American organisations hit by USAID cuts struggle to operate

Uncertainty still grips organisations that had relied on funding from the United States Agency for International Development (USAID), months after President Donald Trump's administration began dismantling it.

“We went into what we call hibernation,” said Keith Ives, chief executive of Causal Design in Denver, Colorado. “And I think this is true for a lot of your small businesses who had a concentrated portfolio with USAID.”

Causal Design monitors the effectiveness of foreign assistance programmes in locations including Iraqi Kurdistan, Syria and Jordan. USAID last year awarded more than $1 billion to small businesses such as Mr Ives’s, but the Trump administration's pivot on international aid led to the cancellation of 83 per cent of the agency's programmes.

Causal Design scaled back operations as a result, losing 80 per cent of its portfolio. As of June 1, it had no employees, Mr Ives said.

The Trump administration's move was part of the Elon Musk-led effort to reduce “waste” in federal spending. Secretary of State Marco Rubio said in March that 5,200 contracts were cancelled to save money.

More than 233,000 jobs have been lost globally – including more than 19,500 in the US – from USAID and its partners because of the funding freeze, according to the tracker USAID Stop-Work.

USAID was allotted $35.49 billion during the 2025 fiscal year, less than 1 per cent of the federal government's budget. Advocates argue funding the agency was a small price to advance US interests.

“It's a small investment compared to the other large sums of money that we spend on different things that bring in a very positive return,” said Mouaz Moustafa, executive director of the Syrian Emergency Task Force (SETF).

Mr Moustafa told The National the cuts come at a perilous time for Syria’s major humanitarian and reconstruction efforts. Relocating the roughly 14 million Syrians who were displaced during Bashar Al Assad's regime would bring stability to the region, he said, which was in the US's interests.

Though the SETF does not receive USAID funding, Mr Moustafa said it works with agencies that had relied on it and have made “massive cuts” to staff, limiting the resources they can provide.

“There's an overwhelming amount of people that need help, and now they can help less,” he said.

The cuts also represent a significant lost source of funding for Bahar, a Syrian non-government organisation based in Turkey.

Bassel Alimam, a programme director at Bahar, said the NGO is trying to fill the funding gap from the cuts, but the budget “was stopped in one second” and “it was hard”.

“This decision and the uncertainty about the future of humanitarian aid, it really makes you feel you won't be able to do anything,” Mr Alimam said.

Mr Alimam told The National that the NGO has stopped food assistance for 1,500 households in Syria, nutrition assistance for children under five and suspended activities in four protection sectors. He said the cuts also left a significant gap in the NGO's water, sanitation and hygiene (WASH) and nutrition programmes.

'Mad dash'

In the 2025 fiscal year so far, USAID has planned to spend less than one-third of its budgetary resources, according to USAspending, an open data source for federal spending. The agency has given 560 new awards, a fraction of what it awarded previously.

Mr Ives said he expects a “mad dash” to spend those allocated funds nearer the end of the fiscal year on October 1.

“There's so much uncertainty right now in the sector,” he said.

In the meantime, Causal Design is focusing on a handful of projects funded by other donors such as the World Bank, Mr Ives said. The company intends to begin operations slowly this autumn before ramping up efforts in early 2026.

“My uncle always said you can't let a machine sit. If you do, it just rusts out,” he said.

According to a State Department spokesperson, the administration has made clear that small businesses power the US economy from the ground up and build products that keep the country “strong, competitive and secure”.

“Under the Trump administration, we will finally have a foreign funding mission that prioritises our national interests,” they told The National.

Uncertainty still abounds. On August 13, Mr Trump won a victory when a federal appeals court lifted a ruling that required the State Department to continue making foreign aid payments.

In July, the Senate approved cutting more than $9 billion in funding for foreign aid programmes that largely affect USAID-administered programmes. The State Department, which absorbed USAID that month, said it would restructure foreign assistance programmes to align with Washington's interests.

In a blog post at the time, Mr Rubio said the USAID's development objectives have exacerbated anti-American sentiment, pointing to sub-Saharan African nations' record of often voting against the US on UN resolutions.

“More than $89 billion invested in the Middle East and North Africa left the US with lower favourability ratings than China in every nation but Morocco,” he wrote.

Mr Rubio also said the administration found USAID “fell well below” the standard of ensuring programmes it funded advanced US interests after a “thorough review of thousands of programmes”.

Peter Goldsmith, who runs the Soybean Innovation Lab at the University of Illinois Urbana-Champaign, said projects like his were good investments by the federal government.

The Soybean Innovation Lab provides organisations across the crop's supply chain with the technology needed to advance its development in Africa. Mr Goldsmith said the soybean's value chain – which includes multiple businesses such as seed breeders, producers, processors and end users such as nutritionists – supports the private sector.

“We were doing work that was very much in the interest of US industry and US policy,” he said.

“This was the thesis I'm giving to USAID to say: 'This is a good idea. You want this,'” Mr Goldsmith told The National.

Tim Johnson, the lab's commercialisation adviser, said those export channels are vital to the US, which is the world's second-largest exporter of soybeans.

USAID cuts forced the lab to lay off its staff. It was due to shutter operations in April before a last-minute $1.02 million gift that will keep it afloat for another 12 months.

“We got a year of life to figure out how to sustain ourselves,” Mr Goldsmith said. He added that the Soybean Innovation Lab is working on proposals with other organisations such as Norwegian Aid that provide similar funding to USAID.

But he said the dismantling of the agency has created a vacuum in areas, such as those where the Soybean Innovation Lab operates, which had promoted US industrial standards, cultural values and business values.

“US products will not be welcome when the doors do open,” Mr Goldsmith said.