As aid dwindles, can philanthropy rewrite the rules of giving?

The global aid sector is in a deep crisis. With the Trump administration dismantling USAID and European governments pulling back, funding for critical programs is drying up. This is leaving those who depend on aid stranded and pushing many employed in the aid sector out of work. Amid this uncertainty, many are now asking: Can philanthropy step in? Experts emphasize that philanthropy is distinct from aid — and should be. It has the flexibility to support innovation and was never meant to replace government functions. Yet, as some critics point out, philanthropy has often shaped interventions around donors' interests rather than community needs. Still, philanthropy has a crucial role to play at this moment. To be effective, however, it must break from past power imbalances. At a panel discussion in South Africa Tuesday, philanthropic leaders argued that the sector must shift from top-down, donor-driven models to more equitable, community-led approaches. One major foundation, for example, is already embracing this approach. The Open Society Foundations, which underwent a major restructuring last year, is now giving long-term core grants to global south partners, as opposed to its traditional global north partners only. The funding crisis is already having devastating consequences, with long-term impacts yet to fully unfold. But it also presents an opportunity for global south countries to take greater control of their futures and for philanthropies to fundamentally change how they operate, making their work more sustainable, equitable, and impactful, the panelists said. Can big philanthropy break free from old power dynamics? Institutional philanthropy has long been criticized for reinforcing the very inequalities it claims to address. Some argue that its connection to elite donors limits its ability to drive real systemic change. “Can philanthropy truly be a force for justice when it's so often tied to the very elites who've benefited from the status quo? These are difficult but necessary questions,” said Binaifer Nowrojee, president of the Open Society Foundations. For years, institutional philanthropy has prioritized short-term projects over long-term transformation, tackling symptoms rather than root causes, Nowrojee said. It has also imposed top-down solutions that sideline the lived experiences of affected communities. As crises multiply, that approach is proving inadequate. Graça Machel, founder of the Graça Machel Trust, argued that it’s not enough for global north funders to promote social justice abroad while maintaining inequitable relationships themselves. “I want to see social justice between me, as an African, and Soros, who is giving money from where he is,” she said. True change, she insists, requires philanthropy to shift from transactional giving to genuine partnership. Beyond funding decisions, philanthropy’s very structures have perpetuated inequality — through short-term grants, donor-driven programming, and rigid reporting requirements. “If you can only see one year ahead, you really can't plan in a way that takes you more than a year,” Nowrojee said. “So you resort to project-related activities. … You scale down. And when you report back, you say, we had these many meetings, these many convenings, we spent this much on refreshments, etc.” To drive real change, philanthropy must shift to a longer-term vision that enables ambitious, transformative solutions rather than limiting organizations to short-term fixes, the panelists said. The global south’s moment of self-reliance As international aid retracts, leaders across Africa are calling for homegrown solutions and greater self-reliance. This shift is not just about necessity — it’s about restructuring development to ensure local ownership. “Steve Biko's words have come true: ‘Black man, you're on your own,’” said Naledi Pandor, chairperson of the Nelson Mandela Foundation, referencing the anti-apartheid activist who championed Black consciousness and self-determination. “This moment is a test for the global south. If we don't woman up, we're going to fail.” There are reasons for optimism. Across Africa and the global south, mutual aid and local solidarity have long shaped giving. According to the 2024 World Giving Index, 4.3 billion people worldwide donate time, money, or assistance to others. “Every African is a philanthropist,” Nowrojee said. “Everyone is paying for someone’s school fees, funeral, or daily needs.” This culture of informal generosity is a powerful force. The challenge now is to formalize and harness these networks to sustain key programs. “If all of us committed even a modest 50 [South African] rand a year, many organizations could survive — and that 50 rand could grow,” Pandor said. Larger-scale African philanthropy is also gaining momentum. African wealth is rising, diaspora contributions remain strong, and non-African funders are increasingly engaged. Machel pointed to productive partnerships between philanthropy and the private sector — particularly with telecoms companies such as MTN and Vodafone — but stressed that organizations must improve how they engage with Africa’s philanthropic community. OSF’s big bet on long-term change OSF has begun making changes to better align with this new vision, Nowrojee said. One major shift is a move toward longer-term funding. Previously, OSF operated on one-year budgets, limiting grants to short-term projects. Now, the foundation is allocating $2 billion over the next decade through five- to eight-year grants, allowing for more strategic, lasting investments. Another key change is redefining anchor grantees. Rather than restricting funding to organizations that fit predefined program areas, OSF is prioritizing impactful partners, even if they fall outside traditional funding categories. Historically, long-term core support was reserved for organizations in the global north. “We never ever gave a long-term core partner grant in the global south. We are changing that now,” Nowrojee said. OSF is also streamlining grantmaking to reduce bureaucratic barriers. Past recipients now get faster renewals, compliance requirements have been eased and applications are available in multiple languages to improve accessibility. Beyond direct funding, OSF is ensuring its philanthropic role continues to drive innovation — even at the governmental level. The foundation is connecting policymakers with global south economists to provide alternative perspectives on economic development and the green transition. The foundation is especially interested in doing this as it relates to the critical minerals sector — which has been a major focus of the new Trump administration. “If Africa can manage its critical minerals sector properly, it can leapfrog into prosperity,” Nowrojee said. “When the Trumps of the world come to take your critical minerals, governments, and the mining sector must be ready to negotiate terms that actually benefit Africa,” she emphasized.