The current funding landscape for non-profit organisations (NPOs) is characterised by a structural reconfiguration that shifts the centre of gravity away from traditional non-repayable development subsidies towards support models geared towards investment, entrepreneurship and innovation. This transformation is not merely conjunctural, but reflects a profound recomposition of relations between development co-operation, philanthropy and private capital, based on hybrid logics that seek to reconcile social and financial returns (Bugg-Levine & Emerson, 2011; Hörtnagl, 2025). In this context, initiatives such as the European Union's Global Gateway exemplify a new paradigm in which large-scale, "bankable" projects capable of mobilising the private sector shape the opportunity space for civil society, at the same time as the Fourth Industrial Revolution and artificial intelligence (AI) intensify competition for scarce resources between NPOs, social enterprises and technologically advanced actors (European Commission, 2024, 2025; Eurodad, 2024).
The shift from non-repayable funding to an investment logic is particularly visible in the growing centrality of impact investment as a 21st century instrument for channelling capital for social purposes. The literature shows that impact investing operates as a hybrid practice, in which philanthropic and financial logics coexist and force foundations and other institutional funders to recalibrate their risk tolerance, time horizons and return expectations (Hörtnagl, 2025; Brest & Born, 2013). Empirical evidence indicates that philanthropic resources are increasingly mobilised not as stand-alone grants, but as catalytic instruments - for example, recoverable grants, interest-free loans or guarantees - aimed at attracting private investment and supporting "investment-ready" organisations (Jackson & Harji, 2012; Mission Investors Exchange, 2025). In practice, this translates into a relative contraction of outright funding for long-term development work, and a growing expectation that NPOs present business models, revenue streams or scalable innovations aligned with funders' impact investment portfolios (Young, 2017; RSM, 2025).
For NPOs, the consequences of this shift are ambivalent. On the one hand, the focus on entrepreneurship creates opportunities for organisations that can operate as social enterprises, use mixed funding and develop impact management systems capable of meeting the demands of institutional investors (Brest & Born, 2013; BlueMark, 2024). On the other hand, there is a risk of marginalising actors whose main contribution lies in advocacy, the defence of rights or community empowerment - areas that are structurally difficult to monetise and largely depend on non-repayable philanthropic support (Ebrahim, Battilana, & Mair, 2014; Eurodad, 2024). The new funding regime tends to favour organisations with sophisticated financial management capabilities, data infrastructures and the skills to formulate their value proposition in terms of a similar social return on investment, thus reinforcing existing asymmetries within civil society (Fidelity Charitable, 2025; RSM, 2025).
The European Union's Global Gateway strategy is a particularly clear illustration of this rethinking of the logic of development funding. Presented as a value-based response to the global infrastructure deficit, the Global Gateway aims to mobilise up to 300 billion euros by 2027 in the areas of digital connectivity, climate and energy, transport, health, education and research, using mainly loans, guarantees and the mobilisation of private capital, within the framework of a "Team Europe" approach (European Commission, 2024, 2025). Analyses conducted by civil society networks show that the Global Gateway functions less as a classic subsidy instrument and more as a geopolitical investment platform, focused on creating favourable business environments and resilient value chains, particularly in the Global South (CONCORD Europe, 2025; Eurodad, 2024). Although the European Commission has set up an Advisory Mechanism for Civil Society and Local Authorities and promoted forums dedicated to the participation of non-state actors, the intervention of NPOs often remains limited to consultative spaces, located downstream from central investment decisions (Local2030, 2023; WECF International, 2025).
This institutional architecture has relevant implications for the availability of NPO-orientated funding. Organisations able to position themselves as partners in infrastructure, digitalisation or green transition projects - often through consortia with companies and development banks - can access Global Gateway pipelines, technical assistance or risk-sharing mechanisms (European Commission, 2024; CONCORD Europe, 2025). In contrast, smaller NPOs or those with a predominantly advocacy vocation, which have historically depended on European grants for governance, human rights and social inclusion initiatives, face the prospect of shrinking grant envelopes and a more fragmented funding ecosystem (Eurodad, 2024; WECF International, 2025). This paradigm shift raises normative questions about who actually benefits from major investment strategies and whether the social fabric that NPOs sustain - through participation, accountability and local knowledge - is properly recognised in architectures dominated by bankability criteria and sovereign risk assessments (Ebrahim et al., 2014; Jackson & Harji, 2012).
In parallel, the Fourth Industrial Revolution is reconfiguring both the operational capacities of NPOs and the competitive dynamics of funding. AI and data analytics tools offer significant potential to improve fundraising, programme targeting and impact measurement, as evidenced by the emerging literature on digital transformation in the non-profit sector (Kuenzi, Stewart, & Walk, 2022; ScholarsArchive, 2020). AI-based grant matching systems, for example, make it possible to align organisational profiles with relevant funding opportunities at scale, reducing search costs and, in theory, expanding access to donors, especially in saturated thematic markets (Al-Hasnawi et al., 2024). However, these same technologies create a digital divide: organisations with more resources are in a better position to invest in AI, specialist skills and robust data governance structures, increasing their competitiveness in innovation competitions, while community-based NPOs, with less institutional capacity, risk being further marginalised (Joseph Rowntree Foundation, 2024; IC² Institute, 2025).
Generative AI also accentuates this competitive pressure. Recent studies indicate that NPOs that incorporate AI into fundraising and communications functions are able to substantially increase the volume and sophistication of applications, donor contacts and reporting, often without a commensurate increase in human resources (Joseph Rowntree Foundation, 2024; Giving Compass, 2024). However, this acceleration does not automatically expand the overall volume of resources available; rather, it raises the minimum standard of quality and complexity of proposals considered "competitive", making the position of organisations without access to AI tools or training more difficult (Kuenzi et al., 2022; IC² Institute, 2025). In this sense, AI acts as a power multiplier for those already integrated into the emerging investment and innovation ecosystem, while at the same time it can reinforce structural inequalities in the non-profit field (ScholarsArchive, 2020; Joseph Rowntree Foundation, 2024).
Against this backdrop, the leadership of NPOs faces the strategic imperative of engaging critically - but not uncritically - with entrepreneurship-orientated financing and AI. On the financial front, the literature suggests that the most successful organisations are those that integrate impact investment instruments and hybrid revenue models into a coherent, mission-driven strategy, rather than adopting commercial logics in a purely opportunistic manner (Young, 2017; Jackson & Harji, 2012). This implies strengthening internal capacities in financial management, data collection and impact measurement, while calling for the preservation of non-repayable funding for dimensions of civil society work that cannot be commodified, such as defending rights, community organisation and democratic oversight (Ebrahim et al., 2014; CONCORD Europe, 2025). On the technological front, a growing number of authors advocate a "critical" adoption of AI, anchored in principles of data ethics, fairness and participatory governance, so that digital innovation contributes to democratising, rather than hollowing out, the public value produced by NPOs (Kuenzi et al., 2022; Data Feminist AI scholars, 2023).
Ultimately, the current moment is characterised less by an absolute shortage of resources and more by a profound reordering of the mechanisms for allocating these resources and the eligibility criteria. The shift from subsidies to gateways, from development to entrepreneurship and from analogue to AI-mediated competition is forcing NPOs to rethink funding strategies, organisational models and ways of building coalitions, while remaining grounded in their normative commitments to social justice, human dignity and democratic participation. If civil society wants to avoid becoming a peripheral actor in a development regime dominated by investment, it will have to assert not only its instrumental efficiency, but also its constitutive role in defining the social and ethical horizons within which finance, technology and politics operate (Ebrahim et al., 2014; Eurodad, 2024).
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