US Foreign Aid Budget Cuts – What Next?

Alta Alonzi About Alta Alonzi

Alta Alonzi is a prospect researcher of international donors. She works with the fundraising consulting company Philantropia, conducting research for clients ranging from small NGOs to UN organizations. She also works closely with FundsforNGOs running training webinars and updating the Premium donor database.

Get Specific Grants relevant to your Country & Areas of Work. Learn how

In early March 2017, the new Trump administration published a budget proposal which, among other things, called for a 28% cut to United States spending abroad including the State Department and USAID for fiscal year 2018. This is a troubling prospect for many international organizations relying on the US government for funding. So what does this mean and what can we expect going forward? Here we have answered some of the questions currently on the mind of every NGO.

What is the current US foreign aid budget?

75% Discount on Premium Membership (Ad)
For a limited time only, this discount offer gives you exclusive access to all the Premium Standard features for NGO grant success. Join Today.

For FY 2017, the requested budget for the US State Department and USAID was $50.1 billion, less than 1% of the federal budget. Much of this funding is earmarked for US diplomacy activities, maintaining US embassies and staff. The budget for USAID funding accounts was $22.7 billion.

What is the President’s proposed budget?

Here is the Official Press Release from March 16, 2017:

Searching for the fastest way to write proposals? (Ad)
We have an extensive database of sample proposals from successful grantee organizations from around the world offering project ideas, proposal writing techniques and planned strategies. Join Premium to view Sample Proposals

Today the President released the Fiscal Year (FY) 2018 budget blueprint which provides an overview of the Administration’s overarching priorities for discretionary spending. It includes $37.6 billion for the Department of State and U.S. Agency for International Development (USAID), of which $12.0 billion is Overseas Contingency Operations funding.

The FY 2018 budget advances the national security interests of the United States by focusing on diplomatic efforts and foreign assistance programs that advance the security and prosperity of the American people.

The budget blueprint includes $3.1 billion to meet our security assistance commitments to Israel and supports other critical foreign assistance efforts, including global health and humanitarian assistance programs. The budget also supports diplomatic engagement activities, and ensures the safety of our diplomats by applying $2.2 billion towards new embassy construction and maintenance. The budget will support Department of State and USAID efforts to optimize organizational effectiveness, helping us work to efficiently achieve our diplomatic and development goals and objectives.

Are you overwhelmed with too much grant information? (Ad)
Join Premium and view relevant grants and resources on a clean, ad-free and user-friendly Member Dashboard to organize and plan your successful fundraising. Learn more

More information will be available in May of this year.

Will this budget cut be approved?

While the foreign aid budget is likely to be cut, it is unlikely to be cut by a number as high as 28%. The President is asking Congress for a 28% reduction, the President does not have the power to make the budget. It is the job of the U.S. Congress to create the budget. The Republican Party, which currently carries the majority in both Houses of Congress as well as the Presidency, typically supports cutting government spending. However a significant number of Republicans have openly acknowledged that such a drastic budget cut would harm U.S. interests abroad. Thus, while the foreign aid budget is expected to shrink next year, the cuts are not expected to be as high as 28%.

Getting late information about new grants? (Ad)
The Early Grant Information feature for Premium Members ensures that you receive grant announcements much ahead of others so that you can have enough time to research and apply. Join Premium to get early information

What is the President’s role in creating the budget?

Creating the budget is a long and complicated process. Congress holds the main power over creating the budget, but there are a number of different groups and interests that also play a role. In general, the President submits an initial proposal to Congress, and then in a few months’ time he can send back or sign into law the budget Congress decides on.

For more information on the US Federal budget approval process, see this report on Introduction to the Federal Budget Process.

How to write Proposals? How to raise funds? How to research donors? (Ad)
Premium Members can download our rich library of downloadable Ebooks covering topics on how to write funding applications, how to identify new donors, how to contact potential funders. Join Premium to download

When will the new budget go into effect?

In theory, the budget will go into effect at the beginning of the new fiscal year, October 1st. In practice, there is often a lot of back-and-forth, and oftentimes parts of the budget are not finalized until later.

For a more detailed timeline, see this report on: The Congressional Budget Process Timetable.

Receiving funding alerts that are not relevant to your work? (Ad)
With our Premium Standard Membership, you can select to receive only those funding alerts that you want to see. No more junk but real information you can use. Join Premium to choose the type of grant information you want

Will this result in any immediate changes to current grants?

No. The FY 2017 budget allocations will not be effected, nor should multi-year grants that have already been allocated. Renewal of funds next year however may be effected.

How will this impactNGOs receiving US government funding?

The Trump administration has not yet nominated a new head for USAID, so it is unclear where exactly the cuts will occur. However, experts predict that most of the cuts will come out of administrative cost and overhead, not program support. In particular, the cuts will likely be dealt with by closing offices, letting staff go, and combining programs.

While program support may not decrease drastically, there are some changes which could affect organizations depending on US government support:

  • Fewer offices, so fewer opportunities to directly connect or network with staff.
  • Greater burden on remaining staff, likely slowing down the application process and ability to respond to questions.
  • USAID may be combined into the State Department, reducing overhead but more closely aligning USAID to US political interests.
  • US aid operations will likely be scaled back, meaning some countries and programs may be dropped completely.
  • Fewer funding opportunities, so more competition for the remaining funds.

Which programs will be affect and which will not?

