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ImpactMojo 101 Series · Free Forever

Aid
& Philanthropy
101

Who pays for development, on what terms, and what changed in 2025: a foundational course on official aid, Indian philanthropy and funding law for practitioners in South Asia

100 SlidesSouth Asia FocusFree ForeverODA to CSR

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Agenda

What we cover

What counts as aid

Slides 3–11

How aid moves

Slides 12–19

The great aid debate

Slides 20–28

The aid effectiveness agenda

Slides 29–36

The 2025 aid cuts

Slides 37–45

Aid to South Asia

Slides 46–54

India as a development partner

Slides 55–62

Philanthropy in India: money and law

Slides 63–73

Effective altruism and its critics

Slides 74–81

Power, trust and localisation

Slides 82–90

Putting it to work

Slides 91–99

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Section One

What counts as aid

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Starting point

Why a practitioner needs to understand where the money comes from

Most development work in South Asia runs on someone else's money. A district nutrition project may be paid for by a state budget, a World Bank loan, a European bilateral grant, a company's CSR obligation and a family foundation, all at once. Each source arrives with its own rules, timelines, reporting formats and ideas about what success looks like. The people who design and run the work spend a large share of their time translating between these rules.

Official aid

Money from governments and the bodies they own, such as the World Bank, UNICEF and bilateral agencies. Counted and reported to the OECD when it meets the definition of official development assistance (ODA).

Private philanthropy

Money from individuals, families, foundations and companies. In India this includes corporate social responsibility (CSR) spending required by the Companies Act 2013, and foreign donations regulated by the FCRA 2010.

This course follows both streams: how they are defined, how they changed in 2025, what the law in India says about each, and how to judge a funding offer.

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Definition

Official development assistance: the OECD definition

The OECD's Development Assistance Committee (DAC) adopted the concept of official development assistance in 1969, and it remains the standard measure of aid. The OECD glossary sets out three tests. A flow to a country on the DAC List of ODA Recipients, or to a multilateral agency, counts as ODA only if all three hold.

Official development assistance (ODA)

Government aid that promotes and specifically targets the economic development and welfare of developing countries (OECD glossary). The flow must be undertaken by the official sector, have the promotion of economic development and welfare as its main objective, and be on concessional financial terms.

Official: from governments or their agencies, so a private foundation grant is excluded however large.
Developmental: economic development and welfare must be the main objective.

Concessional: cheaper than a market loan, or a grant.
To eligible recipients: countries on the DAC list, or multilateral agencies working for them.

Source: OECD, Glossary of statistical terms and concepts of development finance, accessed October 2026.

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Boundaries

What counts as ODA, and what is counted elsewhere

The boundary matters because governments are judged by their ODA totals. Anything inside the line raises a donor's score, so donors argue about where the line sits. Two flows sit just outside it. Military assistance is classified as other official flows (OOF) because its main aim is not development. Official loans that are not concessional enough are also OOF: since 2018 flows, a loan counts as ODA only with a grant element of at least 45 per cent for least developed and other low-income countries, 15 per cent for lower middle-income and 10 per cent for upper middle-income countries (a single 25 per cent threshold applied until 2017).

Flow	Counted as ODA?	Why
Grant to a ministry of health in Nepal	Yes	Official, developmental, concessional
Concessional loan to Bangladesh for a power line	Yes, at its grant equivalent	Concessional terms
Core contribution to UNICEF or IDA	Yes	Multilateral agency on the DAC list
Costs of hosting refugees in the donor country	Yes, within DAC limits	Counted, and contested
Military equipment or training	No, classed as OOF	Main aim is not development
Near-market loan, below the grant-element threshold	No, classed as OOF	Not concessional enough
Grant from a family foundation	No	Not official

Sources: OECD glossary; OECD, 2026 Development Co-operation Profiles, methodological notes (loan thresholds); Wikipedia, Official development assistance (OOF definition and treatment of military aid). Refugee costs within donor countries appear in OECD's own ODA statistics, which is why critics call the total inflated.

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Measurement

The grant-equivalent measure: counting a loan by its generosity

Until 2018, a loan was counted in full in the year it was disbursed, and repayments were subtracted as negative aid when they came back. A donor lending at near-market rates could report the same ODA as one giving a grant. In 2014 the DAC agreed to count only the grant equivalent of a loan, an estimate of how much cheaper it is than a market loan, recorded when the loan is agreed. It was first applied to headline reporting in 2019.

Grant equivalent

The value of a loan's concessionality: the face value minus the present value of the repayments, discounted at a reference rate. A grant's grant equivalent is its full value.

Illustrative: a US$100 million grant counts as US$100 million.
Illustrative: a US$100 million loan with a 40 per cent grant element counts as US$40 million in the year it is signed.
Repayments no longer reduce ODA in later years.

Source: Wikipedia, Official development assistance, which records the 2014 decision and its implementation in 2019. Debt relief rules were settled only in 2020.

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The target

The 0.7 per cent target: a promise made in 1970

On 24 October 1970 the UN General Assembly adopted resolution 2626 (XXV), the strategy for the Second Development Decade. It asked each economically advanced country to reach a minimum net amount of 0.7 per cent of its gross national product as ODA by the middle of the decade. Sweden and the Netherlands became the first to meet it, in 1974. Most donors have never met it in any year.

1970

UN General Assembly adopts the 0.7% goal (A/RES/2626 (XXV))

Wikipedia, Official development assistance

1974

First year any donor met it: Sweden and the Netherlands

Wikipedia, Official development assistance

The measure is now ODA as a share of gross national income (GNI).
SDG target 17.2 restates 0.7 per cent and adds 0.15 to 0.20 per cent of GNI for the least developed countries.
The figure was a political compromise; it carries no estimate of need.

When a government announces a cut "to 0.5 per cent" or "to 0.3 per cent", it is measuring itself against this 1970 benchmark.

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Who meets it

Only four donors met 0.7 per cent in 2025

The OECD's preliminary data for 2025 show that four of the 34 DAC members exceeded the UN target. All four are small, rich Northern European countries with long cross-party agreement on aid. The DAC as a whole gave 0.26 per cent of combined GNI, down from 0.34 per cent in 2024, which is little more than a third of the target.

ODA as % of GNI, 2025 (preliminary)

OECD, preliminary 2025 ODA data, press release of 9 April 2026

A share of GNI measures effort relative to a country's income. It rewards small economies that give generously and penalises large ones that give large sums in absolute terms but little relative to income.

Norway 1.03%, Luxembourg 0.99%, Sweden 0.85%, Denmark 0.72%. Source: OECD, 9 April 2026.

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Who gives most

The five largest providers in 2025, by volume

Volume tells a different story from effort. In 2025 Germany became the largest provider of ODA for the first time, just ahead of the United States, whose ODA fell by 56.9 per cent. All five of the largest providers reduced their aid, which had never happened before, and together they accounted for 95.7 per cent of the total decline. Eight of the 34 DAC members held or increased their ODA.

Provider	ODA 2025 (US$ bn)
Germany	29.1
United States	29.0
United Kingdom	17.2
Japan	16.2
France	14.5
All DAC members and associates	174.3

US$174.3 bn

total DAC ODA in 2025, 0.26% of GNI

OECD, preliminary 2025 ODA data, press release of 9 April 2026

US$215.1 bn

total DAC ODA in 2024, 0.34% of GNI

OECD, preliminary 2025 ODA data, press release of 9 April 2026

Figures are preliminary. The OECD publishes final 2025 data in December 2026.

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Reading aid numbers

Four questions to ask of any aid statistic

Aid figures are easy to quote and easy to misread. A headline about "record aid" or "historic cuts" can rest on a change of definition, a single large recipient or a currency movement. Before you use a number in a proposal or a policy brief, check four things.

Gross or net? Net ODA received subtracts loan repayments, so it can fall even when new lending rises.
Current or constant prices? The OECD reports the 23.1 per cent fall in real terms, after inflation and exchange rates.

Flows or grant equivalent? Donor totals since 2018 use grant equivalents; recipient data in the World Bank tables are net flows.
Preliminary or final? Preliminary figures are revised, sometimes by billions.

Write the definition next to the number. "Net ODA received, current US$, World Bank WDI 2023" is a citation. "Aid to India" is not.

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Section Two

How aid moves

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Channels

Bilateral and multilateral aid

A donor government can spend its aid budget directly or pass it through an international organisation. The choice changes who decides where the money goes. In April 2026 the OECD noted that in recent years members have increasingly relied on the multilateral system to support the least developed countries and offset cuts to bilateral aid.

Bilateral

Government to government, or donor agency to NGO. The donor chooses country, sector and partner. Examples: Germany's GIZ and KfW, Japan's JICA, the UK's Foreign, Commonwealth and Development Office (FCDO). Bilateral aid often follows trade, security and historical ties.

Multilateral

Core contributions to bodies such as the World Bank's IDA, the Asian Development Bank, UNICEF or the Global Fund. The board of the organisation decides allocation, usually by formula and need. Donors give up control and gain scale.

In practice many donors also give "multi-bi" aid: money passed through a UN agency but earmarked for a country or theme, which keeps bilateral control inside a multilateral channel.

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Two purposes

Development aid and humanitarian aid

Humanitarian aid responds to emergencies: floods, earthquakes, conflict and displacement. It aims to save lives within weeks and months. Development aid aims at change over years: schools, health systems, roads, institutions. The two run on different rules, staff and budgets, and the gap between them is a familiar problem after a disaster ends.

