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Private foundations are moving from parallel funders to actors in the architecture of development finance. This overview explains why philanthropy’s position in the system is changing as public aid contracts, the five numbers that describe its scale and concentration, and where private capital gains public consequence—in evidence, risk, coalitions and bridge finance. It then examines four tensions shaping the turn, the concentration behind headline totals, the local-funding measurement gap, and finally what philanthropy can—and cannot—become in place of public obligation.
Private philanthropy contributed an estimated US$68.2 billion to development between 2020 and 2023—about 10% of gross official development assistance over the same period. Its influence exceeds its volume. Foundations increasingly fund research, data, early-stage innovation and coalitions that shape how larger public and multilateral institutions act. Philanthropic finance is highly concentrated: health received 40% of recorded development funding, and two foundations supplied 63% of cross-border philanthropic flows to Africa. Flexibility is a genuine comparative advantage, but not an automatic property of private money. Only 49% of surveyed foundations reported providing core, flexible and multi-year funding to local actors.
Foundations have long financed development. They are now being invited into a different role: co-financing with governments, absorbing early risk, supporting local intermediaries, convening coalitions and helping shape the evidence on which larger institutions act. This turn is partly a consequence of scarcity. Official development assistance fell by 23.1% in real terms in 2025, its largest annual contraction on record, and is projected to decline again in 2026. As public finance retreats, resources controlled by private boards acquire greater strategic visibility.
Five numbers describe the new philanthropic landscape. Estimated contributions to development reached US$68.2 billion between 2020 and 2023—about 10% of gross ODA over the same period. Health absorbed 40% of philanthropic development finance, while two foundations supplied 63% of cross-border philanthropic finance to Africa. Only 49% of surveyed foundations reported supporting core, flexible and multi-year funding to local actors.
Foundations finance research, datasets, technical standards, demonstration programmes and professional networks. A relatively small grant can determine which ideas are available when a government or multilateral organisation is ready to act. Philanthropic influence is therefore epistemic as well as financial: it shapes what the system knows and which solutions it considers credible.
Foundations are valued for being able to move quickly, tolerate uncertainty and finance work outside public procurement cycles. Yet project restrictions, short grant periods and detailed reporting remain common. Flexibility can remain inside the foundation rather than reaching the grantee. The question is not whether philanthropic money can be flexible, but where the uncertainty is ultimately held. Co-financing can connect specialised expertise with institutions capable of scale. But a field with many donors may still be governed through a few closely connected platforms using similar assumptions and evidence requirements. The number of partners matters less than who can define the problem, alter the design and absorb failure.
The US$68.2 billion figure can suggest a broad and diversified financing system. The underlying allocation is considerably narrower. Health received US$27.1 billion between 2020 and 2023, or 40% of all recorded philanthropic development funding. Education received 11%, and government and civil society 7%. Africa received one-third of cross-border flows, but two foundations accounted for 63% of that total.
Foundations increasingly commit to locally led development, but available figures describe different points in the financing chain. The OECD’s flow analysis found that about US$5 billion was channelled directly through local entities between 2020 and 2023, compared with around US$40 billion through international entities. In a separate organisational survey, responding foundations estimated that 47% of their funding went to local actors, 11% to local intermediaries and 7% to women-led or women’s rights organisations.
Foundations can protect organisations abandoned by public politics, test models, sustain independent research and combine grants with other forms of capital. Their freedom from electoral cycles can preserve long-term and politically contested work. They cannot privately reconstruct a public system. Increasing payout today can reduce capacity tomorrow. Existing commitments limit flexibility. There is no collective mechanism ensuring that private finance reaches the countries, sectors and populations experiencing the deepest public cuts.

Research report

The Philanthropic Turn

Private foundations are moving from parallel funders to actors in the architecture of development finance.

7-minute readJuly 2026OSKEEN RESEARCH OVERVIEW

In brief

Private philanthropy contributed an estimated US$68.2 billion to development between 2020 and 2023—about 10% of gross official development assistance over the same period.^[1]
Its influence exceeds its volume. Foundations increasingly fund research, data, early-stage innovation and coalitions that shape how larger public and multilateral institutions act.
Philanthropic finance is highly concentrated: health received 40% of recorded development funding, and two foundations supplied 63% of cross-border philanthropic flows to Africa.^[1]
Flexibility is a genuine comparative advantage, but not an automatic property of private money. Only 49% of surveyed foundations reported providing core, flexible and multi-year funding to local actors.^[1]

What is changing is philanthropy’s position in the system

Foundations have long financed development. They are now being invited into a different role: co-financing with governments, absorbing early risk, supporting local intermediaries, convening coalitions and helping shape the evidence on which larger institutions act.

