The United Nations is facing an acute cash crisis, with senior officials warning of a “race to bankruptcy.”
The UN’s two largest contributors, the United States and China, are withholding and delaying billions of dollars in payments.
In response, the UN has cut thousands of jobs, scaled back peacekeeping operations and delayed payments to countries that supply troops. But even so, officials warn it may run out of cash by mid-August.
Experts say the 80-year-old institution is unlikely to disappear. But sustained financial pressure risks hollowing it out.
“This is an awful moment,” said Thomas Weiss, professor emeritus at the City University of New York who worked as a consultant to the UN from 1999 to 2004.
Weiss, who was born a year after the UN launched in 1945, notes the storied institution has had “a lot of ups and downs” throughout its life.
“But this is the biggest down that I’ve lived through.”
This article is the third installment in a Canadian Affairs series examining the transformation of the global development aid landscape and what it means for donor countries and aid recipients.
International cooperation
The United Nations was founded after World War II to prevent future conflicts through diplomacy and coordinated responses to transnational crises.
Its work is organized around three main pillars: peace and security, humanitarian assistance and development.
The UN’s funding for this work comes from two main sources: mandatory member contributions for the UN’s core budget and peacekeeping operations; and voluntary government and NGO contributions to fund its humanitarian agencies.
In 2026, the UN’s core budget was about US$3.45 billion. The humanitarian agencies — such as UNHCR and UNICEF — collectively spend tens of billions of dollars each year.
Farhan Aziz Haq, deputy spokesperson for the UN Secretary-General, told Canadian Affairs the UN is owed about US$2.04 billion by the U.S. for its core budget and about $455 million by China. The U.S. is also in arrears for about US$2.2 billion for peacekeeping operations.
But Weiss notes that delays and partial payments are no longer limited to large contributors.
“Lots of other countries are getting into this game of not paying their bills or paying them late or paying them partially,” he said.
Of the UN’s 193 members, 116 — including Canada — had paid their 2026 assessed contributions in full as of June 22. This means 77 are in arrears.
UN financial reports also show the value of unpaid assessments has been rising.
Haq worries there is no credible external actor ready to fund the UN’s core functions.
“The traditional good guys are not going to jump in,” he said.
Cash crunch
The cash crunch is being felt across the UN system. The UN has begun reducing staff, scaling back its executive and administrative arm, and delaying reimbursements to countries that contribute to peacekeeping missions.
While these measures are intended to preserve liquidity, they are straining global operations.
“We remain deeply concerned by the widening gap between needs and resources,” Tracey Maulfair, the UNHCR’s spokesperson, told Canadian Affairs in an email.
The UNHCR alone has cut about a third of its staff — more than 6,000 positions. In 2026, its total funding was projected to be just over $3 billion. This is about 15 per cent below 2025 levels, which were already down 30 per cent from 2024.
“Over the past year, we have been forced to make a number of difficult decisions,” Maulfair said.
Shortfalls have affected its ability to provide food, water, shelter, medicine and protection services for children and survivors of sexual violence.
The UN has estimated 252 million people require assistance in 2026. Funding constraints mean its agencies are only able to serve about a third of them, a spokesperson for the UN Office for the Coordination of Humanitarian Affairs said in a statement.
“A cash-starved UN can achieve only a fraction of what its members ask,” said Daniel Forti, the head of UN Affairs at International Crisis Group, an independent conflict analysis organization.
“Diplomats on the Security Council cannot discuss UN peacekeeping operations without worrying whether they will have enough cash to do patrols,” Forti said in an email.
“Even basic secretarial services like translating meetings or printing reports can no longer be taken for granted.”
Adapt or die
Despite these struggles, Weiss, of the City University of New York, says the UN is unlikely to disappear entirely.
“[I]nstitutions rarely go out of existence,” he said. “What will happen is that … these institutions will be a shell of what they could have been and should be.”
Forti notes the UN’s influence has “waned in recent years.”
“Major power divisions and the erosion of respect for international law have narrowed the space for Security Council diplomacy, while the UN’s peace operations now operate in far more volatile conflicts with considerably weaker political backing,” he said.
Those concerns build on longstanding criticisms of the United Nations. Scholars have questioned the UN’s political impartiality, limited enforcement powers and uneven record in preventing conflict.
A 2014 academic study found the UN Security Council’s political preferences influence the timing, size and composition of peacekeeping missions during civil wars. Research on the UN’s effectiveness at conflict resolution also paints a mixed picture.
Quantitative studies show post-Cold War UN peacekeeping missions have reduced the risk of civil wars re-occurring by more than half. However, the UN has also failed to prevent major atrocities, such as the 1994 Rwanda Genocide.
‘Starvation diet’
Weiss says the current financial crisis differs from previous periods because it is not obvious who could step in to stabilize the institution.
“[W]hen the U.S. pulled out of the [UN’s International Labour Organization], or pulled out of UNESCO … others jumped in to kind of pick up the slack,” he said.
“That’s not the case at all this time.”
Forti says Washington is using its financial leverage to force institutional reform.
“For decades American diplomats have urged the UN to go on a diet to make it leaner and more efficient,” he said. “But the Trump Administration is testing whether a starvation diet will get the fastest and most dramatic results.”
The greatest loss, Weiss says, is not capacity on the ground; it is the UN’s role as a bastion of international cooperation.
“What can’t be replaced … is the norms, principles, and standards part of the UN, which only a universal organization can do,” he said. “The ideational part of the system … is where there’s the greatest multiplier effect.”
Forti agrees. “For all its flaws, the UN’s universal mandate and international legal legitimacy make it an irreplaceable peacemaking and conflict management institution,” he said.
“States would sorely miss the UN’s efforts in international peace and security even if the organisation is an easy punching bag.”