Humanitarian

Short cycles, speed over process, often delivered by UN agencies and international NGOs. Humanitarian ODA fell by 35.8 per cent in 2025, its second year of decline (OECD, 9 April 2026).

Development

Longer cycles, aligned in principle with national plans, more often through governments and multilateral banks. Bilateral ODA for core development programming fell by 26.3 per cent in 2025, the largest drop on record (OECD).

The humanitarian-development nexus is the attempt to join the two, so that relief builds toward recovery. Section 10 returns to humanitarian funding and the Grand Bargain.

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Instruments

The forms aid takes

The same rupee of aid can arrive in very different shapes. The form decides who controls the money, what reporting follows it and how easily it can be withdrawn. Practitioners in national NGOs mostly meet project grants; ministry officials more often meet loans, budget support and technical assistance.

Form	What it is	Who controls spending
Project aid	Funds a defined project with its own budget and log frame	Donor and implementer
Budget support	Money paid into the recipient government's budget	Recipient government
Technical cooperation	Experts, training and studies, often paid to donor-country firms	Donor
Concessional loan	Below-market loan, repaid over decades	Recipient, within loan terms
Debt relief	Cancelling or rescheduling official debt	Recipient, indirectly
Humanitarian assistance	Food, shelter, cash and health care in emergencies	Agencies on the ground
In-kind aid	Goods such as food or medicines	Donor, through supply chains

Budget support gives most control to the recipient and the least visibility to the donor's taxpayers. That trade-off explains why donors often prefer project aid.

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Tied aid

Tied aid: when the grant must be spent at home

Tied aid is a grant or loan that must be spent on goods or services from the donor country, or from a small group of countries. It turns part of an aid budget into an export subsidy. The recipient pays more for the same equipment or consultancy and has less choice. Untying aid was one of the Paris Declaration commitments in 2005.

Tied aid (OECD glossary)

Official grants or loans where procurement of the goods or services involved is limited to the donor country or to a group of countries which does not include substantially all aid recipient countries.

Raises costs: the recipient cannot buy from the cheapest supplier.
Shifts benefits: part of the aid returns as donor-country orders and fees.
Shapes design: projects tilt toward what the donor sells.
Persists: the Paris target was more than 89 per cent untied; the share fell from 89 per cent in 2005 to 86 per cent in 2009 (OECD 2011 survey).

Ask of any offer: must we buy from your suppliers or hire your consultants? The answer changes the real value of the grant.

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The aid chain

Every layer between donor and community takes a share

Aid rarely travels straight from a donor to the people it is meant for. It passes through agencies, pooled funds, international NGOs and national partners. Each layer adds management, compliance and overhead, and each one holds some power over the next. The Global Humanitarian Assistance Report 2026 found that two thirds of humanitarian funding, US$17.4 billion, could not be tracked beyond the first recipient.

DONOR TREASURY: budget vote

→

DONOR AGENCY: country strategy

→

UN AGENCY OR INGO: first-tier recipient

→

NATIONAL NGO: second tier

→

COMMUNITY GROUP: delivery

Why it matters: a community organisation in Sylhet or Satkhira may receive a small fraction of the original grant, on the shortest contract, with the heaviest reporting.

Transparency gap: when funds cannot be traced past the first tier, no one can show how much reaches local actors. Source: Development Initiatives, Global Humanitarian Assistance Report 2026.

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Beyond ODA

ODA is one flow among several

For most South Asian economies, ODA is now a small share of external finance. Remittances from workers abroad, foreign direct investment, commercial borrowing and loans from non-DAC lenders are each larger in many years. Private philanthropy is separate again. The categories have different owners and different rules, so they cannot simply be added together as "aid".

Flow	Official?	Concessional?	Counted as ODA?
ODA grants and soft loans	Yes	Yes	Yes
Other official flows (OOF)	Yes	No, or below the threshold	No
Loans from non-DAC lenders	Yes	Varies	Only if reported and eligible
South-South cooperation (for example India's ITEC)	Yes	Often	No, India is not a DAC member
Remittances	No	Not applicable	No
Foreign direct investment	No	No	No
Private philanthropy and CSR	No	Grants	No

Section 7 looks at India as a provider of South-South cooperation, which sits outside the ODA statistics.

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Allocation

Aid follows donor priorities: the case of Ukraine in 2025

Where aid goes is a political decision. In 2025, ODA to Ukraine including outflows from European Union institutions rose 18.7 per cent to US$44.9 billion, the largest volume of ODA ever provided to a single country. The OECD noted that this exceeded total bilateral ODA from DAC members to all least developed countries, or to all of sub-Saharan Africa, combined.

US$44.9 bn

ODA to Ukraine in 2025, including EU institutions

OECD, preliminary 2025 ODA data, press release of 9 April 2026

−25.8%

change in DAC ODA to least developed countries, 2025

OECD, ODA trends and statistics page, accessed October 2026

Security and proximity shape allocation as much as poverty does.
Bilateral ODA to Ukraine alone fell 38.2 per cent to US$10.3 billion; EU institutions made up the difference.
In-donor refugee costs fell 22.1 per cent, another sign of shifting priorities.
For South Asia, competing priorities mean less room in shrinking budgets.

When you read a donor's country strategy, ask what else is competing for the same budget line this year.

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Section Three

The great aid debate

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Three questions

Does aid work: three different questions

The argument over aid is often confused because people answer different questions. One economist asks whether aid raises national growth rates. Another asks whether a bed net programme saves lives. A political scientist asks whether aid changes how governments behave toward their citizens. A programme can succeed on the second question while the first remains unanswered.

Macro: does aid raise growth across countries? Studied with cross-country regressions.
Micro: does this intervention change outcomes? Studied with evaluations, including randomised trials.

Political economy: does aid strengthen or weaken accountability between a state and its citizens?
Ethical: do rich people and rich states have a duty to give, whatever the growth effect?

Keep the four apart when you read Sachs, Easterly and Moyo below. Each moves between them.

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The big push

Jeffrey Sachs, The End of Poverty (2005)

Jeffrey Sachs argued that extreme poverty, then defined by the World Bank as income below one dollar a day, could be eliminated by 2025 through carefully planned aid. Very poor countries are stuck below the "bottom rung" of the development ladder; a large, coordinated injection of investment would let them climb. He called for global aid to rise from US$65 billion in 2002 to between US$135 and US$195 billion a year by 2015, and endorsed the 0.7 per cent target as enough to do it.

Clinical economics

Sachs compared countries to patients: each needs a differential diagnosis of its particular constraints, from disease to geography to debt, before a prescription.

South Asia in the book

The book discusses India and Bangladesh as examples of different stages of development, beside Malawi and China. Sachs headed the UN Millennium Project from 2002 to 2005.

Source: Wikipedia, The End of Poverty, summarising Sachs (2005), Penguin Press.

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Planners and searchers

William Easterly, The White Man's Burden (2006)

William Easterly, a former World Bank research economist, wrote partly in reply to Sachs. He described a second tragedy beside poverty itself: after roughly fifty years and about US$2.3 trillion in Western aid, there was comparatively little to show, even as cheap medicines and bed nets failed to reach people. His central device is a contrast between two kinds of actor.

	Planners	Searchers
Goals	Large, set from outside (end world poverty)	Small, found by asking what is in demand
Knowledge	Assume the answer is known	Test, learn and adapt
Feedback	Little from the intended beneficiaries	Constant, from users
Accountability	Diffuse; no one answers for failure	Clear; failure is punished

Easterly accepted that some aid works, citing vaccination and other targeted health programmes with measurable results as successes. Source: Wikipedia, The White Man's Burden (book).

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Dead aid

Dambisa Moyo, Dead Aid (2009)

Dambisa Moyo, a Zambian-born economist, argued that government-to-government aid had harmed Africa and should be phased out. She separated humanitarian relief from official development assistance, which she said perpetuated the cycle of poverty and held back growth. In its place she offered proposals for African governments to finance development without relying on aid.

The argument

Aid that flows to governments regardless of performance reduces their need to tax and answer to citizens. It encourages corruption and dependency, and crowds out other sources of finance.

The criticism

Reviewers, including in the IMF's Finance & Development and in Prospect, faulted its use of evidence and its oversimplification, and noted that Peter Bauer and William Easterly had made similar points earlier, with more nuance.

Source: Wikipedia, Dambisa Moyo, which summarises the book and its reviews.

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Side by side

Three authors, three diagnoses

The three books are often taught as a set. They agree that poverty is urgent and that much aid has been wasted. They disagree about why, and so about what to do. The table sets their positions next to each other so you can see where the real disagreement lies.

	Sachs (2005)	Easterly (2006)	Moyo (2009)
Binding constraint	Too little capital to escape a poverty trap	Bad incentives and no feedback	Aid dependence and weak accountability
Prescription	Scale up aid, a coordinated big push	Small, tested, accountable interventions	Phase out government aid; find other finance
View of 0.7%	Endorses it	Sceptical of big targets	Rejects the premise
Strongest evidence used	Health and agriculture cost estimates	Record of failed plans	Africa's growth record
Common criticism	Overconfident planning	Too sweeping against planning (Sen)	Weak use of evidence

None of the three is about South Asia first. Read them as arguments to test against cases you know, such as polio eradication in India or microfinance in Bangladesh.

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The evidence

What the cross-country evidence says about aid and growth

Economists have tried for decades to measure whether aid raises growth across countries. The results swing with the method. The main problem is reverse causation: donors send more aid to countries in trouble, so a simple correlation can make aid look harmful.

