The Human Cost of US Funding Cuts
On January 24th, the US government abruptly decided to suspend foreign aid disbursements for 90 days and dismantle USAID, the United States Agency for International Development. This was followed by a series of very general waivers regarding the types of projects that could be continued, but in reality, most US-funded humanitarian activities had to stop. And even today, everything stands still.
In its first days in office, the new US administration suddenly decided to freeze a large part of its foreign aid commitments. As of 24 February, the United States – the world’s largest bilateral humanitarian donor – froze funds, cancelled contracts, blocked payments and dismantled USAID, the United States Agency for International Development, destabilising the entire humanitarian system.
The consequences of these decisions are dramatic, both for people affected by crises and for the organisations that support them. The executive orders have forced the closure of hospitals and health centres, halted nutrition programmes, cash and food distributions, legal aid for displaced people, and essential shelter, education, water and sanitation programmes. All this is happening in a dire global humanitarian context: according to the Global Humanitarian Overview (GHO), 305 million people worldwide are in need of urgent humanitarian assistance and protection in 2025.
Impact on the Humanitarian System
The United States is the leading global donor of humanitarian aid, with a contribution of $13.80 billion in 2024, accounting for 43.04% of total funding monitored by the United Nations Financial Tracking Service (FTS). This figure exceeds the combined contributions of the next 10 largest donors in the world.
Many humanitarian organisations, including the UN agencies, international NGOs, and local NGOs, rely heavily on US funding to provide food, medical supplies, shelter, and other emergency services and life-saving programmes for people living in conflict-affected regions and natural disasters.
Local, national, and international NGOs, the backbone of the humanitarian response, are now facing severe operational disruptions and are being forced to close projects, lay off staff, and withdraw from communities where trust and infrastructure have taken years to build.
Organisations are facing cash flow and liquidity problems, as well as a high level of risk regarding employees with US-funded contracts, leading to significant financial losses due to human resources costs and penalties for contract terminations that do not comply with local labour laws. Additionally, costs and penalties due to pre-ordered supplies will also create an additional financial burden.
Impact on INTERSOS
The USAID budget cuts have forced us to halt projects providing essential humanitarian aid in West Africa (Burkina Faso, Chad, Nigeria), Afghanistan, Yemen, and Lebanon. This is leaving approximately 500,000 people without life-saving medical assistance and humanitarian protection.
Due to a lack of liquidity (caused by USAID’s failure to reimburse expenses advanced to implement projects), we have had to furlough all workers (doctors, midwives, psychologists, social and legal workers, etc.) on USAID-funded projects and close medical centres, halt child malnutrition programmes, stop assistance for women with high-risk pregnancies living in remote areas without other services available, and much more. People continue to call us daily for emergencies, visit our centres, and seek assistance, but we are not in a position to help them. In 2024, USAID represented 17% of INTERSOS’s total budget, and the impact of the cuts since late January is impossible to absorb in the short term without compromising our services in the coming months as well.
“Overnight, due to USAID cuts, we had to stop the work that doctors, nurses, social and legal workers, psychologists, had been doing for years in rural communities, where no other services exist. We were assisting hundreds of pregnant women with high-risk pregnancies, residents of internally displaced camps or remote areas, children under 5 years old suffering from acute malnutrition with mobile clinics and the support of health centers.
We are closing two community centers, the only spaces where women could find a listening ear and children a place to feel safe and play.
Our team receives dozens of calls a day.
Last week, one of the women we were assisting, who lives in a very distant and isolated area, gave birth. They called our ambulance to take her to the hospital, but we no longer had the ambulance. We do not have rescue vehicles available at this time because we cannot afford them. The newborn died.
Usually, when we are forced to end projects due to lack of funds or other reasons, we make sure that the people we cared for and assisted are referred to other organizations, associations, service providers in the area. But here there are no other services. Closing means abandoning. Closing means condemning high-risk cases to death.
We need immediate funds, which cannot wait weeks. We must assist women in their eighth, ninth month of pregnancy who could give birth at any moment, we must start treating malnutrition cases again to avoid nullifying the progress made so far”.
Alessandra Caputo, Head of Programme in Yemen
Judicial Steps
Following lawsuits filed by several US organisations challenging the aid block, Federal Judge Amir H. Ali of Washington issued a temporary order on February 13th, prohibiting the Trump administration from stopping or suspending payments. However, the US administration did not comply with this ruling and instead proceeded with the cancellation of thousands of contracts (over 80% of the USAID portfolio).
Shortly after, many organisations received letters informing them that the cancellations of their contracts had been reversed and their projects reinstated. Nevertheless, in many cases, this was followed by further communications stating that the reversal of the cancelled contracts had been sent by mistake. What remains unclear to this day is the lack of clarity on how payments for the work done under various programmes might be reimbursed, given that USAID has been dismantled and the payment system does not seem to be operational.
On March 5th, the Supreme Court rejected the appeal filed by the Trump administration against the federal court ruling that required the government to immediately release $2 billion in foreign aid payments.
On March 10th, Federal Judge Amir H. Ali then, with another ruling, ordered the Trump administration to pay USAID partners for work completed before February 13th but did not rule on the reinstatement of cancelled contracts. However, the judge provided a very clear rationale for his decision regarding payments, arguing that the decision whether or not to fund foreign aid does not rest with the President but with the US Congress.
On March 18th, District Judge Theodore Chuang in Maryland indefinitely blocked further cuts to USAID by the Department of Government Efficiency. He also ordered the Trump administration to restore email and computer access for all employees, including those who had been placed on administrative leave. According to the judge, the dismantling of the U.S. Agency for International Development likely violated the Constitution. The judge also ordered agency functions be partially restored, though that relief could be temporary.
In essence, there is persistent confusion and lack of clarity about the situation of ongoing US-funded projects, and above all, considerable uncertainty lingers over the future funding of humanitarian and development aid.
What is certain today is that INTERSOS operators working on USAID projects are at a standstill, health facilities are closed, and hundreds of thousands of people are without aid and at risk of death.