Impact of Funding Cuts on Gender Diverse Community Organizations in Bangladesh

Introduction:
Late one humid evening in Rangpur, Bangladesh, the small office of a community group fell dark. The Noboprobhaat Foundation – a grassroots organization serving Bangladesh’s marginalized gender-diverse youth community – had just run out of funds. Its few remaining staff sat together in silence, absorbing the reality that their life-affirming programs might not survive the month. This scene is not unique. Across Bangladesh, numerous groups that support hijra, and other gender & sexual-diverse people are shutting down or scaling back, casualties of a perfect storm: an international funding drought and a hostile local environment. What began as global policy shifts – from the freezing of U.S. foreign aid to conservative backlashes in Europe – has trickled down to the back alleys of Rangpur, Sylhet, Chittagong and other grassroots district, where these vulnerable communities now find themselves with dwindling support. This article explores how worldwide funding cuts have crippled Bangladesh’s gender-diverse community organizations, weaving in the stories and struggles behind the stark statistics.

Global Funding Crisis and the Domino Effect:
In early 2025, a wave of international funding cuts sent shockwaves through civil society organizations worldwide. The most jarring blow came when the United States abruptly froze and slashed its foreign aid programs under USAID. This sudden 90-day aid freeze under the new administration forced countless projects to halt overnight (context.news). A rapid survey by one advocacy network found that 75% of gender-diverse organizations globally were thrust into life-threatening financial emergencies almost immediately, 70% had to shut down critical programs, and nearly half had to lay off staff (allout.org). Vital services – from HIV prevention and health care to legal aid for hate-crime victims – were thrown into chaos as grants were canceled mid-stream.

And it wasn’t just the U.S. retreating. A broader donor retreat unfolded in tandem. The Netherlands, historically the single largest government donor to gender-diverse causes, announced a staggering 70% cut to its development funding for human rights NGOs in late 2024 (context.news). Within months, other Western governments – including the United Kingdom, Switzerland, Belgium, and France – signaled reductions or suspensions of their gender and sexual diverse community aid programs (context.news). Estimates by a global philanthropy consortium indicated that over $100 million in funding for gender-diverse movements across the Global South and East was suddenly at risk, representing roughly a quarter of all such support previously available in these regions. This unprecedented rollback comes just as anti-rights movements and authoritarian governments are on the rise, creating what activists call a “perfect storm” of shrinking resources and growing need (context.news).

The ripple effects of this funding crisis have been devastating. Every week, grassroots organizations report being forced to close operations or cancel campaigns (context.news). Hard-won progress made over decades – in visibility, safety, and legal protections – is now imperiled. Globally, community safe houses have been shuttered and outreach programs erased; one international study noted cases where sudden budget cuts even led to the closure of shelters, abruptly leaving people without safe refuge (Outright International). In short, the global movement for gender and sexual minority rights has been left “less vibrant, smaller, and poorer, with [a] diminished ability to resist and document human rights violations” in the coming year (context.news). Nowhere is this bleak forecast felt more acutely than in countries like Bangladesh, where local support for the gender-diverse community is virtually non-existent.

A Perfect Storm in Bangladesh: Legal Barriers and Lost Support:
Even before the current crisis, gender-diverse community organizations in Bangladesh were operating under severe constraints. The country’s laws make it extremely difficult – almost impossible – for these groups to exist openly. Many colonial-era laws still in force in Bangladesh contribute to discrimination and social stigma against the hijra, gender and sexually diverse community, forcing most activities to operate underground.. More immediately, Bangladesh’s NGO regulations choke off the lifeline of foreign funding. The Foreign Donations (Voluntary Activities) Regulation Act of 2016 mandates that any organization seeking to receive foreign grants must register with the government’s NGO Affairs Bureau and obtain project-by-project approval (icnl.org). This is an onerous, highly political process under the Prime Minister’s Office. In practice, virtually no grassroots gender-diverse group has been able to secure such registration due to the intense scrutiny and risk of exposure it entails. “It’s a paradox,” one rights advocate notes, “that foreign donors committed to gender & sexual minority rights typically require NGOs to be officially registered, but in Bangladesh that very requirement is an insurmountable hurdle.” As of 2025, out of an estimated 70 community-based organizations working with gender-diverse people across Bangladesh, only three have ever managed to register with the NGO Affairs Bureau. Those few that succeeded did so by downplaying their gender rights-focused mission and presenting themselves under more socially acceptable umbrellas like public health or HIV prevention programs. (For example, BSWS – one of the country’s oldest groups working with hijra and gender divers communities – obtained registration in the 1990s by emphasizing health services for marginalized populations.)