Study	Finding
Burnside and Dollar (2000), American Economic Review 90(4)	Aid raises growth in countries with good fiscal, monetary and trade policies, and has little effect under poor policies
Easterly, Levine and Roodman (2004), AER 94(3), comment	Updating the data to 1970–97 and filling gaps, the good-policy result no longer holds
Rajan and Subramanian (2008), Review of Economics and Statistics 90(4)	After correcting for the bias that poor growth may attract aid, little evidence of a positive or negative effect; no sign aid works better under better policy

Policy message: Burnside and Dollar concluded that aid would work better if it were more systematically conditioned on good policy.

Lesson: macro results are fragile. Judge programmes by their own evaluated results. See Impact Evaluation 101.

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The ethical case

Peter Singer and the refugees of 1971

In 1971, as refugees from the Bangladesh Liberation War faced starvation in camps in India, the philosopher Peter Singer wrote "Famine, Affluence, and Morality", published in Philosophy & Public Affairs in 1972. He argued that if we can prevent something very bad without sacrificing anything of comparable moral importance, we ought to do it. Distance makes no moral difference.

It makes no moral difference whether the person I can help is a neighbor's child ten yards from me or a Bengali whose name I shall never know, ten thousand miles away.

Peter Singer, Famine, Affluence, and Morality, Philosophy & Public Affairs, 1972

The drowning child: walking past a child drowning in a shallow pond to keep your clothes clean is plainly wrong. Singer asks why distance changes that.

Why it matters here: the essay shaped the ethics behind effective altruism (Section 9), and it began with South Asia.

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For practitioners

What the debate means for your work

You do not need to settle the macro debate to do good work, but it should change how you design and defend programmes. Each side of the argument offers a test you can apply to a proposal before a funder applies it for you.

Take from Sachs

Some problems need scale and coordination: immunisation, disease control, infrastructure. Under-funding a proven programme has a cost in lives.

Take from Easterly and Moyo

Build feedback from the people served. Ask who is accountable when the plan fails. Watch for programmes that weaken a government's accountability to its own citizens.

Separate the evidence for the intervention from the evidence for aid in general.
Amartya Sen, reviewing Easterly in Foreign Affairs, praised his attention to incentives but called his rejection of planning too sweeping. Hold both views at once.
Write down which question your programme answers: growth, lives, or accountability.

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Section Four

The aid effectiveness agenda

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The forums

From Monterrey to Busan, 2002–2011

After the Millennium Development Goals were adopted, donors and recipients met repeatedly to agree how aid should be delivered, as well as how much. The UN conference on financing for development at Monterrey in 2002 urged more aid and better aid. Four OECD-coordinated high level forums followed.

Year	Meeting	Main product
2002	Monterrey, Mexico (UN)	Monterrey Consensus: more aid, owned by developing countries
2003	Rome, Italy	Rome Declaration on Harmonisation
2005	Paris, France	Paris Declaration: five principles and 12 indicators
2008	Accra, Ghana	Accra Agenda for Action, 4 September 2008
2011	Busan, Republic of Korea	Busan Partnership; Global Partnership for Effective Development Co-operation

Source: Wikipedia, high level forums on aid effectiveness; COSV summary of the Paris Declaration and Accra Agenda.

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Paris 2005

The Paris Declaration's five principles

The Paris Declaration of 2005 is the best known product of the forums. It set out five principles and a set of measurable targets for 2010, with a monitoring survey to check progress. Each principle answers a complaint recipient governments had made for years: too many donors, each with its own systems, plans and missions.

OWNERSHIP: countries set their own strategies

→

ALIGNMENT: donors use those strategies and country systems

→

HARMONISATION: donors coordinate and simplify

→

RESULTS: manage toward measurable goals

→

MUTUAL ACCOUNTABILITY: both sides answer for results

Ownership means national development strategies agreed with parliaments and citizens, and governments leading on aid coordination.

Harmonisation means joint missions, shared analysis and fewer parallel project units that bypass ministries.

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Did Paris deliver?

The 2010 monitoring results

The OECD's 2011 survey compared each indicator with its 2005 baseline and 2010 target. Progress was real but slow, and most targets were missed. The pattern is telling: targets that depended on recipients improved more than those that depended on donors changing their own procedures.

Indicator	2005 baseline	Target	2010 outcome
Countries with operational development strategies	19%	75%	52%
Aid for government sector reported on budget	44%	85%	46%
Aid using country public financial management systems	40%	55%	48%
Aid disbursed within the scheduled year	42%	71%	43%
Aid fully untied	89%	More than 89%	86% (2009)
Parallel project implementation units	1,696	565	1,158
Countries with mutual assessment reviews	44%	100%	50%

Source: OECD, Aid Effectiveness 2011: Progress in Implementing the Paris Declaration (2012), Figure 1.2 (the 32 countries in both the 2006 and 2011 surveys) and, for untied aid, Table 1.1 and chapter 3. Of all the 2010 targets, only coordinated technical cooperation (target 50 per cent, outcome 57 per cent) was met.

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Accra 2008

The Accra Agenda for Action

Ministers from donor and developing countries endorsed the Accra Agenda for Action in Accra, Ghana, on 4 September 2008. It took stock of slow progress on Paris and set out three areas for faster change. The most visible shift was the recognition that civil society and parliaments, as well as governments, should shape development policy.

Ownership: wider participation in policy, stronger government leadership of aid coordination and more use of country systems.
Inclusive partnerships: DAC donors, developing countries, other donors, foundations and civil society all participate fully.

Delivering results: aid focused on real and measurable impact.
Accra also asked for more predictable aid, so that governments could plan budgets beyond a single year.

Source: COSV summary of the Paris Declaration and Accra Agenda for Action, reproducing OECD text.

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Busan 2011

Busan: from aid effectiveness to development effectiveness

The fourth and final forum, at Busan from 29 November to 1 December 2011, widened the frame beyond traditional donors and governments to the private sector, civil society organisations, parliamentarians and local authorities. The outcome document set four shared principles and created the Global Partnership for Effective Development Co-operation (GPEDC), which replaced the forum process.

Busan principle	Meaning
Ownership of development priorities by developing countries	Partnerships succeed only if led by developing countries
Focus on results	Lasting impact on poverty, inequality and national capacity
Inclusive development partnerships	Openness, trust and mutual learning among all actors
Transparency and accountability to each other	To each other, to beneficiaries and to citizens

Source: European Commission, The Busan Commitments: An Analysis of EU Progress and Performance, quoting the Busan Partnership document.

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Ownership in practice

What ownership looks like from a ministry

Ownership sounds simple until a ministry has many donors, each with its own priorities, reporting cycle and preferred indicators. The example below is Illustrative, built from the pattern the Paris indicators were designed to measure: parallel units, off-budget aid and separate missions.

Low ownership (Illustrative)

A health ministry hosts six donor-funded project units, each with its own staff on higher salaries. Two thirds of aid does not appear in the national budget. Officials spend weeks each year hosting separate review missions.

Higher ownership (Illustrative)

Donors fund one sector plan through a pooled fund, use the government's procurement and audit systems, and hold one joint annual review. Aid appears on budget and parliament can see it.

Ownership can also be claimed by a government that does not answer to its own citizens. Accra's addition of parliaments and civil society was meant to address this.

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Why it stalled

Why the effectiveness agenda lost momentum

By the late 2010s the effectiveness agenda had faded from donor speeches. Several forces pulled against it. Donors faced domestic pressure to show visible, attributable results, which favours separate projects with donor flags. Security concerns and migration drew budgets toward donor interests. New lenders did not sign up to DAC norms. Then the cuts of 2025 reduced the money itself.

Visibility: a pooled fund cannot carry a single donor's logo.
Risk: using country systems means sharing fiduciary risk.
Attribution: results frameworks reward what one donor can claim.

Politics: aid budgets tied to trade, security and migration aims.
Fragmentation: more funders, including foundations and new states.
Volume: less money in 2025 means less influence over reform.

For a South Asian NGO, the principles remain useful as a checklist. A funder who aligns with your plan, accepts your systems and reports jointly is following Paris, whether or not it says so.

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Section Five

The 2025 aid cuts

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The scale

2025: the largest fall in aid on record

The OECD's preliminary data, published on 9 April 2026, show that ODA from DAC members and associates fell by 23.1 per cent in real terms in 2025, the largest annual drop in the history of ODA and the second year of decline. It brings aid back to levels last seen in 2015, the year the Sustainable Development Goals were adopted.

−23.1%

real change in DAC ODA, 2025

OECD, preliminary 2025 ODA data, press release of 9 April 2026

US$174.3 bn

DAC ODA in 2025, down from US$215.1 bn

OECD, preliminary 2025 ODA data, press release of 9 April 2026

0.26%

of combined GNI, down from 0.34%

OECD, preliminary 2025 ODA data, press release of 9 April 2026

−5.8%

further decline projected for 2026

OECD, preliminary 2025 ODA data, press release of 9 April 2026

Concentrated: the United States alone cut its ODA by 56.9 per cent, and the five largest providers made up 95.7 per cent of the fall.

Broad: 26 members cut aid; only eight held or increased it. Cuts reached core programmes, humanitarian aid and refugee costs alike.

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The United States

How USAID was dismantled in 2025

USAID was founded in 1961 and was, until 2025, the largest foreign aid agency in the world. Within six months of the new administration taking office, its programmes were mostly cancelled and its remaining functions moved to the State Department. Because Congress reorganised USAID as an independent agency in 1998, it can be formally abolished only by an act of Congress.

