July 21, 2025
July 1, 2025, marked the closure of the United States Agency for International Development (USAID) after more than 60 years of operations. What remains of the former USAID programming has been folded into the U.S. State Department.
For those who have worked for USAID or on USAID-funded projects, it has been a challenging period. Organizations that have relied on USAID funding have had their operations disrupted, laid off large numbers of staff, or, in some cases, shut down completely. More concerning, vulnerable populations around the world that depended on USAID-funded projects are now left without essential supplies and services.
The speed of USAID’s dismantling, which began shortly after Donald J. Trump's inauguration as the 47th president of the United States, caught most people by surprise. Following the initial shock, people began to wonder how USAID could be dismantled so swiftly and with such limited public outcry.
If you work for an organization outside of the U.S., or if you are based in the U.S. but rely on grants from private foundations and not federal sources, the closure of USAID might seem like an unfortunate event, but one unrelated to your grantseeking. Although USAID’s dismantling may not directly affect your organization or sector, some lessons from its shuttering are relevant to all grantseekers. In this post, we cover four lessons that we believe are universally applicable.
Lessons from the Closure of USAID
1. Good Work Does Not Speak for Itself
As the majority of USAID programs were frozen and ultimately canceled earlier this year, those in the USAID sphere quickly realized that the general public was unaware of what USAID did or what it meant to work for a USAID implementing organization. This lack of knowledge created an opening for USAID to be more easily framed by its opponents as the epitome of fraud, waste, and abuse, making it an easier target to demolish. The lesson from USAID’s downfall is that messaging matters. The public needs to know what you are doing, why you are doing it, how you do it, the results you are achieving, and why those results matter (to the world and to them) before your organization or sector comes under attack and your funding is at risk. When it became clear that USAID was being targeted, there wasn’t the groundswell of support that might have existed had the public understood what USAID did and how its work benefited people globally and in the U.S.
🎯 Every organization must maintain a website that is up to date, easy to navigate, and clearly communicates why the organization exists, what the organization does, and what it has accomplished.
There are several free and low-cost options available for creating a website. If you do not have a website yet, we’ve listed a few resources below that may help. Having an active presence on social media is probably also necessary, though it's now more fragmented, with numerous outlets, so it can take some trial and error to find the best ones to reach your desired audience.
Resources:
Create and Launch! How to Create a Website Using a Free Website Builder
Improve Your Chances of Getting Grant Funding: Create a Communications Strategy
2. Talking to Your Core Supporters Is Not Enough
Over the years, USAID staff have worked closely with members of Congress, educating them about USAID’s work and hosting them on country visits so they can see projects firsthand. Dedicating resources to educate members of Congress made sense because Congress approved USAID’s funding. However, perhaps insufficient focus was placed on educating U.S. taxpayers about USAID’s mission and achievements. Organizations are more stable when they have both core and broad support. While core supporters in Congress may have enabled USAID’s funding in the past, public understanding and support for the organization might have helped it weather the current period of political upheaval. In the U.S., there has long been a false belief that foreign aid spending accounts for a huge share of the federal budget. This misunderstanding has led many Americans to believe that their communities’ needs were going unmet because too much money was being funneled into foreign assistance. In reality, USAID’s budget represented approximately 1% of the federal budget. Supporters of foreign aid found this mischaracterization frustrating. In retrospect, the false beliefs about foreign assistance should have been countered more vigorously.
🎯 A lesson from USAID’s dismantling is that it is not enough to communicate regularly with your current supporters, including individual donors, government representatives, foundation staff, and elected officials. USAID maintained a comprehensive website, published a variety of downloadable publications, and regularly posted updates on multiple social media accounts. It appeared to be covering all the bases. All that activity wasn’t enough, perhaps in large part because we see online content similar to what we’ve previously searched for or liked. Most Americans probably rarely or never saw stories about USAID, its programs, and how these programs benefited the U.S. Maybe USAID staff did not think an expansive public informational campaign was needed, or maybe it lacked the resources to implement one. Presumably, a public campaign seemed unnecessary, given the impression of widespread support in Congress for USAID. It’s a “what if” thought experiment, but possibly, reaching out to people across the U.S. through diverse messaging campaigns could have changed public opinion about USAID’s value.
3. Many Programs Will Require Ongoing Support
Another vulnerability for USAID, which community organizations also face, is that the initiatives it funded were not “one and done” interventions, with the possible exception of providing emergency supplies during a natural disaster or humanitarian crisis. Even in the case of a natural disaster, assistance may be needed for years after the event to help a community fully recover.
Some skeptics of USAID and foreign assistance argue that the continued need for aid to developing countries demonstrates that such assistance is ineffective. If the aid system really worked, they reasoned, recipients of foreign aid would have graduated from the aid-based system by now. However, countries receiving foreign aid face significant challenges, and it is unrealistic to expect them — especially without a planned and thoughtful phase-out of aid — to go it alone.
