It’s already been a momentous year for U.S. foreign assistance, but we’re entering another crucial phase this month. Congress will return from its summer recess, and decide on what it wants to allocate for future years. So far, both houses have indicated they want to spend far more than the White House has requested, and it’s not at all clear how things will shake out.
Meanwhile, after courts lifted an injunction, the Trump administration is busy handing back money it has already been allocated, and has decided not to spend, through a highly debated tool known as a pocket rescission.
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Pocket dimensions
Right now, aid in the United States is in a complex position. The Trump administration has closed USAID and canceled thousands of programs, but it’s still legally required to spend the money Congress appropriated to foreign assistance. Billions of dollars of that funding will expire at the end of the U.S. fiscal year on Sept. 30, and the administration currently looks in no hurry to get it out of the door.
It also might not be logistically possible. Almost anyone remaining with the skills needed to distribute those funds is getting fired tomorrow, Sept. 2 — and most are gone already.
So what happens to the money? Last week, after a court ruling in favor of the administration, the White House sent a “pocket rescission” worth almost $5 billion back to Congress. It’s a legally questionable maneuver, which effectively freezes those funds until the end of the fiscal year.
It marks the first shots in a battle over the budget that will shift to Congress next week, when it returns from recess on Sept. 9. At that stage, expect a huge tussle over spending.
Foreign assistance will be just a line item in a much wider budget fight — but Congress’ decision could be extremely consequential. In theory, at least, it’s Congress rather than the White House that sets the foreign assistance budget, and what we’ve seen so far suggests that it wants much higher spending than the Trump administration has requested.
Read: Trump’s $5B ‘pocket rescission’ escalates foreign aid funding fight
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Funding activity
We publish tenders, grants, and other funding announcements on our Funding Platform. Here are those viewed the most in the past 10 days.
The World Bank has approved a $300 million loan to provide economic opportunities for internally displaced persons and host communities in Nigeria.
The Asian Development Bank has signed a $2.8 million loan agreement for renewable energy generation in Samoa.
The African Development Bank has launched a $63.2 million initiative to improve agricultural trade while ensuring food safety and health standards in Tanzania.
The United Nations is inviting qualified firms to design and implement a three-pronged evaluation of a project addressing violence against women in Bangladesh.
The U.S. Department of State is seeking companies to provide maintenance services for data servers in Colombia.
The Australian Department of Foreign Affairs and Trade has announced a call for proposals to conduct a comprehensive assessment of current data governance landscape in Indonesia.
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New tricks
The New Development Bank hasn’t been around very long. The clue is in the name. But it’s already building up a substantial project portfolio. My colleague Miguel Antonio Tamonan has broken down where it’s lending money, mostly to its main shareholders — Brazil, Russia, India, China, and South Africa, collectively known as the BRICS countries.
More than half its lending has so far been for transportation projects, although water, sanitation and hygiene, or WASH, projects and energy projects also feature heavily in the portfolio.
Read: How the New Development Bank built a multibillion-dollar portfolio (Pro)
The end of aid?
A few years ago, official development assistance, or ODA, seemed to be on an escalator that only went up. We’d seen consistent real terms increases for many, many years. Last year, however, the staircase switched direction, and the escalator is headed firmly for the basement.
The trend is being driven by many factors — not least political posturing in the U.S. and by a sudden cash crunch in an embattled Europe. But is this a long-term trend? Have we seen this kind of dip before, and what happened then? Is this time different?
Last week was Pro Week at Devex, where we looked at the key issues concerning our professional members. As part of that week, Devex contributor Jessica Abrahams spoke to experts to try to understand what the future might hold.
Read: Is this the end of aid as we know it? (Pro)
ICYMI: How do we fix aid? (Pro)
INGOs on the outs
Last week, also as part of Pro Week, we brought you a list of the largest international NGOs in the United States, along with a summary of the potential impact they might suffer from the aid cuts. Those cuts have driven a bout of heavy introspection in the aid community, with many INGO leaders questioning whether the model that’s sustained them for so long is really, well, sustainable.
Christian Aid, a U.K. organization, has already decided it will move its primary model from that of a delivery organization to a fundraiser for partners in the global south. Others are making a virtue of necessity and taking a long look at their real point of difference.
Even if ODA does recover, the current dip may lead to an aid sector that looks very different.
Read: After the aid cuts — what’s next for INGOs? (Pro)
Download your copy: The 50 largest US INGOs in 2025 — and where they get their money (Pro)
Brave new World Bank
Another Pro Week subject was the future of multilateral development banks. As part of that work, we looked at what’s happened at the World Bank, which was in the middle of a reform program when U.S. President Donald Trump swept to power.
The program’s still ongoing, although the word “climate” has disappeared rather suddenly from the rhetoric and literature, and been replaced with a focus on jobs. It’s not obvious that the substance has changed to match the language, though. The reforms have just gone into what one observer called “stealth mode.”
Lending capacity is up, but lending hasn’t really shifted to match it. Project approval time is down. A new, more concise scorecard is being piloted. But private capital mobilization remains weak.
Altogether, things are improving, but a lot of people think the bank continues to move slowly. So what happens next?
Read: In a changing world, where do World Bank reforms stand? (Pro)
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Glimmers of improvement
Philanthropy is another key player in the new world of aid. Everyone is asking for it to do more to make up for bilateral donors doing less. But can it respond? And will it?
There’s no way it can really fill the gap. Annual philanthropic giving is likely to be something over $10 billion annually in the coming years, much of it from the Gates Foundation. Historically it’s been around 5% of what was spent by bilateral donors.
But philanthropy can at least spend money better, and it’s beginning to do so. There are shifts toward long-term, light-touch unrestricted funding, which doesn’t force nonprofits to spend a fortune on filling out applications and assessments.
There’s plenty more to do, though, as I heard at a Devex Pro event last Monday.
Read: How can philanthropy fund development better? (Pro)
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About the author
David Ainsworth@daveainsworth4
David Ainsworth is business editor at Devex, where he writes about finance and funding issues for development institutions. He was previously a senior writer and editor for magazines specializing in nonprofits in the U.K. and worked as a policy and communications specialist in the nonprofit sector for a number of years. His team specializes in understanding reports and data and what it teaches us about how development functions.
