What should philanthropy do about the US freeze on aid?

Here we are. The entirety of USAID’s, the biggest bilateral aid donor on earth, programmes were suddenly frozen last week by US President Trump. The organisation’s website is now offline, and the Trump administration is moving to put the free-standing agency under the umbrella of the State Department. Elon Musk, who now holds a key position in Trump’s government, has called the USAID ‘criminal’ and said it’s ‘time for it to die’.

Though the aid freeze is meant to be temporary, there is little doubt that vast portions of this work will never restart. For a huge number of organisations, including some members of the WINGS global philanthropy network, the implications are existential as we enter what many are already calling a ‘post-aid’ world.

 Our sector is under shock and wondering how to save what can be saved, and what to expect next. Well, before thinking about what happens next let’s remember what else just happened. The Netherlands announced cutting their aid by €2.4 billion, Germany by €2 billion, France by close to 40 percent, and similar announcements were recently made by Switzerland and Belgium. Now what could happen next? Elections are coming in various European countries and the winds are not blowing towards increased international solidarity. Nationalist agendas and geopolitical tensions continue to be on the rise.

We can worry that some philanthropies might reorientate their giving to align with the new zeitgeist, for instance divesting from issues such as climate or social justice.

What will this mean for international solidarity in general, not to mention progressive social work and activism in the Global South? We are talking about a tectonic shift and a huge risk for these actors who rely heavily on northern funding, both public and private. This pitfall could, in return, quickly accelerate democratic erosion around the world and the very real polycrisis humanity is facing.

None of this is really new. We knew the direction of travel. But what can philanthropy – this diverse, eclectic, relatively small field – do? Part of the answer is to continue what we do and do it better, with more flexibility, long-term support, and more collaborative approaches, helping the communities we support navigate even greater uncertainty and trying to increase our levels of giving.

But if there is a moment of reckoning that even this is not enough, it is now.

Should philanthropy step in and fill the growing financial gaps? Yes, but not as we may think. It is reassuring to see foundations like Bloomberg Philanthropies deciding to compensate for the withdrawal of their government from international agreements and fund the UNFCCC, but these kinds of remedies, although laudable and needed in the short term, could ultimately exacerbate the problem. Seeing unelected private wealthholders replacing democratic governments in their international responsibility will certainly fuel the profound lack of trust that led to the situation in the first place. Even if such substitution strategies were fully participatory, democratic and transparent (such models exist in our field), it would still not solve the broader equation: our sector just doesn’t have the cash. Its added value lies in its ability to take risks, go where others can’t or won’t, build bridges, etc., more than in the amounts we can put on the table.

Stepping in for foundations at this critical point means investing in unlocking the collective power of philanthropy, particularly in the Global South where the impacts of the aid shifts are most acutely felt. With significant investments in local campaigns of giving, advocacy bodies and networks, multistakeholder partnership mechanisms, coordination platforms, community funds, online giving platforms, and other critical ecosystem players, the potential is massive to make existing resources more effective and transformative, to grow the pie, and ensure civil society’s funding basis is more distributed and local. Boosting local philanthropy, including from the middle class, small companies, and grassroots giving, will increase financial resilience in challenging times, but even more importantly, it will enhance political resilience as it counters the growing narrative on foreign agents’ influence and makes it harder for authoritarian governments to crack down on social change actors.

Stepping in also means building bridges within our own field, and across regions, to support and learn from each other in challenging contexts, and organising our sector’s collective voice at the global level before it is too late to be heard. Just like foundations are raising their collective voice at the national level the sector must come together in its diversity at the global level.

Investing in generosity’s potential domestically and internationally, locally and globally, is what will create the kind of multiplier effect that social impact and social change actors need more urgently than ever in a critical context.

It may sound counterintuitive: cuts on public resources mean more urgency to fill the gaps close to where we are. While this is true, we also need to dedicate parts of our limited resources to new ways of working. In such moments as the saying goes, it is urgent to take our time and think long-term and collective impact.

WINGS has a growing body of evidence that proves the worth of investments in ecosystems and their ripple effect in increasing and improving private funding for civil society. Paradoxically, our current participation as a technical partner in USAID’s Powered by the People programme, which is now frozen, is exactly focused on that matter: documenting how grassroots philanthropy ecosystems play a critical role in growing the funding base for social movements around the world, especially domestic and more distributed funding, and how that increases civil society’s local legitimacy and resilience in a context of shrinking civic space.

We hope we will be able to continue this critical work and build even stronger arguments for funders to invest in these ecosystems. Given the urgency and the obvious relevance of such strategies as part of the response, I hope our field will step up and embrace these approaches.

At this critical juncture, philanthropy can go in two different directions: refocus on immediate needs, try to fill the gaps with their individual resources, reduce international involvement and narrow down on domestic issues. That is what I assume a vast number of philanthropies are considering. The other possibility is that, we finally see a move towards collective action, an enabler mindset, investments in ecosystems, greater local/global articulation, and a coming together of the field across boundaries and across borders.

Will inertia make us do more of the same? Will we need to see even more destruction, the vanishing impact of philanthropic programmes because of the external disruptions that will continue to strike, in order to be forced to take collective action and loosen control over direct attributable impact? Or will this finally be a wake-up call to think differently and take collective action?

For those who want to take that path, we’re here to support each other. There is a whole constellation of local, national, regional and global actors that have come together through WINGS. We are ready to ignite collaboration and unlock philanthropy’s potential at all levels of society. We are organised to raise a diverse and inclusive voice for the field and to accelerate investments in philanthropic ecosystems that will unlock more and better resources worldwide. It’s now up to foundations to believe and invest in our field’s collective strength, and to make theirs the saying ‘help yourself if you want to help others’.

This article was first published in Alliance magazine and reprinted here with kind permission from Benjamin Bellegy. Benjamin is executive director at WINGS.

Join our upcoming event, in collaboration with Australian International Development Network (AIDN), Implications of USAID funding freeze, where we will hear from three leaders in international development and philanthropy, both from the USA and Australia, who will share perspectives on the USAID funding freeze.