Date	Event
20 January 2025	Executive Order 14169 orders a 90-day pause in US foreign development assistance
Late January 2025	Secretary of State Marco Rubio issues a waiver for humanitarian aid; delivery stays uncertain
10 March 2025	Rubio announces 83 per cent of USAID programmes cancelled, about 5,200 contracts
28 March 2025	State and USAID notify Congress of a plan to move some USAID functions to State by 1 July and end the rest
1 July 2025	USAID ceases to implement foreign assistance; State Department takes over

Sources: EO 14169 (Federal Register, 30 January 2025); State Department, 28 March 2025; Anadolu Agency, 1 July 2025; Wikipedia, United States Agency for International Development.

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The order

What Executive Order 14169 said

The order was signed on 20 January 2025 and published in the Federal Register on 30 January under the title "Reevaluating and Realigning United States Foreign Aid". Its operative section froze new obligations and disbursements of development assistance while each programme was reviewed against foreign policy goals. A programme could resume early only if the Secretary of State decided to continue it.

90-day pause in United States foreign development assistance for assessment of programmatic efficiencies and consistency with United States foreign policy.

Executive Order 14169, section 3(a), 20 January 2025

For implementers: a pause in disbursement stops salaries, supply chains and services within weeks, even if a programme is later restored.

For the law: several lawsuits argued that the administration lacked the power to do this without congressional authorisation.

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The United Kingdom

The UK: from 0.7 to 0.5 to 0.3 per cent of GNI

The UK wrote the 0.7 per cent target into law in the International Development (Official Development Assistance Target) Act 2015, s1, and reported 0.70 per cent in 2019. In 2021 the government cut ODA to 0.5 per cent of GNI. On 25 February 2025 Prime Minister Keir Starmer told the House of Commons that defence spending would rise to 2.5 per cent of GDP by 2027, paid for by cutting ODA from 0.5 to 0.3 per cent of GNI over the same period.

0.5% → 0.3%

UK ODA target, announced 25 February 2025, for 2027

Civil Service World, 25 February 2025

£13.4 bn

extra defence spending a year from 2027

Civil Service World, 25 February 2025

The UK was still the third largest provider in 2025, at US$17.2 billion (OECD).
ODA had risen to 0.58 per cent under the previous government (Civil Service World).
The cut follows a pattern across donors: aid budgets moved to defence and security.

If your organisation holds FCDO funding, directly or through a partner, check the current country allocation before assuming a programme continues.

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Who cut

The five largest providers all cut aid in 2025

For the first time on record, every one of the five largest providers reduced its ODA in the same year. Germany became the largest provider, ahead of the United States, mainly because US aid fell so far. The chart shows 2025 volumes; the OECD release gives the US fall as 56.9 per cent and attributes 95.7 per cent of the total decline to these five.

ODA by provider, 2025 (US$ billion, preliminary)

OECD, preliminary 2025 ODA data, press release of 9 April 2026

Germany, the UK, Japan and France all cut alongside the United States, and smaller donors faced budget, security and political pressure, in the words of the DAC Chair, Carsten Staur.

Only four donors exceeded 0.7 per cent: Norway, Luxembourg, Sweden and Denmark.

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The human cost

Estimating what the US cuts may cost in lives

A study in The Lancet, published online on 30 June 2025, used panel data from 133 countries to estimate the effect of USAID funding on mortality between 2001 and 2021, and then forecast the effect of the cuts. It is an observational study with wide uncertainty intervals, so quote its ranges.

91.8 million

deaths estimated prevented by USAID funding, 2001–2021

Cavalcanti et al., The Lancet 406(10500), 2025

14.05 million

additional deaths forecast by 2030 if cuts are not reversed (range 8.5–19.7 million)

Cavalcanti et al., The Lancet, 2025

4.54 million

of those forecast deaths among children under five

Cavalcanti et al., The Lancet, 2025

Method: fixed-effects Poisson models linking funding levels to mortality, combined with microsimulation forecasts.

Caution: these are observational associations from panel data, with no randomised comparison. Use the ranges, and say so when you cite the figure.

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Who is hit

The cuts fall hardest on the poorest countries

Aid cuts are not spread evenly. Donors protect some priorities and let others fall. The OECD's 2025 data show the steepest falls in the places and sectors with fewest alternative sources of finance. Gender-related aid had already started falling before 2025.

Category	Change	Period
DAC ODA to least developed countries	−25.8%	2025
DAC ODA to sub-Saharan Africa	−26.3%	2025
Bilateral ODA for core development programming	−26.3%	2025
Humanitarian ODA	−35.8%	2025
In-donor refugee costs	−22.1%	2025
Bilateral allocable ODA with gender equality objectives	−13%	2023 to 2024

Sources: OECD, preliminary 2025 ODA data, press release of 9 April 2026; OECD, ODA trends and statistics page, accessed October 2026. Final 2025 data are due in December 2026.

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South Asian organisations

What the cuts mean for organisations in South Asia

Many South Asian NGOs never held a USAID contract directly. They were sub-grantees of an international NGO or a consulting firm, so the cut arrived as a stop-work notice from a partner. Indian organisations face an extra constraint: since 2020 a FCRA-registered organisation may not pass foreign contributions on to another (Section 8 of this course), so they cannot easily be rescued by a larger Indian partner's foreign funds.

Immediate effects

Staff contracts ended, health and nutrition services paused, data collection stopped mid-survey, and organisations with one large funder faced closure.

Strategic responses

Diversify funders, build domestic donor and CSR income, keep three to six months of reserves, write exit clauses into sub-grants, and document assets bought with foreign funds.

GiveWell ran a rapid response fund in 2025 and disbursed US$39 million to programmes that lost US funding (Wikipedia, GiveWell). Private money moved fast, but it replaced a small fraction.

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Section Six

Aid to South Asia

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The numbers

Net ODA received by South Asian countries, 2023

The World Bank's World Development Indicators report net ODA received by each country, using OECD data. Net means disbursements minus repayments of principal on earlier aid loans. The latest year with complete data is 2023. Three measures tell three different stories: the total, the share of national income and the amount per person.

Country	Net ODA received (US$ million)	% of GNI	Per person (US$)
Bangladesh	5,684	1.25	33.15
Pakistan	3,964	1.20	16.01
Afghanistan	3,060	17.76	73.82
India	2,377	0.07	1.65
Nepal	1,173	2.82	39.51
Sri Lanka	827	1.01	37.54

Source: World Bank, World Development Indicators (net ODA received), updated 13 July 2026, indicators DT.ODA.ODAT.CD, DT.ODA.ODAT.GN.ZS and DT.ODA.ODAT.PC.ZS. Current US dollars. Data for 2024 were not yet published.

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Trends

Net ODA received, 2012–2023

Over a decade the totals move a great deal from year to year, because large loans are disbursed in lumps and repayments come back in others. Bangladesh shows the clearest rise, from US$2.15 billion in 2012 to US$5.68 billion in 2023. India's total has stayed between about US$1.7 billion and US$3.2 billion throughout.

Net ODA received, US$ million (current prices)

World Bank, World Development Indicators (net ODA received), updated 13 July 2026

Afghanistan is left off the chart so that the scale stays readable; it received US$6.67 billion in 2012 and US$3.06 billion in 2023.

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Size and dependence

India receives a lot of aid and depends on it very little

India is a large recipient in absolute terms. Relative to its economy, though, aid is close to zero: 0.07 per cent of GNI in 2023. For Nepal the share was 2.82 per cent, forty times larger. The difference matters for bargaining power. A ministry that relies on donors for a large part of its development budget has less room to say no to their conditions.

0.07%

net ODA received as share of GNI, India, 2023

World Bank, World Development Indicators (net ODA received), updated 13 July 2026

2.82%

net ODA received as share of GNI, Nepal, 2023

World Bank, World Development Indicators (net ODA received), updated 13 July 2026

1.25%

net ODA received as share of GNI, Bangladesh, 2023

World Bank, World Development Indicators (net ODA received), updated 13 July 2026

For India: aid matters most where it brings technical knowledge, pilots or loans for specific infrastructure, and through NGOs that depend on it.

For Nepal: aid is a visible part of public finance, so donor coordination and alignment with national plans matter more.

Per person, India received US$1.65 in 2023, against US$39.51 in Nepal.

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Per person

Per person, the ranking reverses

Ranking by aid per person turns the table upside down. The smaller countries receive far more per head, and India, with the largest population, receives the least. This is one reason donors describe India as a partner for technical cooperation and lending, and describe Nepal and Afghanistan as aid-dependent.

Net ODA received per person, 2023 (US$)

World Bank, World Development Indicators (net ODA received), updated 13 July 2026

Per-person figures depend on population estimates as well as aid flows. Sri Lanka's figure was US$0.55 in 2022 and US$37.54 in 2023, which shows how a single year can mislead.

Always show more than one year before drawing a conclusion about a country.

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Net flows

Reading a negative number: Sri Lanka in 2018

In 2018 Sri Lanka's net ODA received was negative: minus US$247 million, or minus 0.27 per cent of GNI. The negative sign records that its repayments of principal on earlier concessional loans were larger than the new aid it received that year. A negative figure tells you about the timing of loans and repayments, and nothing about donors' goodwill.

Net ODA received

Gross disbursements of grants and concessional loans, minus repayments of principal on earlier ODA loans, in a given year. It can be negative.

Year	Sri Lanka net ODA (US$ m)
2017	316
2018	−247
2019	193
2022	12
2023	827

Source: World Bank, World Development Indicators (net ODA received), updated 13 July 2026. When you cite aid to a country that borrows heavily, say whether the figure is gross or net.

