President Donald Trump’s order to suspend all U.S. foreign aid, which was announced on January 20, is currently on hold amid a legal review.
But for nonprofits, charities and public service organizations that rely on federal funding, some damage has already been done.
“Foreign assistance programs don’t operate with an on/off switch,” said Mitchell Warren, executive director of the AIDS Vaccine Advocacy Coalition, which provides HIV prevention resources worldwide.
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About 30% of the overall nonprofit sector’s revenues come from government grants and contracts, according to Diane Yentel, president and CEO of the National Council of Nonprofits, which brought a suit against the federal funding freeze resulting in a temporary restraining order.
“The temporary restraining order preventing the administration from freezing all federal funding has had a positive effect, with many nonprofit organizations previously unable to access funds to continue their vital work now able to do so,” Yentel said.
However, “some federal agencies continue to make expected funding unavailable, and many nonprofits — especially the smallest among them, with the least resources to fall back on if a federal payment doesn’t come through — are having to make difficult decisions to furlough or lay off staff, or to close programs entirely,” Yentel said.
A worker removes the U.S. Agency for International Development sign on their headquarters on Feb. 7, 2025 in Washington, DC.
Kayla Bartkowski | Getty Images
Trump’s foreign aid freeze and the shutdown of the U.S. Agency for International Development is part of a larger effort to shrink the federal bureaucracy.
Backed by the Trump administration, Elon Musk and his advisory group known as the Department of Government Efficiency said dismantling the USAID is a first step.
“We spent the weekend feeding USAID into the wood chipper,” Musk wrote on his social media platform X on Feb. 3.
Most Americans support foreign aid. A 2024 poll by the Reagan Institute found that 54% of Americans believe the U.S. should be more involved in international affairs, while 33% want less U.S. engagement. Even more — 77% — said the U.S. has a moral obligation to stand up for human rights and democracy around the world.
‘Now is the time to dig deep’
The freeze on foreign assistance funding sent “a shock wave through the nonprofit sector,” said Michael Thatcher, the CEO of nonprofit evaluator Charity Navigator.
Many international organizations operate with less than 100 days of working capital, according to Thatcher, which means “this is going to change their ability to pay their staff and maintain operations,” he said. “About half may not survive.”
In some cases, individual donors can bridge some of the funding gap, Thatcher said. “If some of these causes are things you care deeply about, now is the time to dig deep.”
In fact, foreign assistance only comprises about 1% of the federal budget — or roughly $63 billion in fiscal year 2023 — and less than 0.33% of gross domestic product, according to a Brookings Institution report from September. By comparison, U.S.-based institutions and individual donors contributed about $49.3 billion to overseas causes as of a 2020 tally.
Where to give
“Individual givers and philanthropy on a larger scale has a really important role right now,” said Michael Jarvis, executive director of the Trust, Accountability, and Inclusion Collaborative, a Washington, D.C.-based network of funders that operate around the world.
“There’s no way that private givers can fill the gap that the U.S. government is leaving,” Jarvis said, “but it means that their funds are all the more important and needs to be strategically deployed even more effectively.”
To that end, Charity Navigator compiled a list of highly rated nonprofits that were affected by the funding freeze on foreign assistance, including Save the Children and UNICEF, among others.
Individual giving “is already an important player and I do think people will step up more now,” Jarvis said. “There are ways people can use their voice effectively and certainly use their money effectively.”
There may even be a tax benefit, depending on how those donations are made.
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