The world has been reeling from the devastating impact of the United States president Donald Trump’s abrupt suspension of foreign aid since end-January.
While the Trump administration has claimed that it would preserve the US Agency for International Development (USAID) “lifesaving and strategic aid programming”, the dismantling of the world’s biggest donor over the last two months has severely disrupted the lives of people who rely on it for infectious disease treatments, food, clean water and education in conflict-ridden communities.
The 90-day review on all foreign aid – which has resulted in the closure of organisations, staff layoffs and non-payment to service providers – officially lasts until the end of this week. But the US already declared last month that 83 per cent of USAID’s global contracts would be permanently terminated.
In Asia alone, the US disbursed US$12.9 billion worth of aid in 2023, with Southeast and South Asia receiving US$3.8 billion in funding. But the full scope of USAID cuts on the region has been difficult to estimate, given that the US has yet to make a comprehensive list of its terminated programmes publicly available.
A rapid response survey conducted by Asia Philanthropy Circle (APC) of 367 non-profits across the region in February found that 70 per cent were reliant on USAID funding. The network of over 60 philanthropists across 12 markets reported that its partners have lost some US$275 million in funding. Of that amount, they were only confident of replacing US$2 million within a year, citing increased competition for funding and lack of access to new donors as key challenges.
Indonesia, Myanmar and the Philippines were also revealed to be the hardest hit countries in the region, with advocacy, education and climate being the sectors most vulnerable to the funding freeze.
‘Like making a contract with a mafia’
On 28 January, Thailand Clean Air Network (Thailand CAN) was among the thousands of organisations issued a “stop work” order by USAID. This meant that non-profit had to immediately halt its work to minimise expenditures incurred under a grant it was previously promised.
“It felt like we had made a contract with a fly-by-night mafia who just disappeared,” Weenarin Lulitanonda, co-founder of Thailand CAN, told Eco-Business. “I have never in my life dealt with such a situation and I’m sure most people haven’t.”
Last November, Thailand CAN had signed off on all the documents to receive USAID funding for a six-month campaign aimed at raising awareness about the deadly effects of air pollution in Thailand – where air quality frequently reaches dangerous levels in many cities – and to ensure a robust version of the country’s first clean air legislation gets passed.
This comes at a crucial juncture of Thailand CAN’s citizen-led campaigning efforts for the past seven years, which culminated in the first version of the bill being drafted in 2022, prompting the cabinet and other political parties to submit their own versions. Seven drafts are currently being deliberated – one from the cabinet, five from political parties and one from civil society.
The aid freeze came while Thailand CAN was producing a music video based on the true story of the environmental lawyer who drafted the citizen-initiated clean air act at the bedside of her mother, who succumbed to lung cancer.
Last month, Thailand CAN launched its “No Breath to Trade” campaign with a music video to call for a clean air fund that pushes air polluters to be held accountable for the damages caused. Image: Thailand CAN
It was slated to be the first in a series of videos aimed at sharing stories of Thai citizens who have lost loved ones to air pollution and are continuing the fight for the right to breathe clean air. Thailand CAN’s communications lead Kandhana Apirapakon told Eco-Business that the USAID withdrawal meant that it would have insufficient budget to pay for the launch event it had planned and subsequent information campaigns.
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It felt like we had made a contract with a fly-by-night mafia who just disappeared. I have never in my life dealt with such a situation and I’m sure most people haven’t.
Weenarin Lulitanonda, co-founder, Thailand Clean Air Network
The organisation managed to pull through with the music video’s launch last month due to the goodwill of the artistes and other partners it was working with. “We said, sorry we don’t have the money anymore. But they said they understood what we were doing and would continue supporting the campaign, and that we could pay them back when we get the support later,” said Kandhana.
But for its remaining campaign, Thailand CAN is still struggling to look for funders to fill the gap that USAID has left. “For clean air, the funds within Thailand are non-existent, and globally, it is dismal,” said Weenarin. Outdoor air pollution only received 1 per cent of all international development funding from 2018 to 2022, according to the philanthropic initiative Clean Air Fund’s latest annual report.
