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The Pond Is Shrinking. Nobody Has Noticed the Lake

claudiotancawk
Aug 30
5 min read

Updated: Aug 31


Official development assistance from members and associates of the OECD's Development Assistance Committee fell to $174.3 billion in 2025, a 23.1 percent decline in real terms in a single year, the steepest drop ever recorded. It pushes global aid back to where it stood in 2015.[1]


The United States drove most of the collapse. U.S. ODA fell to $29 billion, a 56.9 percent real-terms decline, the largest single-donor contraction ever recorded by any country in any year.[2] For the first time since the DAC began tracking these figures, the United States is no longer the world's largest donor; Germany is, at $29.1 billion.[3]


This is the pond where every NGO in the sector has been fishing for decades; a pond that has lost a quarter of its water in one year.



The sector's response

Watch what the sector does when the pond shrinks: it starts optimizing the boat and fishing harder in the same water.


Responses include consolidation, emergency campaigns, stricter grant pipelines, and board retreats focused on crisis analysis and cost reduction. However, all these measures continue to rely on the same funding instruments: grants, donations, and restricted gifts.


But none of them asks a different question: whether there is a second body of water the sector has never built a boat for.


Grants and donations remain the main funding source for most INGOs. The sector’s institutions, staffing, and compliance systems were largely built to acquire and administer grants, government awards, and charitable contributions. When that mechanism’s primary supply – government aid – contracts by 23 percent in a year, the instinct is to compete harder for what remains of it, but nobody asks whether the mechanism itself is the constraint.



The lake nobody is looking at

Fortune Global 500 companies generated $3.4 trillion in profit in fiscal 2025, up 14 percent year over year, on $43.1 trillion in revenue.[4] That figure covers the same year as the ODA numbers above. This is a flow-to-flow comparison, not a comparison of accumulated wealth against annual spending. Both numbers describe money that moved in 2025.


Total DAC ODA, the pond much of the traditional international NGO sector is fighting over, is smaller than half of one year of Fortune Global 500 profit alone. $174.3 billion against $3.4 trillion is a different order of magnitude, not a rounding error.



The proof nobody’s even looking at

Here is the number that should make the sector rethink its main source of revenue.


Those same Fortune Global 500 companies spend approximately $20 billion a year on corporate social responsibility. The estimate traces to Meier and Cassar (2018) and is based on 2013 Fortune Global 500 data drawn from a 2015 Varkey Foundation/UNESCO study.[5] [6] The estimate itself is eight years old. The underlying data is thirteen years old. I could not find a comparatively authoritative and updated aggregate for this figure in the academic, consultancy, or industry literature since. The sector has been citing a decade-old number because nothing has replaced it.


Run the math. $20 billion against $3.4 trillion in profit is roughly 0.6 percent. Even if the real number today were ten times higher, it would still be under 6 percent of one year's profit, almost a rounding error.



Proof this isn’t hypothetical

One Acre Fund runs agricultural programs for smallholder farmers across ten African countries. It is a registered nonprofit. It also reported $161.5 million in revenue from sales to farmers and third parties in fiscal 2025, up from $130.8 million in fiscal 2024, audited by BDO USA.[7] In both 2024 and 2025, sales to farmers and third parties represented roughly half of One Acre Fund’s total reported support and revenue.


Matt Forti, managing director of One Acre Fund USA, put the logic plainly: treating farmers as clients rather than beneficiaries means “everyone’s incentives are going to be aligned.” Farmers pay for the bundle of seed, fertilizer, training, and market access. If the service fails, farmers stop paying, and the organization knows immediately where it failed.[8] One Acre Fund’s own 2014 annual report framed the same principle as its operating mandate: “By listening to our boss – the smallholder farmer – we have developed a complete solution.”[9]


It’s a commercial relationship wrapped inside a nonprofit legal structure, built by an organization that decided at founding that the people it served should be customers, not recipients. Earned revenue like this helps finance the mission alongside philanthropy, not instead of it.


One Acre Fund proves the model works with the people NGOs already serve. The mechanism works on the corporate side too: Fairtrade International already collects licensing fees directly from companies for the right to use its certification. [10] 


Proof of concept is not the problem; scale is.


What this actually means

None of this is an argument against grants. Grants fund work that has no commercial logic and never will: emergency response, basic research, advocacy that produces no revenue stream by design. The point is not that NGOs should walk away from donors.


The point is arithmetic. The sector has essentially one instrument for engaging $3.4 trillion in annual corporate profit. That instrument represents a rounding error of it. Meanwhile, the pond everyone is fighting over – DAC ODA, the thing consuming every strategy memo and every board conversation – is nearly 20 times smaller than one year of Fortune Global 500 profit by itself. The sector has spent a generation perfecting its grip on a shrinking pond while a gigantic lake sits twenty feet away, with plenty of fish, uncharted, because nobody built the boat.

The pond was never the real constraint. The absence of a second vessel was.



End Notes

[4]Fortune Global 500 2026, released via Morningstar/PR Newswire, July 28, 2026. https://www.morningstar.com/news/pr-newswire/20260728ny12964/fortune-announces-2026-fortune-global-500-list

[5]Meier, Stephan, and Lea Cassar. "Stop Talking About How CSR Helps Your Bottom Line." Harvard Business Review, January 31, 2018. https://hbr.org/2018/01/stop-talking-about-how-csr-helps-your-bottom-line

[6]Meier and Cassar estimate, cited in "The Hidden Costs of Corporate Social Responsibility." CEPR/VoxEU. https://cepr.org/voxeu/columns/hidden-costs-corporate-social-responsibility

[7]One Acre Fund, audited consolidated financial statements, fiscal year 2025, issued by BDO USA, April 29, 2026. https://oneacrefund.org/sites/default/files/2026-05/One%20Acre%20Fund%202025%20Audited%20Financials.pdf

[8]Matt Forti, interview with Denver Frederick, "Matt Forti, Co-Founder and Managing Director of the One Acre Fund, Joins Denver Frederick," 2017. https://denverfrederick.wordpress.com/2017/03/14/matt-forti-co-founder-and-managing-director-of-the-one-acre-fund-joins-denver-frederick/

[10]Fairtrade International, “FAQ for Business.” Fairtrade states that licensing grants companies the right to use the FAIRTRADE Mark on finished products, with license fees based on reported product sales volume. https://www.fairtrade.net/us-en/for-business/faq-for-business.html

 
 
 

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