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Nepal

Nepal: aid in a small economy

Nepal shows what aid dependence looks like. Net ODA received rose from US$770 million in 2012 to a peak of US$1.76 billion in 2020, when it reached 5.2 per cent of GNI. By 2023 it had fallen to US$1.17 billion, or 2.82 per cent of GNI. In the years when aid is a large share of public investment, the timing of donor disbursements shapes what the state can build.

5.2%

net ODA as share of GNI, Nepal, 2020 (decade peak)

World Bank, World Development Indicators (net ODA received), updated 13 July 2026

US$39.51

net ODA received per person, Nepal, 2023

World Bank, World Development Indicators (net ODA received), updated 13 July 2026

Aid coordination is a daily task for Nepal's ministries, so Paris-style alignment has real stakes.
Federalism under the 2015 Constitution added provincial and local governments as partners for donors.
Falls in donor budgets in 2025 reach Nepal through both bilateral and multilateral channels.

Practitioners in Nepal should track donors' multi-year commitments as closely as the national budget.

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Afghanistan

Afghanistan: the extreme case of dependence

Afghanistan is the region's outlier. In 2012 net ODA received equalled 33.4 per cent of GNI, and in 2021 it was still 32.7 per cent. By 2023 it was 17.76 per cent, US$3.06 billion. When aid supplies a third of national income, aid decisions are economic policy, and a donor exit becomes an economic shock.

Net ODA received as % of GNI, Afghanistan

World Bank, World Development Indicators (net ODA received), updated 13 July 2026

Very high dependence brings a known set of risks: parallel systems outside the state, salaries set by donors, and services that stop when funding stops.

These ratios rely on GNI estimates that are themselves uncertain in crisis years. Treat the level as indicative and the direction as the finding.

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Loans and growth

Bangladesh and Pakistan: rising totals and the role of loans

Bangladesh's net ODA received more than doubled between 2012 and 2023, and per person it rose from US$13.89 to US$33.15. Pakistan's moved between US$1.4 billion and US$4.0 billion. Net ODA includes concessional loans, so rising totals can mean more borrowing as well as more grants. As incomes rise, countries lose access to the softest terms and the mix moves toward loans.

Bangladesh

2,154 (2012) to 5,684 (2023), US$ million. Per person, 13.89 to 33.15 US$. Share of GNI stayed between about 0.9 and 1.6 per cent, because the economy grew alongside aid.

Pakistan

2,017 (2012), a low of 1,387 (2018) and 3,964 (2023), US$ million. Swings follow large disbursements in some years and repayments in others.

Source: World Bank, World Development Indicators (net ODA received), updated 13 July 2026. For a loan-heavy country, read the debt data beside the aid data. See Development Finance 101.

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Section Seven

India as a development partner

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Both sides

India: recipient and provider at the same time

India still receives aid: net ODA of US$2.38 billion in 2023, including concessional loans and grants. It also provides development finance and training to other countries, through programmes run by the Ministry of External Affairs. India is not a member of the OECD's Development Assistance Committee, so its outgoing assistance does not appear in DAC ODA totals and follows its own rules.

India as recipient

World Bank and Asian Development Bank loans, bilateral loans from countries such as Japan, and grants to NGOs registered under the FCRA. Small relative to the economy: 0.07 per cent of GNI in 2023 (World Bank WDI).

India as provider

Training under ITEC since 1964, concessional lines of credit under the IDEAS scheme, and grants for projects in neighbouring countries, managed since 2012 by the Development Partnership Administration in the MEA.

India describes this as development partnership and South-South cooperation, a framing that avoids the donor-recipient hierarchy of DAC aid.

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ITEC

The Indian Technical and Economic Cooperation programme

ITEC was launched on 15 September 1964 by the Ministry of External Affairs. For decades it remained small, because India was itself a major aid recipient. It grew from the 2000s as the economy grew. It is described as demand-driven: partner countries request the training or support they want.

Training for civil and defence personnel in Indian institutions, with airfare, boarding and tuition paid by India.
Projects and project-related activities, including consultancy and feasibility studies.
Study tours and donation of equipment.

Deputation of Indian experts to partner countries.
Aid for disaster relief.
Coverage of about 158 countries with its companion programme for Africa, according to MEA material summarised by Wikipedia.

Source: Wikipedia, Indian Technical and Economic Cooperation Programme, citing the Ministry of External Affairs. Check itecgoi.in for current course lists.

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Institutions

The Development Partnership Administration, 2012

In 2012 the Ministry of External Affairs set up a Development Partnership Administration (DPA) within its Economic Relations Division to bring outgoing assistance under one roof and simplify its administration. Earlier finance ministers had floated a separate agency, under names such as an India International Development Cooperation Agency, but India kept development partnership inside the foreign ministry.

Why inside the MEA

Development partnership is treated as part of foreign policy, closely tied to the Neighbourhood First policy and to relations with Africa. Decisions sit with diplomats.

What it means for partners

Projects are negotiated government to government. Indian NGOs and researchers have few formal routes into the programme, unlike DAC donors' open calls for proposals.

Source: Wikipedia, Indian Technical and Economic Cooperation Programme (section on an Indian aid agency).

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Lines of credit

Lines of credit under the IDEAS scheme

In 2003-04 the Government of India set up what is now the Indian Development and Economic Assistance Scheme (IDEAS). Under it, concessional lines of credit backed by the government are routed through the Export-Import Bank of India to partner governments and institutions. The loans pay for goods and services, including consultancy, supplied from India (Exim Bank of India).

300+

lines of credit extended

Ministry of External Affairs, Lines of Credit for Development Projects, as on August 2024

US$32 bn

total value of lines of credit

Ministry of External Affairs, Lines of Credit for Development Projects, as on August 2024

partner countries

Ministry of External Affairs, Lines of Credit for Development Projects, as on August 2024

~600

projects covered

Ministry of External Affairs, Lines of Credit for Development Projects, as on August 2024

Sectors: railways, roads, agriculture, industry, airports, ports, hospitals, power transmission, hydroelectricity and information technology (MEA).

Mechanism (Exim Bank): credits let buyers in partner countries import projects, equipment, goods and services from India on deferred credit terms.

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Where the credit goes

Lines of credit by partner, as on August 2024

The MEA states that the neighbourhood gets priority under its Neighbourhood First policy. Bangladesh alone accounts for about a quarter of the total. Africa, taken together, received 196 lines of credit worth US$12 billion across 42 countries.

Indian lines of credit, US$ billion (as on August 2024)

Ministry of External Affairs, Lines of Credit for Development Projects, as on August 2024

Sri Lanka is shown at US$2 billion; the MEA says "more than US$2 billion". Oceania received US$155 million.

Examples named by the MEA include railway projects in Bangladesh and Sri Lanka and Hanimaadhoo International Airport in the Maldives.

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Assessing the model

Strengths and criticisms of India's approach

India presents its development partnership as demand-driven and free of the policy conditions attached to much DAC aid. Lines of credit, though, are designed to buy Indian goods and services, which is close to the OECD's definition of tied aid. Both things can be true at once, and partner governments weigh them differently.

Strengths claimed

Requests come from partner governments. Few policy conditions. Training builds networks across the Global South. Infrastructure is visible and long-lived.

Common criticisms

Procurement tied to Indian suppliers. Credits must be repaid, adding to partners' debt. Limited public data on disbursement and results compared with DAC reporting, which makes outside assessment hard.

The Exim Bank has itself invited proposals for socio-economic impact assessments of projects funded under these lines of credit, a sign that evidence on results is still being built.

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Comparing providers

DAC donors and India compared

Comparing India with DAC donors helps explain why the same partner country may prefer different providers for different jobs. The table summarises the formal differences. It describes rules and channels, and says nothing on its own about which model delivers more development.

Feature	DAC donors	India
Reports to OECD as ODA	Yes, required	No; not a DAC member
Main instruments	Grants, concessional loans, multilateral contributions	Lines of credit, grants, training
Policy conditions	Often, especially on budget support	Few, by stated policy
Procurement	Mostly untied (86% fully untied in 2009)	Lines of credit buy from India
Who implements	Governments, UN agencies, NGOs, firms	Indian companies and public bodies
Managing body	Development agencies or ministries	MEA Development Partnership Administration

Sources: OECD; MEA; Exim Bank of India; Paris monitoring as tabulated in Wikipedia. See Global Development Governance 101.

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Section Eight

Philanthropy in India: money and law

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The scale

India's social sector funding, and the gap

The India Philanthropy Report 2026, from Bain & Company and Dasra, estimates that total social sector funding grew at 13 per cent a year between FY20 and FY25 to about ₹27 lakh crore. Public spending is about 95 per cent of it. Private philanthropy, at a projected ₹1.43 lakh crore in FY25, is small by comparison, and the report estimates a funding gap near ₹16 lakh crore against NITI Aayog norms.

₹27 lakh cr

total social sector funding, FY25 (about US$310 bn)

Bain & Company and Dasra, India Philanthropy Report 2026

~95%

share from public spending

Bain & Company and Dasra, India Philanthropy Report 2026

₹1.43 lakh cr

private philanthropy, FY25 projection

Bain & Company and Dasra, India Philanthropy Report 2026

₹16 lakh cr

estimated funding gap, FY25

Bain & Company and Dasra, India Philanthropy Report 2026

Lesson: philanthropy cannot replace the state. Its value lies in risk-taking, innovation, advocacy and filling gaps the state does not reach.

