Foreign aid budgets are being slashed worldwide as Western governments—from Washington to Berlin—shift spending toward defense and domestic priorities.
In the U.S., a sweeping USAID stop-work order has halted nearly all critical aid programs.
Governments across Europe are also cutting back. The Netherlands has slashed 30% of its aid budget, redirecting funds to projects that “directly contribute to Dutch interests.” Belgium cut aid by 25%, while France reduced its budget by 37%.
Most recently, the UK made a dramatic move, slashing foreign aid by 40% while raising defense spending. Prime Minister Keir Starmer described the decision as “extremely difficult and painful,” as concerns arise across Europe over America’s wavering commitment to European security.
In Germany, one of the world’s largest foreign aid donors plans to cut aid were already in motion before the government collapsed and called snap elections. The next administration is expected to prioritize defense, keeping aid cuts firmly on the table.
As I’ve written before, cutting foreign aid may seem like an easy budget fix. Yet it comes with long-term risks: it can fuel instability, shrink trade opportunities, and ultimately make donor countries less safe and prosperous.
With foreign aid under pressure worldwide, those who see its role in global stability and economic growth must now consider three urgent questions:
1. How To Resist Further Foreign Aid Cuts and Protect What’s Left?
Foreign aid accounts for less than 1% of the national budget in most donor countries. It is small enough that cutting it barely affects overall spending, yet significant enough to disrupt industries and put millions of lives at risk.
So why is it so easy to cut?
Because politicians don’t think there’s a voting bloc that cares about foreign aid. As one former policymaker said to me, “Sometimes it feels like the only people who care about foreign aid are the people who work in it. Even the recipients stay quiet for fear of more cuts.”
But that narrative is false—there is public support for foreign aid.
A recent Washington Post article highlighted that many Americans oppose the current USAID freeze—by 21 points in the Post-Ipsos poll (59%-38%) and 25 points in a CNN poll (53%-28%). The 2024 Global Solidarity Report also found that, even in politically divided times, there is broad public backing for global cooperation—especially on shared issues like health, climate, and security.
The Real Problem? Politicians Don’t See This Support.
Like the rest of us, they see media stories that frame foreign aid as wasteful or bogged down in bureaucracy. Meanwhile, everyday people who know the value of aid aren’t making their voices heard. They’re not protesting en masse or calling lawmakers, leaving the onus of the resistance to NGO and civil society actors who are often themselves the recipients of funding.
But here’s the challenge with that approach: “When NGOs protest cuts, it can come across like a union protecting its jobs—reinforcing the perception that aid funds bloated bureaucracies rather than real solutions,” as one aid practitioner told me.
If politicians don’t hear from ordinary people, they assume public support doesn’t exist—making aid an easy target.
We need to change that by mobilizing the large but quiet group that supports foreign aid yet lacks the tools or platforms to speak up.
To push back against deeper cuts, advocates need to:
A) Activate grassroots networks—supporters of aid exist but aren’t being heard.
B) Make it easy for people to contact policymakers—direct pressure on decision-makers works.
C) Tell real stories—highlight how aid saves lives, stabilizes economies, and benefits donor countries.
The bottom line: If we want a more stable, prosperous world, we can’t afford to let foreign aid vanish quietly.
2. How to Win Foreign Aid Funding in Today’s New Reality?
As foreign aid budgets shrink, every dollar must prove its value—only programs that align with donor priorities will survive.
The reality is that many governments no longer see aid as a moral obligation; they now expect direct returns, whether in trade deals, security benefits, or economic gains.
In the U.S., Senator Marco Rubio’s review of USAID programs reflects this shift, with three key criteria determining what stays and what gets cut:
- Does it make America stronger?
- Does it make America safer?
- Does it make America more prosperous?
In briefings to civil society, Rubio’s proxies have clarified that broad arguments about “soft power” won’t answer these questions. Programs must show concrete outcomes—trade partnerships, resource security, or job creation—that benefit both the recipient and the donor nation.
Norway, once a leader in foreign aid, is also asking more challenging questions. Some politicians are questioning aid to countries that didn’t support UN votes condemning Russia’s invasion—an issue Norway views as directly tied to its own security. One young leader put it bluntly: “Why should we send money to countries that won’t stand with us when it counts?'”
Many foreign aid advocates will be uncomfortable with this shift, but ignoring it is not an option. Programs must demonstrate mutual benefits for donor and recipient countries if they want to maintain funding.
Some examples of how to frame foreign aid in this new era:
A) Global health programs like Gavi, the vaccine alliance—beyond saving lives, they create healthier markets that buy goods from donor nations. Fully funding Gavi over the next five years through foreign aid commitments could inject $100 billion into developing economies, expanding customer bases for American and European businesses. Plus, healthier populations abroad reduce the risk of pandemics that can cripple supply chains and cost billions.
B) Trade stability—a European dairy farmer relies on West African markets, just as an East European factory owner might depend on exports to Egypt. The same applies to American farmers and manufacturers—without economic stability abroad, their businesses lose customers and jobs.
If aid organizations fail to adapt to this new reality, they risk losing funding.
3. How to Leverage Partnerships, Policies, and Funding Beyond Foreign Aid?
Shrinking foreign aid budgets creates an opportunity to explore alternative funding and partnerships for sustainable development. The focus shouldn’t just be on what’s being cut but on what can be built—not to replace aid, but to complement it and drive more substantial outcomes.
Here are a few examples:
Clean Energy Investments—Africa’s clean energy sector is already attracting private money, but tools like guarantees and low-interest loans could help scale it further. A Financial Sector Deepening (FSD) study estimates that Africa’s clean energy sector alone could create 3.3 million new jobs.
Skills Training for the Future—investment only creates jobs if workers have the skills to fill them. Microsoft is addressing this by committing to train 1 million people in South Africa with digital skills to meet industry demand.
Unlocking the Creative Economy—music, film, and digital content generate billions, yet many developing countries lose revenue due to weak copyright laws and a lack of local infrastructure. Strengthening intellectual property rights and modernizing revenue collection systems can ensure artists and their home countries benefit.
Cutting Fees on Money Transfers—migrant workers send home more money than foreign aid, but high transfer fees consume these funds. Lowering fees to 3% could save African families $16 billion annually.
Engaging Emerging Donors: As traditional donors cut back, new players like Saudi Arabia and South Korea are stepping up. South Korea increased its foreign aid budget to $4.8 billion in 2024—a 31% jump from the previous year—and plans to double assistance to Africa by 2030.
New Ways to Fund Development—taxes on polluting industries, carbon markets, and debt-for-nature swaps could raise billions for climate action and development. A global task force backed by 17 governments is already exploring these options.
Local Leadership—countries receiving aid must take a more significant role in financing their development. Expanding tax collection and reducing corruption can free up health, education, and infrastructure resources. Nigeria has reportedly already stepped up, allocating $200 million to cover gaps left by USAID cuts.
The Road Ahead for Foreign Aid and Beyond
The next few years will define the future of foreign aid. Jobs will be lost, organizations will shut down, and lives will be at risk. These cuts are not just numbers on a budget—they have real human consequences.
We cannot afford to be passive. We must ensure policymakers hear from a visible constituency that aid isn’t just generosity—it’s an investment in stability, security, and prosperity.
At the same time, we need to think beyond foreign aid. If we don’t adapt, we risk losing decades of progress. However, if we do, we can build a system capable of fighting extreme poverty that is stronger and built to last.