Pauses on U.S. foreign aid and local grants send funders and nonprofits scrambling

Independent

29-01-2025

Freezing foreign aid. Withdrawing from the Paris climate agreement. Prohibiting nonprofits that receive U.S. foreign aid from providing abortions.
Then Monday, the new Trump administration announced a freeze on all federal loans and grants, though a judge has paused that until next Monday.
Nonprofits of all sizes are now grappling with how these changes will impact their missions — with some even stepping in to replace a very small part of the funding the U.S. government is withholding.
'The pause on federal funding is creating a tremendous amount of confusion, and we don't have clarity about what happens from here,' said Fatimah Loren Dreier, executive director of the HAVI, a public health organization that specializes in stopping gun violence. 'And that confusion has ripple effects on communities that are particularly vulnerable to shifts.'
The U.S. government is the largest single global humanitarian funder, giving $ 13.9 billion in 2024, and largest supporter of U.N. agencies, meaning any changes to foreign assistance have sweeping impacts across geographies and issues. The State Department and U.S. Agency for International Development are the main agencies that oversee foreign assistance, which Trump paused for 90 days to review if every grant and dollar aligns with his foreign policy.
Yuriy Boyechko, who founded the New Jersey-based nonprofit, Hope for Ukraine, said he woke up to a barrage of messages on Sunday from the grassroots organizations he works with in Ukraine. They feared what would happen if USAID stops making grants there.
He pointed specifically to programs that send trucks of firewood to rural areas that don't have electricity. The people who remain are often elderly and poor, he said, and use the wood both to heat their homes and to cook.
'I really don't know how they're going to get through the winter,' he said.
The organizations that make the deliveries are mostly volunteer run, Boyechko said, and don't have the capacity to buy the wood or fuel needed to transfer it without regular funding from USAID's office in Kyiv. He suggested that anyone who is concerned about the funding for humanitarian aid in Ukraine call their representatives or the White House.
'What made America great and what makes America great is generosity. And this is not a good move for America, and this is not a good move for humanity as a whole,' he said, noting that Ukraine has really relied on the U.S. for its support.
USAID said 'all programs and grants without a waiver approved by the Secretary of State,' are paused, but did not specifically say whether humanitarian aid to Ukraine would be halted.
In fiscal year 2023, the most recent data available, $68 billion had been obligated in U.S. foreign aid to programs that range from disaster relief to health and pro-democracy initiatives in 204 countries and regions.
It is not the first time billionaire philanthropist Mike Bloomberg has stepped in after Trump announced he was withdrawing from the landmark Paris climate agreement. The former New York City mayor pledged on Jan. 23 to fund the U.S. government's share of the budget for the main offices of U.N. Climate Change. He also covered the cost of the U.S. commitment from 2016 to 2019, in the amount of $10.25 million.
'Being able to step in to be nimble and quick, not to replace the role of government, but just to show what's possible and to continue to move progress forward when governments are not, is really important to Bloomberg Philanthropies,' said Antha Williams, who leads its environment program.
The U.N. climate body was established as part of the historic 2015 climate agreement that aims to keep warming under 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels. It organizes the annual climate negotiations, where countries set emissions reduction targets and commit to financing climate adaptation and mitigation measures, and tracks progress toward those goals.
Williams said Bloomberg Philanthropies wanted to offer certainty to U.N. Climate Change that their budget would be met.
In addition to funding the U.N. Climate Change secretariat, Bloomberg Philanthropies will continue to support a coalition now named America is All In. It brings together local governments, companies and universities, who report on progress toward climate goals, which the federal government will stop doing after pulling out of the agreement.
Joanna Depledge, a historian of international climate negotiations, called that reporting 'critical, as it provides a picture of trends in emissions and therefore progress made toward,' the Paris agreement targets.
Communication from USAID and the State Department with their grantees and contractors has been sparse, according to attorneys and consultants who work with foreign aid recipients. The publication Devex, which reports on international development, convened a webinar of experts on foreign aid on Monday to field questions about how to comply with stop work orders, how to manage cash flows, the likelihood of receiving a waiver.
Susan Reichle, a retired senior USAID officer, said organizations need to make the case that their work is important not just to the agency, but to the American people and to Congress.
'Every day that goes by that the U.S. is not leading and meeting its obligations, whether contractual obligations or cooperative agreements or grants, we are actually hurting our national security,' she said.
Some organizations are hit by both the pause on foreign aid and the order called the Global Gag Rule that prohibits nonprofits receiving U.S. foreign assistance from providing abortion services or even talking about abortion as a potential option.
MSI Reproductive Choices, an international nonprofit that provides reproductive health services, did not sign onto the rule under the last Trump administration, meaning that it hasn't won that much U.S. funding in recent years. Still, a mobile health clinic they run in Zimbabwe is funded through the U.S. embassy there, and Beth Schlachter, senior director of U.S. external relations, said that work would stop unless another funder comes forward.
However, she said no amount of philanthropic funding can make up for the loss or pause of U.S. funds, meaning large donors are facing very difficult choices.
'Given the breadth of what's just happened in the last week, it's not as if other donors are only looking at gaps in reproductive health services now. They're looking across the range of their development concerns,' she said.
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