The decision by the Trump administration to order a 90-day pause in Washington’s foreign development and humanitarian aid has not only created a major humanitarian crisis among the recipients; it has also hit the NGO community like a thunderbolt. And it has also highlighted the degree of dependency of the international NGO community on American funding.
For decades NGOs were a significant component of America’s foreign policy. By and large, they were divided into two groups: advocacy NGOs whose vocation was to denounce human rights violations, real or imagined, and operational NGOs who actually delivered assistance at the grassroots level.
Channeling foreign assistance through NGOs has been a staple of Washington’s foreign policy since the inception of the Cold War. At the time, there was hardly a Communist party throughout the world that did not receive some covert assistance from the Soviet Union.
Washington reciprocated by providing financial support, mostly through the Central Intelligence Agency (CIA), to the likes of independent trade unions or media outlets.
In 1961, President John Kennedy sought to reunite under one roof Washington’s foreign assistance programs. To that effect, he induced Congress to create USAID which, under State Department supervision, became the main purveyor of American foreign aid. In parallel, however, the CIA continued to fund specific programs through its own mechanisms.
Over time, however, these proved unpractical and, in 1983, an act of Congress created the National Endowment for Democracy (NED). Structured like an NGO, and thus technically not a branch of the US government, the NED took over from the CIA the provision of grants to organizations throughout the world that sought to promote “democracy.”
With a current budget of US$315 million allocated by the US Congress, the NED provides financial support to the World Uighur Congress, Chinese dissidents, activists in Hong Kong, various Tibetan groups, as well as democracy advocates in Iraq, Tunisia and Egypt.
Conversely, the NED steers clear from financing dissident groups in countries closely allied to the United States such as Saudi Arabia or the Gulf States.
Whatever the impact of the NED, which Elon Musk qualified as “a scam”, it is a marginal player compared to USAID.
With a staff of about 10,000 and an expenditure of some $44 billion in 2023, USAID is a global player present in some 170 countries. And while its purported mission is to support “development”, 10% of its budget finances humanitarian aid and another 10% healthcare programs.
Seen in a wider context, the United States contributes some 50% of all humanitarian aid distributed throughout the world. This amounted in 2023 to $71.9 billion, equivalent to 1.17% of total American federal expenses. In addition, the United States contributes some 25% of the UN’s budget.
Like practically all government donors, USAID does not directly implement its programs but channels its funds through NGOs that ensure the practical implementation of the project. Thus each project has three actors: the provider of funds, in this case USAID, the NGO that implements the project and the beneficiary.
Currently, USAID channels some 52 % of its assistance, equivalent to some $21 billion, through NGOs. The remaining part of the assistance, namely 34%, is channeled through 30 United Nations agencies and the rest through for-profit organizations such as Deloitte.
Worldwide there are currently some 42,000 active NGOs that manage a total of approximately $400 billion. Within this ecosystem, some 1,300 local and international NGOs are the operational partners of USAID.
Some administer projects that run in the hundreds of millions of dollars while others manage programs of 100,000 dollars or less. But whatever the size of the sum they manage, the issue they are now facing is central to their very existence.
All NGOs have overheads. These are covered by program allocations from which they are deducted. By freezing funds intended for aid projects, the Trump administration has not only hurt the recipients. It has also dealt what could develop into a fatal blow to thousands of NGOs who literarily overnight lost the aid projects from which they deducted their overheads.
The ripple effect of the freezing of funds has been felt all over the world. In Thailand, NGOs that provide medical assistance to many camps for refugees from Myanmar have not only had to suspend their programs but are now in the process of closing down altogether and dismissing their staff.
In Europe, the Danish Refugee Council, which operates worldwide and of which USAID is the second largest donor, is currently dismissing a quarter of its 8,000-strong staff. The same phenomenon is occurring in Africa, where not only programs to combat TB have been suspended, but the agencies that implement them are on the verge of closing down.
There is little doubt that over the past decades, the humanitarian ecosystem had acquired a life of its own. The main responsibility for this development lies with governments who found it easier to sign checks than to monitor those to whom they were addressed.
The end result was that the bureaucracies, whether UN or NGOs, left to themselves proceeded to slowly but steadily expand. To wit, when the UN High Commissioner for Refugees opened its office in Beijing in 1980 in order to assist with the resettlement in China of some 260,000 refugees from Vietnam, it had a $50 million program managed by one mid-level international staff member and a local team.
Today, the same UN agency has a half-million-dollar program in China managed by five international staff members. The same pattern repeated itself throughout the whole humanitarian ecosystem.
It is a given that the humanitarian ecosystem is in need of some reform. It is also a given that the system is not programmed to either monitor or reform itself. Thus, if there is to be some reform, it can only come as the result of outside input, which raises two questions: by whom and how?
Given the size of its contribution as compared to other donors, the impetus for reform, if there was to be one, could only come from the United States. Considering the complexity of the issue and the fact that, in many cases, the recipients were among the poorest of the poor, it would have required the deft use of a scalpel. Instead, it saw the ruthless use of a chainsaw.
There is little doubt that many of the recipients of assistance provided by USAID either do not know that it comes from the United States or are in no position to have an impact on their political environments; the end result being that Washington gets nothing concrete in exchange for the assistance it provides.
While this appears to be the perception of the Trump administration, it discounts the fact that the most powerful country in the world might have a responsibility that extends beyond purely mercantile considerations. Whether this total lack of empathy will contribute to making America “great “again is at the least doubtful.
