The fall of USAID changed everything — even for those it didn’t fund

When the Trump administration halted USAID funding on Jan. 24, it seemed like no one in the sector was left unscathed. Programming across more than 10,000 organizations in over 120 countries ceased overnight, and the fallout wreaked havoc on operations everywhere from Brazil to Burkina Faso. The vast reach of USAID — and the widespread despair its sudden cessation has caused — creates the impression that all organizations rely to some extent on government funding in order to function. That’s not actually true — in fact, some of the most prominent organizations in the space don’t touch a dime of aid from USAID and other bilateral donors. For Oxfam America, the decision to forego government funding was made decades ago in order to ensure its freedom to advocate as it sees fit, Daryl Grisgraber, the organization’s humanitarian policy lead, told Devex. “If we’re taking U.S. government money, we might not feel as free to criticize the U.S. government as much as we do,” she explained. It’s a similar situation for Refugees International, said Sarah Sheffer, its vice president for strategic outreach — as an advocacy organization, independence is paramount. “There are organizations that worry about biting the hand that feeds them, and we never wanted to have to make those calculations,” she said. Of the organizations Devex spoke with, none avoided government funding in anticipation of the taps someday being turned off, as they were in January. And though they’re not facing the same dire circumstances as those reliant on USAID, it doesn’t mean they haven’t been affected by the cuts — far from it. Humanitarian aid and global development function as a network — or, as Grisgraber termed it, an ecosystem — made up of players ranging from philanthropic funders to international NGOs to community-based organizations. Oxfam America may not take USAID funding, but that funding remains crucial to many of the organizations it partners with to carry out its work. When one of the organisms in an ecosystem suddenly vanishes — or finds itself defunded, as the case may be — the ripple effects are significant. Andy Harrington, the executive director of Canadian Foodgrains Bank, another non-USAID-funded organization, likens the aid landscape to a body. “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 said. Grisgraber agreed. “No matter how you look at it, this [loss of] funding … will have an effect on absolutely everyone,” she said. “Where one thing changes, everything will start to change. And we're seeing those effects already.” Stepping up For the organizations who haven’t lost funding, one of the most obvious impacts to their operations is a sudden surge in demand to fill the gaps. Direct Relief, which provides emergency medical assistance around the world, has been fielding higher than usual requests for medicines and supplies, Jeffrey Samuel, the organization’s regional director for Africa, told Devex. Direct Relief is doing its best, working overtime to communicate the needs it is hearing on the ground to pharmaceutical companies in an attempt to mobilize the needed resources. “The number of requests for support that we’ve received in the last three to four weeks has been very, very high,” Samuel said. Harrington explained that right now, Canadian Foodgrains Bank’s efforts are directed at triage. “The initial thing we’re trying to do is really look at the programs that we’re responsible for, that we’re funding, and seeing … what can we do to take up the slack?” But no matter how valiant the efforts of organizations trying to stem the tide, the cuts have dealt a brutal blow to global programming. In 2023, the most recent year for which figures are available, the U.S. disbursed a little under $65 billion in official development assistance, or ODA. Meanwhile, it was responsible for roughly 41% of all humanitarian aid last year. While some funding has been mobilized across organizations and philanthropy, stop-gap measures will not be enough to save many of the programs whose operations have stalled. As Samuel put it: “No single entity in the world can plug the gap that’s been left by this.” The pointy edge of the spear While they can’t make up for what has been lost, independently funded organizations can leverage their platforms to speak up for those who can’t. For the partners it works with, Refugees International has long served as “the pointy edge of the spear,” said Sheffer, leveling criticisms at governments when needed without the fear of losing funding. Now, that role has taken on new meaning. “I think I didn't fully appreciate the merits of that policy until January 20,” she added. Many of the organizations that lost USAID funding have stayed mum for a variety of reasons; among them, the hope of someday receiving the funds they’re owed, ongoing litigation, or simply because the cuts have left them so thoroughly decimated that they lack the bandwidth to put out a statement. Still, Sheffer has been surprised by the pervasive silence, even among partners who would normally ask Refugees International behind the scenes to serve as their voice. “It’s been really startling,” she said. “They’re having to make really, really tough, heart-wrenching decisions about their staffing and capacity and programming.” Still, Sheffer noted that Refugees International is available to anyone with a message to send. “We’re here, and we’re ready to catch the ball and run with it.” With so many organizations’ hands tied, those that can say something should, Oxfam America’s Grisgraber said. Oxfam America itself has been more than just vocal; it recently signed on to a lawsuit denouncing the freeze as unconstitutional, demanding the Trump administration reverse its actions until the courts weigh in. As for the effect that its advocacy is having, Grisgraber said progress is tough to track, though there have been promising signs. At the end of February, for example, a small group of Republican senators quietly pushed back against the freeze, expressing concern that the administration’s actions were not authorized by the U.S. Congress and therefore in violation of the law. “Where we can, we’re trying to make sure there’s really broad awareness among policymakers of what this is actually going to mean,” Grisgraber said. “Not even just next week, or at the end of the 90 days, but years from now.” Competition or collaboration Of the experts Devex spoke with, all agreed that in the immediate term, the priority is to mitigate the effects of the freeze to whatever extent possible. “Right now, we’re letting the patient die on the operating table,” said Sheffer, adding that future reform is only possible if there’s something left to reform. As of now, the freeze is estimated to have destroyed up to 100,000 jobs worldwide. At least 15,000 people have reportedly lost their lives due to the slashing of the U.S. President's Emergency Plan for AIDS Relief alone, and millions more are presumed to be affected by programming losses across sectors. Regardless of what the future holds for U.S. foreign assistance, organizations are going to have to find new sources of funding if they hope to survive. Even for organizations not directly gutted, the current moment is a stark reminder of the risks of overreliance on a single funder, government or otherwise. But even as the need for deeper collaboration becomes more pronounced, so does the risk of territorialism. “Where resources become scarce, every being in that ecosystem starts to compete,” Grisgraber explained. So far, there’s little indication that the void left by USAID will be filled any time soon, though attempts are being made. The MacArthur Foundation announced it would increase its charitable payment to at least 6% over the next two years, amounting to an additional $150 million. Unlock Aid has launched the Foreign Aid Bridge Fund, and others have started similar fundraising ventures. As other Western governments shrink their aid spending, discussion has turned to China. But while China appreciates the strategic advantage of soft power, its differing views on human rights mean it won’t be bankrolling many of the programs prioritized by USAID, such as those that emphasize democratic governance. In the absence of a new tranche of money to match what has been lost, “everyone is going to be coming to those same sources for funding,” Grisgraber said. “But there’s, you know, tens of billions of dollars less of it out there.” One conversation Grisgraber said humanitarian INGOs have been having is the extent to which they will allow themselves to vie for funds against local and national organizations, as well as civil society. For now, there seems to be a tenuous agreement not to encroach upon funds meant for local players. How long it will last, Grisgraber is not sure. “I can see that conversation falling by the wayside at this point, because the funding is going to be so scarce,” she said, adding that the attendant blow to the localization agenda will be significant. Harrington, of Canadian Foodgrains Bank, hopes this does not become the case. “We’re not about defending ourselves here,” he said. “We’re about defending the rights of humanity and humane and compassionate aid, and a system that needs some reconstruction, but that was keeping millions and millions of people out of poverty and saving many, many lives.”