About USAID
The United States Agency for International Development (USAID) was established in 1961 and now has offices in most developing nations from where projects are managed. As a pioneer in modern foreign aid, USAID transformed international development by providing financial assistance, technical expertise, and policy guidance to developing nations. Its programs span sectors including agriculture, health, education, and infrastructure.
USAID is one of the largest bilateral donors. In 2023, the U.S. government allocated approximately $72 billion (£55 billion) to international humanitarian assistance and development, with USAID managing a significant portion of these funds. By comparison, the UK spent £15.3 billion. Africa has been a great beneficiary of USAID funding. According to the New York Times, Sub-Saharan Africa received $12.7 billion in 2024 only. In South Sudan, USAID made up 16% of the GDP in 2024 and funded 21% of Nigeria's 2023 Health budget in 2023. The most affected countries in Africa were identified as South Sudan, Somalia, the Democratic Republic of Congo, Liberia, Afghanistan, Sudan, Uganda, and Ethiopia USAID funds 20% of their budgets.
The Recent Political Shift
In 2025, the U.S. administration issued a stop-work order that froze most USAID operations worldwide, aligning with its 'America First' policy. This included a freeze on new programs and stop-work orders on existing projects, leaving governments, nonprofits, and community-based organizations (CBOs) uncertain about future funding and operations. Approximately 14,000 USAID staff were placed on leave, affecting the agency’s ability to manage ongoing projects. Many organizations are still grappling with the aftermath, particularly in diversity, equity, inclusion, and accessibility (DEIA) initiatives, as well as health programs like HIV and AIDS, which previously benefited from significant USAID funding.
SOURCES: Relief web, Newyork Times, African Business, The Conversation, CGDEV Blog
Impact of the Funding Cuts
The effects of this withdrawal continue to be felt not only in developing nations but also in the USA and include:
- Program Disruptions:
Program funding has been cut off across critical health, education, and agriculture sectors. The loss of funding for emergency humanitarian programs—such as HIV/AIDS treatment, infectious disease control, and food security initiatives—poses a direct threat to lives. Local communities are left without essential support and with no clear timeline for when these services might resume.
Beyond life-saving programs, funding cuts have also sidelined crucial areas like youth employment, enterprise development, and disability inclusion, which are now secondary concerns. At the same time, discussions have emerged portraying diversity, equity, and inclusion (DEI) programs as wasteful expenses rather than strategic investments. This shift risks reintroducing barriers to accessing essential services and reversing years of progress in inclusive employment, economic self-sufficiency, and social equity—especially for marginalized groups, such as people with disabilities.
The funding withdrawal has also forced many organizations to downsize, leaving remaining employees overloaded and struggling to sustain operations. As uncertainty looms, both organizations and marginalized communities face an increasingly challenging future.
- Operational and Financial Strains
With reduced budgets, organizations are forced to tighten operational costs, resulting in layoffs and potential closures of some organizations, including some providing essential services. In Kenya, over 5,000 health workers and NGO employees have been laid off as foreign-funded projects shut down, while many small NGOs in Nigeria that relied on US grants for education and healthcare services are closing. Organizations such as ADRA have reported an 18% reduction of its staff in the US with additional layoffs expected in their country offices.
- Impact on Consultants and consultancy firms
The withdrawal of USAID funding has disrupted not only the programs it supported but also the businesses that relied on them, including consultancies. Many programs depend on external consultants for services such as Monitoring, Evaluation, Accountability, and Learning (MEAL), implementation support, training, and capacity building. As a result, numerous consultancy firms and independent consultants providing these services have been severely impacted. Many have lost contracts, and some have yet to receive their payments, ultimately straining local economies.
