The UN is reinventing its finances — and it’s a better bet than you think

This article was originally published in Devex.

It’s been a tumultuous year in Turtle Bay. Amid new threats to defund the United Nations, the secretary-general and U.N. member states have used the organization’s 80th anniversary to focus on cost-saving and efficiency measures. This effort, known as UN80, has been underway for nearly a year, and while staffing cuts and mergers have helped staunch the bleeding, a critical question remains: How can we pay for the U.N.’s future?

Funding determines what the U.N. can actually do. Whether the challenge is pandemic preparedness, climate adaptation, or digital capacity in low- and middle-income countries, the U.N. needs capital to translate scientific consensus and political agreement into action.

The winner of this year’s race for the position of U.N. secretary-general will inherit a system that is financially strained. Climate impacts, humanitarian needs, and development challenges are intensifying while available resources are falling dramatically short. The annual financing gap for achieving the Sustainable Development Goals in low- and middle-income countries is now estimated at $4 trillion. Closing this gap will require new and creative approaches to financing international cooperation.

Trends in official development assistance will make the new secretary-general’s task difficult. In 2025, ODA experienced its most severe contraction ever, with several major donor countries implementing deep cuts to aid budgets and development programs.

There is little reason to expect these funds to return anytime soon. Most donor governments have defended the reductions as necessary responses to fiscal pressures, rising security spending, and changing political priorities.

The result is not simply a temporary funding shortfall but a structural challenge to a global development system that has long relied on public resources from a relatively small number of wealthy countries. At the U.N., low- and middle-income countries have pushed back on these cuts, calling them unacceptable and warning of a reversal in hard-won development gains.

But the next secretary-general has reasons for optimism too.

First, in June, the U.N. General Assembly passed a landmark decision that will bring an end to a long-standing practice that forced the organization to return unspent funds to contributing states even when these were paid late. This “Kafkaesque financial rule” of late payments and forced returns were the cause of numerous cash shortages across the system and fears of a full-blown liquidity crisis in New York.

Equally important but rarely reported are initiatives across the U.N.’s specialized agencies to build out a diversified financing architecture to ensure the organization can still deliver when and where it is needed most.

Encouraged by Secretary-General António Guterres to integrate innovation in all it does, the U.N. is experimenting with blended finance vehicles, digital currencies, endowments, bonds, and instruments designed to make capital function in high-risk environments where private money rarely goes alone. Across the U.N. system, financial and legal teams are working to identify what works in other sectors, including the private sector. They are integrating and scaling those instruments — and moving to a more diverse, resilient and sophisticated financing architecture — to ensure lifesaving programs reach the people who rely on the organization.

UNICEF operates a crypto fund and has built one of the U.N.’s leading innovation portfolios, investing in open-source digital public goods that can be used by anybody, anywhere. Backed by an AA+ credit rating, the International Fund for Agricultural Development has entered international bond markets to multiply the development impact of its capital. UN-Habitat’s Cities Investment Facility is bringing in subnational governments as co-investors in urban development projects. The UN Refugee Agency has launched the Global Islamic Fund for Refugees, using an endowment model to diversify its funding base — a model the United Nations University has long relied on to support its global research mission.

These examples differ widely in design, but they share a common logic: They align financing with institutional functions, political incentives, and sources of value in the global economy. They also introduce new questions around mandates, legitimacy, and institutional capacity that must be carefully managed. A new area of work for the next secretary-general will be identifying which financial models can be adapted and scaled, and under what conditions.

At the same time, core financial stability remains a precondition for innovation. Member state contributions remain the foundation of a functioning U.N. These contributions are a legal requirement for any state member of the organization. They anchor a global system of multilateral cooperation, lifesaving humanitarian assistance, and initiatives that sustain peace around the world. The U.N. continues to press its membership to meet their financial obligations to the organization — and many do.

But new U.N. research shows that the global body is learning to work around the current financial impasse and use the contributions it does receive to attract additional capital, draw in new partners, and multiply the reach of public investment. Much of this work is happening inside dedicated innovation units that have so far attracted little public attention.

These innovations mean the U.N. system is becoming more capable at mobilizing resources at precisely the moment its political environment is making resource mobilization harder. While they cannot replace member state contributions, these strategies show that the U.N. is not paralyzed; it is actively innovating at every level to respond to new realities.

Too often, the U.N. is not thought of as an organization that offers value for money. Speaking at Davos several years ago, Guterres acknowledged the widespread perception of the global body as a heavy and bureaucratic organization. He can take some credit for encouraging innovations that make the organization much better value for money today. Guterres’ legacy also includes the General Assembly decision on unspent funds mentioned above, for which he campaigned loudly.

The challenge for the next secretary-general will be to preserve the foundation of predictable member state support while accelerating the innovations that can make each dollar go further. If they succeed, the U.N. may be a better investment than any of its critics — and even some of its supporters — imagined.