With the Trump administration cutting funding and withdrawing from numerous international organizations, criticizing the U.N. for not advancing American interests, the cautions that it may encounter a cash shortfall by July.

In a January 28 communication from U.N. Secretary-General António Guterres to member state ambassadors, he pointed to unprecedented arrears and inflexible budget regulations that have placed the organization at risk.

Guterres stated that the U.N. is caught in a “Kafkaesque cycle” where strict budgetary requirements compel it to return “unspent” money even when those contributions were never actually received. He noted that unpaid contributions hit an all-time high of $1.568 billion at year-end 2025, with revenue covering merely 76.7% of mandated contributions, putting the organization in a precarious position.

Unless collections “drastically improve,” cautioned, the U.N. will be unable to execute its 2026 budget completely and might confront a liquidity shortfall by mid-year.

A high-level diplomatic source informed Digital that the secretary-general carries substantial blame for the worsening crisis, contending that red flags were apparent well before the present deficit.

Per the source, key donor nations had been demanding greater efficiency and reforms for years, but substantive measures were postponed. When changes were finally implemented, the source indicated they were enacted across the board instead of through focused reductions in sectors where genuine savings could be achieved, damaging even core U.N. entities vital to the organization’s mission. “He is going to go down as the worst secretary-general in the history of the U.N.,” the source stated.

Guterres’s alert coincides with the United States, the organization’s largest financial backer, has reduced voluntary contributions to numerous U.N. initiatives and declined to make some required payments, deepening the financial strain described in the secretary-general’s correspondence.

Wider reductions in U.S. foreign aid under the Trump administration’s foreign policy shift. In January 2026, the United States formally and started withdrawing from dozens of international organizations, including several U.N. bodies, pointing to a mismatch with U.S. strategic objectives.

The financial pressure has already compelled the United Nations to curtail expenditures across multiple agencies. Independent Reuters coverage reveals that U.N. entities, such as the World Food Programme and refugee organizations, are gearing up for staff reductions and program cutbacks as total contributions drop to a ten-year low.

Hugh Dugan, previously a special assistant to the president and senior director for international organization affairs at the National Security Council, told Digital that the present upheaval stems from enduring structural deficiencies rather than an abrupt breakdown.

“We’ve heard this before,” Dugan told Digital, alluding to frequent alerts from U.N. leadership regarding budgetary shortfalls.

Dugan noted that the organization has battled for decades with irregular income streams and obsolete fiscal procedures, asserting that panic-inducing communications are improbable to rebuild donor trust absent tangible internal overhauls.

He observed that Guterres, with approximately 11 months left in his term, seems preoccupied with preventing the institution from shutting down during his tenure.

“The doors will remain open, maybe just, but that’s his legacy,” Dugan remarked.

When questioned about , Dugan stated it should not be perceived as a rival to the United Nations or as a substitute for its charter-based framework.

“I don’t see it as a replacement of the principles of the U.N.,” he said, characterizing the initiative as practical rather than philosophical.

Dugan likened it to previous gathering initiatives like the Clinton Global Initiative, noting it concentrates on negotiation and collaboration rather than replacing the global system.

Notwithstanding growing critiques of its effectiveness and financial management, Dugan said the U.N. retains one lasting strength.

Citing the annual U.N. General Assembly session, Dugan stated, “When the U.N. calls a meeting today, it’s routine to have more than 100 heads of state in the room.” He added, “The power to convene is no small accomplishment.”