A new survey by the EU SEE network has revealed that the US funding freeze is severely impacting civil society worldwide, with 67% of surveyed organisations directly affected and 40% reporting budget losses of up to 50%.
This sudden halt in funding is disrupting human rights, democracy, gender equality and health programmes, forcing organisations to cut services, lay off staff, and, in some cases, close their doors entirely.
“Across the world, the immense contributions of civil society to democracy, the rule of law, good governance, policy making and in advancing the rights of excluded voices continue to be undermined by actions that constrain their enabling environment. The time is now for joint action with civil society to push back on these restrictions by advocating for open spaces and progressive laws that promote and protect rights for all,” says David Kode, Global Programme Manager EU SEE.
The Cost of the Freeze: Key Findings
- Severe budget cuts – 40% of affected CSOs have now reported losing up to half of their funding thus significantly reducing their ability to operate.
- Political & media backlash – In Nigeria, Indonesia, and Pakistan, for instance, CSOs face increasing scrutiny, misinformation, negative narratives, and a restrictive legal and regulatory framework, further threatening their ability to function.
- Human rights, democracy, gender equality and health programmes are bearing the brunt of the crisis.
- Uncertain future – Several organisations lack alternative funding sources thereby putting their long-term sustainability at risk.
“The cuts come at a time where funding is already limited a further decrease is to be expected. This is a dangerous precedent. Without urgent intervention, the crisis will deepen, leaving millions without access to vital services and advocacy,” says Sarah Strack, Forus Director.
A message echoed by Oluseyi Oyebisi, Executive Director of the Nigeria Network of NGOs: “We are seeing a dangerous trend. The funding freeze is not just shutting down programs—it is also undermining civil society.”
A Crisis Unfolding: Who is Being Affected?
Discover the EU SEE alerts to monitor the effects in real-time.
Nigeria: Misinformation about USAID funding has led to political investigations into CSOs, with authorities questioning organizations’ legitimacy. This has fueled public distrust and increased the risk of new anti-NGO legislation.
Indonesia: With USAID funding halted, CSOs have been forced to suspend governance, Indigenous rights and social welfare programmes. Many fear a democratic backsliding if the freeze is not lifted.
Pakistan: The funding freeze has emboldened critics of foreign-funded NGOs, resulting in public defamation campaigns and increased government restrictions on civil society.
Honduras: Health programsme, including HIV/AIDS treatment and maternal healthcare, are facing severe funding gaps, putting vulnerable populations further at risk.
Philippines & Argentina: While these countries are less reliant on USAID funding, political narratives and scrutiny toward CSOs are increasing, further weakening civic space.
Myanmar: The grants cut severely impact work covered included programmes on conflict-related sexual violence, Transnational Repression, and ASEAN Advocacy. The funding cuts are causing huge shortages and closure of projects providing medical and subsistence support to the most vulnerable communities inside the country and along the border.
Malaysia: This USAID funding cut has negative impacted local NGOs, INGOs or even government and cancelled all activities which support the people or community such as health, agriculture, education and good governance projects.
What Needs to Be Done?
The EU SEE and its partners are calling for immediate action to mitigate the crisis and this action includes but is not limited to the following:
- Emergency bridge funding – Governments and donors must step up to provide short-term financial relief to stabilize affected organizations.
- Flexible funding mechanisms – Granting bodies should allow greater flexibility in how CSOs use existing funds to cover operational costs.
- Stronger advocacy & communication – Civil society must counter misinformation and anti-NGO narratives, ensuring the public understands the value of their work.
- Diversified funding sources – Organizations must expand their donor base to prevent reliance on a single funding source.