Without USAID funding, Thailand CAN’s “Don’t Let Go” campaign, which shares stories of those who died prematurely due to air pollution, cannot continue. As of March, it has removed the USAID’s logo from its social media materials. Image: Don’t Let Go Facebook page
RTI International, a US-based non-profit which had been leading the Sustainable Interventions for Biodiversity, Oceans, and Landscapes (SIBOL) initiative to help the Philippine government improve natural resource governance, told Eco-Business that it received a similar order on 27 January, and had its USAID funding officially terminated a month later.
In a written statement to Eco-Business, Joy Anne Marcelo, human resource manager of RTI International, confirmed that SIBOL will be permanently closed, effective 18 April.
SIBOL was a five-year, PHP 1.1 billion (US$19 billion) project launched by the US government in 2020 to support the sustainable management of the Philippines’ natural resource and combat environmental crimes. Image: Blue Motus/USAID
YouthWorks PH, a workforce development initiative that was jointly implemented by the USAID and advocacy group Philippine Business for Education to provide training to out-of-school young Filipinos, declined to comment on how the aid cut has affected the project.
They were the only two non-governmental organisations (NGOs) in the Philippines that formally responded to Eco-Business’ queries on how they had been impacted by the USAID funding freeze.
Eco-Business had also reached out to the Zoological Society of London, Gerry Roxas Foundation, Communities Organised for Resource Allocation Philippines, Green Antz Builders Philippines and The Asia Foundation.
Stepping up, not stepping in to fill a gap
At the AVPN Southeast Asia summit in late February, Naina Subberwal Batra, chief executive of Asia’s largest network of social investors, said that some funders in the region are “feeling a lot of pressure” to step up to fill the gaps left by USAID.
Many will therefore need to contend with “uncomfortable questions,” she said. “If we are stepping up to fill the breach, what is happening to those projects that we had [previously] decided to fund? Who’s going to fund those?”
AVPN’s CEO Naina Subberwal Batra said it is important that Asia steps up in the new global order. “The answer is to act faster, quicker and take more people along with you. Stopping is not an option,” she said. Image: AVPN
ECCA Family Foundation, a philanthropic organisation founded by the family behind global jewellery brand Pandora which primarily operates in Thailand, Denmark and Singapore, has disbursed bridge funding – emergency one-off grants – to existing affected partners, who make up about a tenth of its portfolio.
But the foundation has also allocated an additional budget this year to extend support to non-existing partners via referrals. Up until March, ECCA Family Foundation had been getting requests every week, especially from the humanitarian, migrant services, climate adaptation, gender and advocacy sectors.
Thailand CAN was one of those that had reached out for help. “We don’t have the luxury to work with somebody who will have 20,000 steps for us to manage… So we decided to be very selective in approaching key decision makers who already have an interest in Thailand and understand this issue,” said Weenarin, who knew ECCA Family Foundation has supported another project tackling air pollution from agricultural burning through the use of biochar-based fertiliser.
“What Naina said is correct. We need to step up,” said Carol Liew, managing director of ECCA Family Foundation. “But I want to be very clear – we are not stepping in to fill the gap, because I don’t think it’s as easy as coming in to fill the gap that USAID has left and I don’t think that’s a very smart thing for us to do.”
“It’s really about helping partners re-strategise. Without this USAID funding, what could the programme look like in the long term? We are providing bridge funding for at least this year to buy them time to think about how to diversify their funding sources and rethink their strategies before moving forward,” said Liew.
Liew encouraged philanthropies in the region not to shift their funding to where the gap is, but to consider how they can give more than before and move together as an ecosystem. “Because if you keep shifting to the gap, there is no end to it. There will always be a gap. It’s a zero sum game.”
