Donald Trump signed an executive order freezing all foreign development assistance for 90 days on 20th January 2025. This threw the aid sector into chaos. Programmes received stop work orders or were terminated en masse, with a dysfunctional system for gaining exemptions. In the meantime, the infrastructure of USAID was destroyed – staff were laid off; critical databases went offline; payment systems were frozen; and documentation was shredded.

45 days on, however, some clarity about the new status quo in international development is emerging.

The US Government is retreating from the international sphere for the foreseeable future. 

The Administration is terminating 83% of USAID contracts and wants to merge USAID into the State Department. It is also exiting or reducing its commitments to multinational bodies like the UN and the WHO, further reducing the US presence in international aid and cooperation.

There are attempts to mitigate the damage, like ongoing litigation to force USAID to pay existing bills and halt firings; direct advocacy to figures like Elon Musk; and, in the medium term, the possibility of a Democratic congress directing the President to spend money on aid and enforcing the Impoundment Act. 

These efforts will not be effective enough or quick enough to save the majority of international aid programmes, however, and waiting for them to play out would be a mistake.  In the meantime, the dismantling of US assistance is having a devastating impact on a daily basis. 

Recipients can no longer access medicines and healthcare services, which will cause hundreds of thousands (potentially millions) of people to die. Children are no longer receiving antiretroviral drugs to control HIV; polio vaccination programmes have stopped; and starving people will no longer receive high-nutrition paste.

The second order consequences are also severe. Many independently-funded programmes relied indirectly on US Government funding. For example, interventions promoting modern contraception require local clinics with trained nurses and stocks of contraception. Often, the US Government (or INGOs predominantly funded by the US) paid for some or all of these facilities, staff and stockpiles. 

Likewise, programmes to distribute anti-malarial bednets require stocks of bednets. Many supplies are now lost (because of the destruction of USAID paperwork) or are owned by the US and cannot be distributed without their permission. In February, $500m of food assistance was reported to be rotting in ports, warehouses and in transit.

Given their reliance on the US or US-funded NGOs, it is not inconceivable that entire health systems in low-income countries could collapse.

At the same time, the sector is losing swathes of expert staff. Large INGOs are grappling with enormous cuts to their budgets, sometimes over 40%, leading to layoffs. Simultaneously, expert staff from USAID and other agencies report that they and their families are stranded, sometimes in dangerous countries, without medical evacuations, healthcare or visas. Consequently, tens of thousands of expert staff are looking for jobs in other sectors.

Finally, the relationships between implementers, governments and local people are being grievously damaged. Governments are learning that the US and aid implementers do not honour their commitments. Recipients are finding that promises of continued help were false.


Image: Unsplash/Julien de Salaberry/ Inle Lake, Mynamar


In each of these cases, it seems unlikely the previous status quo can be resuscitated. Every day, there is less left to rescue. So, under these circumstances, what can we do?

As a philanthropic advisor to major donors in global health, and the manager of a global health fund, I am hearing daily from affected programmes. While it is highly unlikely that private philanthropy can replace all $40bn per year of lost USAID funding, I recommend that philanthropists react in three ways. 

First, they should consider supporting the most cost-effective programs that are now under-funded, to rescue programmes from the US portfolio that deliver the most benefit per dollar. Unless these programs are more cost-effective than their existing portfolio, I recommend that these reactive donations are additive (i.e. in addition to what they would have donated to international causes anyway, rather than redirecting funds from non-USAID funded programs that are also still in need). 

This support can be done directly to affected organisations, or through funds set up in response to the USAID freeze, such as the Founders Pledge rapid response fund, which funds pre-vetted, highly cost-effective programmes that have lost funding from USAID. Given the political sensitivities, there are also response funds that are not advertising publicly but which can be discussed directly with donors in my network, such as one providing convertible loans to projects that are still owed money by USAID.

Second, philanthropists should consider surging funding into international development interventions more broadly, to increase their financial resilience, retain talent and expand cost-effective interventions. This can be done via direct support to implementing organisations or via pooled donor funds, like GiveWell’s All Grants Fund, the END Fund or Ultra Philanthropy’s global health fund, which aims to provide more funding to the ‘missing middle’ in global health. There is such acute need in the sector that now is the time to act.

More broadly, programmes and funders also need to think more deeply about their role in this new and uncertain environment. Programmes that build local capacity and resilience should be prioritised, to make low-income health systems more self-sufficient. One immediate option is to fund interventions implementing health taxes on tobacco, alcohol, sugar and salt, which can raise revenue for cash-strapped governments and improve health outcomes. Funders should also consider funding fewer programmes but for longer periods, so that they can become the reliable, sustainable partner that the US is not. 

Perhaps most importantly, funders and implementers should evaluate their current portfolios with an extremely critical eye. In this new reality, where funding is sharply reduced, it is more important than ever to prioritise the most cost-effective interventions, so that the aid funding that remains can create the biggest impact possible for the largest number of people.

 

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Jack Lewars is the founder of Ultra Philanthropy, where he provides philanthropic advice to over $2bn in wealth. Ultra Philanthropy advises donors on philanthropic strategy, grant selection and monitoring and evaluation to maximise their impact and cost-effectiveness. He was previously the co-founder of a domestic UK charity and Executive Director at One for the World, and he is currently the Executive Chairman of High Impact Athletes. He holds an MA in Classics from the University of Cambridge.

For more information on the full range of public and non-public USAID response funds, bespoke recommendations or for more information, please contact Jack at jack@ultraphilanthropy.org.

Feature image: Unsplash/Annie Spratt/Sierra Leone