NGO funds boom in FY25 despite USAID cuts
Fund inflows remained low over the past few fiscal years, reaching Tk7,601 crore in FY24, but saw a sharp 21% jump in FY25, according to NGO Affairs Bureau data
Highlights:
- NGO foreign funding hits record Tk9,220 crore in FY25
- Surge linked to regime change, streamlined approvals, currency depreciation
- USAID cuts closed 55 projects, costing 50,000+ jobs
- Health, education top funding sectors, both saw major increases
- Rohingya funds halved, worsening refugee access to essential services
- Small NGOs face crisis; democracy, governance funding opportunities rising.
Despite USAID funding cuts, foreign donations to non-governmental organisations (NGOs) in Bangladesh hit a record high of Tk9,220 crore in the last fiscal year (2024-25), driven by factors like political transition, streamlined fund disbursement, and currency depreciation.
Fund inflows remained low over the past few fiscal years, reaching Tk7,601 crore in FY24, but saw a sharp 21% jump in FY25, according to NGO Affairs Bureau data.
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Following USAID funding cuts, thousands lost their jobs, prompting the NGO Affairs Bureau to urge NGOs to prioritise laid-off staff in new projects. Although funding has increased, its impact on NGO job recovery is yet to be seen.
Funding surge after regime change
Sector insiders said after last year's August regime change, donors have shown renewed interest in NGO funding under the government led by Muhammad Yunus – a globally renowned figure – believing the funds will be better utilised for Bangladesh's socio-economic development.
They said this growth is noticeable because Rohingya-related funding, particularly from USAID, has decreased since 20 January of this year.
Local NGOs attribute this positive growth largely to the easing of fund release procedures by the NGO Affairs Bureau, which had faced bureaucratic hurdles under the previous government.
Bureau data also reflects a faster disbursement process: the country received more donations than its FY25 commitment of over Tk9,206 crore, compared with Tk7,601 crore in FY24 against a commitment of over Tk9,754 crore.
"Most small NGOs are facing a funding crisis. Allocations for rights promotion and socially oriented programmes are very low. Those working on women's empowerment or human rights are particularly vulnerable. These sectors used to receive more funding, but it has declined,"
Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD), said the increase in funds could partly also be due to the depreciation of the taka against the dollar, which raised the local-currency value of foreign donations.
"During the previous government, NGOs faced challenges in securing funding in sectors like democracy, human rights, and good governance. However, with the current government, opportunities to work in these areas have emerged," he said, adding that it will take some time to fully understand the impact of the fund increase.
Sector-wise allocation
Top sectors for released funds included health (Tk2,726.5 crore), education (Tk1,269 crore), social development (Tk750 crore), relief and rehabilitation (Tk711 crore), disaster management (Tk544 crore), water & sanitation (Tk422 crore), women's development (Tk302 crore), local government (Tk231 crore), environment (Tk225 crore), and agriculture (Tk202 crore).
Funding for education and health has risen further: the education sector received Tk538 crore more last fiscal year, while the health sector saw an additional Tk531 crore.
Golam Moazzem said, "The NGO sector does not directly create jobs, but it helps build a supportive environment. For example, funding in the health sector contributes to expanding health services. NGOs often collaborate with organisations working in health rather than implementing programmes directly themselves."
He added that, due to the multi-layered monitoring system in the NGO sector, the economic impact of funds is generally higher, and the benefits are directly received by the end users.
NGOs are also securing alternative funding from development partners, including the World Bank, the European Union, Middle Eastern nations, and American foundations.
USAID cuts hurt sector
Md Anwar Hossain, director (Project 1 & 2) of the NGO Affairs Bureau, told TBS, "After the USAID funding cut, NGOs have focused on raising funds from other sources. I believe the situation is somewhat positive, with opportunities particularly opening up to secure funds from European countries."
"USAID announced a funding cut starting in January. As a result, the impact was not fully visible in the last fiscal year, since a substantial amount had already been received. However, from the current fiscal year [FY26] onward, the effect will be more pronounced," he said.
"When USAID funding was cut, we advised NGOs to give priority to their laid-off staff in new projects. As far as we know, they are giving priority to existing employees in their new initiatives. However, we do not have any specific data on this," Anwar added.
The Association of Unemployed Development Professionals (AUDP) highlighted in a press conference last May that following a Stop Work Order by the Trump administration on January 20 this year, 55 out of 59 USAID projects in Bangladesh were shut down, resulting in the country losing approximately $700 million in development assistance.