Caution: these are consultancy estimates with stated methods. Quote them as estimates and name the report and year.

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Who gives

Families, companies and the rise of family offices

Families are at the centre of private giving in India. The 2026 report estimates that they contribute about 42 per cent of private giving, through personal philanthropy and through the CSR of family-owned or family-run businesses. The 2025 report found that such businesses provide 65 to 70 per cent of private-sector CSR, about ₹18,000 crore a year.

~42%

of private giving from families (personal and family-business CSR)

Bain & Company and Dasra, India Philanthropy Report 2026

45 → 300

family offices in India, 2018 to 2024

Bain & Company and Dasra, India Philanthropy Report 2025

About 65 per cent of families had dedicated staff to manage their philanthropy (2025 report).
41 per cent preferred grant-making as their main approach; 23 per cent combined grants with running programmes.
Causes are widening to gender, equity, climate, livelihoods, arts and animal welfare.

Sources: Bain & Company and Dasra, India Philanthropy Report 2025 (27 February 2025); Bain & Company and Dasra, India Philanthropy Report 2026 (26 February 2026).

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CSR: who must spend

Section 135 of the Companies Act 2013: who is covered

India is one of the few countries where companies are required by law to spend on social causes. Section 135 of the Companies Act 2013 took effect on 1 April 2014. It applies to any company that, in the immediately preceding financial year, met any one of three thresholds.

Threshold under s135(1)	Amount
Net worth	₹500 crore or more
Turnover	₹1,000 crore or more
Net profit	₹5 crore or more

The company must form a CSR committee of three or more directors, at least one independent (s135(1)).
The committee drafts the CSR policy, recommends spending and monitors it (s135(3)).

The Board approves the policy and places it on the company's website (s135(4)).
If the required spend is ₹50 lakh or less, the Board itself does the committee's work (s135(9)).

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The 2% rule

Spending 2 per cent, and what happens to unspent money

Section 135(5) requires the Board to ensure the company spends at least 2 per cent of its average net profits from the three immediately preceding financial years, giving preference to local areas where it operates. Amendments in 2019 and 2020 turned a comply-or-explain rule into a spending duty with money penalties.

CALCULATE: 2% of average net profit, last three years

→

SPEND: in the financial year, under the CSR policy

→

ONGOING PROJECT UNSPENT: move to Unspent CSR Account within 30 days; spend within 3 years

→

OTHER UNSPENT: transfer to a Schedule VII fund (s135(5) proviso, s135(6))

Penalty (s135(7)): the company pays twice the amount it should have transferred or ₹1 crore, whichever is less; each officer in default one tenth or ₹2 lakh, whichever is less.

Impact assessment (CSR Rules, rule 8(3)): companies with an average obligation of ₹10 crore or more must commission independent assessment of projects of ₹1 crore or more.

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Schedule VII

Schedule VII: what counts as CSR

CSR spending counts only if it falls within the activities listed in Schedule VII to the Companies Act 2013. The list has been amended several times, including in 2019 and 2020. Under the CSR Rules, activities that benefit the company's own employees do not count, and activities outside India count only for training Indian sports personnel.

Item	Activity (summarised)
(i)	Hunger, poverty and malnutrition; health care, sanitation and safe drinking water
(ii)	Education, including special education and vocational skills; livelihood projects
(iii)	Gender equality; homes and hostels for women and orphans; care for older people; reducing inequalities
(iv)	Environmental sustainability, animal welfare, conservation; Clean Ganga Fund
(v)	National heritage, art and culture; public libraries; traditional crafts
(vi)–(vii)	Armed forces veterans and war widows; training for sports
(viii)	Prime Minister's National Relief Fund and specified welfare funds
(ix)–(xii)	Technology incubators and research; rural development; slum area development; disaster management

Source: Companies Act 2013, Schedule VII, as amended (ca2013.com).

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CSR spending

CSR spending, 2018-19 to 2022-23

The Ministry of Corporate Affairs publishes CSR spending reported by companies. Total spending rose from ₹20,218 crore in 2018-19 to ₹29,988 crore in 2022-23. For scale, the same India Philanthropy Report estimates total private philanthropy at well over a lakh crore, so mandatory CSR is a large but minority share of private giving.

Total CSR expenditure, ₹ crore

Ministry of Corporate Affairs CSR data via data.gov.in, 2018-19 to 2022-23

Reported spending rose in every year of this series, including the pandemic year 2020-21. Growth was slowest between 2020-21 and 2021-22.

These are reported figures. The MCA's state-level series ends in 2022-23, the latest year it publishes at that level.

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Concentration

CSR money follows company headquarters

Section 135(5) asks companies to prefer local areas where they operate. Most large companies are headquartered in a few industrial states, so CSR spending concentrates there. In 2022-23 Maharashtra received ₹5,497 crore, while Bihar received ₹235 crore and Meghalaya ₹22 crore. A further ₹6,061 crore was reported as "PAN India", with no state named.

Sector, 2022-23	₹ crore
Education	10,086
Health care	6,831
Rural development	2,005
Environmental sustainability	1,960
Livelihood projects	1,654
Hunger, poverty, malnutrition	1,233
All sectors	29,988

State or category, 2022-23	₹ crore
Maharashtra	5,497
Gujarat	2,008
Karnataka	1,986
Uttar Pradesh	1,153
Bihar	235
Meghalaya	22
PAN India (no state)	6,061

Education and health took more than half of all CSR in 2022-23. Source: Ministry of Corporate Affairs CSR data via data.gov.in, 2018-19 to 2022-23. See CSR & ESG 101.

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FCRA

The Foreign Contribution (Regulation) Act 2010

Foreign money for Indian civil society is regulated by the Foreign Contribution (Regulation) Act 2010. An association may accept a foreign contribution only if it is registered with the central government or has prior permission for a specific contribution (s11). Certain people may not accept foreign contributions at all, including election candidates, editors and publishers of newspapers, judges, government servants, legislators and political parties (s3).

Foreign contribution

A donation or transfer of currency, security or article, beyond a specified value, from a foreign source (PRS summary of the Act). The Act governs both acceptance and use.

Registration must be renewed before it expires (s16).
Foreign funds must be used for the purpose for which they were received (s8).
The government may suspend (s13) or cancel registration.
More than 19,000 registrations were cancelled between 2011 and 2019, according to the 2020 Bill's statement of objects and reasons (SCC Times, 23 September 2020).

FCRA status is the first thing a foreign funder will ask an Indian partner about.

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FCRA 2020

The 2020 amendment, section by section

Parliament passed the Foreign Contribution (Regulation) Amendment Bill in September 2020 and it received assent on 28 September 2020 as Act No. 33 of 2020. It tightened almost every stage of the money's journey. The Supreme Court upheld the main amendments in Noel Harper v Union of India, judgment of 8 April 2022, holding that the right to association does not include a right to unregulated foreign funds.

Section of the 2010 Act	Change made in 2020
s3	Public servants, and employees of government-owned corporations, barred from accepting
s7	No transfer of foreign contribution to any other person, even if registered
s8(1)	Administrative expenses capped at 20 per cent (was 50 per cent)
s12(1A), s17	Receipt only in an "FCRA Account" at the notified State Bank of India branch, New Delhi
s12A	Aadhaar of office bearers, directors or key functionaries required
s13	Suspension may be extended by a further 180 days
s14A	New route to surrender a registration certificate

Sources: FCRA (Amendment) Act 2020 (No. 33 of 2020), Gazette of 28 September 2020; PRS bill summary; Supreme Court Observer, WP (C) 566/2021.

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Tax and giving

Donations under the Income-tax Act 2025, section 133

The Income-tax Act 2025 applies from 1 April 2026 and replaces the Income-tax Act 1961. Section 133 now governs deductions for donations, the role section 80G played under the old Act. For a gift to a charity to earn the 50 per cent deduction, the charity must be a registered non-profit organisation, or a listed institution or fund, approved under section 354.

100 per cent deduction (s133(1)(a)): listed funds such as the Prime Minister's National Relief Fund, PM CARES, the National Children's Fund and Swachh Bharat Kosh.
50 per cent deduction (s133(1)(b)): donations to an approved registered non-profit organisation established in India for a charitable purpose.

Cap (s133(2)): certain donations count only up to 10 per cent of adjusted gross total income.
Cash (s133(5)): no deduction for cash donations over ₹2,000.
Verification (s133(6)): claims are checked against the information the organisation files with the tax department.

Source: Income Tax Department, Income-tax Act 2025, section 133. CSR sums spent under s135(5) and paid into Swachh Bharat Kosh or the Clean Ganga Fund do not qualify (s133(1)(a)(xx) and (xxi)).

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Section Nine

Effective altruism and its critics

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The argument

From Singer's essay to a movement

Singer's 1972 essay set out a simple chain of reasoning. Effective altruism, a name coined in 2011, added a second question: if you are going to give, how do you do the most good with each rupee or dollar? The philosophers most associated with it are Peter Singer, Toby Ord and William MacAskill. Giving What We Can and 80,000 Hours came together under the Centre for Effective Altruism in 2011.

PREMISE: suffering from lack of food, shelter and care is bad

→

PREMISE: if we can prevent it at little moral cost, we ought to

→

STEP: distance does not change the duty

→

EA ADDS: compare options and fund the most cost-effective

What EA measures: outcomes per dollar, such as deaths averted or years of healthy life gained.

What EA asks of donors: give a meaningful share of income, and choose where it goes by evidence.

