As the Trump administration continues to cut funding and withdraw from various international organizations due to criticisms that the United Nations has not adequately advanced U.S. interests, the U.N. is sounding alarms about a looming financial crisis. According to U.N. officials, the organization could confront a severe cash shortage by July.

In a letter dated January 28, U.N. Secretary-General António Guterres addressed ambassadors, highlighting an unprecedented level of unpaid dues and inflexible budgetary protocols that have left the U.N. in a precarious position. He described the situation as a “Kafkaesque cycle,” where strict budget rules mandate the return of “unspent” funds, even when the expected contributions were never received.

Guterres revealed that by the end of 2025, outstanding dues had reached a record $1.568 billion, with collections covering only 76.7% of the assessed contributions. This shortfall has put the organization at risk, and without significant improvements in collections, the secretary-general warned that the U.N. would struggle to fully implement its 2026 budget, possibly leading to a liquidity crisis by mid-year.

Meanwhile, President Donald Trump and U.N. Secretary-General António Guterres met on September 23, 2025, during the 80th session of the U.N. General Assembly in New York City. The assembly, which gathered world leaders, focused on the theme “Better together: 80 years and more for peace, development, and human rights.”

Despite these discussions, a senior diplomatic source informed Fox News Digital that Guterres himself holds a share of the blame for the escalating crisis, suggesting that the warning signs of financial trouble were apparent well before the current deficit became unmanageable.

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.

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.

A Security Council meeting on the situation in Sudan, on July 13, 2023, at United Nations headquarters. (AP Photo/Mary Altaffer, File)

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 U.N. 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.

United Nations Secretary-General António Guterres speaks about the Israel and Hamas ceasefire deal outside the Security Council at the United Nations Headquarters in New York City, Jan. 15, 2025. (REUTERS/Eduardo Munoz)

“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.

A view of the United Nations Headquarters building in New York City, United States on July 16, 2024. (Jakub Porzycki/NurPhoto via Getty Images)

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.

President Donald Trump during the United Nations General Assembly (UNGA) in New York on Tuesday, Sept. 23, 2025. (David Dee Delgado/Bloomberg via Getty Images)

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.”