The UK:The 2025 Spending Review announced a reduction in ODA to 0.3% of GNI by 2027. At the same time, the UK stated that it would “prioritise support for countries and communities facing the worst humanitarian need”, including Ukraine, Gaza and Sudan. The government committed £1.4 bn a year to address major humanitarian crises and that 70% of all geographic support will be allocated to the most fragile and conflict-affected states. Initial analysis of the FCDO recipient allocations suggest that these prioritisations will likely have significant implications for other recipients and sectors;
• Germany: The draft 2027 budget caps considered in the underlying analysis indicated that the humanitarian budget would be maintained even as overall ODA was expected to decline. This would protect humanitarian assistance relative to other areas of development spending, but could also reduce the resources available for programmes that do not fall within the humanitarian budget; and
• Switzerland: As part of its 2027 budget relief package, Switzerland announced plans to increase the share of humanitarian aid within its international cooperation budget from around 26% to around 40%. In the past, the government had allocated additional funding via supplementary budget requests to go to humanitarian crises. This new approach means that humanitarian funding will come from within the core ODA budget. Within this announcement, the Federal Council also stated that there would be a small cut in overall ODA of around CHF20 million from 2027.

These examples illustrate a broader point: protecting humanitarian funding can help sustain assistance for people facing acute and severe needs. However, when humanitarian spending is protected within a declining ODA envelope, the decision changes the distribution of resources across the wider development portfolio. The implications depend on whether the protection is additional, ring-fenced within the aid budget, or financed by reducing other programs. Making these trade-offs visible is essential to understanding how shrinking aid budgets affect both crisis response and longer term development.

Protecting humanitarian action while preserving development capacity

The humanitarian funding crisis is a test of how the international development system allocates scarce resources. As needs rise and ODA shrinks, funding risks becoming increasingly concentrated in visible or geopolitically significant crises, while neglected emergencies are chronically underfunded and longer-term development priorities lose out.

Three priorities for improving the humanitarian system stand out:

• Make funding flexible and needs based: donors should increase more flexible multilateral and pooled funding to help direct resources towards multiple crises and reduce fragmentation;
• Make trade-offs visible: donors should be clear on whether protection of humanitarian is additional, ring-fenced within the ODA envelope, or financed through cuts elsewhere. This is essential for understanding the full effects of budget decisions; and
• Connect, but do not conflate, humanitarian and development finance: development finance can support recovery and resilience, potentially reducing humanitarian need in the long-term, while humanitarian finance can assist in longer-term development goals.

Therefore, humanitarian and development actors should coordinate jointly while maintaining distinct objectives and instruments

Humanitarian action should not be prioritised over development, or vice versa. Donors should safeguard assistance for people facing acute needs, direct greater support to neglected crises, and maintain and strengthen the development investments that build resilience over time. The future effectiveness of the humanitarian system will depend not only on the volume of funding available, but also on donors allocating it transparently, flexibly, and in line with need.