Liew told Eco-Business that ECCA Family Foundation is also in close discussions with two other foundations to set up a collaborative pooled fund to address the unfolding health crisis at the Thai-Myanmar border in the wake of the recent 7.7 magnitude earthquake. However, this will take time due to the scale of the USAID cuts – which has extended to the disaster response team the US had sent to Myanmar – and the need to coordinate a sustainable approach with local NGOs and the Thai government, beyond just providing interim bridge support, she added.
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If you keep shifting to the gap, there is no end to it. There will always be a gap. It’s a zero sum game.
Carol Liew, managing director, ECCA Family Foundation
But the flexibility and agility of funders also depends on the size of the philanthropic organisation.
Stacey Choe, co-founder of Singapore-based social impact advisory Real Impact Advisors told Eco-Business that the likes of Tanoto Foundation, one of the largest philanthropies in the Asia, deal with much larger grant quantums compared to smaller foundations like ECCA Family Foundation, meaning it needs time to come to a decision strategically.
Founded by Indonesian businessman Sukato Tanoto, the founder and chairman of pulp, paper and palm oil giant Royal Golden Eagle, Tanoto Foundation had partnered USAID on various programmes, including the Partnership to Accelerate Stunting Reduction in Indonesia (PASTI), to reduce childhood stunting. However, it declined to comment on whether it will be continuing with these projects as it is “still in discussions regarding recent developments with USAID”.
Nicky Wilkinson, executive director, Firetree Philanthropy, the philanthropic arm of the Singapore-based Firetree Group, similary said that while private philanthropies like itself can respond a lot faster and take more calculated risks, big institutional philanthropic funders “generally have to move a bit slower because they have more processes in place.”
Firetree Philanthropy, which supports child protection and case management as well as refugees undergoing forced migration in Thailand, Cambodia, Philippines, Malaysia and Singapore, was one of the APC members that helped get the survey assessing the USAID pullout’s impact in Asia off the ground.
Within its own portfolio, Wilkinson said that only 10 per cent have been significantly impacted by the funding freeze thus far. It has seen a spike in cold emails requesting for support up until March, though they have slowed down in the last few weeks.
“Philanthropy does have the capacity to respond, especially certain types, and we also have some learnings from Covid-19,” said Wilkinson. “Of course they’re totally different contexts, but there are some lessons there about how we can step up and give emergency grants, make funding more flexible, reduce reporting requirements, share information and pool funding. These are all practices that emerged during the pandemic.”
“But having said all that, looking at the sheer numbers at the aggregate level… no one philanthropic funder – and certainly not the private philanthropic sector – is going to be able to replace the level of funding,” she said.
“The only bodies that have that kind of money are governments. But the trend among wealthy governments is to cut back. All of Europe is pretty much cutting their aid budgets to pay for more defence spending,” said Wilkinson.
A month into the USAID funding freeze, the United Kingdom (UK) – the world’s fifth largest aid donor – announced a 40 per cent cut in its international aid budget to boost defence spending.
Similarly, France – the third largest international aid donor – has decreased its foreign development aid by 35 per cent, amid far-right allegations that it is wasting taxpayer money.
Since 2024, the Netherlands has also announced foreign aid cuts, and reiterated in February that any programmes it funds must directly benefit national interests by promoting trade, enhancing national security and reducing migration. Starting 2027, the country will implement approximately US$2.5 billion in aid cuts.
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No one philanthropic funder – and certainly not the private philanthropic sector – is going to be able to replace the level of [USAID] funding… The only bodies that have that kind of money are governments. But the trend among wealthy governments is to cut back.
Nicky Wilkinson, executive director, Firetree Philanthropy
Wilkinson believes that some degree of US funding will return, but it will be much less and very transactional, compared to before. “So I suppose there’s an opportunity for some Asian governments, beyond Japan, to step up and do more international giving,” she said.
In 2023, Japan was the largest donor to Southeast Asia, providing a total of US$4.2 billion in development assistance. But unlike USAID’s grants, Japan’s funding was mostly made through loan agreements and largely went into building rail infrastructure.
