As the Trump administration froze foreign assistance concluded, immediate actions were initiated to determine how to sustain critical aid programs projects that could receive funding from private contributors.
TL;DR
- Private donors contributed over $125 million to sustain critical aid programs after U.S. foreign assistance was reduced.
- Project Resource Optimization identified 80 programs for private donors, securing over $110 million in grants.
- Millennials in finance and tech, like Jacob and Annie Ma-Weaver, accelerated giving plans to support these initiatives.
- While insufficient to replace all U.S. aid, private funds helped maintain essential program components and operations.
In February, several groups launched fundraisers initiated actions, and within eight months, these emergency funds managed to gather over $125 million. This amount, though insufficient, exceeded the organizers' wildest expectations.
During that initial period, even with needs piling up, affluent benefactors and independent organizations struggled with their approach. Among the thousands of programs that the U.S. Supported internationally, decisions had to be made about which ones were viable for preservation and which would yield the greatest results if sustained.
“We were fortunate enough to be in connection with and communication with some very strategic donors who understood quickly that the right answer for them was actually an answer for the field,” said Sasha Gallant, who led a team at the U.S. Agency for International Development that specialized in identifying programs that were both cost effective and impactful.
Members of Gallant's team and employees from the USAID chief economist's office compiled a list of 80 programs for private donors, working beyond business hours or after their dismissal. This initiative, known as Project Resource Optimization, reported in September that all recommended programs had secured funding, totaling over $110 million in charitable grants. Additionally, other emergency funds generated at least another $15 million.
The mentioned funds represent the most apparent contributions from private donors responding to the unprecedented withdrawal of U.S. Foreign aid, which reached $64 billion in 2023, the most recent year for which complete data is accessible. It's conceivable that private foundations and individual contributors provided even greater sums, but such donations will not be publicly disclosed for an extended period.
The closure of USAID was a moment of triumph for The Trump administration. Secretary of State Marco Rubio stated in July that the agency had accomplished little since the Cold War concluded.
“Development objectives have rarely been met, instability has often worsened, and anti-American sentiment has only grown,” Rubio said in a statement.
Going forward, Rubio said the State Department will focus on providing trade and investment, not aid, and will negotiate agreements directly with countries, minimizing the involvement of nonprofits and contractors.
Some new donors were motivated by the emergency
Gallant stated that some private contributions originated from foundations, which opted to disburse more funds this year than initially projected, motivated by their confidence in PRO’s assessments. For instance, the grant-making organization GiveWell reported distributing $34 million to address the aid reductions directly, with $1.9 million allocated to a program endorsed by PRO.
Some were first-time contributors, such as Jacob and Annie Ma-Weaver, a couple in their late thirties residing in San Francisco. Their careers in a hedge fund and a prominent tech firm, respectively, had allowed them to accumulate sufficient wealth to eventually donate substantial amounts. Jacob Ma-Weaver commented that the reductions in U.S. Assistance caused needless deaths and were surprising, yet he also perceived an opportunity at that time to enact significant change.
“It was an opportunity for us and one that I think motivated us to accelerate our lifetime giving plans, which were very vague and amorphous, into something tangible that we could do right now,” he said.
The Ma-Weavers contributed over $1 million to initiatives chosen by PRO, and they've decided to share their philanthropic efforts publicly to inspire others to participate.
“It’s actually very uncomfortable in our society —maybe it shouldn’t be — to tell the world that you’re giving away money,” Jacob Ma-Weaver said. “There’s almost this embarrassment of riches about it, quite literally.”
Private donors could not support whole USAID programs
PRO's mobilized funds didn't fully replace USAID's grants. Instead, PRO's team collaborated with implementing organizations to reduce their budgets, focusing solely on the most crucial elements of the most effective projects.
For example, Helen Keller Intl ran multiple USAID-funded programs providing nutrition and treatment for neglected tropical diseases. All of those programs were eventually terminated, taking away almost a third of Helen Keller’s overall revenue.
Shawn Baker, a senior vice president at Helen Keller, stated that once it was evident U.S. Funding wouldn't be reinstated, they began prioritizing their initiatives. He mentioned that when PRO reached out, they could offer a significantly reduced budget to private donors. For a nutrition program in Nigeria, which previously had a $7 million yearly budget, they suggested a budget of $1.5 million to sustain its operations.
Village Enterprise, another nonprofit organization, secured $1.3 million from PRO to further its antipoverty initiatives in Rwanda, focusing on enabling individuals to launch microenterprises. In addition, they successfully garnered $2 million from their private donors via a targeted fundraising campaign and utilized a $7 million unrestricted donation from billionaire and author MacKenzie Scott, which they obtained in 2023. This adaptable financial support enabled them to maintain their core programs throughout a period CEO Dianne Calvi described as seven months of instability.
Researchers at PRO were surprised that numerous organizations managed to persist and continue operations despite substantial reductions in funding. The PRO support staff have been extending their dedication to the project on a monthly basis since February, anticipating either a depletion of donations or the cessation of project viability.
“That time that we were able to buy has been absolutely invaluable in our ability to reach more people who are interested in stepping in,” said Rob Rosenbaum, the team lead at PRO and a former USAID employee. He said they have taken a lot of pride in mobilizing donors who have not previously given to these causes.
“To be able to convince somebody who might otherwise not spend this money at all or sit on it to move it into this field right now, that is the most important dollar that we can move,” he said.
Other donors may wait to see what is next
Not every private contributor was keen to step into the void left by reduced U.S. Foreign assistance, a situation that occurred without any “rhyme or reason,” according to Dean Karlan, USAID's chief economist when the Trump administration assumed power in January.
Despite the extraordinary mobilization of resources by some private funders, Karlan said, “You have to realize there’s also a fair amount of reluctance, rightly so, to clean up a mess that creates a moral hazard problem.”
The uncertainty about what the U.S. Will fund going forward is likely to continue for some time. The emergency funds offered a short term response from interested private funders, many of whom are now trying to support the development of whatever comes next.
Professor of economics at Northwestern University, Karlan finds it distressing to witness the effects of reduced aid on those who receive it. He also harbors resentment towards the attacks on the motivations of aid personnel broadly.
Nevertheless, he mentioned that numerous individuals in the sector desire the administration to re-establish a system that is both effective and focused. However, Karlan stated he has not yet observed any actions, “that give us a glimpse of how serious they’re going to be in terms of actually spending money effectively.”