Sources: Wikipedia, Famine, Affluence, and Morality; Wikipedia, Effective altruism.

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GiveWell

GiveWell: rating charities by cost per life saved

GiveWell was founded in 2007 by Holden Karnofsky and Elie Hassenfeld, who had worked at a hedge fund and found that the data they wanted on charities often did not exist. Where many evaluators looked at overhead ratios, GiveWell estimates how much good a donation does, using published evidence and its own cost-effectiveness models. It argued early on that charities should spend more on overhead if that paid for tracking results.

2007

GiveWell founded

Wikipedia, GiveWell

US$39 m

rapid response grants in 2025 after USAID cuts

Wikipedia, GiveWell

Recommends a small number of top charities working in low-income countries.
Publishes its models and reasoning so others can check them.
Leif Wenar, a philosopher, has criticised it for not taking enough account of harms caused by recommended charities.
Overhead is treated as a cost like any other, judged by what it buys.

Compare this with Cost Effectiveness 101, which teaches the same arithmetic for programme choices.

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Top charities

GiveWell's top charities, September 2025

GiveWell lists four top charities. For each it gives a unit cost and an estimated average cost per life saved for the funding it directed in 2022–2024. These are model estimates with wide uncertainty. All four programmes work in sub-Saharan Africa or similar settings, where child mortality from malaria and vaccine-preventable disease is high.

Charity and programme	Unit cost	Estimated cost per life saved
Malaria Consortium: seasonal malaria chemoprevention	About US$7 per child protected	US$4,000
Against Malaria Foundation: insecticide-treated nets	About US$6 per net	US$5,500
Helen Keller Intl: vitamin A supplements	About US$2 per child per year	US$3,500
New Incentives: cash for routine childhood vaccines (Nigeria)	About US$146 per infant vaccinated	US$4,500

Source: GiveWell, Our Top Charities, last updated September 2025. Figures are averages for funding directed 2022–2024.

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Reading the numbers

What "cost per life saved" does and does not tell you

A figure such as US$4,000 per life saved is the output of a model. It combines the effect size from trials, local disease burden, coverage, costs and adjustments for what would have happened anyway. Change any input and the figure moves. Its value lies in comparing options on the same method, and its main danger is false precision.

What it tells you

Which of several health programmes, assessed the same way, is likely to avert more deaths per dollar in a particular setting.

What it leaves out

Outcomes that are hard to count, such as rights, dignity, voice or institutional change. Long-run effects on the state. Benefits outside health.

Ask which inputs drive the result most (a sensitivity analysis).
Ask whether the estimate travels: a malaria figure from the Sahel tells you little about a district in Odisha without local data.
Ask who chose the outcome being counted.

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Critiques

Five criticisms of effective altruism

Effective altruism attracted strong criticism as it grew, and more after the collapse of the FTX cryptocurrency exchange, whose founder Sam Bankman-Fried had been a major funder of the movement. The criticisms below are drawn from the published debate summarised in Wikipedia's articles on effective altruism and on GiveWell.

Incrementalism: it favours fixable, measurable interventions over systemic or political change.
Elitism: Ken Berger and Robert Penna of Charity Navigator called the ranking of causes "elitist".
Uncounted harms: Leif Wenar argues GiveWell does not take enough account of harms caused by the charities it recommends.

Concentration: a few very large donors, such as Dustin Moskovitz, provide much of the movement's money.
Longtermism: later books, such as Toby Ord's The Precipice (2020), turned toward risks to future generations, which raises the question of how much attention stays on present poverty.

Cost-effectiveness remains a useful tool. These criticisms are reasons to use it beside participation and judgement.

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In South Asia

Using effective-giving ideas in South Asia

Effective-giving thinking has a role in India, but it needs local inputs. Unit costs, disease burden and existing public provision differ sharply from the settings GiveWell models. A programme that is cost-effective in a country with weak public health systems may duplicate a functioning state scheme in another.

Useful habits

Compare at least two ways of reaching the same goal. Price them with local costs. Count the counterfactual: what the state or the market would have done anyway. Publish the reasoning.

Local cautions

Check overlap with public schemes such as the National Health Mission or nutrition programmes. Ask whether the funding builds or bypasses public systems. Include outcomes that matter to the community, even when they are hard to measure.

Illustrative: a funder comparing two adolescent anaemia projects in Jharkhand should cost both with Jharkhand prices and current public supplementation coverage, before borrowing any global figure.

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Two cultures

Effective altruism and trust-based philanthropy compared

Two approaches dominate current debate among funders. Effective altruism asks the funder to decide carefully where money does most good. Trust-based philanthropy asks the funder to hand more decisions to the people doing the work. They answer different questions, and a thoughtful funder can borrow from both.

	Effective altruism	Trust-based philanthropy
Starting question	Where does a dollar do the most good?	How can funders share power with grantees?
Who decides	Funder, using evidence	Grantee, with funder support
Funding type	Often restricted to a specific programme	Multi-year, unrestricted
Evidence	Trials and cost-effectiveness models	Grantee knowledge and feedback
Main risk	Ignores what cannot be counted	Weak accountability for results

Section 10 turns to trust-based philanthropy and the wider question of power in funding.

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Section Ten

Power, trust and localisation

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Power in a grant

Who holds power in a funding relationship

Every grant is a relationship between unequal parties. The funder decides whether to fund, for how long, on what terms and with what reporting. The grantee holds knowledge of the community and the work, but can be replaced. That imbalance shapes behaviour on both sides: grantees tell funders what they want to hear, and funders mistake compliance for results.

Funder holds

Money, timing, renewal, the choice of indicators, the reporting template and the power to walk away. Often also the public story about the work.

Grantee holds

Relationships with communities, local knowledge, staff who stay, and the practical judgement of what will work in a particular block or ward.

A useful test: who can end the relationship at short notice without cost to themselves? In most grants it is the funder alone.

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Trust-based philanthropy

Trust-based philanthropy: the idea

Trust-based philanthropy was first set out in 2014 by the Whitman Institute in San Francisco, which had argued for years that grantees should hold more decision-making power. The approach aims to shift the imbalance between funders and nonprofit leaders toward trust, shared power and mutual accountability. It spread quickly during the COVID-19 pandemic, when many funders relaxed reporting and converted restricted grants to general support.

Trust-based philanthropy

An approach that treats grantees as partners pursuing their own goals, reduces the burdens funders impose, and gives grantees more say over how money is used (Wikipedia, Trust-based philanthropy).

More than 800 organisations signed a pledge to adopt trust-based practices.
Critics include the Philanthropy Roundtable, which rejects the focus on power.
The hardest problem is keeping meaningful measurement while cutting reporting.

Sources: Wikipedia, Trust-based philanthropy; Trust-Based Philanthropy Project.

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Six practices

The six practices of trust-based grantmaking

The Trust-Based Philanthropy Project turns the idea into six practical steps for funders. Each one moves a burden from the grantee to the funder. Read them as a checklist you can hold up to any funder, including an Indian CSR team or a family foundation.

Practice	What it asks of the funder
Give multi-year, unrestricted funding	Let grantees decide where money is most needed
Do the homework	Get to know prospective grantees before asking for proposals
Simplify paperwork	Shorter applications and reports focused on dialogue
Be transparent and responsive	Open, honest communication about decisions
Solicit and act on feedback	Ask grantees and communities what to change, and change it
Offer support beyond the cheque	Leadership, networks and organisational support

Source: Trust-Based Philanthropy Project, Six Practices of Trust-Based Grantmaking, accessed October 2026.

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Restricted and unrestricted

Restricted and unrestricted money

Restricted grants pay only for named activities. Unrestricted grants pay for whatever the organisation judges most needed, including salaries, systems, reserves and new ideas. Most Indian NGOs live on restricted project money, with overheads squeezed by funders and, for foreign funds, by the 20 per cent cap on administrative expenses in s8 of the FCRA.

When money is all restricted

No reserves, so one late payment stops work. Finance and monitoring staff are underpaid. Staff move between projects as grants end. Organisations cannot invest in learning.

When some money is unrestricted

Reserves bridge gaps. Systems for data and finance improve. Organisations can respond to a flood or a policy change without waiting for a new grant.

Illustrative: an NGO with a ₹2 crore budget and no unrestricted income cannot cover a three-month funding delay from any source. A reserve of ₹50 lakh would cover it.

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Grand Bargain

The Grand Bargain of 2016

At the World Humanitarian Summit in Istanbul in May 2016, some of the largest donors and humanitarian organisations agreed the Grand Bargain, a set of 51 commitments to get more means into the hands of people in need and make humanitarian action more efficient. First conceived as a deal between the five biggest donors and the six largest UN agencies, it now has 71 signatories. One commitment became the centre of the localisation debate.

The localisation target

Signatories committed to achieve by 2020 a global, aggregated target of at least 25 per cent of humanitarian funding to local and national responders as directly as possible (Grand Bargain, May 2016, commitment 2.4).

A review in 2021 led to Grand Bargain 2.0.
In June 2023 the signatories endorsed a further iteration.

Its focus: quality funding, localisation and participation of affected people.
Signatories also committed to multi-year investment in the capacities of local and national responders.

Sources: IASC, About the Grand Bargain, accessed October 2026; Grand Bargain document, May 2016.

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Target and reality

Localisation: the 25 per cent target and the 5 per cent reality

Nine years after the Grand Bargain, the target remains far away. The Global Humanitarian Assistance Report 2026 found that local and national actors received only 5 per cent of humanitarian funding as first-tier recipients in 2025, US$1.2 billion. Localised funding fell in volume by 27 per cent, faster than funding overall. Counting money passed on through intermediaries as well, 8.7 per cent reached local and national actors, down from 9.5 per cent in 2024.

