On January 13, 2025, LG Consulting shared the results of their annual research on predictions and trends shaping the international development sector for the upcoming year. This comprehensive analysis draws from a sector-wide survey, in-depth interviews with leaders, and insights from the LG Consulting-sponsored podcast, Lessons from Leaders. It also reflects hundreds of hours spent working closely with leaders, teams, and boards across the sector.
Overall Context for the 2025 Predictions
Geopolitical Turbulence: Turbulent and rapidly evolving landscape with prolonged and often unpredictable geopolitical and economic crises increasing both humanitarian and development needs and reshaping global priorities.
Changing Ways of Working: Advancing AI technologies redefining workflows, organizational roles, and reshaping the external information environment following changes from hybrid and remote work, further challenging traditional organizational models.
Pressures on the Global System: Rising nationalism and growing pressures on multilateral engagement threaten collaborative efforts with the need to balance diverse and competing priorities to meet the intricate and evolving needs of the future.
2025 Predictions: Nine Predictions in Three Categories
LG Consulting presented the 2025 Predictions in three categories of key themes inviting questions and comments from participants.
External Environment Creating More Needs and Uncertainty
P1: Shrinking Foreign Assistance Budgets
- Funding cuts will disproportionately impact global health, inclusive development, and multilateral programs.
- Strategic responses include prioritizing scenario planning and diversifying funding sources.
P2: Climate Crisis Takes Center Stage
- Effective disbursement of climate funds is hindered by bureaucratic delays.
- Organizations must prepare for climate-induced crises while positioning to access climate-related funding.
P3: Political Polarization Reshaping the Sector
- Faith-based organizations may receive preferential treatment, while programs for marginalized communities face potential setbacks.
- Boards are encouraged to remain apolitical and focus on long-term mission resilience.
Operating Models Continuing to Evolve
P4: Challenges in Localization
- Misalignment between funding and capacity with overall intentions threatens progress.
- Need to balance the urgency for localization with operational realities and seek innovative partnerships to maintain impact.
P5: Diversifying Revenue Streams
- NGOs are increasingly exploring blended finance, impact investment, and social enterprise models to reduce reliance on traditional grants.
- Focus on how to innovate underlying business models, with some exploring and implementing social enterprise initiatives, and striving for more operational flexibility to respond to changes in the geopolitical and funding environments.
P6: Embracing Systems Thinking and Strategic Partnerships
- Importance of shifting from fragmented interventions to a systems-level approach, addressing underlying infrastructure and systemic issues in education, agriculture, and health.
- Strategic alliances, including cross-sector collaborations and mergers, are essential for tackling these systemic challenges.
Organizations Striving to Meet This Moment
P7: Evolving Board Priorities
- Boards are moving toward scenario planning, political diversity, and adaptive governance to navigate uncertainty and support innovation and resilience.
P8: Leadership Prioritizes Trust and Adaptability
- Trust-building is critical to maintaining morale and alignment during turbulent times.
- Adaptive leadership focused on clear, actionable priorities is vital for organizational stability.
P9: Rebuilding Organizational Culture to Strengthen Resilience
- Remote work and funding pressures have eroded social capital.
- Leaders must focus on inclusion, talent retention, and fostering team resilience.
Call to Action
The 2025 Predictions report highlights the urgency of embracing bold strategies, fostering collaboration, and prioritizing resilience to navigate the challenges ahead. In this environment, the facilitators reiterated with their framework that balancing the imperative to perform and transform across different levels of the organization will continue to be key as leaders better position their organizations to sustain impact. As a community of sector leaders, we have an opportunity to shape the future through sharing innovative approaches and collective action.
To explore effective responses to the challenges in 2025 or to share your thoughts, contact LG Consulting at [email protected].
About the Authors
Lynne Gilliland is the CEO and Founder of LG Consulting, a world-class consulting firm. She is a recognized thought leader for her work on leadership, organizational and resilient cultures, and CEO effectiveness.
Tom Dente has extensive experience as an advisor, consultant, and leader assisting nonprofit and commercial organizations over a thirty-year career to achieve their full potential.