In light of the decline in development budgets, Ani Dasgupta, president and CEO of research non-profit World Resources Institute (WRI) told Eco-Business that the role of multilateral development banks, like the World Bank and Asian Development Bank, will become more pronounced to leverage declining capital from developed nations more catalytically.
Rethinking aid-reliant funding models
While Trump had repeatedly attempted to cut US development assistance in his first term, few organisations were prepared for the rapid-fire cuts when he got re-elected.
“A lot of people felt that there was some degree of risk with having USAID funding, but the messaging was mixed,” said Wilkinson, citing how former USAID administrator Samantha Power had even announced US$50 million of new funding last October. “So the messaging was quite positive. Still, many within the NGO community said they were not going to apply for that funding. But for many organisations, it’s money on the table that allows you to do what you can do, so you’re going to take it.”
Thailand CAN’s Weenarin similarly shared that the USAID representatives she had been in contact with had seemed quite optimistic that congressional funding support would not get pulled, and even reached out to discuss funding for subsequent projects two days before President Trump took office.
The gutting of USAID has therefore presented a moment of reckoning with the region’s overreliance on aid funding.
“I think most people you speak to would agree that foreign aid as a funding model was long overdue for overhaul. It’s just that nobody had that pressure to do so,” said ECCA Family Foundation’s Liew. “So I actually quite welcome this freeze – I just wished that it had been done in a fashion that allowed people more time to transition.”
For instance, it is common practice to give organisations a “sunset grant” and two years notice ahead of ending a partnership for them to make preparations for the future, said Liew.
While engaging the private sector through innovative funding mechanisms, like social impact bonds or blended finance, could be a way to unlock more funds for its partners, Liew said that strengthening local and community-based funding, while not as scalable, is the “most important thing most people don’t talk about”.
“In times of crisis, the fastest solution is always the closest to the problem,” she said. For instance, ECCA Family Foundation has supported the work of Thai crowdfunding platform Taejai, which played a significant role in harnessing citizens to increase donations to projects during Covid-19, by listing and sharing projects on it.
“Giving a dollar or two sounds very little, but Thailand’s population is not small, so it can be quite significant for people. That also helps our partners have another diversified source of funding,” said Liew.
The foundation has also been experimenting with revolving fund structures in the south of Thailand. Through a one-time injection, it has helped to set up a fund for smallholder farmers and fisherfolk to access interest-free loans to buy certain agricultural inputs, which becomes self-sustaining over time as the borrowed sums get paid back.
Since 2022, ECCA Family Foundation has been supporting a project to launch a regenerative farmers’ cooperation to encourage the permanent adoption of regenerative techniques in Chiang Mai, alongside a debt-reduction programme. Image: Pai Seedlings Foundation
“It’s not a huge number, but it can be quite critical at that point in time for local communities,” said Liew. “They’re not going to solve USAID’s problem, but I do think that the more of these types of financing mechanisms we can invest in, the less we’re going to be reliant on any single big funding source in the world.”
Weenarin similarly pointed out that in challenging times, it has always been the local community members, small businesses and non-profits coming together to support Thailand CAN’s work. “One theme that’s come through quite clearly is that it’s always been the small guys or girls that have helped us. It’s not the deep-pocketed groups, the big corporations or high net worth individuals,” she said.
During the pandemic, for instance, they were only able to gather at least 10,000 physical signatures – a requirement for submitting a citizen-initiated legislation in Thailand – due to the help they got from small business owners, not larger corporations.
“The fact that they too are in a precarious situation financially and were the ones to hand an olive branch to us is incredible,” said Weenarin. “But the most able are honestly free riders. It’s not that they’re not affected by [air pollution].”
“Maybe there is a silver lining to all of this. But the growing pains of getting to that point is very painful, and it is really us small guys that are really being hit.”
With additional reporting from Rhick Lars Albay and Robin Hicks.
