The Trump administration has dropped its budget proposal for fiscal year 2026 — one that would slash foreign assistance to unprecedented levels. The budget outlines just $9.6 billion in new international spending — an 83.7% cut when factoring in expected rescissions to previously approved funds.
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Also in this edition: A look back at the United States’ U.N. funding, the stakes of a shuttered Millennium Challenge Corporation, and stateside philanthropic spending.
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Aid to black
If enacted, U.S. President Donald Trump’s budget request would mean entire funding lines — such as development assistance and the Economic Support Fund — would be either eliminated or folded into a new $2.9 billion “America First Opportunity Fund,” which would give the president discretionary spending to advance U.S. priorities.
Winners are few: the U.S. International Development Finance Corporation would gain $2.8 billion, and the World Bank’s International Development Association is promised $3.2 billion over three years — and while the latter is $800 million less than what was promised under former President Joe Biden, it’s more than some feared. Meanwhile, the budget axes $3.2 billion of humanitarian aid, $6.2 billion of global health, $1.6 billion of food aid, and $315 million from the National Endowment for Democracy, among other foreign aid accounts.
“At the end of the day, this is really cutting off your nose to spite your face,” Lisa Bos, InterAction’s vice president for global development policy, advocacy, and learning, told me on Friday.
The U.S. Congress ultimately controls appropriations, and lawmakers on Capitol Hill will have the final say on whether this budget request becomes reality. But with a more ideologically aligned legislature than in Trump’s first term, many in the aid sector are bracing for a fight.
Read: Trump budget proposes unprecedented, ‘reckless’ cuts to foreign aid
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Funding activity
We publish tenders, grants, and other funding announcements on our Funding Platform. Here are some of those that have been viewed the most in the past 10 days.
The World Bank has approved a $33 million grant to enhance water supply and sanitation services in Zambia.
The European Bank for Reconstruction and Development is lending €270 million ($306.6 million) to improve energy security in Ukraine.
The Swedish International Development Cooperation Agency is contributing $2.2 million to prevent malnutrition among vulnerable mothers and children in Afghanistan.
The United Nations is seeking services of civil society organizations to produce quality content on justice, human rights, and social cohesion in Burundi.
The Global Environment Facility is looking for a consulting firm to promote agricultural development by conducting a baseline survey on pesticide use in Ecuador.
The Saudi Fund for Development is inviting qualified firms to express their interest in providing management services to oversee the construction of a hospital in Nicaragua.
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Stars, stripes, and stops
With Trump’s new budget request, the future of the United Nations — which receives more than a quarter of its budget from the United States — hangs in the balance. Trump’s latest figures pause nearly all U.S. funding for the multilateral system, a sharp contrast from the last presidential administrations, including Trump’s first term in office.
In his latest analysis of U.N. funding between 2013 and 2023, my colleague Miguel Antonio Tamonan writes: “In this analysis, we examined historical data to see how different U.S. administrations — from Barack Obama’s second presidency, Donald Trump’s first term, to Joe Biden’s tenure — funded the U.N. system.”
During Trump’s first term, Miguel found that the president defunded the U.N. Population Fund and UNRWA, the main U.N. aid agency for Palestinian refugees, while reducing voluntary contributions toward nine other agencies. At the same time, however, Trump’s first presidency increased funding for 19 other U.N. agencies — and one unlikely agency saw nearly a 400% bump: the U.N. Environment Programme.
Read more: How different US administrations funded the UN system (Pro)
ICYMI: Which multilaterals are hit most by USAID terminations? (Pro)
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MCC in limbo
While the Millennium Challenge Corporation is not mentioned in Trump’s budget proposal — and we’re not sure if that’s a good or a bad thing — the agency is doubtless facing a crossroads. Last month, the budget-slashing Department of Government Efficiency had turned its attention toward MCC, with an internal email warning staff to expect a “significant reduction” in the number of the organization’s programs and staff.
Known for its data-driven approach to tackling poverty, MCC has funded over $18 billion in global development. It’s done so through a compact — a five-year grant agreement with partner countries that requires them to meet governance and policy performance criteria in exchange for funding large-scale infrastructure and related projects.
But with contracts on the brink of cancellation, the agency’s 21-year track record may soon become history. My colleague Raquel Alcega took a look at what’s at stake if the agency, which has historically had a great deal of bipartisan support, goes under.
Read: MCC in numbers — the grants, countries, and programs at stake (Pro)
ICYMI: Elon Musk’s DOGE takes aim at Millennium Challenge Corporation
Donor dynasty
U.S. foundations poured $8.3 billion into global development in 2022, with new data revealing just how outsized their role has become. But with growing political scrutiny in Washington, some foundations are shifting strategies — and even assets — as concerns rise over potential threats to tax-exempt status for those seen as out of step with the administration’s agenda.
The Gates Foundation alone, for example, contributed $5.2 billion, more than 60% of the total private development funding flow tracked by the Organisation for Economic Co-operation and Development. That puts it on par with even the largest bilateral donors, with the foundation ranking 10th when compared to the other big players in development.
Open Society Foundations came next, channeling $414.1 million into civil society, human rights, and governance programs the same year. The Bloomberg Family Foundation followed closely behind them, providing $401.9 million the same year. The impact of these philanthropies and others were spread across sectors, with $3.3 billion alone going toward global health.
“The stakes are high because foundations play a significant role in development, with their cumulative influence comparable to some of the world’s biggest bilateral donors,” writes Miguel.
Read: How 20 US foundations spent more than $8 billion on development (Pro)
Download: The top 10 foundations funding development
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New beginnings
Case in point: In a world of dissolving foreign aid, the Gates Foundation has launched a new fund to support maternal and newborn survival in Africa. The $500 million Beginnings Fund aims to save more than 300,000 lives over the next five years, while providing quality health care for 34 million women and newborns in sub-Saharan Africa.
The fund will focus on 10 African countries — Ethiopia, Ghana, Kenya, Malawi, Lesotho, Nigeria, Rwanda, Tanzania, Uganda, and Zimbabwe — and be managed by a Nairobi-based investments team. It’s also supported by philanthropies from across the world, from the Mohamed bin Zayed Foundation for Humanity in the United Arab Emirates to the Children’s Investment Fund Foundation headquartered in London.
“These investments will advance maternal and newborn survival in high-burden hospitals, health centers, and referral networks, in which most maternal and newborn deaths — the majority of which are preventable — occur,” the fund’s news release reads.
Read: New Gates-backed fund targets maternal and newborn health in Africa
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About the author
Elissa Miolene
Elissa Miolene reports on USAID and the U.S. government at Devex. She previously covered education at The San Jose Mercury News, and has written for outlets like The Wall Street Journal, San Francisco Chronicle, Washingtonian magazine, among others. Before shifting to journalism, Elissa led communications for humanitarian agencies in the United States, East Africa, and South Asia.