USAID and the implementers of its projects typically emphasized successes because success is a way of saying “this investment is worth it” and “we’re good at what we do.” It’s certainly important to measure a project’s impact and to celebrate achievements. The downside of emphasizing success and constant forward motion is that for big issues like those USAID worked on, change can be incremental. It may be necessary to fund similar projects over several decades to mitigate the worst effects of a given problem while gradually working toward a longer-term, more satisfactory solution. The aid sector’s understandable emphasis on progress and accomplishments may have created unrealistic expectations among donors regarding the need for ongoing support.
🎯 Regardless of your organization’s mission, if you rely on outside funding (grant funding or charitable donations), you have probably felt pressure to spin things as positively as possible, believing showcasing successes leads to more financial support and that it’s bad policy to admit when things aren’t going well or will require continual investment. Emphasizing project achievements is a standard practice. However, the narrative of accomplishments must align with the facts of what has actually been accomplished, or your supporters may wonder why your organization still needs funding to conduct similar projects for the same beneficiaries.
One solution to this dilemma is to structure your narrative around what has changed rather thanwhat has been accomplished. Words like “accomplished” or “accomplishments” are loaded. They have a tone of finality about them (i.e., “mission accomplished”) that may not be a correct depiction of your organization’s projects. Your reports and communications are opportunities to share news about the actions taken and the changes that have occurred. They create an opening to discuss the very real, smaller shifts that can lead to bigger results over time. The word “change” is also associated with motion, which allows for the telling of a fuller, ongoing, and more nuanced story of the full spectrum of your work: what your project has accomplished, what it hopes to achieve, and why continued support is necessary.
4. All Donor Funding Carries Risk
Through USAID, the U.S. government (USG) funded more international aid projects than any other country in the world. Because of the perceived reliability of USG funding and the diversity of programs it supported, many organizations became overly dependent on funding from this single source. Everyone — including USAID staff who watched the programs they selected for funding be terminated — has learned that USG funding cannot be relied upon.
Would it have been a better policy for USAID to require all projects it funded to have multiple income streams (e.g., cost-share) to avoid this dependency? Maybe. Cost sharing is difficult for organizations to develop and manage, so it would have been unpopular. However, such a policy could have prevented organizations from becoming overly reliant on a single funding source and from basing their business models on it. And although it might not have saved all USAID-supported projects, requiring every project to have more than one funding source could have prevented some projects from closing down when USAID funding was frozen and subsequently canceled. Of course, the counterarguments are that mandatory co-funding on such a large scale would have been unwieldy to implement, and that USAID typically did not require cost-sharing because important initiatives would never have happened unless USAID funded them fully. Whether different funding policies on USAID’s part could have helped preserve some of its investments, we’ll never know. What we have learned in 2025 is that countries, organizations, and communities are vulnerable if they become overly reliant on a single donor, even if that donor has been a dependable partner since 1961, as in the case of USAID.
🎯 If your organization receives a significant amount of money from a single funding source —such that if that donor stopped funding you, your organization might not be able to survive — you must reevaluate how you operate.
Many USAID-funded organizations would scale up their operations when they received a new award and did not (as they are doing now, post-USAID) try to economize when it came to budgeting with unrestricted funding, which pays for administrative and executive staff salaries, among other non-project-related expenses. Partly, organizations expanded because it was inconceivable that USAID would cease to exist or that funding would be cut. What the shuttering of USAID and the cancellation of other USG programs have taught us is that no external funding source is a 100% certainty, especially in today’s political climate.
To prepare for a potential loss of donor funds, your organization may want to start reducing its costs by taking actions such as hiring fewer staff, using existing staff more efficiently, leveraging surge support instead of hiring permanent staff, and (if feasible) operating entirely virtually rather than maintaining a physical headquarters. Implementing one or more of these measures, along with others, could help your organization reduce its operational costs and better position itself to survive the loss of a major donor. It is standard advice to diversify funding. Diversifying funding can be challenging to implement, so don’t wait for a financial crisis to hit before exploring new funding streams or seeking ways to increase efficiency.
What Does the Future of Grant Funding Look Like?
Based on current trends, we predict that funding opportunities will be more limited and competition for them more intense. These trends were already visible before the turmoil in the U.S., and they have accelerated under the Trump administration. The loss of USG funding (for both domestic and international programs) cannot be fully replaced by other funding sources. Many nonprofit organizations may not survive the loss of USG funding and will permanently close their doors, and those that do survive may end up significantly smaller than they were in December 2024. These changes will not just impact service delivery and research initiatives. It will also significantly impact careers, potentially leaving fewer people able to start or maintain careers in organizations focused on humanitarian initiatives. The one potential upside to all this turmoil is that it may lead to innovations and efficiencies that were not discovered or employed earlier because there wasn’t the downward pressure to do so. But that one positive is overshadowed by the millions of people who will go without life-saving food and medicine, and the tens of thousands of people who have lost their jobs because of recent USG actions to cut assistance.
Grant funding will not disappear entirely, but it will be different, and there will be less of it.
While we can’t solve the bigger issues or change the trends we see, we can offer some tools to help you be more competitive in your grantseeking. If you haven’t already, we invite you to explore our blog and free, affordable courses for tips on grantseeking and writing.
Further reading
- Opinion: I Worked at U.S.A.I.D. for Over 8 Years. This Is Our Biggest Failure (Note: This is a NY Times article, which may require a subscription to access.)