Opinion: As a CEO at an INGO, I know we need to adapt or die

In business, the mantra “adapt or die” has been repeatedly proven historically. Of the world’s largest corporations from a century ago, only a few, like ExxonMobil, are still among the top companies globally. Today's corporate giants are technology companies like Apple, Microsoft, Nvidia, and Alphabet (Google). Yet the list of the largest international NGOs has largely remained unchanged despite tectonic geopolitical, economic, and technological change. The International Committee of the Red Cross has existed since 1863. Save the Children emerged in the aftermath of World War I in 1919, while Oxfam was founded during World War II, in 1942. These organizations have become fixtures in the landscape of international aid, synonymous with humanitarian response and development. And despite endless predictions of their decline, they have instead continued to grow. But is this era of stability finally nearing its end? And is their longevity now their biggest vulnerability? A post-ODA world Since the turn of the century, INGOs have thrived off the back of increasing official development assistance, or ODA. In 2000, ODA from Development Assistance Committee members was around $54 billion. By 2023, it had risen to $223 billion. The Millennium Development Goals, declared at the start of the millennium, galvanized global commitment to aid, with international conferences in Monterrey, Mexico, and Gleneagles, Scotland, extracting promises to grow ODA. But the outgoing European Union commissioner for international partnerships, Jutta Urpilainen, has recently signaled that the world may now be moving toward a “post-ODA” world. Today, governments are increasingly seeking to leverage private investments alongside traditional aid — a notable shift from the simple grant models of the past. This evolution is starkly evident in the rise of development finance institutions. In 2023, 15 European DFIs funneled €9.6 billion as new investment into private-sector projects in emerging economies — a 10% year-on-year increase in new investments, and a demonstration of how the funding landscape is changing. Total assets under management by European DFIs reached €52.6 billion in 2023. Meanwhile, the U.S. International Development Finance Corporation has had a record year, with $12 billion in investment commitments for fiscal year 2024, nearly three times the level from just five years ago. As DFIs grow, major donors including France, the United Kingdom, and Germany are cutting back on traditional ODA. This growth in DFIs, coupled with the rise of impact investing — now valued at $1.57 trillion globally by the Global Impact Investing Network — represents an expanding pool of funds that, currently, mostly bypass traditional international NGOs. This is a dramatic shift. Instead of funding traditional aid and development programs, funding agencies are prioritizing scalable, impact-driven investments. INGOs’ lack of response to change INGOs, which for decades have enjoyed growing public grants, are now caught in a funding squeeze. The consequences are evident: In late 2023 and early 2024, ICRC cut 4,000 positions across its global operations. Save the Children and the International Rescue Committee have also been forced to downsize. “Too many NGO programs achieve only marginal improvements and lack any sustainability beyond the next round of grant funding.” --— Oxfam, in the wake of multiple crises in 2020, announced a reduction of 1,500 staff and the closure of operations in 18 countries, including Afghanistan, where it had worked for five decades. This was followed by further staff cuts in 2021 and more cost-cutting measures announced late 2024. This change in public funding is just one of multiple challenges facing INGOs: Private giving is also being transformed in many countries by new vehicles like donor-advised funds, technologies such as artificial intelligence require new skills and capabilities, and the political environment is increasingly hostile in many countries. And all the while, humanitarian needs are increasing due to climate change and conflict. Despite global commitments to the Sustainable Development Goals, we are far off track from achieving them. Too many NGO programs achieve only marginal improvements and lack any sustainability beyond the next round of grant funding. To paraphrase Charles Darwin, it is not the strongest of the species that survives, nor the most intelligent, but the one that is most responsive to change. Unfortunately, INGOs have shown themselves to be anything but responsive to their strategic challenges. This is not surprising. A white paper by the Unlock Aid Group highlighted that many of the industry's structural features actively disincentivize innovation. Large grants are awarded to those who already have the requisite administrative and compliance systems in place, effectively shutting out smaller, more agile players. This perpetuates a cycle where a handful of large organizations dominate, while real innovation struggles to gain a foothold. Yet in my experience, far too few INGOs are engaged in genuine soul-searching. I've seen how insiders remain firmly in control, resistant to the radical rethink required to adapt to the changing environment — perhaps hoping that the financial pressures will change over time. The opportunity: New funding models that focus on outcomes This resistance comes despite the immense opportunities that new technologies and funding sources present. AI-powered health interventions, for example, could provide high-quality health care at an affordable cost in many low-income countries. Instead, there is a trend that I’ve experienced where many INGOs continue to prioritize compliance over outcomes. This reluctance to embrace risk, paired with short-term funding structures, makes them ill-suited to nurturing new, technology-based models that could have a transformational impact. At Save the Children, we have seen how these barriers make it extremely difficult to scale innovation alongside our traditional programming. That is why we created Save the Children Global Ventures, an initiative which I lead, designed to harness new funding models and invest in scalable solutions. Based on our own challenges and learnings from other INGOs, the organization was established as a part of the Save the Children family but as a separate entity with its own governance and processes to facilitate more risk taking. The goal is to occupy the “goldilocks zone,” a position that is just right: Close enough to leverage the global brand and capability of Save the Children but sufficiently distinct to be more adaptable to change. Save the Children Global Ventures’ focus is on identifying startups in education and health, especially those using new technologies, that are dramatically more impactful per dollar spent and supporting them with capital — both investment funding and blended finance. A good example is ATEC, one of the investments we made through our first impact fund. ATEC is at the forefront of decarbonizing cooking in low-income countries, with plans to reduce carbon emissions by up to 10 million tons annually. ATEC's internet-of-things-enabled electric stoves offer particular benefits to women and children. By replacing traditional cooking methods, these stoves dramatically reduce indoor air pollution, which is a leading cause of respiratory diseases and premature deaths. In addition to providing capital, we are facilitating access, where appropriate, to communities who may benefit from the technology, harnessing carbon markets to ensure the stoves are affordable. Save the Children is following in the footsteps of impact-investing pioneers like Acumen and WaterEquity. Both organizations have recently raised significant impact funds, demonstrating that there is a market at scale for products that bridge philanthropy and investment. Acumen, for example, is nearing the first close on a $250 million fund to activate clean energy markets in Africa’s underserved regions. WaterEquity has raised $100 million for water and sanitation projects, with major corporate investors like Microsoft and Starbucks supporting the initiative. If INGOs fail to adapt — if they cannot pivot to new models, embrace new technologies, and attract new sources of funding — their decline is not just likely, it is inevitable. The question we face is stark: Can INGOs evolve in time to remain relevant in a post-ODA world? Or will we finally see a new generation of organizations better suited to meet the challenges of the 21st century? The opportunity is there, but so too is the risk of obsolescence. The time to adapt is running out.