By EU SEE members Clarisse Sih and Bibbi Abruzzini – Forus
The Bigger Picture
Around the world, civil society organisations continue to be essential partners in governance, development and crisis response. Yet, they are increasingly facing challenges—ranging from digital restrictions to legal and financial barriers—that threaten the enabling environment in which they operate.
Launched in January 2025, the EU System for an Enabling Environment for Civil Society (EU SEE) documenting near real-time changes in civil society’s enabling environment and sheds light on critical trends—including legal, financial, political, and digital threats and opportunities.
This article draws on the first alerts submitted by the EU SEE Network Members to explore the growing impact of global funding cuts—particularly the freeze on U.S. development aid—and to assess what’s at stake for civil society worldwide. It also offers actionable recommendations for protecting and rebuilding civil society’s operating space. You can find the full list of Alerts here.
Financial Cuts and Civil Society’s Struggle for Sustainability
Civil society cannot thrive without the means to sustain itself. Accessible and sustainable resources are not just about budgets—they are about the ability of Civil Society Organisations (CSOs) to operate independently, reach marginalised populations, and respond rapidly to crises.
“As a global civil society network with worldwide reach we have seen that in the changing funding landscape, flexible, sustainable funding isn’t a luxury—it’s a lifeline,” says Sarah Strack, Director of Forus.
Funding must be equitable, predictable, and flexible—reflecting the real costs of social impact. When this dimension is compromised, civil society is forced into survival mode. Projects are suspended, staff laid off, trust with communities erodes, and vital voices fall silent. Monitoring threats to this principle is essential to understanding the broader deterioration of civic space.
“The recent funding cuts are a stark reminder of the precarious position civil society organisations find themselves in globally. Without sustainable support, their ability to advocate for human rights and protect marginalised communities is severely compromised,” says Mandeep Tiwana, Co-Secretary General at CIVICUS.
Since early 2025, the EU SEE mechanism has recorded a troubling surge in alerts linked to funding disruptions. Recent cuts to USAID and other sources of funding, alongside shifting donor priorities and new legislative attempts to control or delegitimize CSO funding at national levels, have further strained CSOs’ ability to operate effectively. Before the cuts, civil society actors were already calling for more flexible, needs-based funding. Now, this adds to an already challenging landscape. These challenges are manifesting in different countries, from Peru’s tightening control over CSO funding to the criminalisation and stigmatisation faced by organisations in Nigeria, Indonesia, and beyond. The alerts below reflect the growing precarity of civil society around the world:
Greater control over CSO funding
In Peru, in March 2025, the Peruvian Congress approved amendments to the Law of the Peruvian Agency for International Cooperation, granting the government greater control over CSOs’ funding and operations. Critics argue that these changes threaten the autonomy and sustainability of independent organisations, effectively placing them under state surveillance.
“[The law] is a direct threat to freedom and fundamental rights of association, expression, opinion and citizen participation,” says Proética, Transparency International chapter in Peru.
Similarly, Nigeria witnessed an alarming development when a U.S. Senator accused local CSOs of indirectly funding terrorist organisations. This led to heightened scrutiny and investigations into civil society groups, despite a lack of credible evidence. Such accusations contribute to the criminalisation of NGOs, making it harder for them to operate freely and access crucial funding.
“We are seeing a dangerous trend. The funding freeze is not just shutting down programs—it is also undermining civil society,” says Oluseyi Oyebisi, Executive Director of the Nigeria Network of NGOs.
Indonesia’s civil society is facing mounting pressure as two major funding streams—USAID and Dutch development aid—are simultaneously scaled back. The U.S. foreign aid freeze, impacting $153.5 million in funding, has already forced CSOs to suspend programs, cut staff pay, and pause essential services in areas like governance, education, and environmental protection.
At the same time, the Netherlands has announced a €2.4 billion reduction in its global development budget by 2029, deprioritizing support for civil society, gender equality, and climate action. This dual retreat from international solidarity-based aid threatens the financial sustainability of Indonesian CSOs, weakens their ability to advocate for marginalized communities, and risks long-term setbacks to democratic governance and local development.
Increased financial pressure on CSOs
A similar pattern of increased financial pressure on CSOs emerged in Mexico and Malaysia, where USAID funding cuts directly impacted the sustainability of the civil society sector. With reduced international financial support, many organisations are struggling to continue their essential work in areas such as human rights advocacy, environmental protection, and social justice.
In Paraguay, a new law imposing restrictive controls on non-profits, combined with calls to investigate USAID-funded CSOs, has deepened a hostile political environment for civil society, with smaller organisations already shutting down due to increased administrative burdens.
The recent USAID funding freeze has also re-ignited discussions of the NGO Bill by the government in Sri Lanka, which was initially drafted in January 2024 without a comprehensive consultative process with the sector. Civil society has raised several concerns in relation to the proposed legislation as it aims primarily at regulating them and not supporting them, and as it contains vague and subjective restrictions on NGO activities. It has been warned that the law could be interpreted to “restrict dissent, alternate political views and activities perceived as opposing government.
Rollback of support for civil society at a time when civic actors are more essential than ever”
The EU SEE network’s data confirms a deeply concerning trend: this is not an isolated incident. It’s part of a broader rollback of support for civil society at a time when civic actors are more essential than ever.
As detailed in a recent report on the impact of US Funding cuts on civil society, various steps are needed to reverse and prevent the current scenario.
This moment demands decisive leadership from governments, donors, and multilateral institutions. Civil society organisations cannot be expected to weather these compounding crises alone—not when their very capacity to serve communities, protect rights, and defend democratic values is under threat.
Immediate long-term financial support, flexible to needs, and led by civil society actors—without being tied to any agendas must be mobilized to stabilise the most affected organisations. Emergency bridge funding, coupled with flexible grant mechanisms, will be crucial to prevent irreversible program closures, layoffs, and the erosion of essential services. Donors must go beyond short-term fixes and invest in the long-term resilience of civil society, ensuring that support is sustained, predictable, and aligned with real operational needs.
Equally urgent is stronger donor coordination – at civil society level as well. Fragmented funding landscapes are leaving gaps that authoritarian actors are quick to exploit. Governments and international partners should work together to ensure that core areas such as democracy, human rights, media freedom, and civic participation are not deprioritised in times of crisis but instead protected as pillars of stable, inclusive societies.
Finally, civil society needs more than financial lifelines—it needs political backing and narrative support. Governments and donors must stand publicly with CSOs facing disinformation and delegitimisation campaigns. This includes supporting efforts to strengthen advocacy, amplify success stories, and counter false narratives that portray civil society as threats rather than essential allies in development and peacebuilding.
In short, this is a moment to reaffirm—not retreat from—the shared values of solidarity, participation, and justice. What’s at stake is not just the future of civil society, but the democratic and inclusive world we aspire to build together.
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