The Builders Report: What We Learned When Aid Froze
Unlock Aid interviewed 50+ social entrepreneurs & partners to understand how the world’s most resilient innovators navigated freezes to foreign aid. Here's what we learned.
Dear Unlock Aid community,
The 2025 aid freeze did not just expose the weaknesses of the old system. It also highlighted where we must focus support to build what comes next.
This summer, Unlock Aid interviewed more than 50+ social entrepreneurs, their funders, and ecosystem partners to understand how the world’s most resilient innovators are navigating dramatic shifts to international assistance. Today, we’re releasing our State of Builders Report, which summarizes what we learned. The report also includes recommendations for funders and policymakers on where we go from here.
The first opportunity in decades. Despite the challenges, disruptions to international assistance now creates the first real opportunity in decades to institutionalize a new model for global development, one rooted in evidence for impact, financial sustainability, and local leadership. What comes next will determine whether we rebuild what broke or invest in what works.
Click here to download the report and read the State of the Builders Report in full.
Here are some of the report highlights:
What We Heard
Social Entrepreneurs Were Able to Withstand (and Even Thrive) During This Moment Because They Had Built Diversified Revenue Models
When freezes to U.S. international assistance hit in early 2025, many of the aid industry’s largest implementers collapsed or significantly downsized their operations. This had a direct impact on the communities they served, and exposed the dangers of building systems and organizations that relied on a single donor.
Meanwhile, 82% of the social entrepreneurs we interviewed experienced zero or minimal impact. This is because they’d deliberately built multiple funding streams over many years with no single source of revenue typically exceeding 30%. None built business models dependent on aid. Even the 18% that reported significant impacts were all able to bounce back by tapping into other revenue sources.
Nearly one-third of the organizations we spoke to reported they even saw their revenues increase this year, especially as local governments, philanthropies, and markets looked for alternative service providers in the wake of program closures.
*Note The findings from this report reflect primarily the experiences of organizations in relatively stable environments. Its conclusions should not be applied to fragile states or conflict zones, where weaker private markets and state capacity create more dependence on international funding.Social Entrepreneurs Are Doubling Down on Revenue Pathways Beyond Aid
Rather than pursuing aid dollars post-freeze, or trying to figure out how to become the “new” aid industry players, builders told us they are accelerating their direct-to-government relationships, investing more in generating commercial revenue, and exploring new and nontraditional sources of income, such as tapping into donor advised funds (DAFs), diaspora investments, sovereign wealth funds, and working more with regional multilateral banks.Local Governments Are Increasingly Turning to Them.
When U.S.-funded aid contractors withdrew, many interviewees reported that local governments increasingly turned to social entrepreneurs that had been doing vital work all along, but had often been ignored by traditional implementers, or that had had their work buried deep within subcontracting arrangements. Now social entrepreneurs were able to have much more direct relationships with the local governments they served.Entrepreneurs Shared Concerns About Secondary Effects of Aid Cuts.
While most of the social entrepreneurs we interviewed said they experienced only minimal direct impacts, many interviewees shared concerns about the potential secondary effects of aid cuts, especially in highly aid-dependent and debt-distressed countries. Interviewees said that as governments reallocated budgets to absorb previously-funded services, that could lead to cuts in other sectors.Social Entrepreneurs Report Mixed Feelings About Traditional Philanthropy.
Entrepreneurs spoke favorably about smaller family foundations that backstopped organizations directly or via emergency funds amid major disruptions to international assistance earlier in the year. However, they also noted that traditional philanthropy has largely closed ranks around their existing grantees, with limited appetite for funding new solutions, a frustration for innovators with proven models ready to scale.Optimism and Opportunity to Reset the System.
Despite challenges, entrepreneurs expressed genuine optimism about the future. They said the traditional aid model’s flaws – expensive middlemen, parallel systems, financially unsustainable projects, innovation blocked by rigid procurement – have become undeniable in the wake of the cuts. Builders believe they can deliver 60%-70% of legacy aid’s impact at 10%-20% of the cost. As one African entrepreneur noted: “The shift from dependence to ownership, from charity to investment, from projects to systems – that’s what gives entrepreneurs hope.”
Click here to download the report and read the State of the Builders Report in full.
Where Do We Go From Here?
Social Entrepreneurs Want to Partner with the U.S. Government, But on New Terms.
Innovators said they remained open to American engagement but seek direct partnerships designed with local governments and that were more responsive to local priorities. Entrepreneurs said they wanted jolts of catalytic funding to address the “Missing Middle” or “Valley of Death” to build sustainable business models rather than pursuing funding arrangements that created long-term dependency. They’re asking for a “build fast, try new things” approach: listen to what countries need, support proven organizations on the ground, measure systemic change, and invest in catalytic innovation.What Funders Can Do.
Social entrepreneurs said major institutional funders deploying $50-$100M+ annually should shift from funding intermediaries to backing proven solutions directly through outcomes-based contracts, long-term commitments (5-10 years), and flexible funding that allows adaptation to local contexts. Smaller philanthropic foundations should provide risk-tolerant funds for innovation, patient capital for pilots, technical assistance for R&D, and bridge funding for organizations transitioning between models. All funders should support the enabling ecosystem: advocacy, matchmaking, narrative shifts, knowledge sharing, and talent development. These functions often lack funding but determine whether innovations scale or remain boutique, and can influence the innovation and entrepreneurship ecosystem writ large.
Click here to download the report and read the State of the Builders Report in full.
Introducing the Solutions Index
The social innovator ecosystem didn’t get built overnight. Builders have been investing in new models for the past twenty years, bolstered by support from a number of forward-leaning philanthropies and impact investors. The State of the Builders Report also includes a chronology of where we came – and where we can go from here.
Now, as major funders like the State Department redesign their approaches, they’re searching for proven actors outside of their traditional, legacy approaches – organizations delivering cost-effective and measurable results, and with financially sustainable models.
That’s why, as a follow up to the State of the Builders Report, we’re soon to launch the Solutions Index: a public, easy-to-use resource cataloging proven global development solutions with capacity to absorb significant scale-up funding. Our goal for the Solutions Index will be to help governments, investors, and philanthropists quickly identify high-impact, cost-effective, and scale-ready partners.
We’ve already received nearly 100 submissions and our first review committee is set to meet this week. If your organization is a high-impact social innovator with a proven record of results, financial sustainability, and government or market validation, make sure you nominate yourself this week.
Click here to learn more about the Solutions Index and to nominate your organization.
The builders are ready. The models are proven. The need is urgent. Read the State of the Builders Report to see where we need to go from here.
To Progress,
Unlock Aid