Shifting power distributions, geopolitical tensions, and an ever-palpable momentum for alternative frameworks have gradually led to a rise in the number and shared competences of international organizations (IOs) in recent decades. Institutional overlap is often seen as threatening the continuity and focality of established IOs, thus posing a contemporary and significant challenge to the current multilateral system. Extant explanations of overlap often focus on the design and inception of IOs and examine the role of power politics amongst states. Less attention is paid to the institutional processes that may be conducive to overlap after inception. This paper makes the case as for why funding modalities are an important factor in that regard. The paper focuses on the recent trend of earmarked funding, on which IOs are increasingly dependent for their operations. While earmarked funding may help IOs expand their resource pool and donor governments justify multilateral funding policies to domestic audiences, it also carries important implications for IO operations. Specifically, this paper expects earmarked funding to be associated with variation in IO scope. This is likely across regional IOs which often overlap in membership and thus may compete more for scarce resources. Striving to attract (voluntary) funding, regional IOs may inadvertently go beyond their usual competences, straying closer to those of their peers. To test this, the paper relies on data on funding (core and earmarked) and institutional overlap (e.g., competences, membership, etc.) in over 70 regional IOs between 1990 and 2020. Preliminary findings suggest further examining the effect of earmarked funding on IO operations to better understand the drivers of overlap. This has important implications for IO scholars and policymakers.