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As the Trump administration slashes funding and exits multiple international bodies over criticism that the U.N. has failed to promote U.S. interests, the United Nations is warning it could face a cash crisis by July.
In a Jan. 28 letter from U.N. Secretary-General António Guterres to ambassadors, he cited record unpaid dues and rigid budget rules that have left the organization exposed.
Guterres said the U.N. is trapped in a “Kafkaesque cycle” in which rigid budget rules force it to return “unspent” funds even when those contributions were never paid. He said outstanding dues reached a record $1.568 billion at the end of 2025 and that collections covered only 76.7% of assessed contributions, leaving the organization dangerously exposed.
Unless collections “drastically improve,” the secretary-general warned, the U.N. will not be able to fully implement its 2026 budget and could face a liquidity crisis by mid-year.
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A senior diplomatic source told Fox News Digital that the secretary-general himself bears significant responsibility for the deepening crisis, arguing that warning signs had been visible long before the current shortfall.
According to the source, major contributors had been pressing for efficiency and reform for years, yet meaningful action was delayed. When reforms were eventually introduced, the source said, they were applied broadly rather than through targeted cuts in areas where real savings were possible, harming even U.N. bodies considered central 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 said.
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The warning from Guterres comes as the United States, the world body’s largest contributor, has cut voluntary funding to multiple U.N. programs and declined to make some required payments, deepening the cash crunch described in the secretary-general’s letter.
Broader U.S. foreign assistance cuts under the Trump administration’s foreign policy realignment. In January 2026, the United States formally withdrew from the World Health Organization and began exiting dozens of international bodies, including multiple UN entities, citing misalignment with American priorities.
The funding squeeze has already forced the United Nations to tighten spending across several agencies. Separate Reuters reporting shows that U.N. bodies, including the World Food Programme and refugee agencies, are preparing layoffs and program reductions as overall contributions fall to the lowest level in a decade.
Hugh Dugan, former National Security Council special assistant to the president and senior director for international organization affairs, told Fox News Digital that the current turmoil reflects long-standing structural weaknesses rather than a sudden collapse.
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“We’ve heard this before,” Dugan told Fox News Digital, referring to repeated warnings from U.N. leadership over cash shortfalls.
Dugan said the organization has struggled for decades with inconsistent revenue and outdated financial practices, arguing that alarmist messaging is unlikely to restore donor confidence without visible internal reforms.
He said Guterres, who has roughly 11 months remaining in office, appears focused on ensuring the institution does not close on his watch.
“The doors will remain open, maybe just, but that’s his legacy,” Dugan said.
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Asked about President Trump’s newly announced peace board, Dugan said it should not be viewed as a competitor to the United Nations or a replacement for its charter-based system.
“I don’t see it as a replacement of the principles of the U.N.,” he said, describing the initiative as operational rather than ideological.
Dugan compared it to past convening efforts such as the Clinton Global Initiative, saying it focuses on dealmaking and coordination rather than supplanting the international order.
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Despite mounting criticism of its performance and finances, Dugan said the U.N. continues to hold one enduring advantage.
Referring to the annual U.N. General Assembly debate, Dugan said, “When the U.N. calls a meeting today, it’s routine to have more than 100 heads of state in the room,” he said. “The power to convene is no small accomplishment.”
