The year 2025 marks a turning point in the global aid architecture. Unravelling of longstanding funding patterns signal a structural shift with wide-ranging consequences. These changes will reduce resources for civil society worldwide. In Georgia, where civic space is increasingly constrained by restrictive legislation, international support remains essential to advancing democratic participation and human rights โ fundamental national interests vital to the countryโs development and stability.
A Global Shift in Development Financing and Its Implications for Georgia
The United States has suspended most USAID operations, transferring remaining activities to the State Department and reducing staff to fewer than 20 by September. Aid obligations exceeding $75 billion were frozen or cancelled. Major European donors including the United Kingdom and Germany are also scaling back aid commitments. Proposed U.S. tax reforms threaten to limit philanthropic funding by raising taxes on investment income for large foundations from a flat 1.39% to tiered rates up to 10%. Foundations that have historically supported flexible, long-term funding in critical sectors like human rights and media freedom now face considerable financial pressure. These global developments pose serious challenges for Georgian civil society, which relies heavily on foreign funding to advocate for human rights, provide essential services, and hold governments accountable. Shrinking international support, combined with new domestic legal restrictions, threatens to reduce civil societyโs financial and operational space. This blog explores the convergence of these pressures and examines their impact on Georgiaโs civic resilience, arguing that sustaining democratic participation amid these uncertainties requires urgent and coordinated responses from donors, civil society organizations, and international partners.
Domestic Legal Constraints and Compounding Challenges for Georgian Civil Society
Recent analyses indicate that many countries in regions such as Sub-Saharan Africa, South Asia, and parts of Eastern Europe are experiencing significant declines in aid relative to their gross national income (GNI). For example, some countries in these regions could lose more than 3% of their GNI due to the USAID freeze alone, while others face losses above 1%. Donors, facing shrinking budgets, tend to prioritize support for countries with the most acute needs or fragility. As a middle-income country with growing economic indicators, Georgia risks being deprioritized despite persistent democratic and social challenges.
At the same time, Georgian civil society confronts a restrictive legal environment that further complicates donor engagement. This tightening began with the introduction of the Law on Transparency of Foreign Influence, and continued with the adoption of the Foreign Agents Registration Act (FARA) and amendments to the Law on Grants, which impose operational barriers requiring organizations receiving more than 20 percent of their funding from abroad to register as foreign agents and obliging donors to obtain prior government approval for foreign-funded grants, with steep fines for noncompliance.
The combination of limited funding availability and the increased administrative and reputational risks posed by restrictive legislation creates a challenging environment for donors. Many may choose to limit or withdraw support rather than navigate the complex compliance landscape, effectively deprioritizing Georgia as a funding destination. This convergence of domestic legal pressures and shrinking international support places Georgian civil society in a precarious position.
Sustaining Civic Resilience Amid Shrinking Support and Rising Risks
Civil society organizations in Georgia play a critical role in advancing democratic participation, protecting human rights, and delivering essential advocacy and services. This work supports fundamental national interests by strengthening governance and safeguarding vulnerable groups. Practice shows that declines in democracy and human rights protections may also create spillover effects that undermine human rights standards in similar contexts, reduce respect for the rule of law, encourage restrictive practices regionally, increase risks of conflict, limit cooperation on global challenges, and often lead to humanitarian crises and cross-border instability.
Investing in democracy and human rights through civil society is the shield against the wildfire of rights violations spreading across borders. Prevention reduces the costs and complexities of addressing crises once they arise, including displacement, social unrest, loss of public trust, and weakened public institutions, all of which require substantial donor intervention. Early support helps avoid these costly outcomes and ensures more stable and resilient societies.
The withdrawal of principled donors risks creating gaps that may be filled by actors whose aid is tied to political influence, strategic alignment, or economic concessions. These conditions can undermine human rights, restrict democratic freedoms, and prioritize donor interests over the needs of the local population.
Addressing these challenges requires coordinated action that recognizes current legal and operational realities. Donors should strive to maintain flexible, multi-year funding modalities even within the constraints imposed by the Grants Law, exploring mechanisms such as funding through local fiscal agents or regional pooled funds to reduce compliance burdens. Civil society organizations should engage consistently with international human rights bodies, development agencies, and diplomatic missions to provide timely, evidence-based reports on the impact of restrictive laws and funding cuts on democratic space and vulnerable populations. They can participate actively in global forums, shadow reporting mechanisms for treaty bodies, and multilateral processes to keep donor attention focused on Georgiaโs democratic challenges. By fostering direct dialogue with donor governments and international partners, they can advocate for tailored risk mitigation approaches and emphasize the long-term strategic benefits of sustained investment. Coordinated campaigns using data-driven narratives, personal testimonies, and strategic messaging can help counter negative perceptions and demonstrate civil societyโs indispensable role in maintaining national stability and regional security. Building coalitions and alliances regionally and globally amplifies their voice and creates solidarity networks that deter donor withdrawal. Investing in capacity building to navigate complex legal environments and proactively addressing donor concerns around compliance and political risk can also improve donor trust. Learning from regional examples, such as Hungaryโs use of legal counselling to ensure compliant funding flows, offers practical guidance. Continued international advocacy remains vital to counter shrinking civic freedoms and uphold democratic accountability. Without urgent and concerted efforts, democratic space and human rights protections risk serious erosion at a critical moment.
ยฉ Cover Photo: S&D
Marika Mkheidze
Advocacy Expert
