Philanthropy shifts focus as donor aid collapses
Dr. Nisha Dhawan now leads EMpower from Delhi, a move that signals a fundamental change in global philanthropy. The New York-based foundation, established 25 years ago by professionals from emerging economies to redirect wealth back to those regions, has never before had its leadership based outside the U.S. or Europe. “I was never asked to get on a plane and move to London or move to New York,” she says. “And that, I think, is not only different for EMpower, but it is different for the sector as a whole.”
The timing of her appointment is significant. Official development assistance from OECD donor countries fell 23.1 percent in real terms in 2025 to $174.3bn, according to preliminary data published by the OECD in April—the steepest single-year drop on record. The US alone drove three-quarters of the decline, falling by 56.9 percent. At the same time, private capital is flowing into emerging markets through new channels. U.S.-based ETFs focused on EM stocks absorbed almost $31bn over the year, according to estimates from Strategas Securities.
Can private capital address the $4 trillion financing gap?
The World Bank estimates the funding shortfall required to meet the Sustainable Development Goals by 2030 stands at around $4 trillion. Dhawan, who began her career at Deutsche Bank and Barclays before earning a PhD at IIT Delhi, has spent 14 years at EMpower examining whether private capital—through investment, philanthropy, or blended models—can meaningfully close that gap.
“It is absolutely possible,” she says of philanthropy stepping into the vacuum. “It is amazing to see how the philanthropic sector has stepped up, namely individuals. I feel like there is a lot more risk capital, for lack of a better word, coming from individuals than we have ever seen. And corporates are really thinking through their role, their responsibility in what it means to be giving back in the markets they are investing in.”
Since 2000, EMpower has allocated over $60 million to support nearly 400 locally led organizations across 15 countries. Unlike traditional funding models, the foundation emphasizes long-term partnerships, typically spanning 10 years, rather than the one- or two-year cycles common in development work. In India, for instance, final grant decisions are made by youth fellows from the communities EMpower serves. Similar models operate in Mexico, South Africa, and Indonesia, where local cohorts shape programming focused on mental health, education, and reproductive rights.
“Expertise lies in the hands of the people that we most want to serve,” she says. “It is young people creating a curriculum that is then embedded across several of our organisations.”
Dhawan rejects the sector’s habitual obsession with scale in numbers. Instead, she highlights depth and influence, such as the Antarang Foundation in India, whose school-to-work modules the Indian government now runs across six states, or Virlanie in the Philippines, which works with street-born youth. “Success can be depth and it can be influence and influencing others in a meaningful way,” she says. “The greatest cream that rises to the top is that for us success looks like sustainability.”
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Blending commercial and concessional capital remains a key challenge. Triodos Investment Management, which recently partnered with the Austrian Development Bank and FMO to launch the Hivos-Triodos Fonds, demonstrates this hybrid approach. The fund targets agriculture, renewable energy, and other high-impact sectors in emerging markets. Maritza Cabezas, a senior investment strategist at Triodos, notes that the solution lies in collaborating with institutions offering lower-cost funding, making projects more feasible for clients.
“We finance agriculture projects in Ghana using technology, but the biggest obstacle is aligning with development finance institutions that impose rigid requirements,” she explains. “Some investors also ignore impact because their costs aren’t transparent, allowing them to appear more profitable, even when their projects are harmful.”
For EMpower, another obstacle is donor volatility. Roughly 30 percent of its funding comes from institutional sources, which provide stability during economic downturns, such as those in 2008 and 2013. These stable funders, including the Ford Foundation and Co-Impact, enable EMpower to support bold initiatives, like letting youth fellows decide grant allocations or design curricula.
Shifting structures in philanthropy
The relocation of EMpower’s leadership to Delhi and the decentralization of decision-making reflect broader changes in how philanthropy engages with the Global South. Unlike traditional foundations, which often rely on Western-based boards and short-term projects, EMpower prioritizes local leadership. This includes not just funding but also capacity-building: youth fellows in India, for example, complete a year-long training program in grant-making, financial literacy, and advocacy before influencing funding decisions. Similar programs exist in Mexico, where fellows analyze regional economic data to identify youth employment gaps, and in South Africa, where they co-design mental health training for teachers.
Challenges persist. Donor volatility, especially from institutional sources tied to market cycles, continues to test EMpower’s stability. The foundation’s reliance on stable funders like the Ford Foundation and Co-Impact provides some protection, but even these relationships face geopolitical risks. In 2023, a sudden drop in European corporate giving forced EMpower to pause two multi-year commitments in Africa, despite local buy-in. “The idea that philanthropy is stable is misleading,” Dhawan acknowledges. “But we’re building resilience with our partners, not just for them.”
To address this, EMpower has diversified its revenue streams, including a pilot where youth fellows in India design and sell digital tools, such as a mobile app tracking menstrual health, to generate additional funds. The initiative, still in its early stages, has already raised over $150,000, with profits reinvested locally. “We’re not just funders,” Dhawan states. “We’re partners in creating sustainable economies.” The experiment reflects a broader trend: as traditional aid declines, foundations like EMpower are increasingly merging philanthropy with social enterprise.
The last grant EMpower approved before Dhawan’s appointment was for a mental health collective in Pakistan, where young activists are mapping community resources using open-source technology. The $500,000, five-year project was selected entirely by a panel of Pakistani youth fellows, no Western board members were involved. The collective’s first output, a crowdsourced database of affordable therapy services, is now being scaled by the Pakistani government. “This isn’t about money alone,” Dhawan emphasizes. “It’s about proving that change begins when people in the Global South are given the tools, and the trust, to lead.”
