Trends in CSO funding: how does the UK’s bumpy trajectory compare to other European donors?

It might sound like an understatement for the UK development community to describe the previous five years as turbulent.

In our new study we compared the trends in government funding of development CSOs in UK with five other European countries (the Netherlands, Germany, Sweden, France and Belgium) over the period 2018-2023.

It is the third consecutive study executed by the University of Leuven (HIVA-KU Leuven) on this topic, this time commissioned by the Belgian CSO umbrella organisations, ngo-federatie and ACODEV. For this blog we look at what other European countries have in common with the tumultuous development cooperation trajectory of the UK over the previous five years.

Insecure CSO policy frameworks in an insecure world

Obviously, over the last five years, one must consider the impact of COVID-19, which disrupted CSO operations on the ground and fundraising opportunities at home. Similarly, closing civic space in different parts of the world curtailed CSO activities in both direct and indirect ways, and the Ukraine conflict and other geopolitical tensions affect CSO operations to different degrees.

While all development CSOs in the six countries had to navigate these major disruptive events at the global level, CSOs in the UK, along with two more countries, also faced drastic changes in the funding landscape at home. In the UK and France, development CSOs and their representative structures are less likely, or no longer, invited to the table when CSO policies are designed and evaluated.

Changes in the policy framework, or in individual funding channels, are decided unilaterally by the government, often in unpredictable ways. More recently, a similar shift happened in Sweden, where the new right-wing government announced drastic changes to the main CSO policy, which was praised in the past. In the Netherlands there is a solid and evidence-based dialogue with Dutch CSOs on CSO policies, but the situation may be more insecure after recent elections, with a likely coalition between parties on the (far) right of the political spectrum.

Long-term, predictable, and flexible framework agreements are becoming the exception

The trend of moving away from long-term, predictable, and flexible framework agreements further accelerated in several countries. In the UK, before Brexit, CSOs were already used to a highly competitive CSO funding landscape favouring larger CSOs and consultancy firms, and emphasising CSO-private sector collaboration. After Brexit, however, a range of drastic policy changes had a profound impact on the whole development sector, related to the integration of DFID into FCDO, major budget cuts, and the end of two of the four main CSO channels.

This went hand in hand with more instrumental views about the role of CSOs, exemplified by donor-driven funding modalities wherein CSOs act in service-delivery roles and more geographic and thematic conditions. While recent policy developments may signify a positive turning point for the UK’s development cooperation policies, it is still too early to confirm this will be the case.

Although less drastic for now, similar trends to those in the UK are also emerging in France and, recently, in Sweden. In the Netherlands, the government respects CSO autonomy, including the political role of CSOs, but funding is highly competitive and fragmented. Germany and Belgium are exceptions, as these countries still allocate a significant portion of their funding through flexible, long-term framework agreements, respecting the right of initiative.

Sharp budget cuts in CSO funding in the UK are the exception

For the six countries together, CSO funding as a percentage of ODA continued to decrease slightly in the period 2018-2022, although less sharply compared to the previous reporting period. In the UK, absolute CSO funding volumes took a steep dive after 2020, while in other countries, funding remained steady or increased in absolute terms since 2018.

The fact that shrinking ODA budgets in the UK was accompanied by a sharp rise of in-donor refugee costs, further affecting CSO budgets in the country. While costs associated with hosting refugees have increased substantially across the six countries, the UK surpassed the other countries during the reporting period.

National interests-based development cooperation

ODA reforms in the UK, Sweden, and France show a clear trend towards funding that aligns more with their own domestic interests. This preference is evident in various aspects, such as the geographical focus shifting from low-income countries to middle-income countries with promising economic opportunities, as well as countries closer to the donor (such as Ukraine). Additionally, thematic shifts indicate a growing emphasis on supporting the (domestic) private sector, advancing geo-political agendas, managing migration, and addressing security concerns.

While some forms of instrumentalisation can be observed in all six countries, it is much less pronounced in Belgium, Germany and the Netherlands. For CSOs, this trend of instrumentalisation poses risks as it undermines their autonomy and right of initiative, contributing to the contraction of civic space. It constrains the roles that CSOs can and should play in sustainable development.

Global citizenship education is only big in Belgium

Across the countries, there is a notable decline in government funding allocated to global citizenship education and development awareness raising programmes. Taking a long-term perspective, Belgium is the only country in our sample that has safeguarded the budgets for this topic and even augmented their budgets over time.

In contrast, the Netherlands and Sweden have experienced drastic reductions in funding. Similar dynamics have been observed in the UK post-2010. In France, funding is mainly directed towards fighting extremism. In these four countries, this shift is attributed to changing political perspectives about the relevance and benefits of these programmes.

Weathering the storm

The landscape for development CSOs across Europe has undergone significant shifts over the past years, influenced by a range of global and national disruptions and events, and more turbulence can be expected in the coming years.

The operations and autonomy of CSOs are constrained by the increasingly fragmented funding environment, the rise of interests-based development agendas and the shrinking space for civil society in shaping these agendas and policies.

Despite these challenges, there are glimmers of hope, such as Belgium’s progressive funding framework for CSOs, the Dutch policies to strengthen the political role of CSOs, and the stability of Germany’s policies. As the sector continues to evolve, it will be crucial to maintain a focus on preserving the autonomy and effectiveness of CSOs in driving sustainable