AUDP is a platform representing professionals who lost their jobs following the closure of USAID-funded projects and currently has over 600 members.
According to AUDP's estimates, more than 50,000 development professionals lost their jobs across NGOs and INGOs previously funded by USAID projects. However, in the absence of any official government data, these figures remain largely indicative, with AUDP suggesting that the actual number is likely even higher.
2,600 NGOs operating in Bangladesh
Bangladesh has around 2,600 registered local and international NGOs working with foreign funds. Among them, about 1,000 are active as they receive funds regularly, according to the NGO Affairs Bureau. The number of international NGOs is 287.
Bangladesh last received its highest NGO foreign funding of Tk7,929 crore in FY19. In FY21, the figure dropped to Tk6,624 crore and slightly rose to Tk6,986 crore in FY22.
Sector experts attributed that decline to the redirection of donor funds toward humanitarian crises in Ukraine and Palestine, which diverted resources away from Bangladesh. However, last year's regime change has fueled funds towards Bangladesh.
NGO Bureau's Md Anwar Hossain said that in the last fiscal year (FY25), funds for sectors such as health, education, Rohingya relief, and sanitation also came from friendly countries in the Middle East, including Qatar and the UAE.
"In the context of LDC graduation, we are urging our NGOs to become more self-reliant. At the same time, if LDC graduation is delayed, that would temporarily be positive for us," he said.
He noted that most of these fundings were directed to the coastal regions, some northern districts, and Rohingya-focused programmes.
Coast Trust, a mid-level local NGO working in the coastal region of Southern Bangladesh, saw its funds increase by around 20% in FY25 compared to FY24, according to its Executive Director, Rezaul Karim Chowdhury.
He said that Bangladesh has received increased assistance to tackle natural disasters, such as floods in Feni, cyclones in coastal areas, and flash floods in Teknaf.
Highlighting a new trend in disaster management, he said, "Donors are now funding anticipatory actions. For example, if a cyclone is expected in an area, funds are provided beforehand to repair cyclone shelters or fix access roads."
Rezaul Karim identified increased confidence of international donors in local NGOs as another reason for the rise in funding.
"There is a global movement to channel funds directly to local NGOs instead of large international ones, which has led to increased funding," he added.
Referring to the changing approach of donor organisations, he said, "Even though USAID funding has decreased, many progressive donor agencies worldwide, especially American foundations, have stepped in to compensate for the shortfall. Immediately after the funding cut, they even offered to provide direct compensation to us."
"Prof Yunus has presented Bangladesh positively to donors. Thanks to him, obstacles in the NGO sector, such as approval procedures, have been streamlined. This has also been a positive factor in the increased flow of funds," Rezaul Karim added.
Rohingya funds decline over 50% in FY25
Rohingya funds saw about a 50% decline, from over Tk779 crore in FY24 to Tk387 crore in FY25, according to NAB data.
This fund gap, largely due to the suspension of US funding, will further strain conditions in the Rohingya camps, making it harder for refugees to access essential services such as education and healthcare.
Dozens of projects, including those related to health, family planning, nutrition, and education, have already been affected by the cuts. Humanitarian organisations warn that the situation will further deteriorate unless funds are urgently released.
Rezaul Karim of Coast Trust said, "While Rohingya grants from international donors, excluding the US, have increased, institutions like the World Bank are raising allocations for the Rohingya issue, particularly to address pressures in health, education, and food sectors."
Small NGOs struggling to survive
The Association of Development Agencies in Bangladesh (ADAB), the country's leading NGO network, has 1,135 members, of which 138 are registered under the NGO Bureau and can collect foreign funds directly.
"Most small NGOs are facing a funding crisis. Allocations for rights promotion and socially oriented programmes are very low. Those working on women's empowerment or human rights are particularly vulnerable. These sectors used to receive more funding, but it has declined," Jashim Uddin, ADAB director, told TBS.
He said, "Many NGOs are surviving by mobilising local resources. Some government projects in health and education provide support, but not all NGOs have access. Micro-scale organisations are doing slightly better, while others are struggling."
Jashim Uddin expressed optimism, saying, "Recent government changes have created new opportunities. In areas like democracy, good governance, media freedom, and women's development, the working environment has opened up. This democratic progress could attract more funding in these sectors."
He also noted, "After Bangladesh graduates from LDC status, funding modalities will change. Nevertheless, the country still has immense demand and potential, and opportunities are likely to grow in critical areas such as climate change."
The ADAB director warned that around 10 lakh people employed in NGOs could lose their jobs if small and mid-level organisations are forced to close due to low fund flows.
