Published July 2025

Emerging Themes from the Consultation

Participants highlighted the significant impact that recent changes in international funding have had on civil society across the region. These shifts have led to the virtual closure of many organizations and media outlets through large staff layoffs, stalled programming, and heightened uncertainty. Participants also noted that authoritarian-leaning governments have taken advantage of this financial crisis to intensify their attacks on civil society. 

In response, organizations have adopted a range of adaptive strategies. The most common and effective measures have included internal restructuring (such as changes to organizational charts and employment models), reduced operational and programmatic costs, and explored alternative revenue streams. Some organizations have turned to providing paid consulting services to former staff (thus reducing their overhead), conducting research, and introducing symbolic fees for services that were previously free. 

Participants outlined key areas to strengthen the resilience and relevance of civil society in this new context: 

• Encouraging national CSO and funder alliances to foster collaboration, such as shared office space or co-working arrangements that reduce overhead and boost collective impact. 

• Advancing digital transformation strategies, including a shift to virtual operations and a strong emphasis on protecting digital rights, particularly in contexts where governments seek to restrict civic space online. 

Participants urged dialogue with the international donor community to raise the profile of Latin America as a strategic region, one whose enabling legal environment for civil society needs protection in today’s geopolitical landscape. They also encouraged a data-centered approach, believing that the sector and donors need an improved understanding of the impact of international funding cuts. 

For many, however, the main threat currently is coming from governments that are using the current funding crisis to increase stigmatizing attacks against CSOs and further restrict civic space. Facilitating regional exchange spaces like this consultation also offer an opportunity for local organizations to share their experiences and raise their voices. 

Forging Ahead in Challenging Times 

Participants shared their experiences about the impact of foreign funding cuts on their operations, how national governments have responded, and what steps CSOs have taken to improve sustainability. 

IMPACT ON THE SECTOR 

At the consultation, 100% of participants reported that the latest international funding cuts have directly impacted their operations, with 77% reporting moderate to severe impact. impacted reported a range of effects, spanning all areas of operations. Some partners terminated or suspended projects in areas such as anticorruption and media. Others shared that they had halted or reduced delivery service for vulnerable populations. Most participants have implemented staff cuts and reported reduced operational sustainability. 

Most partners noted that negative rhetoric against civil society, often framed by allegations of fraud and abuse echoes narratives promoted by their own governments In Latin America, several governments have gone further, often suggesting that CSOs support terrorist and criminal organizations. Partners also highlighted growing hostility toward international cooperation funding, particularly when at anti-corruption efforts or the protection of minority rights. Countries such as El Salvador, Nicaragua, Peru, and Venezuela have taken concrete steps in recent months to further restrict civic space. 

ADAPTIVE STRATEGIES 

To improve sustainability and mitigate negative impacts, partners shared renewed efforts to engage the private sector, particularly with companies with strong social responsibility commitments. They also described nascent efforts to expand economic activities that reduce reliance on foreign donors, along with steps to collaborate with other impacted organizations to share operating costs. These types of efforts are still evolving, and organizations are waiting to see what outcomes they may produce. 

Survey responses suggest that, aside from traditional philanthropy, participants see local philanthropy and community giving as the most promising forms of new funding. Seeking resources from the private sector and economic activities enjoys limited favor, as does seeking resources from diaspora contributions and crowdsourcing. This may be because organizations have limited experience with these approaches, or past resistance from the private sector. Unsurprisingly, partners showed almost no interest in establishing endowments or seeking fiscal sponsorships, as they tend to prefer operating independently, especially given a history of being offered shoestring budgets that do not allow for capital building. 

Interestingly, during the discussion, participants showed more openness and interest in diversifying sources of funding and engaging new donors. There was also significant interest in economic activities, prompting interest in understanding (and improving as necessary and possible) the legal environment for profit-making activities. The same applies to exploring innovative platforms for engaging broader support through crowdsourcing and diaspora contributions. This disparity with earlier survey results may be because partners may not consider these strategies as fully viable but remain open to testing them. 

The discussion also covered non-financial strategies, such as partnerships to share space, resources, and expertise to reduce overhead costs and bolster solidarity. For regional partners, it was clear that increase reliance on digital spaces is necessary to lower the programming costs. Participants at the event overwhelmingly expressed interest in finding these new partnerships and collaborations over other models, such as potential mergers. Throughout, partners emphasized that their preferred models require strong security measures to protect the privacy of beneficiaries and ensure both physical and digital security of staff members. 

INTERNATIONAL SUPPORT AND COOPERATION 

Throughout the consultation, partners highlighted two issues where international co- operation remains critically important: 

1. Sustained support for creating and maintaining enabling legal environments for organizations. Partners noted that compared to the need for an enabling legal environment for civil society, access to funding is a secondary issue. They recognize the challenges that they are facing regarding funding at this moment but consider the threat of closing civic space in the region to be especially alarming. 
2. Increased efforts to assess the financial impact of shifting donor priorities Partners noted that without robust metrics and data, especially regarding the withdrawal of key donors, CSOs will have a hard time convincing new donors to support important causes, both locally and internationally. 

Calls to Action: Opportunities for ICNL and Allies

Participants highlighted the following gaps and opportunities for ICNL and other stakeholders to engage: 

• Bridge knowledge gaps on the impact of recent developments and increasingly restrictive legal frameworks, particularly new and restrictive laws governing philanthropy and digital engagement. 

• Strengthen networks, sector collaboration, and technical assistance, particularly small, local organizations impacted by the funding cuts. 

• Raise awareness of diverse funding models available for CSOs, and steps they can take to implement them within different legal environments. Share examples of successful implementation to encourage adaptation and replication.