Devex Pro special report: The real-world impacts of the aid freeze

Since the United States announced a freeze on all the U.S. Agency for International Development funding on Jan. 24, much of the aid sector has been left paralyzed, with food rotting in warehouses, vital medicine going undelivered, and aid camps falling into chaos. Right now, the most high-profile fight over USAID is happening in the courts. NGOs and contractors are fighting to get paid for the work they have done, and employees are fighting mass terminations that have cost thousands of jobs. But on the ground, the lack of funding is costing lives and shuttering entire programs. While the situation keeps changing, it doesn’t seem to be improving. We’ve created a sector-by-sector breakdown of what we know so far. Humanitarian funding The U.S. has historically been the world’s largest donor to emergency aid, funding programs that respond to famine, conflict, and displacement crises. Total U.S. humanitarian assistance stood at nearly $14 billion last year. Despite the Trump administration’s assurances that exceptions would be made in the foreign aid freeze for programs delivering lifesaving humanitarian support, many humanitarian organizations have been hard hit by the broad termination of programs, resulting in massive job losses and leaving millions of recipients at risk. The International Rescue Committee, or IRC, warned that “a humanitarian catastrophe is unfolding in real time.” The organization reported it has lost dozens of grants from USAID and the State Department, which it said will have devastating consequences for millions of people in need. “Vulnerable communities who rely on humanitarian aid to survive are being left with nothing. This is a matter of life or death,” the organization said in a statement. Mercy Corps, an NGO that receives 26% of its funding from USAID, told Devex that it will need to make “workforce reductions,” while the Danish Refugee Council, or DRC, said it planned to lay off around 2,000 staff members — about a quarter of its workforce. Norwegian People’s Aid also announced that it would lay off more than half of its workforce, while the Norwegian Refugee Council, or NRC, said it would be laying off staff as well. NRC operates in some of the world’s most vulnerable regions, providing services to women and girls in Afghanistan and supporting nearly 500 bakeries in Darfur, Sudan, that supply subsidized bread amid ongoing conflict. Both organizations received about $150 million in U.S. funding in 2024. Surprisingly, Christian organizations that have previously enjoyed Trump’s support have not been spared. Some of the largest Christian aid organizations, including World Vision, Catholic Relief Services, and Samaritan’s Purse, have been subject to the same cuts as secular aid agencies. Catholic Relief Services expects workforce reductions of up to 50%, while World Vision is preparing to lay off as many as 3,000 workers worldwide. Meanwhile, HIAS has laid off 500 international staff, deferred payments to vendors, and canceled programs, placing its programs in Africa and South America on hold, “including its work helping displaced children who are at high risk of trafficking, sexual exploitation, abuse and neglect.” Noah Gottschalk, the senior director for international advocacy and international Jewish community relations at HIAS, told Devex that his organization was “totally surprised” by the aid freeze. “What we’ve seen is a sledgehammer being taken to the really delicate and complex lifesaving system that has been built up over the course of decades to serve some of the world’s most vulnerable people,” he said. Many fear that local organizations that were previously supported by the U.S. will not survive without U.S. funding. Before President Donald Trump took office, USAID was reaching 2,300 local and regional partners, a 48% jump in the local partner count since 2021. “The past month has been like a big funeral. A big funeral across the entire country, and a big funeral across the world,” said Moses Isooba, the executive director of the Uganda National NGO Forum.“USAID was the pace-setter on locally led development. Now that the pace-setter has now gone away, what we are most likely going to see is not only the rolling back of budgets, but the rolling back on the whole idea of localization.” Despite the unprecedented turmoil, others in the sector see this as an opportunity for change. In a Devex opinion piece, Jacek Siadkowski, co-founder and CEO of Tech To The Rescue, stressed there have been calls for more transparency, efficiency, and localization within the humanitarian sector, yet “real change has been elusive.” He added that this is an opportunity to “reimagine humanitarian work, with technology at the center of this transformation.” “The humanitarian sector must be more open to innovation. Established funding models, hierarchical decision-making, and bureaucratic processes often make it difficult for new solutions to gain traction. In my experience, even forward-thinking traditional INGOs like the International Rescue Committee and ACAPS face systemic challenges despite their innovation and commitment — funding instability, rigid structures, and difficulty scaling solutions,” he wrote. Global health funding With billions of dollars in U.S. aid frozen or terminated, hundreds of health programs globally have ground to a standstill. That includes programs to prevent and treat infectious diseases such as HIV/AIDS, tuberculosis, and malaria, as well as services for women’s health, including family planning and cervical cancer screening. Researchers were also forced to stop critical studies, including those on HIV prevention and vaccines. The freeze