Unregistered groups historically found creative workarounds to receive critical foreign aid, but previous (Awami League) government actions have closed those avenues. Many operated informally as unregistered CBOs and relied on “fiscal sponsors” – sympathetic registered NGOs willing to pass through donor funds – or channeled grants to individual activists’ bank accounts to fund community projects. In November 2021, however, a directive from the Prime Minister’s Office explicitly banned registered NGOs from transferring any grants or assistance to unregistered groups, slamming shut this loophole (icnl.org). By 2023, it became effectively illegal for even local NGOs to re-grant funds to the grassroots gender-diverse groups that lacked government approval. As a result, many foreign donors had no legally safe way to support these communities at all.

The NGO Affairs Bureau Circular 2025 has raised some hope, as per this revised circular, locally registered organizations will be able to receive funds from the NGO Affairs Bureau by collaborating with other NGOs registered. In addition, various investigations in the registration process have been reduced to some extent, and the registration deadline has been expedited. But it remains a provision but there are still various complications including the long formality of the registration process, the complexity of project approval, and obtaining certificates from local authorities. Which are difficult and challenging for gender diverse grassroots organizations to meet.

Some funders attempted stopgap measures – hiring community leaders as “consultants” or routing money through personal accounts – but these come with heavy penalties. Up to 30% of the funding can be lost to income taxes, VAT, bank fees and other costs when using such indirect routes, devouring nearly a third of desperately needed resources.

The outcome of these compounded barriers is a dire financial isolation. Funding for Bangladesh’s gender-diverse community has now plunged to almost zero. Where once a few international grants trickled in via creative channels, today even those have dried up in the wake of the global donor retreat. Noboprobhaat Foundation’s experience is telling: in 2025, the organization frantically applied to 20+ different international grant opportunities – ranging from human rights funds to health initiatives – in hopes of keeping their work alive. Out of 20+ proposals, only 2 very small grants were approved, and those were modest short-term projects. As a result, Noboprobhaat has been unable to raise any significant funding for the year. Come October 2025, when existing project funds run out, the foundation expects to halt roughly 70% of its activities. All but three of its staff will likely lose their jobs, and there will be no budget for basic operating costs like rent, internet, or transportation. “We have a team that’s been running on fumes and hope,” says one staff member, “but hope doesn’t pay the electricity bill.”

Grassroots Organizations Collapsing
The story of Noboprobhaat is sadly mirrored by many others. One particularly devastating example was the end of the USAID-backed “ Shomota (Equality) Project,” which until recently had been a rare lifeline supporting about 10 grassroots groups nationwide. This multi-year project, funded by the now-withdrawn U.S. assistance program, provided small grants and training to community organizations working on gender diversity awareness, legal aid and mental health education. When the USAID funding freeze hit and the project was abruptly terminated, the effects were immediate and brutal. Out of the 10 groups that had been supported, 5 have already closed their doors entirely. Their offices are shuttered, phone lines disconnected, and the community drop-in centers they ran now sit empty. 4 more of those organizations have managed to hang on in a severely diminished capacity – cutting most of their programs, laying off staff, and operating on a volunteer-only basis. The sole remaining group from that cohort that is still fully functioning (one based in Rangpur) has announced it will have to scale down its activities by 70% by the end of 2025, due to the loss of funds and no alternatives in sight. In other words, an entire network of grassroots support built up over years was largely wiped out in a matter of months.

These closures and cutbacks translate directly into loss of services for an already marginalized population. Critical programs have been halted across Bangladesh. For instance, a community legal aid initiative that once helped hijra (transgender) individuals respond to police harassment can no longer afford its lawyers. Several peer-led HIV prevention programs targeting MSM and transgender women have been scaled back or ended – a dangerous development in a country where stigma often keeps these groups out of mainstream health clinics. Each program lost is irreplaceable because virtually no government or local funding exists to pick up the slack. Unlike some countries where domestic philanthropy or public funding might cushion civil society, in Bangladesh the gender-diverse community has always relied almost entirely on international support. Now that support is vanishing.

The geography of this funding collapse also matters. Historically, most donor funding – however limited – tended to be concentrated in the capital, Dhaka. Groups in smaller cities or rural areas were often left with crumbs. As funds dry up, this urban-centric resource bias has intensified, effectively sidelining gender-diverse activists outside Dhaka. A handful of NGOs in the capital (often those with an HIV focus or connections to broader human rights coalitions) might still receive sporadic help through global health programs or cross-cutting development projects. Meanwhile, smaller organizations in places like Rangpur, Rajshahi, Sylhet, or Barisal are far more likely to have zero support and zero presence now. This centralization means the overall movement becomes less representative and accessible – the voices of gender-diverse people in more conservative rural communities risk being completely unheard if their local support groups can’t survive. “It feels like we’re back to square one,” an activist from Chittagong says, describing how she now travels to Dhaka periodically to meet others because her hometown group dissolved this year. “All the community building we did in the districts has been undone.”

