The perspective from Red Comunidades Rurales invites a rethinking of the challenges and opportunities facing local funds in the face of resource scarcity.
The funding landscape for civil society is going through a critical moment. In 2024, Official Development Assistance (ODA) registered a 7.1% drop – the first decrease in six years – and further reductions are projected between 2025 and 2027. On top of these cuts, restrictions are scaling: “foreign agent” laws, excessive audits, political discrimination, and narratives aimed at delegitimizing NGOs, portraying them as “radicals” or even “terrorists.”
The impact is direct and profound. Community-based organizations in the Global South – those on the frontlines of the climate and social crisis – are seeing their capacity to operate and sustain long-term processes weakened.
Reflections from Local Funds
Facundo Ibarlucia from Red Comunidades Rurales (Argentina) recently shared ideas in an Alianza members’ exchange that provide a broader perspective on the challenges and opportunities for achieving the financial sustainability of local funds.
“Less than 10% of international resources reach local funds and civil society, and barely 2% reach communities directly,” Ibarlucia states. In other words, those closest to the solutions are the ones receiving the fewest resources.
Beyond the funding scarcity, there is also a hostile environment, with restrictive regulations and stigmatizing campaigns. This combination threatens not only the financial viability but also the social and political legitimacy of many organizations.
Emerging Strategies
Still, local funds are exploring ways to sustain their work. Among the strategies that stand out:
Diversifying funding sources, building alliances with different actors, while safeguarding autonomy and organizational principles.
Building citizen-based support through individual donors. Though it requires long-term processes, it strengthens independence from external agendas.
Non-monetary resources: in-kind contributions, pro bono services, donated audits or technology, which become strategic in times of crisis.
Collaboration among funds, submitting joint proposals and sharing learnings to confront an increasingly challenging ecosystem.
These strategies show that resource mobilization goes beyond securing funding: it is about leveraging local assets – social legitimacy, community networks, organizational creativity – as the foundations of sustainability.
A Crisis that Sparked Collective Organizing
A recent example illustrates this powerfully. In January of this year, a shift in U.S. foreign policy triggered a wave of uncertainty in Latin America and other regions of the Global South. What began as an administrative measure turned into a drastic funding cut, affecting hundreds of social organizations.
The temporary suspension of foreign aid directly impacted agencies such as the Inter-American Foundation. The result: budget cuts, layoffs, and the immediate cancellation of ongoing grants. Many organizations depended heavily on those resources – some with more than 70% of their funding at risk – and more than 60% reported being at risk of closure.
In response, a collective mobilization emerged, led by Red Comunidades Rurales alongside more than 162 affected organizations. Without external funding, they organized themselves into five working groups: diagnosis, legal and financial risks, advocacy, communications, and sustainability.
Through collaborative tools and solidarity contributions, they built a regional diagnosis and designed joint strategies: from public pressure actions to legal advice and exploring local funding alternatives. One milestone was a survey that gathered key data on the impacts, enabling the creation of an interactive map that made the scale of the problem visible.
Today, even though the funding suspension remains in place, the coalition managed to bring the case to U.S. courts. A judge in the District of Columbia ordered the reinstatement of Inter-American Foundation staff, though the future of the contracts remains uncertain.
Resilience and Autonomy from the South
This experience, born in the midst of turbulence, echoes Ibarlucia’s reflections: sustainability does not depend solely on the availability of external funds, but also on the resilience, collective organizing, and autonomy of local organizations.
Strengthening resource mobilization involves diversifying support, reinforcing social legitimacy, expanding community networks, and sustaining strategic communication that highlights the role of local funds in defending rights and building alternatives.
The question this crisis leaves us with is clear: how do we prepare so that unilateral decisions from the Global North do not put at risk the processes we are building from the South?
What ultimately becomes clear is that during times of cuts and restrictions, collective organizing efforts – such as the one led by Red Comunidades Rurales and its allies – show that it is possible to transform crisis into an opportunity to strengthen autonomy, solidarity, and the action capacity of local funds in the Global South.