Strategies for Moving Forward
The unexpected withdrawal of one of the largest donors cannot be trivialized, nor can we claim to have foolproof strategies for filling the gap left. Without clarity on whether or when these programs might resume, it remains uncertain how other funders will step up to bridge the gap,or whether their priorities will shift to address the most critical needs while also investing in economic development such as youth employment, enterprise development, and DEIA programs. In light of these challenges, this article proposes the following strategies for nonprofits to take a proactive approach in filling funding gaps, sustaining their mission, and navigating this difficult landscape:
1. Alternative Funding
Nonprofits, including CBO need to diversify their donors. Potential alternatives include:
- European Union and European Commission Funding
Offer grants and technical assistance for projects focused on inclusive development, social justice, and youth empowerment. - UK’s Foreign, Commonwealth & Development Office (FCDO)
Supports initiatives that enhance democratic governance, human rights, and economic inclusion—ideal for programs promoting diversity and empowerment. - Multilateral Institutions (World Bank, UNDP)
Provide financing and technical support for health, education, and governance projects benefiting marginalized communities and youth. - Philanthropic Foundations (e.g., Bill & Melinda Gates, Ford, Open Society Foundations)
These foundations focus on global health, education, and social equity, funding programs that advance diversity, inclusion, and empowerment. A search on sites such as Funds for NGOs, ARCO’s List of the World’s 100 Largest Philanthropic Foundations will give you a directory of philanthropic foundations your organization can approach for funding. - Corporate Social Responsibility (CSR) Programs
Many corporations such as Google, Microsoft, Coca-Cola allocate a portion of their profits to social impact programs, often aligning their support with the United Nations Sustainable Development Goals (SDGs). Many of these will invest in health, education, environmental sustainability, and economic development. We found a few that invest in youth employment, digital skills, accessible technology that your organization can explore:
- Google-Funds digital inclusion and social innovation.
- Coca-Cola Foundation- Women empowerment and community development.
- Microsoft Philanthropies- Invests in digital skills training, accessibility technology, and AI for humanitarian causes
Other Strategies to Cope with Reduced Funding
- Strategic Collaboration
Strategic collaboration—whether between nonprofits or consultancy firms—can enhance organizational positioning, enabling access to more resources and scalable operations that may not be feasible independently. By fostering knowledge-sharing, driving innovation, and leveraging shared expertise, collaborations strengthen funding opportunities, improve service delivery, and enhance long-term sustainability while remaining aligned with your mission.
- Merging
When funding is severely limited, keeping your organization operational becomes a priority. In extreme cases, merging with a like-minded organization can help reduce overhead costs by eliminating duplicate roles while maintaining critical functions at minimal expense. A well-planned merger allows organizations to focus on key projects while seeking additional funding sources. Additionally, merging with the right partner can enhance your market position, increase negotiating power with donors, and create a stronger platform for securing alternative funding.
- Leveraging Consultants Over Full-Time Staff
With financial constraints limiting the ability to maintain large teams, nonprofits and organizations can explore engaging consultants instead of full-time employees for specialized tasks and short term projects. This will allow your nonprofits to access expert services without the long-term financial commitment of salaried staff. Consultancy firms like Pointers Global Consultants Ltd can offer tailored support on a project basis, ensuring organizations continue delivering high-impact services despite funding challenges.
Conclusion
The suspension of USAID funding has posed significant challenges for nonprofits, consultancy firms, and organizations working in critical sectors such as disability inclusion, youth employment, and project management. As funding gaps continue to grow, organizations must adopt strategic approaches to sustain their operations. This includes diversifying their donor base, leveraging corporate social responsibility (CSR) initiatives, and fostering strategic collaborations to enhance resilience. Additionally, organizations facing budget constraints can benefit from engaging consultants instead of full-time employees, allowing them to access specialized expertise while managing costs effectively.
At the same time, for consultancy firms like Pointers Global Consultants Ltd , as well as others providing specialized services to nonprofits and those working in DEI or inclusive economic empowerment,, it is time to explore funding alternatives such as social enterprises but also consider strategic partnerships for long term sustainability, and reposition their services to meet shifting needs of their clients while staying aligned to the mission as we navigate the difficult landscape of funding uncertainties.