Human Consequences: “It’s like being abandoned”
Behind each shuttered organization are real human lives thrown into uncertainty. The funding cuts have not only undermined advocacy efforts but also imperiled the personal safety and well-being of many gender-diverse Bangladeshis. These organizations often provided lifelines in a hostile environment. Now, community members have fewer places to turn for help. “We used to run a hotline for emergencies – like if someone faced violence or needed rescue – but we had to cut it because we can’t pay the phone bill and staff time,” explains a volunteer from one of the closed groups. In recent years, Bangladesh’s gender-diverse community has faced waves of threats from extremist groups. In 2016, two prominent queer activists were brutally murdered in Dhaka by violent extremists, an incident that sent many activists into hiding. While some groups cautiously resumed work in the aftermath with international support (including security training and emergency funds), today those safety nets are thinner than ever. Activists report that mob violence and extremist threats have escalated in the tense political climate of 2024-2025, as the country heads into a charged election season. Yet with funding so scarce, community organizations are less equipped to respond. Many have suspended public events and limit their activities to secret support gatherings – a retreat driven both by fear and by lack of resources to ensure security.

For ordinary gender-diverse individuals, the loss of organizational support can be life-altering. Take R., a 19-year-old transgender youth from a small town (name withheld for safety). R. had been attending a weekly community meeting hosted by a local support group where he found friends, counseling, and HIV prevention information. In early-2025, that group shut down without warning when its funding ran out. Now R. is again isolated and living in fear; she has no safe space where she can be herself on a regular basis. Or consider S., a hijra women in his twenties who contacted an organization in early 2025 after being beaten by family members for coming out. The group was arranging to place her in a short-term safe shelter in Rangpur and pursue legal action against the abusers. But weeks into the process, the group lost its funding and could no longer follow through. S. had to return to her village, and her case fizzled out – a stark reminder that when support vanishes, vulnerable people slip through the cracks.

Perhaps most heartbreaking is the psychological toll on those who have dedicated their lives to this work. The sense of betrayal and hopelessness among Bangladesh’s gender-diverse activists is palpable. Many feel abandoned by the international community they trusted. “For years we worked hand-in-hand with donors, sharing our stories, planning projects. Now it’s like the world just walked away,” says one veteran activist, her voice shaking. The abrupt withdrawal of USAID and other donors has badly damaged trust, with local leaders questioning whether they were merely being used to fulfill donor agendas that could be dropped on a whim. According to research by Outright International, these feelings are echoed in many countries: activists worldwide described the cuts as “devastating” and said they felt “the rug was pulled from under their feet”, undermining years of progress (context.news). In Bangladesh, where community advocates already operate under immense stress and danger, the added weight of financial insecurity has led to burnout and despair. Several prominent figures have scaled back their public involvement or left the country entirely over the last two years. Those who remain joke grimly about running on “volunteer spirit and credit card debts.”

Exclusion by Mainstream Initiatives
Ironically, even as dedicated gender-diverse organizations struggle, some well-funded mainstream development projects in Bangladesh have continued – but deliberately excluded gender-diverse communities. Activists cite a recent example involving a youth-focused civic education program called “Youth for Equality,” run by a large NGO consortium with international funding. When local LGBT youth groups tried to engage with this program, they were quietly dropped from activities and told by a partner NGO that “we will not work with this community”. The project’s funders had promoted it as inclusive of all youth, but the implementing organizations feared backlash or controversy if they included gender & sexual diverse community participants. Incidents like this highlight a painful truth: in the current climate, even initiatives branded with words like “equality” or “inclusion” may sideline gender-diverse people in Bangladesh. Such discrimination further marginalizes the community from opportunities that other civil society sectors still enjoy. It means that not only is independent funding drying up, but spaces in broader social programs are also closing their doors – often unofficially – to sexual and gender minorities. The result is a deepening sense of isolation. “We’re being shut out on all fronts – our own groups can’t get support, and general platforms don’t want us either,” an exasperated community organizer explains. This double exclusion underscores how precarious the situation has become.

