Development funding in East Africa is changing fast. There is less reliance on traditional grants, greater emphasis on sustainability, and a growing expectation that impact should last beyond a single funding cycle. This shift affects NGOs, donors, governments, and anyone working to create long-term social and environmental impact in the region.
At the heart of this change is a move from grants to growth.
The traditional grant model – and why it’s evolving
For decades, international development was dominated by grant funding, largely channelled through NGOs and charities. That model delivered enormous value and continues to do so, particularly in humanitarian response and essential services. But the wider funding landscape is evolving.
In the US, this shift has become increasingly stark. USAID, long one of the world’s most influential development institutions, has been significantly dismantled in practical terms in recent years, fundamentally changing how, and in some cases whether, long-term development funding is delivered.
In the UK, the former Department for International Development was merged into the Foreign, Commonwealth & Development Office, aligning development spending more closely with foreign policy, trade, and long-term strategic interests.
The direction of travel is clear: fewer open-ended grants, and greater focus on leverage, accountability, and outcomes that endure.
Why sustainability and long-term impact now matter more
This shift is not purely political. It reflects a broader recognition that impact needs to be sustainable. Grant-funded programmes are often defined by funding cycles, and when those cycles end, activity, and sometimes impact, can taper off. Measuring long-term change is difficult, resource-intensive, and rarely funded in its own right.
At the same time, expectations are rising. Governments want value for money. Institutions want evidence that interventions work over time. And individual donors and foundations are increasingly interested in outcomes, systems change, and durability, not just short-term outputs or emotive stories and imagery.
A global shift, not just a US headline
Whilst the dismantling of US aid is often the main headline, this shift extends well beyond the United States.
Across Europe, major development partners are operating under growing budget pressure, political scrutiny, and increasing expectations that public funding delivers demonstrable long-term value. Germany’s Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the Netherlands’ Directorate-General for International Cooperation (DGIS), and French institutions such as the Agence Française de Développement (AFD) are all projecting tighter funding environments and a stronger emphasis on sustainability, leverage, and accountability.
This is not just a USAID issue. Other major development partners are projecting significant funding cuts, including FCDO, GIZ, the Netherlands and the French.
Martin Fowler, former USAID agricultural planning and policy adviser
The pattern is consistent: fewer grants, more conditionality, and growing emphasis on leverage, co-investment, and sustainability.
The rise of Development Finance Institutions
Against this backdrop, Development Finance Institutions (DFIs) have moved to the centre of the development landscape.
DFIs deploy capital at scale to support private-sector-led development, using tools such as equity, debt, guarantees, and concessional loans. Crucially, they look for both impact and financial return, often through blended finance structures.
Key DFIs active in East Africa include:
• British International Investment
• International Finance Corporation
• U.S. International Development Finance Corporation
• European Investment Bank
• Proparco
• FMO
This marks a significant shift. Large-scale impact is increasingly funded not through one-off grants, but through capital that expects projects and organisations to be governed, measurable, scalable, and sustainable.
What it now takes to secure serious funding
In practical terms, this changes what it takes to secure funding.
Projects seeking significant capital now need to demonstrate:
• Clear governance structures
• Robust impact measurement
• Long-term financial sustainability
• An investable model that can grow or endure
This does not replace grants or philanthropy. But it does mean that impact alone is no longer enough. The way impact is delivered, sustained, and financed matters more than ever.
Leadership roles are changing too
This shift is also reshaping leadership roles within development programmes.
The Chief of Party role is changing fundamentally. It’s no longer just about programme delivery and donor compliance. Increasingly, it requires strategic leadership, aligning impact, governance, financial sustainability, and long-term institutional credibility.
Nicholas Demeter, international development practitioner specialising in complex donor-funded programmes,
Why corporations are increasingly part of the picture
This shift also helps explain why an increasing share of impact capital is now flowing toward corporations and profit-for-purpose businesses, not just NGOs and charities.
Trillions of dollars are now allocated globally through impact investment funds, DFIs, and blended finance vehicles. These pools of capital are explicitly seeking organisations that can deliver social and environmental impact at scale, with strong governance, commercial discipline, and the ability to sustain outcomes well beyond individual grant cycles.
In this context, well-governed businesses are increasingly seen not as alternatives to development, but as vehicles for durable impact.
Signals of organisational readiness
This is also where signals of organisational readiness become important, particularly for corporations seeking to attract impact-aligned capital.
B Corp certification has emerged as one way organisations can demonstrate that impact, governance, and accountability are embedded into how they operate. Globally, there are now over 10,000 B Corps, including around 2,700 in the UK and approximately 75 operating in Uganda.
While B Corp status is not a guarantee of funding, it is increasingly recognised by DFIs and impact investors as a credible indicator of organisational maturity. Purpose-led businesses that align profit and impact are often viewed as more likely to deliver sustainable outcomes at scale, and in some cases to continue generating positive impact long after grant funding has ended.
In this new funding environment, organisations need a clearly defined social purpose and strategy at the C-suite level. Impact cannot sit on the sidelines. It has to be embedded in decision-making, governance, and growth plans if organisations want to attract serious capital.
Dr Chris Arnold – Co-founder of My Social Impact, and former creative board member at Saatchi & Saatchi
A growing skills gap at the intersection of impact and finance
All of this points to a growing skills gap.
Understanding impact without understanding finance is no longer sufficient.
Understanding finance without understanding impact is equally limiting.
The organisations best placed to thrive in this new landscape are those that can operate at the intersection of profit and purpose.
This is why social impact consulting is on the rise, helping organisations navigate the shift from grants to growth, design impact that lasts beyond funding cycles, and translate mission into models that are credible to donors, DFIs, and investors alike.
NGOs and charities may also need to think more intentionally about how they evidence long-term impact, particularly outcomes and lasting change, if they are to remain credible and relevant in a development landscape that increasingly rewards sustainability.
Building collaboration for the next phase of impact
Looking ahead, there is also a strong case for impact-led organisations to collaborate more closely. We are currently exploring the creation of a My Social Impact B Corp Club for Uganda and East Africa, designed to bring B Corps and impact-driven organisations together to learn from one another, share practical experience, and strengthen the regional impact ecosystem.
If you’re working in development, impact, enterprise, or investment in East Africa, whether from an NGO, a business, or a funder perspective, I’d genuinely welcome the conversation.
You can reach me at marcus@mysocialimpact.org.
Not the end of aid – an evolution
This is not the end of aid.
It is an evolution.
East Africa’s development future will still depend on compassion, solidarity, and public funding, but increasingly, it will also depend on sustainability, investment, and growth.
Understanding that shift is now essential for anyone serious about long-term impact.
Marcus Warry
About the author
Marcus Warry is a social impact entrepreneur, Chartered Accountant, and co-founder of My Social Impact. He has been working on the ground in Uganda and East Africa since 2018, supporting organisations to strengthen impact measurement, sustainability, and access to long-term capital.
Marcus also runs The Wild Ones, a social enterprise cultivating creativity and inspiring positive change in Uganda.
Contributors
Martin Fowler
Former agricultural planning and policy adviser at USAID Uganda, with extensive experience in agricultural development policy, programme design, and donor-funded initiatives across East Africa.
Nicholas Demeter
International development practitioner specialising in complex donor-funded programmes, Chief of Party leadership, and large-scale grant-funded delivery in multi-stakeholder environments.
Dr Chris Arnold
Co-founder of My Social Impact and a long-standing specialist in ethical marketing and social impact marketing. Former Creative Board Director at Saatchi & Saatchi, Dr Arnold has worked with major global brands including Diageo, Brewers, and Clarks, helping organisations align commercial strategy with social purpose.
