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Infographic for the Cause Approach
Infographic for the Funding Opportunity Approach
Executive Summary
The Issue
In January 2025, the US government initiated a 90-day pause on new foreign aid. This pause was followed by a State Department memo halting all new obligations and existing work, leading to massive USAID staff reductions. Secretary Rubio subsequently announced the termination of most foreign aid programs, aiming to bring the remaining 12% under State Department control. These actions have resulted in immediate disruptions, including increased disease-related deaths, organizational shutdowns, and vital supplies being held up. In the last few months, we have had conversations with donors and foundations who wish to allocate funds in response to the US foreign aid cuts. This document is meant as a handy resource to help donors and foundations think through these issues. We provide two approaches below.
The Cause Approach
If you are a donor with attachments to a specific cause area (such as education, governance, or health) trying to decide whether you should give additional funding today, we suggest the following approach:
- Evaluate the extent of the US's involvement in your chosen sector or cause before the cuts.
- Why? If the US has historically been a significant donor, there's a stronger case for increased need for funding today.
- How? We’ve obtained and cleaned foreign aid data from the US government that shows the size of past investments here. Talking to experts is another helpful strategy.
- Evaluate the likelihood of your cause area worsening in the very short term without immediate funding.
- Why? If you think things within your cause area will deteriorate very quickly, then there’s a stronger case for increased funding today.
- We suggest starting with your intuitions, and building these out through desk research (see our worked example here, built in 3-4 hours), talking to experts, or hiring others to do this work for you (balancing against the size of your potential donation).
- Assess the likelihood of continued support from the US or other sources, including recipient or other governments.
- Why? If others are unlikely to fill this gap, then there is a stronger case for increased funding today.
- How? Form opinions about what donors will fund using news resources, desk research, and tools like The Budget Cuts Tracker.
We have identified, but not yet vetted, several funds designed to fill current gaps or adapt to the present challenge. More information is available in Table 1.
- Development Innovation Ventures (DIV) Emergency Fund
- Foreign Aid Bridge Fund
- GiveWell
- Keep the Lights On
- Rapid Response Fund
The Funding Opportunity Approach
If you are a large donor trying to allocate your giving to a specific set of interventions and have access to resources to inform your decisions, here are three things we think are relatively important. Especially in the current crisis, donors should strive for a "good enough" level of research that allows them to make reasonably informed decisions without excessively depleting their giving capacity.
What is the total impact?
- Whatever outcomes you aim to achieve, we think it’s important to prioritize those with the largest impact.
- We strongly recommend considering "local total impact," for example, keeping in mind that infrastructure from one organization may underpin other initiatives. The long-term sustainability of organizations you are supporting is key.
What is most neglected?
- While philanthropic efforts will not entirely fill the gap in USAID funding, it’s still important to avoid donor coordination problems and support initiatives that receive less attention.
- It may be possible to identify neglected areas by recognizing signals of "crowded" funding landscapes, and considering opportunities other than direct delivery, such as the final stages of research.
Will my funding make a difference?
- Given the far reaching implications of the USAID foreign aid cuts, it’s necessary to check whether a given opportunity is limited by non-financial constraints.
- Funding opportunities that aim to deliver “last-mile” interventions may be most feasible, but you should still check for issues such as unclear ownership of supplies or limited infrastructure.
We’ve identified, but not vetted, some lists of specific funding opportunities that may be helpful in combination with more general funds described above:
- IPA research projects,
- Project Resource Optimization [available beginning March 28],
- Ultra Philanthropy.
Interested in learning more? Read the report
Contributions and acknowledgments
Tom Vargas researched and wrote this report, with Aisling Leow providing supervision, guidance, and support. Special thanks to Marcus Davis for review, and Hannah Bell, Harlan Downs-Tepper, Nic Lyon, Rossa O'Keeffe-O'Donovan, Caitlin Tulloch, and Rickard Vikstrom for comments on earlier versions of this report, in their individual capacity. Thanks also to the additional, unnamed experts who we spoke with to inform this report. Thanks also to Shaan Shaikh for copyediting support, and to Sarina Wong for assisting with the dissemination of the report. An anonymous donor provided funding for this report, but they do not necessarily endorse our conclusions.
Thanks for this helpful framework.
Perhaps I'm stating the obvious, and of course you've got it here already at the start of your "funding opportunity" approach, but whether you are are single cause focused or not I think cost effectiveness (impact is a bit vague for me) has to be front and center and what USAID bridging decisions ride on. I would estimate ?80 percent plus of USAID funding which has been cut is not very cost effective. (Cost effective programs like HIV meds and malaria meds have not yet been completely cut although the future is unclear)
I would even put much of the the Open Phil funded DIV grants in this bracket. We applied for a DIV grant last year and (I'm not just bitter haha and there were good other reasons for our rejection). When we were rejected by the panel there were many issues raised but not even a mention of cost effectiveness. I would bet quite a lot that half the panel that reviewed us didn't consider it important. Looking at DIV grants given last year im pretty dubious about whether cost effectiveness has been deeply considered for half of them.
Whether the org will die if they don't get funded, or the program won't complete, or the study will be stopped halfway through is somewhat immaterial if it's well below a given cost effectiveness bar.
This might sound obvious but I thought it could have come through a little more strongly maybe?
Also I could be a bit wrong here (and it's not super important), but my impression is that the "contributing to funds" approach is more of an EA thing. Its a good approach for this audience, but most outside philanthropists and donors want to fund individual orgs rather than contribute to high impact general funds. I suppose the post is mostly for this audience though so makes sense.
Keep up the good work :)
Hi Nick, Thanks for engaging! I'll engage with one bit of your comment in return :) As you can imagine, cost-effectiveness is very important to us, and I hope that doesn't get lost in our approach. One of the issues we've tried to highlight is that even if your estimate of the number of cost-effective programs funded by the US is accurate, we still won't be able to close all the funding gaps. If that's the case, cost-effectiveness alone might not allow us to substantially narrow down on opportunities. In these situations, we believe it might be important to consider some of the things we've pointed out. For example, how many future opportunities will we lose to run cost-effective programs if some organizations cease to exist? (Maybe a lot!) There might also be a weaker, but plausible, case for supporting organizations implementing work below a certain cost-effectiveness threshold, when we consider some of those implications we outline.
Thanks again for reading!
Thanks Tom - I think this great comment was missing "One of the issues we've tried to highlight is that even if your estimate of the number of cost-effective programs funded by the US is accurate, we still won't be able to close all the funding gaps. If that's the case, cost-effectiveness alone might not allow us to substantially narrow down on opportunities."
It might even be helpful saying something like this near the start of your article? This concept that you were only talking about the most cost-effective programs from the stat wasn't clear to me from the initial article and now I think your framework makes a lot more sense.
I agree there's a plausible case for bridging funding fororgs that aren't as cost-effective, for example if 10% of the remaining funding would help them get over the line with 80% of the impact. I'm sure this can be the situation in rare cases, although I can't think of an obvious example right now. The only risk here though is you might keep a less cost-effective org afloat when it might be better for it to die, preventing the org accessing more money from the donor pool.
Thanks Nick, helpful!