Beyond Benevolence: A Shifting Landscape for Life Sciences Donations
May 15, 2025
The life sciences industry has a long-standing tradition of supporting public health through donations. from medicine access programs and diagnostic tools to emergency aid and long-term health system investments. These contributions have never been peripheral; they have been vital.
But what is different in 2025, is the environment in which these donations occur.
Today, regulatory expectations surrounding pharmaceutical giving have intensified dramatically. Laws like the U.S. Foreign Corrupt Practices Act, the UK Bribery Act, and transparency mandates such as Open Payments and Loi Bertrand now reach into spaces once treated as philanthropic. Donors are expected not only to give, but to govern, to ensure traceability, integrity, and compliance far beyond their own supply chains.
NGOs Face a Funding Cliff
At the same time, NGOs the longstanding delivery partners in these efforts, are experiencing a parallel but inverse shift. Following sweeping aid cuts from governments and multilateral institutions, NGOs are increasingly reliant on corporate and philanthropic donors to stay afloat.
The U.S. foreign aid rollback under the Trump administration, which eliminated over 90% of multi-year NGO funding and froze $27 billion in USAID development programs, has only accelerated this shift. In Europe, heightened scrutiny from the EU Court of Auditors and a wave of proposed legal reforms are redefining what qualifies as an NGO and how foreign-funded entities must disclose and operate.
This collision of rising expectations for life sciences companies and rising dependency within the NGO sector is creating a new, more fragile ecosystem of public health support. And it is putting new pressure on both sides to adapt to each other’s realities.
Beyond the Shipment: Compliance Risks in Product Donations
For life sciences donors, the central challenge is no longer just how much to give, but how to give responsibly and how to manage the considerable regulatory and reputational risks that now accompany even well-intended donations.
Once a medicine leaves the company warehouse and enters an NGO distribution chain, visibility drops sharply. Tracking how that product is stored, where it is used, whether it is repurposed, or whether outcomes are documented often becomes speculative, even for the most reputable recipients.
From a compliance standpoint, this introduces significant vulnerability. If a donated product is misused, expired, redirected to a politically sensitive zone, or linked to a government-supported program without adequate controls, the life sciences company may still be held accountable, regardless of whether the error originated with the NGO.
The Cash Conundrum: When Visibility Disappears
While in-kind donations of medicines, diagnostics, and equipment often dominate public narratives, cash donations remain a critical and highly sensitive component of pharmaceutical giving. In many partnerships, cash supports essential programmatic activities such as staff salaries, training, transport, cold chain maintenance, or general operations. But it is also where the compliance risk often spikes.
Pharma companies contribute hundreds of millions in direct cash grants annually. Across the industry, total corporate giving (cash and in-kind) exceeded $10 billion in 2024, with an estimated 25–30% of that in cash disbursements and that share is increasing as companies engage in co-funded initiatives and strategic philanthropy.
The challenge? Once cash is transferred to an NGO partner, particularly in fragile or decentralized environments, traceability can break down.
“We issued a modest grant for vaccine awareness and capacity building. When our internal audit team asked for timesheets to verify personnel spending, the NGO responded, ‘We don’t use timesheets.’ Not because they were hiding anything, but because they simply do not operate that way - they do not use timesheets!”
In another case, funds were transferred to an NGO’s regional subsidiary for project implementation. Weeks later, the donor had no insight into how the funds were used, where they were held, or whether they had even been deployed at all. The NGO had fulfilled its contractual obligation by forwarding the funds but had no system in place to monitor downstream spending.
These scenarios are not exceptional, they are common. And while most NGOs are acting in good faith, the absence of standard financial controls such as time allocation, sub-grantee reporting, or activity-based budgets makes it nearly impossible for donors to meet internal and external compliance expectations.
Misalignment, Not Misconduct
NGOs face a different but equally complex dilemma. They are increasingly expected to meet compliance standards modeled on corporate systems that are simply beyond their operational reach. Many NGOs, particularly those operating in crisis zones or low-resource settings, simply do not have the same infrastructure or administrative capacity as their corporate counterparts.
Detailed audit trails, real-time inventory tracking, and harmonized reporting systems may be aspirational goals, but for many, they remain out of reach due to limited staffing, inconsistent access to technology, or the sheer burden of managing multiple donors with differing expectations.
This is not about blame. It is about structural misalignment. Companies operate in a regulated, liability-conscious environment. NGOs operate in high-need, often unstable settings, with lean administrative teams and a mission-first ethos. Yet both now share responsibility for safeguarding the same donation, under increasingly unforgiving public and legal scrutiny.
This is not a question of intent. It is a matter of capacity. NGOs operate in unstable, high-need environments where lean administrative teams prioritize mission-critical delivery. Life sciences companies, by contrast, are governed by rigorous regulatory frameworks and liability concerns. The result is a structural misalignment: both parties are now jointly responsible for the integrity of donations, but only one is resourced to meet the associated compliance burden.
What Life Sciences Can Do
To navigate this new landscape, life sciences companies need more than policies. They need pragmatic strategies that recognize NGO limitations while still meeting their own regulatory obligations.
Pre-Donation:
Conduct risk-based due diligence: Go beyond surface-level vetting to understand the NGO’s real-world operations, governance maturity, and financial controls.
Draft fit-for-purpose donation agreements: Include clearly defined expectations around product use, audit rights, and compliance responsibilities tailored to the context.
During Implementation:
Support realistic monitoring mechanisms: Field visits, third-party assessments, or joint oversight committees can help reduce blind spots. Leverage external partners when capacity is an issue.
Use technology for traceability: QR-coded packaging, blockchain tracking, or mobile verification apps can improve downstream visibility.
Beyond the Transaction:
Invest in NGO capacity: Fund the systems, tools, and training needed to support compliance, not just programming.
Foster open dialogue: Encourage candid discussion about risks, limitations, and co-created solutions.
What NGOs Can Do
Even within resource constraints, NGOs can take steps to reduce risk exposure and build stronger donor relationships:
Pre-Donation: Set a Foundation for Trust
Communicate real-world constraints: Transparency about operational or contextual challenges helps shape realistic donor expectations.
Engage early in co-developing the scope: Help shape agreements and reporting frameworks that are practical for your operating environment.
Apply basic internal controls: Use low-cost tools like centralized donation logs, approval workflows, or standardized field reports.
During Implementation: Maintain Visibility and Accountability
Track and document basic usage: If detailed logs aren’t possible, narrative updates or photographic evidence can still show where donations are going and how they’re used.
Escalate issues early: Communicate disruptions (e.g. delays, repurposing, staffing turnover) to prevent misunderstandings or compliance breaches.
Coordinate with local partners: Where sub-grantees or field teams are involved, maintain oversight through check-ins, shared logs, or simplified reporting templates.
Post-Donation: Strengthen the Relationship
Share outcome-focused reports: Focus on results, impact, and key learnings — even if the data is qualitative or anecdotal.
Reflect on what worked and what didn’t: Invite donor feedback and share suggestions for improving future collaborations.
Build institutional knowledge: Document processes internally so future staff can maintain standards and avoid reinventing the wheel with each new donor.
Final Word: Do Better, Together
This is not about doing less. It is about doing better with intention, with structure, and with a clear-eyed understanding of what is at stake.
In this era of elevated scrutiny and global health interdependence, life sciences companies must evolve from generous donors to strategic stewards of public good and NGOs must be equipped to meet them in the middle.
Contact me to discuss further at vflowers@koiosglobal.com