Devex Newswire: Has anyone emerged from USAID's downfall unscathed?

Let’s say you’re an aid organization and you never took a dime from USAID. You might be feeling pretty safe right now. Except you’re probably not, because the elimination of USAID has triggered a tsunami that’s left practically everyone struggling to keep their heads above water.

Also in today’s edition: If there’s any lesson to be learned from USAID’s downfall, it’s that relying on a single funding source can be catastrophic. We show you how to diversify and adapt to this new era in aid.

Anatomy of an aid cut

Imagine you suddenly lose your right arm. You still have one left — but you’re not exactly in tiptop shape anymore.

That’s how Andy Harrington, the executive director of Canadian Foodgrains Bank, a non-USAID-funded organization, likens the mass termination of the agency’s programs — only he’s even more graphic: “If you rip off an arm and a leg, or in this case, chop the body in half, that has massive impacts for the infrastructure we need to do our projects,” he says.

There are lots of organizations like Harrington’s that don’t take money from bilateral donors. Oxfam America, for example, decided to forego government funding decades ago to ensure it could advocate freely.

But in a delicate, interconnected ecosystem, the ripple effects of the world’s largest donor going under leave no one undisturbed.

For one thing, the organizations that were not reliant on USAID dollars are now being looked to for help by those that were reliant on them. Some, such as Refugees International, are stepping up by serving as an advocacy voice for groups fearful of ruining their chances to recoup funds they’re owed, or — as Lauren Evans writes for Devex — that are silent because the cuts have left them so drained they lack the bandwidth to even put out a statement.  

The mood seems to be that everyone wants to help in these unprecedented times. Jeffrey Samuel of Direct Relief, which provides emergency medical assistance around the world, says his organization has been working overtime to communicate unmet needs to pharmaceutical companies.

But financially, filling a $65 billion annual hole left by USAID’s demise is an untenable ask.

As Samuel puts it: “No single entity in the world can plug the gap that’s been left by this.”

Read: The fall of USAID changed everything — even for those it didn’t fund (Pro)

+ Two months after the U.S. aid freeze: What’s the fallout? Join us on March 25 for a discussion on what’s next for USAID, Congress’ foreign aid budget, updates on the lawsuits, and how globaldev orgs can navigate the changes. Save your spot now.

The 95% solution

While the chain reaction triggered by USAID’s implosion has left almost no one untouched, it has underscored the need to cultivate diverse funding streams.

In a recent Devex Pro event and an accompanying report, we break down various alternative financing avenues, including government support beyond USAID via agencies such as Millennium Challenge Corporation, tapping into multilateral development banks such as the Inter-American Development Bank, blended finance, and leveraging philanthropic capital.

On the latter, philanthropy is perhaps the most sought-after alternative, but it can’t fill the U.S. government’s shoes. Still, it can be less risk-averse, said Naina Subberwal Batra, CEO of the Asian Venture Philanthropy Network. That risk relates directly to the vast untapped potential of philanthropic endowments that typically sit in investment portfolios.

“We spend so much time focusing on the 5% of annual giving that foundations are required to distribute, but no one talks about the other 95% — the capital that’s being invested to grow their endowment. Imagine if even a fraction of that were deployed with an impact lens,” Batra told my colleague Raquel Alcega.

But to unlock these additional billions, development organizations need to shift their mindsets from simply seeking grants to educating funders on innovative finance.

It’s no easy shift. One of the biggest barriers to engaging with philanthropists or accessing blended finance is their perceived complexity. So we break down some of the myths about how these funding models work and offer practical advice on how to evolve from passive grantee to active capital mobilizer.

Read: 4 strategies for diversifying funding in a post-USAID world (Pro)

Watch the event recording: Philanthropy, blended finance, and the evolving role of NGOs (Pro)

+ Not yet a Devex Pro member? Start your 15-day free trial today to access all our expert analyses, insider insights, funding data, events, and more. Check out all the exclusive content available to you.

A numbers game

From the beginning of, well, the end of USAID, everyone has been trying to figure out which contracts and grants got the ax — and which didn’t. The terminations seem to be a constantly moving target, and even members of the U.S. Congress have fought to pin down a precise list. Leaked lists are floating around LinkedIn, though their provenance hasn’t been established.

The State Department has announced that 83% of USAID programming has been eliminated, which adds up to about 5,200 programs, with 1,000 spared. But what if those numbers are off? Way off?

According to the Center for Global Development, far more planned USAID spending may have been retained than previously thought. The think tank made calculations based on two leaked lists of canceled and retained USAID awards which have been widely circulated in the aid community.

CGD says it is likely that only around 34% of all USAID awards, by dollar value, have been terminated, though it cautions that figure comes with several caveats, including that the lists have not been verified.

Still, a picture emerges of sectors that have been the most and least affected.

Among those completely or almost completely eliminated are private sector competitiveness; higher education; political competition and consensus building; infrastructure; good governance; basic education; family planning; civil society; conflict mitigation; and trade and investment.

Food, health, and humanitarian aid seem to have seen relatively fewer cuts, which tracks with recent proposals for a new, narrower focus on U.S. aid.

Charles Kenny, a senior fellow at CGD and one of the blog’s authors, was quick to highlight that while his calculations showed things in a better light, it was not all positive.

“Compared to the numbers we were seeing, it’s better,” he says. “But it’s a long way from good.”

Read: Has USAID spending been cut by less than we thought?

Under investigation

Bangladesh’s Anti-Corruption Commission has filed two cases against Saima Wazed, who currently serves as regional director of the World Health Organization for Southeast Asia.

According to local news reports, the cases were filed Thursday in Dhaka. One of the cases alleged that Wazed provided false information in her application in 2023 for the WHO regional director position — in particular, for claiming she is an honorary specialist/expert at the Bangabandhu Sheikh Mujib Medical University on autism spectrum disorder and mental health.

The other case alleges that Wazed colluded with the former chair of Bangladesh’s Exim Bank to get banks to contribute to the Shuchona Foundation, a nonprofit advocacy, research, and capacity-building organization Wazed founded specializing in neurodevelopmental disorders and mental health.

She has been under investigation since January, with the efforts appearing to aim at removing her from her WHO position. The investigation follows the ousting of former Bangladeshi Prime Minister Sheikh Hasina — who is also Wazed’s mother.

Read: Bangladesh anti-corruption agency accuses WHO director of fraud

AI learned from the best

My colleagues Thomas Cserép and Naomi Mihara attended the Mobile World Congress in Barcelona, Spain, where the traditional focus on mobile communications expanded to newer technologies, including of course artificial intelligence.

They specifically explored AI’s potential to revolutionize health care delivery, alongside the critical need to mitigate its risks. As Felton warned: “There is a huge AI digital divide developing.”

Watch: How will AI change global health?

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In other news

Sweden, Norway, and the Netherlands, which have contributed $15 million to USAID for joint development projects, now question whether the funds will be used as intended or refunded. [AP]

South Sudan stands on the brink of civil war as political turmoil and escalating violence mount, the U.N. warns. [NPR]

Poliovirus has been found in sewer samples from 18 districts in Pakistan. [Dawn]

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