Direct funding to local and national actors, % of humanitarian funding

Development Initiatives, Global Humanitarian Assistance Report 2026

Indirect funding passed on through intermediaries added US$1.3 billion, much of it from UNHCR and UNICEF.

The gap is partly a counting problem: money passed down through several layers is hard to trace. It is also a power problem: intermediaries keep control.

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India's constraint

Localisation in India and the FCRA

Localisation asks international organisations to pass money and decisions to local ones. In India, since 2020, s7 of the FCRA forbids a registered organisation from transferring foreign contributions to any other person. An international NGO's Indian office with foreign funds cannot sub-grant them to a district-level partner, even one with its own FCRA registration.

Consequences

Foreign funders must contract each Indian organisation directly, which favours larger NGOs able to hold FCRA registration, manage an SBI New Delhi account and meet compliance. Small community groups are cut off from foreign money.

Responses

Direct grants from foreign funders to more partners; Indian intermediaries using domestic money for sub-grants; more domestic philanthropy and CSR. In Noel Harper (2022) the Supreme Court suggested NGOs look to domestic donors.

Domestic philanthropy and CSR therefore matter for localisation in India. They are the funds that can still flow to small local organisations.

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Decolonising aid

Who sets the agenda?

The localisation debate is part of a wider critique. Writers on decolonising development argue that aid often keeps decisions, knowledge and money in the Global North and in capital cities, while the risks of failure sit with communities. The questions apply to Indian funders working in other states as much as to foreign donors.

Whose definition of the problem is used in the proposal?
Who owns the data collected from communities?
Who is named as the author of the report?

What share of the budget is spent in the place the work happens?
Who decides when the programme ends?
Are local staff paid on the same scale as staff from elsewhere?

Go further with Decolonial Development 101 and Participatory Methods 101.

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Section Eleven

Putting it to work

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Reading a funder

Six questions to ask about any funder

Before you apply, or before you accept, read the funder as carefully as it will read you. The questions below work for a bilateral agency, a foundation, a company's CSR team or a wealthy family. Most answers are in public documents if you look.

Question	Where to look	Warning sign
Where does its money come from?	Annual report, CSR policy, government budget	Source is unstable or contested
What does it fund, and for how long?	Grants list, past annual reports	Mostly one-year grants
Who decides?	Board, committee, programme staff	Decisions sit far from the work
What does it ask in return?	Grant agreement template	Heavy reporting for small sums
How did it behave in 2020 and 2025?	News, peers, its own statements	Abrupt exits without notice
Does it fund overhead?	Budget guidelines	Overhead capped far below real cost

Ask two current grantees what working with the funder is like. Their answer is worth more than the website.

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Sources

Where to find information on Indian and foreign funders

Indian law and global reporting standards make a good deal of funder information public. A few hours with these sources can tell you a funder's size, priorities and stability before your first meeting.

CSR: the company's CSR policy on its website (s135(4)) and its annual report on CSR, which must explain any unspent amount.
MCA data: CSR spending by state and sector on data.gov.in.
Foreign funders: OECD aid data and the funder's country strategy.

Foundations: annual reports and grants lists; for US foundations, public tax filings.
Philanthropy research: the India Philanthropy Report (Bain and Dasra), published each year.
Your own records: how the funder paid, reported and communicated in past grants.

Keep a one-page funder profile for each, updated yearly. It saves weeks when a call for proposals opens.

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Assessing an offer

A decision table for a grant offer

When an offer arrives, read the terms before the amount. Seven terms decide whether a grant strengthens or drains an organisation. The table gives a simple green, amber and red test for each, which you can use in a board discussion.

Term	Green	Amber	Red
Duration	3 years or more	2 years	Under 1 year, renewable
Restriction	Unrestricted or broad	Programme budget with flexibility	Line items, no changes
Overhead	Real cost covered	Fixed rate below cost	None allowed
Reporting	Annual, narrative plus key data	Quarterly	Monthly, custom indicators
Data and IP	Shared ownership	Funder use with consent	Funder owns all data
Exit	Notice and transition support	Notice only	Termination at will
Payment	In advance	Quarterly in advance	In arrears

Two or more reds is a reason to negotiate. Under-priced overhead and payment in arrears together can turn a large grant into a loss.

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Worked example

Worked example: a CSR grant (Illustrative)

Illustrative. A manufacturing company had average net profits of ₹300 crore over the last three financial years, so its CSR obligation is ₹6 crore (2 per cent, s135(5)). It offers your NGO ₹1.2 crore over two years for girls' secondary education in two districts near its plant.

Eligibility: education falls under Schedule VII item (ii).
Local preference: districts near the plant meet the proviso to s135(5).
Implementing agency: your organisation must be registered with the MCA for CSR (rule 4(2)), have a three-year track record, and either be exempt under s10(23C) or hold 12A registration and 80G approval (rule 4(1)(d), as amended in 2022). The rule still names those sections of the 1961 Act, which the Income-tax Act 2025 replaced from 1 April 2026: check the current text before relying on it.

Two years: this is an ongoing project. Unspent money at year-end goes to the company's Unspent CSR Account within 30 days (s135(6)).
Impact assessment: not mandatory, because the company's average obligation is below ₹10 crore (rule 8(3)).
Negotiate: overhead, a payment schedule in advance, and data ownership.

Ask the company for its approved CSR policy and annual action plan. A grant outside the plan may be delayed while the Board revises it.

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Worked example

Worked example: a foreign grant under the FCRA (Illustrative)

Illustrative. A European foundation offers your FCRA-registered NGO ₹1 crore over one year for a livelihoods programme run with three community-based organisations in Assam. Plan the budget against the FCRA before you sign.

RECEIVE: only in the FCRA Account at the notified SBI branch, New Delhi (s17)

→

BUDGET: administrative expenses at most ₹20 lakh, 20 per cent (s8(1))

→

PARTNERS: no transfer of foreign funds to the three CBOs (s7)

→

REDESIGN: pay CBO members' costs directly, or fund CBOs from domestic money

Option A: your staff deliver directly, paying vendors and participants from your FCRA accounts. The CBOs advise but receive no foreign funds.

Option B: the foundation funds each CBO directly, if they have their own FCRA registration; or a domestic donor funds the CBOs' share.

Check how the FCRA Rules define administrative expenses before you set salaries, and record the reasoning in your budget notes.

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Checklist

Ten checks before you sign

Run through this list with your finance lead and a board member before signing any grant agreement. Each item has caused real problems for organisations that skipped it.

Is the activity eligible under the funder's rules: Schedule VII for CSR, the purpose of your FCRA registration for foreign funds?
Does the money arrive in the right account?
Is overhead priced at real cost, and within the 20 per cent FCRA cap if foreign?
Are payments in advance, and what happens if they are late?
Who owns the data, and does consent cover the funder's use under the DPDP Act 2023?

Can you change budget lines without fresh approval?
What notice does either side give to end the grant?
Are reporting demands proportional to the amount?
Does the grant depend on sub-granting that the FCRA forbids?
Does accepting it make one funder more than half your income?

Keep the completed checklist with the signed agreement. It is your record of what you knew when you said yes. See Data Protection & the DPDP Act 101.

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Summary

Ten points to take away

Each point connects to a decision you will make when you design, fund or run development work. Facts are stated as of October 2026; check for later amendments and new data.

ODA is official, developmental and concessional, measured since 2019 by grant equivalent.
Only four DAC donors exceeded 0.7 per cent of GNI in 2025; the DAC gave 0.26 per cent.
Aid fell 23.1 per cent in 2025, the largest drop on record, led by the US (−56.9 per cent).
Sachs, Easterly and Moyo disagree about why aid fails; the macro evidence is fragile.
India receives aid worth 0.07 per cent of GNI and has extended US$32 billion in lines of credit.
CSR under s135: 2 per cent of average net profit, Schedule VII activities, unspent rules.
FCRA 2020: no transfer (s7), 20 per cent admin cap (s8), SBI New Delhi account (s17).
Income-tax Act 2025, s133, governs donation deductions from 1 April 2026.
Cost per life saved is a model; use it with local data and judgement.
Localisation lags: 5 per cent direct to local actors in 2025 against a 25 per cent target.

Re-check the OECD figures when final 2025 data are released in December 2026.

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Where next

Where next: related courses

Aid and philanthropy connect to most other courses in the ImpactMojo 101 Series. These are the most direct next steps, chosen to deepen the finance, law, evidence and power questions raised in this deck.

Money for development at scale: Development Finance 101
Company giving and reporting: CSR & ESG 101
Raising money for your organisation: Fundraising Basics 101
Comparing options per rupee: Cost Effectiveness 101
Global institutions and rules: Global Development Governance 101

Testing what works: Impact Evaluation 101
Who sets the agenda: Decolonial Development 101
Interests behind aid decisions: Political Economy 101
Designing fundable programmes: Programme Design 101
Monitoring for funders and for learning: MEL Basics 101

All courses are free. Start with Development Finance 101 for the money, or Fundraising Basics 101 if you are writing a proposal this month.

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Aid & Philanthropy 101 · Complete

Read the terms,
then follow the money

Aid budgets fell sharply in 2025 and Indian philanthropy is growing under tight law. Know where each rupee comes from, what it allows, and who decides. Explore the rest of the ImpactMojo 101 Series, free forever.

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