This turn is partly a consequence of scarcity. Official development assistance fell by 23.1% in real terms in 2025, its largest annual contraction on record, and is projected to decline again in 2026.^[2] As public finance retreats, resources controlled by private boards acquire greater strategic visibility.

Yet philanthropy cannot simply replace aid. Its annual volume is smaller, its sectoral coverage narrower and its mandate different. Public finance carries obligations created through governments and international institutions. Foundations can act quickly and protect contested work, but they are not required to provide universal coverage, sustain national systems or allocate resources according to an agreed map of global need.

The philanthropic turn is therefore not a transfer to an equivalent private system. It is a redistribution of initiative.

The new philanthropic landscape, in five numbers

US$68.2 billion

Estimated philanthropic contributions to development between 2020 and 2023.^[1]

10%

Their approximate value relative to gross ODA over the same period.^[1]

40%

The share of philanthropic development finance directed to health.^[1]

63%

The share of cross-border philanthropic finance to Africa supplied by two foundations.^[1]

49%

of surveyed foundations reported supporting core, flexible and multi-year funding to local actors.^[1]

Where private capital gains public consequence

Guarantees, recoverable grants, equity and first-loss capital can make transactions possible before public agencies or investors are prepared to participate. The OECD reports that 18% of blended-finance transactions recorded since 2014 involved at least one foundation.[1] This can unlock finance for energy, health manufacturing or enterprise—but it is less suited to rights advocacy, emergency protection or services for people without purchasing power.

As aid contracts, foundations are being asked for emergency grants, accelerated decisions and bridge finance. In a 2025 Center for Effective Philanthropy survey, 64% of responding foundations reported providing emergency or rapid-response grants, while 30% had increased payout beyond previous plans.[4] Such funding can preserve capabilities that would be difficult to rebuild, but it cannot restore the fiscal base of public co-operation.

The philanthropic turn is therefore not a transfer to an equivalent private system. It is a redistribution of initiative.

Four tensions shaping the philanthropic turn

Foundations are valued for being able to move quickly, tolerate uncertainty and finance work outside public procurement cycles. Yet project restrictions, short grant periods and detailed reporting remain common. Flexibility can remain inside the foundation rather than reaching the grantee. The question is not whether philanthropic money can be flexible, but where the uncertainty is ultimately held.

The concentration behind the headline total

The US$68.2 billion figure can suggest a broad and diversified financing system. The underlying allocation is considerably narrower.

Health received US$27.1 billion between 2020 and 2023, or 40% of all recorded philanthropic development funding. Education received 11%, and government and civil society 7%.^[1] Africa received one-third of cross-border flows, but two foundations accounted for 63% of that total.

Concentration is not proof of ineffectiveness. It can create sustained expertise and coherent action around difficult problems. It also means that changes in the priorities of a few private institutions can reshape entire sectors and regions.

The issue is especially important because philanthropic influence often travels through institutions as well as grants. A foundation may finance research, support implementation and participate in the coalition advocating scale. Each role may be legitimate. Together, they give the funder an unusual ability to define the problem, produce the evidence and influence adoption.

The local-funding measurement gap

Foundations increasingly commit to locally led development, but available figures describe different points in the financing chain.

The OECD’s flow analysis found that about US$5 billion was channelled directly through local entities between 2020 and 2023, compared with around US$40 billion through international entities.^[1] In a separate organisational survey, responding foundations estimated that 47% of their funding went to local actors, 11% to local intermediaries and 7% to women-led or women’s rights organisations.

These figures are not necessarily contradictory. One measures first recipients; the other relies on institutional reporting and broader definitions. Their distance shows how easily “local funding” can describe legal domicile, implementation location, ultimate recipient or actual decision authority.

Money can move closer to communities while control remains international. Conversely, a domestic intermediary can meaningfully redistribute authority. Without transparent data on onward flows, indirect costs and decision rights, both arrangements can receive the same label.

What philanthropy can—and cannot—become

Foundations can protect organisations abandoned by public politics, test models, sustain independent research and combine grants with other forms of capital. Their freedom from electoral cycles can preserve long-term and politically contested work.

They cannot privately reconstruct a public system. Increasing payout today can reduce capacity tomorrow. Existing commitments limit flexibility. There is no collective mechanism ensuring that private finance reaches the countries, sectors and populations experiencing the deepest public cuts.

The pressure to substitute for aid may also weaken philanthropy’s distinctive role. If flexible capital is consumed reproducing discontinued government contracts, foundations may preserve immediate continuity while abandoning experimentation, movement support and independent knowledge.

The significance of the philanthropic turn will therefore not be determined by whether foundation spending reaches the scale of ODA. It will be determined by the financing architecture philanthropy helps create: one in which private capital expands action and distributes authority, or one in which shrinking public obligations are replaced by increasingly consequential private choice.