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Funding Fallout: More Shocking Organisations Collapse as DOGE Shuts USAID Pipeline

 

By Reel Coverage Feb 05, 2025

 

 

The recent suspension of U.S. foreign aid by the Trump administration, led by the Department of Government Efficiency (DOGE) under Elon Musk, has sent shockwaves through the global aid sector. This sudden funding freeze has resulted in mass layoffs, operational shutdowns, and long-term economic consequences for organizations that heavily rely on USAID support.

 

Billions in Lost Funding

 

In fiscal year 2023, the U.S. allocated approximately $68 billion in foreign aid, covering disaster relief, health programs, and economic development (AP News). USAID, one of the largest government-funded aid agencies, had an annual budget of about $31 billion. The funding halt means that organizations expecting disbursements are now scrambling for alternative solutions or forced to downsize drastically.

 

Some of the hardest-hit organizations include:

 

Credence Management Solutions & DT Global – These firms manage large-scale development projects and are preparing for significant workforce reductions as contracts are suspended (Politico).

 

International Centre for Diarrhoeal Disease Research, Bangladesh (icddr,b) – Over 1,000 employees have received termination notices due to the sudden halt in USAID funding (The Daily Star).

 

Global Health & Nutrition Programs – USAID-funded health initiatives, including malaria prevention and maternal care, are now facing severe funding gaps, affecting millions of beneficiaries.

 

Education & Agriculture Initiatives – With USAID providing $3.4 billion annually for education programs worldwide, thousands of schools and food security projects are now at risk of collapse. 

 

Immediate & Long-Term Cost Effects

 

The funding freeze has forced organizations to take drastic measures:

 

1. Mass Layoffs & Job Losses – Nonprofits and private firms working on USAID contracts are experiencing widespread job cuts, affecting tens of thousands of employees worldwide.

 

2. Project Cancellations – Critical infrastructure, sanitation, and healthcare projects in developing nations are being shut down due to lack of funding. 

 

3. Disruptions in Aid Supply Chains – Many humanitarian organizations rely on USAID grants to procure medical supplies, food aid, and emergency relief. The funding freeze is causing shortages and delays in aid distribution. 

 

4. Economic Uncertainty for Partner Countries – Governments and NGOs that planned budgets based on USAID funding must now scramble for new financing sources or risk economic instability.

 

Global Fallout & Future Outlook

 

The suspension has far-reaching consequences beyond individual organizations. In developing nations, the loss of USAID support could lead to widespread hunger, disease outbreaks, and economic instability. International aid experts warn that if funding is not restored soon, the world could see an increase in refugee crises, political unrest, and humanitarian disasters.

 

Australian aid workers fear that the funding halt will lead to "unnecessary deaths and suffering" in vulnerable communities. NGOs and advocacy groups are lobbying for a reversal of the decision, but the future remains uncertain. 

 

The Bottom Line 

 

Experts' sentiments remain that the DOGE-led crackdown on USAID funding has already resulted in billions of dollars in economic damage, mass layoffs, and a crisis in global development efforts. Adding that while the move is framed as a push for government efficiency, the long-term costs to humanitarian initiatives, international stability, and economic growth may far outweigh the intended savings.

 

If alternative funding sources or policy reversals do not emerge soon, the world could face one of the largest global aid collapses in history.