U.S. Aid Freeze Sparks Uncertainty for Nonprofits

Nonprofits of all sizes are now grappling with the impact of these policy changes. "The pause on federal funding is creating a tremendous amount of confusion, and we don’t have clarity about what happens from here," said Fatimah Loren Dreier, executive director of HAVI, a public health organization focused on preventing gun violence. "And that confusion has ripple effects on communities that are particularly vulnerable to shifts."

The U.S. is the world’s largest humanitarian funder, contributing $13.9 billion in 2024 alone. Any changes to foreign assistance programs—primarily overseen by the State Department and USAID—have far-reaching consequences. Trump’s 90-day funding review seeks to align all grants and funding with his foreign policy priorities.

For organizations like Hope for Ukraine, which relies on USAID support for critical programs, the uncertainty is particularly acute. Yuriy Boyechko, founder of the New Jersey-based nonprofit, said his partners in Ukraine were worried that funding for vital aid, such as firewood for rural, elderly, and low-income populations, could be cut. "I don’t know how they’ll get through the winter if this aid stops," Boyechko said.

USAID has confirmed that all programs and grants without a waiver are paused, though it has not clarified whether humanitarian aid to Ukraine will continue. In fiscal year 2023, the U.S. provided $68 billion in foreign aid across 204 countries, supporting sectors like disaster relief, health, and democracy.

Philanthropist Mike Bloomberg has stepped in to support U.N. climate initiatives, covering the U.S. share of funding for the U.N. Climate Change secretariat after the U.S. withdrew from the Paris Agreement. Bloomberg Philanthropies has pledged continued support to climate action programs, ensuring financial certainty where U.S. leadership has faltered.

Despite these efforts, some organizations find that philanthropic funding cannot fully replace the scale of U.S. support. Susan Reichle, a retired USAID officer, warned that delays in meeting U.S. obligations could harm national security and undermine international development goals.

The pause on foreign aid is further complicated by the reinstatement of the Global Gag Rule, which prohibits nonprofits receiving U.S. aid from providing or discussing abortion services. Organizations like MSI Reproductive Choices are now faced with halting critical programs, such as a mobile health clinic in Zimbabwe, unless alternative funding sources are found.

The rapid shifts in U.S. foreign policy and aid are leaving nonprofits in a precarious position, as they navigate the fallout and look for ways to fill the gaps left by paused funding.