As we enter 2026, volatility is no longer a passing phase but a defining condition. Geopolitical shocks, fiscal constraints, and shifting political priorities have fundamentally changed how governments and organisations pursue impact. Major donors, including the United States and the UK, have recalibrated aid budgets, forcing organisations to deliver more with less and to rethink long-standing models of support.

Palladium anticipated turbulence well before it arrived, and that foresight helped us absorb the initial shocks. But the scale and persistence of disruption through 2025 required rapid adaptation. By February last year, we were in triage—redirecting funds and talent to where needs were most acute: humanitarian response, climate action, and employment. This meant disciplined focus on client priorities and a willingness to move resources quickly to where they mattered most.

What stands out to me from this period is the resilience of our teams. Amid uncertainty, they delivered results that mattered. Data and AI sharpened our speed and judgment, but our work remained grounded in the realities of the people we serve. With the confidence of experience, I can say this: whatever the conditions, the Palladium team delivers.

The Road Ahead: Strategic Imperatives for Governments and Business

Governments now face an unenviable task. Domestic pressures, geopolitical instability, and economic strain are playing out under intense public scrutiny. The tension between long-term planning and short-term response is acute, but there are proven approaches that help leaders navigate this moment.

Outcome-based models are no longer optional. Payment-by-results structures, particularly those that blend public budgets with private finance, protect taxpayer value while accelerating delivery in areas such as humanitarian response, healthcare, and resilience infrastructure. They create clarity on what works, enable faster replication, and strengthen accountability when resources are constrained.

The same logic applies to capital itself. When funding is scarce, impact depends less on volume and more on how it is deployed. Catalytic capital uses public funds to unlock additional investment, absorbing risk and creating conditions for scale. Public capital should act as the spark, not the fuel, with success measured by the momentum it creates.

We saw this through the first phase of Partnerships for Forests, a UK Aid–funded programme that used grants and technical assistance to mobilise £1.35 billion in private investment, protecting forests while supporting local communities. It demonstrated how governments can drive transformation by using public funds strategically rather than exhaustively.

Long-term resilience also requires system strengthening. Sustainable progress depends on local leadership and the systems that underpin economies and communities. When those systems are strong, solutions endure and adapt long after external support ends.

In Nigeria, our Data.FI project’s partnership with the Ministry of Health established weekly, data-driven “situation rooms” to review HIV service delivery in real time. By embedding data use into governance routines, local teams could identify bottlenecks and adjust interventions quickly. The result was a stronger health information system and better decision-making that continues beyond the life of the programme.

Resilience is most powerful when it is designed in from the start. It is not an add-on, but a discipline—using every investment to reduce risk and strengthen recovery. Whether in energy, agriculture, or extractives, resilience means ensuring communities benefit, participate, and are better off when projects conclude. It is not just about outputs, but about durable local economies and climate-ready systems.

Looking Forward

2026 will be a year of rebuilding and sharper focus. As aid budgets tighten, governments will increasingly apply global best practice at home. Palladium is well positioned to address this. Pandemics, migration, and supply chain disruptions do not respect borders and our expertise applies equally domestically and internationally.

The impact of our work in this sector extends well beyond individual projects. Success depends on doing the work with nuance, integrity, and openness to new partners and ideas. The path ahead is clearer, even if the environment remains hard. I am confident in governments, researchers, practitioners and investors will find new ways to work together to create stability for countries and communities in uncertain times.