The great aid dismantling of 2025 triggered existential questions over whether the global assistance apparatus can be rebuilt — or, more importantly, how it should be rebuilt. Start from scratch? Fight to return to the status quo? Find some innovative new middle ground?
As the development community stands at the threshold of 2026, it will be forced to confront these questions head-on. Devex President and Editor-in-Chief Raj Kumar also confronts them in his annual predictions analysis. In this special edition newsletter, we offer a broad overview of those predictions. Check out the piece in full here to get the details.
Will demolition lead to evolution?
Raj’s predictions piece is titled “The old aid model is dead. Now comes the fight over what replaces it.” Describing the death of something implies stages of mourning. And certainly, when the Trump administration took a sledgehammer to the U.S. Agency for International Development, it marked the end of an era. But there’s little time to grieve. Plus, this end offers a new opportunity to take a hard look at long-overdue reforms and the possible rebirth of international assistance.
One of the biggest transformations may not be a complete rebirth but rather a renewed focus, one in which aid advocates turn toward funding sources they have struggled to fully capitalize on for years. Raj cites the private sector, multilateral development banks, development finance institutions, and philanthropy as the most likely, and potentially most lucrative, vehicles driving this pivot.
Of course, the shift from the traditional aid model to an investment model won’t be easy, but it also won’t be an option. “For those still reeling from the destruction of USAID and the budget cuts across many other donor nations, the uncomfortable reality is that bilateral aid is still declining and political incentives point toward further retrenchment, not recovery,” Raj writes. “This isn’t just about one administration, one election, or one budget cycle.”
It’s also not just all about President Donald Trump. European donors have been turning their backs on aid for a while now. That trend will only continue as pressures mount to beef up defense spending.
Raj points out that U.K. Prime Minister Keir Starmer, the leader of a party that’s historically been pro-aid, admitted as much when he announced last year a further 40% cut to official development assistance. Starmer explained it was “a pound-for-pound transfer from the aid bucket to the defense bucket,” Raj writes. “That sentiment is being repeated across European NATO members.”
Read: The old aid model is dead. Now comes the fight over what replaces it
Background reading: Philanthropy, blended finance, and the evolving role of NGOs (Pro)
Where to look
And that leads us back to the money — specifically, the untapped pools of it. Philanthropy is swimming in it, with today’s billionaires holding a staggering $16 trillion in wealth. And many are rivaling entire countries in parting with it. Take the aid powerhouses of Norway and Sweden: Mackenzie Scott has already shelled out more than the two combined. It forces us to challenge the assumed orthodoxy that philanthropy can’t fill the aid gap left by governments. Raj believes it can.
Multilateral development banks and development finance institutions will be another financial avenue, as they are “pushed — by necessity — toward larger-scale, more ambitious interventions: infrastructure, energy systems, modern agricultural value chains, water, and internet connectivity. Increasingly, these will be thought of not as projects but as platforms co-created with private investors,” Raj writes. “Ultimately, these will be bets on economic transformation, not small-scale projects delivered at the margins.”
It’s fascinating, for example, to contrast the downfall of USAID with the ascendency of the U.S. International Development Finance Corporation, America’s DFI. Both happened in 2025 — dramatically bookending a year that left no doubt that investment is usurping traditional aid.
ICYMI: Reauthorization of the US development finance corporation gains traction
Background reading: As aid dwindles, can philanthropy rewrite the rules of giving? (Pro)
Further reading: How MacKenzie Scott quadrupled her philanthropic giving in 2025 (Pro)
+ Not yet gone Pro? Experience unlimited access to expert analyses, hidden funding opportunities, and career resources with recruiters’ insights, and connect with key sector players and influencers at exclusive events when you start your 15-day free trial of Pro today.
What to avoid
DFC illustrates another important trend. The administration recently pumped billions into the agency to, in part, act as a bulwark against China’s Belt and Road courtship of lower-income countries. It’s transactionalism in its rawest form — a sign of things to come for aid.
Countries with geostrategic assets will benefit from Western donor largesse, which will often serve a self-interested purpose — such as Europe demanding that recipient nations curb migration to the continent.
Where does that leave poorer, more fragile countries? At risk of being sidelined.
That’s why Raj says the big question in 2026 is whether some kind of middle ground emerges — one where “might makes right” can stand alongside “moral force.”
What to do
Where does this leave a whiplashed development community? It’s going to have to adapt — a lot — or die.
“Agency leaders hoping for a return to the good old days might be tempted to make minimum cuts instead of using this crisis as an opportunity for tough choices. NGOs, U.N. agencies, and other institutions heavily funded by bilateral aid will sink or swim this year based on the willingness of their leaders — including their boards — to make painful but necessary changes to their business model, organizational structure, and culture,” Raj writes.
“All of which is why the question for 2026 isn’t whether bilateral aid rebounds. It’s how the new model of global development ultimately operates.”
Read: Merge, adapt, or close? How might nonprofits respond to tough times? (Pro)
Reflecting on it all
Last year, Raj’s prediction piece described the old aid model — one saddled with an outdated operating system — as a melting iceberg. Well, that iceberg disintegrated at a rate none of us were braced for.
Devex was there throughout the meltdown, starting with what set fire to it: Trump’s stop-work order that ground U.S. foreign assistance to a worldwide halt. That was Jan. 24, 2025. As we approach the one-year anniversary next week of that historic tipping point, Devex’s newsroom will be both reflecting on the past and reporting on the future.
So stay tuned for stories examining urgent topics ranging from the latest U.S. international assistance budget proposals to where last year’s avalanche of lawsuits stand today. We’ll also have Pro Briefings, downloadable reports, and more insider analysis to help you make sense of 2025 and get a better sense of 2026.
Sign up to Newswire for an inside look at the biggest stories in global development.
About the author
Anna Gawel
Anna Gawel is the Managing Editor of Devex. She previously worked as the managing editor of The Washington Diplomat, the flagship publication of D.C.’s diplomatic community. She’s had hundreds of articles published on world affairs, U.S. foreign policy, politics, security, trade, travel and the arts on topics ranging from the impact of State Department budget cuts to Caribbean efforts to fight climate change. She was also a broadcast producer and digital editor at WTOP News and host of the Global 360 podcast. She holds a journalism degree from the University of Maryland in College Park.
