The Trump administration’s halt on foreign aid is starting to hollow out international development groups and private federal contractors that carry out aid missions abroad — and threatens to cause long-lasting damage to U.S. engagement around the world.

Last month, the State Department ordered an immediate pause on U.S. foreign aid for 90 days and issued “stop-work orders” on nearly all existing foreign assistance awards. This swift decision has effectively left many government contractors and global aid providers — including groups that supply HIV/AIDS care, provide child health services, set up education programs, fight food insecurity and counter disinformation in developing nations — struggling to operate or pay their workers.

Eight U.S.-based individuals who work in the foreign aid sector, all granted anonymity due to concerns about retaliation from the administration, told POLITICO that the foreign aid freeze had undermined their ability to carry out global aid efforts. Some predict that thousands of foreign aid professionals across the industry may soon be out of work.

“I can’t even begin to describe how cataclysmic it is, everyone is furloughing or laying off staff,” said one person. “It’s almost 5,000 people, and it’s just starting.”

The U.S. is the largest provider of humanitarian assistance globally, deploying billions of dollars through multiple agencies, including the U.S. Agency for International Development. The majority of USAID’s funds are awarded competitively through contracts, grants or cooperative agreements with international development groups and private federal contractors.
These organizations often pay out of pocket to support their missions abroad and are reimbursed by the federal government. But a break in federal funding for these critical programs has left many organizations in crisis mode.

It may take months or years for some of these federal contractors and NGOs to recover, while others do not have enough funding to survive the 90-day freeze.
“We’re currently looking at the possibility of many hundreds of seasoned professionals in the humanitarian and development and human rights field going completely out of business,” said a senior executive for an aid group.
One person who spoke to POLITICO said their group had not received federal funding for more than a month. Another individual said they expected multiple non-governmental organizations to declare bankruptcy this week. A third blamed what they said was the “30-day world” of development, where the organizations are paid out by the federal government month to month. If that lapses, funds run out fast, making the situation urgent.

“Every company has lost so much now as a result of offering these furloughs,” one person who works in the industry said. “Even if they start back up say two months from now, there’s likely going to be very few implementations … they will have no more staff.”

Another person who works for a USAID contractor said that looking at their projects and budgets, there was no way to sustain themselves for “even a fraction” of the 90-day pause period. “It’s not a pause if there are no pieces to be picked up when you want to resume. It would be like pausing feeding your dog for 90 days.”

Secretary of State Marco Rubio has issued a waiver allowing “life-saving humanitarian assistance” to continue, though the definition of that assistance remains vague. One person who spoke with POLITICO said the funds from that waiver program had not yet begun to flow, and the stop work order was still in place.

A State Department spokesperson said via email that some salaries and administrative expenses, including travel for U.S. direct-hire staff conducting ongoing programs, will be allowed to continue under waivers. “Staff have been given a template for waiver requests,” the spokesperson said.

The spokesperson underlined the purpose of the aid freeze was to ensure it’s aligned with the America First foreign policy agenda. “For far too long, the United States foreign aid industry and bureaucracy have not been aligned with American interests, and in many cases, antithetical to American values,” the spokesperson wrote. “They serve to destabilize world peace by promoting ideas in foreign countries that are directly inverse to harmonious and stable relations internal to and among countries.”

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