has impacted outbreak response, such as the attempts to curb an ongoing Ebola outbreak in Uganda. It paused a critical global surveys program that for decades had been collecting and publishing critical data on population trends to help countries plan and target their health interventions. It also gutted funding for a global initiative aimed at ending childhood lead poisoning, jointly launched by USAID and UNICEF in September 2024. On top of this, President Trump’s order for the U.S. to withdraw from the World Health Organization is slowing global polio eradication efforts and has put the United Nations health agency under significant funding constraints. Women and key populations — those often marginalized and highly vulnerable to diseases such as HIV and TB — are expected to bear the worst of the cuts. In Afghanistan, the funding freeze means some women have lost access to the only health clinic available to them. And while the U.S. government issued exemptions for several lifesaving health programs, it excluded anything related to abortion, family planning, and those centered on gender, diversity, and equity. Even though the U.S. government issued waivers, they failed to move forward in practice because USAID’s payments system remained shut. At the same time, the people inside USAID responsible for those programs have mostly been terminated or put on administrative leave — the agency’s global health bureau has lost nearly 90% of its staff. Because of the freeze, several global and local health organizations were forced to lay off thousands of staff. Across many African countries, thousands of health workers have already lost their jobs, and many more are at risk of losing theirs as USAID-funded programs shut down. In Kenya alone, about 54,000 health care workers could be affected. Sudden award terminations also left some organizations considering downsizing, although some of these terminations have recently been rescinded. A legal battle is being fought in the U.S. over the freeze, but some experts are arguing the dismantling of USAID presents an opportunity to change global health’s dependency on foreign aid and get low- and middle-income countries to take greater ownership of and invest in their own people’s health. “This is a moment of reality for them. They can now do under duress what they should have done during calmer periods,” Olusoji Adeyi, president of Resilient Health Systems and former director of health, nutrition, and population global practice at the World Bank, said during a recent Devex Pro briefing. Food and nutrition aid The U.S. aid freeze has severely disrupted the distribution of emergency food aid around the world. It has also led to the gutting of USAID-funded development programs such as Feed the Future, which helped countries build more resilient food systems — in turn, lessening their reliance on U.S. aid — as well as a crucial planning tool for predicting famines called FEWS NET that was used by many humanitarian and development organizations. Most of the staffers who ran those programs have been laid off or placed on administrative leave, including both those who worked with USAID and those with external development contractors such as Chemonics and Tetra Tech. One USAID program — Food for Peace, which procures and distributes in-kind food commodities grown by U.S. farmers — could survive, as Republicans have proposed shifting its management to the U.S. Department of Agriculture. An estimated 550,000 people could die within a year without U.S. funding for food aid, according to an analysis by the Center for Global Development. The funding freeze has hit U.N. agencies such as the World Food Programme, which feeds tens of millions of people daily in some of the world’s worst humanitarian emergencies. The agency is funded entirely by voluntary contributions from governments, private sector donors, and individuals. The U.S. is WFP’s largest donor, contributing 46% of its budget in 2024. WFP already faced a severe budget shortfall before Trump took office in January. Now, the agency is largely unable to access its U.S. funding, and other major donors, such as the United Kingdom and some European Union countries, are cutting their aid budgets. It’s forcing WFP to make impossible decisions about who gets fed and who doesn’t as it cuts its rations in places such as Kenya and Bangladesh. And it all comes as the number of acutely food-insecure people worldwide has doubled since 2019, driven by conflicts, economic instability, and climate shocks. Of those facing the hunger crisis, 85% live in war zones. Among the U.S. aid recipients, the most endangered by the U.S. funding freeze are severely malnourished children. Malnutrition tends to hit the very youngest children the hardest, and most aid efforts focus on treating and preventing malnutrition in the first 1,000 days of life — from conception to the child’s second birthday. The Trump administration’s mass terminations of USAID grants and contracts have disrupted vast swaths of the delicate supply chain by which those children are treated — often via inpatient health centers where they are given a lifesaving, nutrient-dense peanut paste called ready-to-use therapeutic food, or RUTF, as well as other medical care. But the U.S.-based producers of much of the world’s RUTF supplies — Edesia and Mana Nutrition, two nonprofits with big contracts from USAID — are each owed tens of millions from the U.S. government. They’ve been forced to halt their production lines. On the other end of the supply chain, many of the local and international aid NGOs that care for these malnourished children are laying off staff as their U.S. aid gets cut. Tania Karas contributed to this report.