A survey by global NGO network ICVA reveals that many US-funded Non-Governmental Organizations (NGOs) are planning to reduce staff costs as they anticipate diminished cash flow after Washington suspended foreign aid for 90 days and shut down a key aid agency.
- •According to the survey, over 60% of NGOs that received over US$1 million from the US aid programs will face a financial crunch.
- •The affected NGOs are also considering limiting their activities, re-evaluating their programs and partnerships with other players.
- •Some of the programs that are likely to be scrapped include essential health care services and diversity initiatives.
- •Although the US has framed its aid suspension as a review period to ascertain the necessary programs for retention, the funding will undoubtedly be downscaled.
The survey shows that 50% of the respondent NGOs received stop work orders from US government sources. In Kenya, the stop work orders are likely to stall programs to mitigate the spread of HIV/AIDS as over 30,000 employees – a majority being doctors, nurses, clinical officers and community health workers – face possible termination as Trump’s administration audits, and downscales, the United States Agency for International Development (USAID).
USAID donated KShs 19 billion to programs in Kenya last year, both to public health programs and to the activities of NGOs and other players. The National Treasury has announced plans to reallocate funds from the development kitty towards crucial health programs that will be affected by aid withdrawal. The country’s health sector relies heavily on foreign aid in funding treatment for Malaria, Tuberculosis, and HIV/AIDS.
The uncertainty that lingers in the NGOs sector has prompted some agencies to hastily look for more donors, utilize reserve funding, and alter their legal positions to prevent emergent lawsuits when layoffs kick off. The US accounts for over 40% of global humanitarian aid, according to the United Nations, and its withdrawal will leave a wide financing gap that will not be easy to fill.
“In fiscal terms, U.S. foreign aid has historically accounted for less than 1% of the federal budget but yielded outsized returns,” Dr. Jamie Munn, ICVA’s Executive Director, said in late January.
“This aid freeze, and potential longer-term cuts to critically needed programmes, risks eroding strategic partnerships and undermining the soft power that has long been a cornerstone of U.S. global aid. Such actions could weaken the United States’ influence and credibility, contributing to a more unstable and fragmented world,” he added.
The suspension of aid will also affect many other NGOs that are not directly funded by the US. 61% of the organizations which receive aid from the US have reported that they would also suspend their partnerships with smaller bodies that are dependent on them. These mostly include educational and health initiatives carried out in specific regions.