Are you an international NGO interested to learn about grants in multiple countries? (Ad)
We have an exclusive Grants Map where you can view the number of open grants available in real-time for different countries. Click on the country of your interest and learn about ongoing funding opportunities. Join Premium

While it remains unclear exactly which programs will be impacted, some information already leads to speculation. For example, the budget of PEPFAR (the President’s Emergency Plan for AIDS Relief) was not touched, however the new Global Gag Rule disallowing abortion services or even abortion counseling or referrals does seem to apply to PEPFAR funding. Funding for Israel is likely to be untouched or even increased. Other likely scenarios include a decrease in grants and increase in loans particularly in foreign military aid, as well as defunding of programs not in line with US political goals. The US still has commitments towards achieving the UN Sustainable Development Goals (SDGs), however the current administration has shown disregard for many international commitments, including the UN, so it is unclear how closely future aid will be tied to the SDGs.

Funding that is likely to be maintained:

  • Israel security programs
  • The President’s Emergency Plan for AIDS Relief (PEPFAR)
  • The Global Fund for AIDS, Tuberculosis and Malaria

Funding that is likely to be decreased:

Disappointed with lack of proper search options to quickly find grants? (Ad)
With unlimited search options, you can find grants by your areas of interest and by country. Sign in anytime and view relevant grants to save time and apply with success. Join Premium at a Discount
  • The United Nations and affiliated agencies
  • UN Peacekeepers
  • S. Global Climate Change Initiative and the Green Climate fund
  • The World Bank
  • The State Department’s Educational and Cultural Exchange Programs

Will other funding sources replace US government funding?

This is also very difficult to say. The US government is a huge donor and it is difficult to fill the gap a 28% cut would leave. However, there has been some show that alternative income sources are available. Domestically, when funding for Planned Parenthood and Meals on Wheels was threatened, individual giving for those causes drastically increased. Internationally, after the Global Gag rule was instituted, the Dutch government and others pledged to fill the funding gap the US rule will cause. It is possible others will step up to fill the other important gaps left by US aid.

How will this effect organizations not directly reliant on US government funding?

Unbelievable Collection of Downloadable Resources (Ad)
Our collection of downloadable resources for Premium Members include Ebooks on Proposal Writing, Donor Research, NGO Promotion and Management, Social Media Management for NGOs, NGO Start-up Funding, donor profiles and more. Join Premium

As the US government funds in over 180 countries on a broad range of issues, adecrease in foreign commitments will likely have wide-spread effects even for those not directly receiving US government funding.

The US government funds many large organizations that in turn sub-grant or provide services to other organizations, including: numerous multilateral aid organizations; other governments; international development consultants and service providers; development banks; and INGOs which may partner or sub-contract to national and grassroots NGOs. The new administration is looking to reduce these commitments, particularly to the United Nations. As the United States currently contributes to over one-fifth the UN’s annual budget, the potential large cuts will diminish UN aid programs, partnerships, and support.  So, organizations relying on the UN or others that are in turn funded by the US government may face budget challenges.It is recommended that all NGOs should check with their current donors. Even if you are not directly receiving USAID grants, your donors might be.

Additionally, decreases in US foreign aid decreases the total amount of funding available for international development in 2018. This will increase the competition for remaining US government funding as well as increase competition for other funding opportunities. Even organizations that have no reliance on the US government will find competition for foreign aid money increase as many programs once supported by the US government turn elsewhere for funding.

Not getting responses to your fundraising questions? (Ad)
Become a Premium Member and ask us any questions about fundraising, grant research or technical support, our dedicated customer support service will provide assured responses to help you in your journey of sustainable fundraising for your organization. Join Premium

Asian Peacebuilders Scholarship for Young Professionals from Asia

EU Call for Proposals for Digital Financial Services for Africa, Caribbean and Pacific (ACP)

Innovative Ideas Mini Grants on Safer Workspaces in East Africa

Mobilize Power Fund: Grants for Youth-led and Intergenerational Groups, Nonprofits, & Coalitions in the USA

“8th Eastern European Academy for Social Democracy Program” for Young Progressive Leaders

Call for Young Promising Individuals for addressing Societal Issues with Fresh Ideas

Submit Your Applications for Gane Grant in the UK

U.S. Embassy in North Macedonia announces Annual Program Statement

U.S. Embassy in Algeria announces Media in Countering Violent Extremism

Fergusson Foundation Grants Program inviting Canadian Organizations

USAID/AMANAT Annual Program Statement seeking Applications from Afghan CSOs and NGOs

USAID/Nigeria’s Integrated Child Health and Social Services Award (ICHSSA) Activity

Apply for Newton-Ungku Omar Fund Grand Challenge 2019

USAID/Uganda Maternal Child Health and Nutrition (MCHN) Activity

Call For Proposals: F-Sure Karamoja Project Micro-Grants

Blue Growth Innovation and SMEs Programme is now open for Applications

Grants to Promote Better Understanding of the United States through American Studies

UNU-WIDER Request for Research Proposal: Regional Growth and Development for Southern Africa’s Prosperity

PEDL seeking Proposals for Exploratory Research Grants (Round 30th)

Research Grants Program on Organic Farming, Ranching, and Food Systems

Small Grant Program to support CSOs and NGOs of Netherlands

Funding Program to Strengthen Rural Communities in Australia

Stroke Foundation announces Research Grant Program in Australia

Canada Feminist Fund for supporting Gender Equality in the Palestinian Territories