No Respite in Sight?
Looking forward, the challenges show little sign of easing. Bangladesh’s general elections loom on the horizon, and political tensions are high. Historically, during times of political turmoil, marginalized communities like the gender-diverse population become convenient scapegoats or are sidelined as “non-issues.” Few politicians or mainstream NGOs in the country are willing to champion gender & sexual diverse community-related causes in the best of times; in a volatile period, their silence is even more pronounced. If international funding remains scant, many of the community-based organizations fear they will not survive another year. “2025 is the hardest year I’ve seen in two decades of activism,” remarks a community elder in Dhaka. Organizational collapse now feels like an existential threat – decades of painstaking progress could be undone if the community’s basic infrastructure of support (the NGOs, CBOs and informal networks) disintegrates. Without these groups, there is no one to document human rights abuses against gender-diverse people, to advocate when laws are misused against them, or to provide sensitivity training to health providers and local authority. The long-term effect of this funding drought, if not addressed, may be to reverse social acceptance and legal gains that activists had achieved through years of hard work. As one analysis warned, the movement could become “smaller, poorer, and less able to resist” abuses, just at the moment when reactionary forces are pushing harder against minority rights context.news.

Yet, amidst the gloom, there are small sparks of resilience. Activists are sharing resources and ideas across borders, often online, to find solutions. Some international human rights networks have set up emergency funds and crowdfunding campaigns to keep grassroots work alive. (In fact, global coalitions like the Fund Our Futures campaign have been urging philanthropies to step up emergency grants context.news, and a few have responded, albeit modestly.) In Bangladesh, a few brave donors have experimented with informal funding channels – for example, sending money to trusted individuals rather than organizations – to bypass the NGO registration trap, despite the risks. These efforts, however, remain limited compared to the scope of the crisis. Community leaders also emphasize the importance of capacity-building and documentation during this downtime: “Even if we can’t run full programs, we are training each other, writing our stories, staying ready for when we can rebuild,” says a youth activist from Sylhet. This spirit of solidarity is what has kept the movement alive through dark times before, and may yet prove crucial in weathering the current storm.

Conclusion
The funding cuts sweeping the globe have hit Bangladesh’s gender-diverse community at the worst possible time and in the worst possible way. Grassroots organizations, which were already navigating a minefield of legal barriers and social hostilities, have seen their meager lifelines pulled away by distant decisions in Washington, The Hague, London, and beyond. The result is a crisis not just of money, but of hope and security. On the ground, it means fewer safe havens and louder silences – an ominous void where once there were support group meetings, advocacy workshops, HIV clinics, and emergency helplines. It means courageous activists lying low, burnt out or feeling betrayed; it means vulnerable gender-diverse individuals with nowhere to turn when danger strikes or when they simply need community.

For the Noboprobhaat Foundation and dozens of groups like it across Bangladesh, 2025 has become a year of triage and heartbreak. Each month seems to bring another difficult announcement: a program terminated, a office closed, a farewell to colleagues who can no longer afford to volunteer. The global promises of “leaving no one behind” ring hollow on the streets of Dhaka’s marginalized neighborhoods, where the most vulnerable have indeed been left behind in this funding retreat. While international attention is largely fixed elsewhere, a quiet unraveling is happening in Bangladesh’s gender-diverse community – a rollback of hard-fought gains and a descent into new uncertainties.

Ultimately, the fate of these grassroots organizations will determine the fate of the community itself. If they vanish, an entire generation’s progress in acceptance, healthcare access, and rights awareness could vanish with them. And so, despite the exhaustion, a few persist: keeping the office open one more day, sending one more funding proposal, making one more phone call to a friend abroad who might help. They persist because the alternative – giving up – would mean abandoning their own people. As one community organizer put it, “We have always been pushed to the margins, but we found ways to survive. We will try to survive this too. But it’s the hardest fight we’ve ever faced.”

References:

  1. Context (Thomson Reuters Foundation). “gender & sexual diverse groups at risk of closure as USAID freeze adds to cuts.” (April 16, 2025) – Discusses global aid cuts, including Netherlands’ 70% funding cut and other donor pullbacks context.news.

  2. All Out. “Filling in the Gaps Left by Drastic USAID Cuts to Lifesaving gender & sexual diverse Programs.” (2025) – Survey of partner organizations showing 75% facing emergencies, 70% shutting programs, and nearly half laying off staff due to funding losses allout.org.

  3. ICNL Civic Freedom Monitor – Bangladesh. Legal framework for NGOs. – Explains Bangladesh’s NGO law requiring government registration for foreign funding icnl.org and the Nov 2021 circular banning fund transfers to unregistered groups icnl.org.

  4. Outright International. “Defending Freedom: Impacts of U.S. Foreign Aid Cuts on gender & sexual diverse People Worldwide.” (Feb 2025) – Documents global effects of the U.S. funding freeze, including service disruptions (e.g. safe house closures) and activists’ testimonies of feeling devastated outrightinternational.org.