President Donald Trump's overhaul of U.S. foreign assistance has significantly impacted the aid and development field, causing financial strain for contractors, with some having to reduce staff and others facing delays in receiving payments
Hours after coming into office on Jan. 20, Trump ordered a sweeping review of almost all U.S. foreign aid and tasked billionaire Elon Musk, who has accused USAID of being a "criminal" organization, with scaling down the agency.
Since then, dozens of USAID staff have been placed on leave, and hundreds of internal contractors have been laid off, while Musk's Department of Government Efficiency has implemented significant changes to the agency, which provides billions of dollars in aid worldwide.
Blanket stop-work orders issued by the State Department have created uncertainty in the aid industry, both domestically and internationally, as contractors typically cover costs upfront and then bill the U.S. government
For Steve Schmida, co-founder of Vermont-based Resonance, a USAID contractor for many years working in areas such as innovation, fisheries conservation and trade and investment, the issue has become an "existential one" after the stop-work orders.
"We had millions of dollars in invoices due to be paid that had been approved by our clients in the U.S. government...We quickly understood that this was a serious threat to our business," Schmida said.
He began laying off and furloughing dozens of his staff as he calculated that about 90 percent of his revenue was about to disappear. Once he is done, all but about a dozen of his nearly 100 U.S.-based employees will have been impacted, he said.
"The last 10 days have been the worst 10 days of my professional life," said Schmida. The funding for some of his projects were granted during the first Trump administration.
An official at a USAID implementing partner, who spoke on condition of anonymity due to fear of retribution, said the company had to furlough hundreds of U.S.-based staff and were owed over $50 million by the U.S. government in invoices from November and December that are past due.
Both the official and Schmida said they might have to go to court over the outstanding balances.
Many USAID staff and contractors noted the rapid timeline of the administration’s personnel changes, which occurred just days before their benefits and health insurance expired.
Rose Zulliger, a senior malaria technical adviser for the President's Malaria Initiative while contracting for USAID, was among those affected. Her contract ended last week with immediate effect, and her benefits expired a few days later, requiring her to secure new insurance before her daughter's scheduled tonsillectomy in three weeks
"It's not just the personal stress of I've lost my job... It's also the reality that global health as we know it, and the work that we do - saving lives and also protecting Americans - has been put on pause, and the trust and relationships that we have worked so hard (for), that are so integral to the U.S. influence in the global sphere, have all been ruptured," Zulliger said.
In fiscal year 2023, the United States disbursed $72 billion of aid worldwide on everything from women's health in conflict zones to access to clean water, HIV/AIDS treatments, energy security and anti-corruption work. It provided 42% of all humanitarian aid tracked by the United Nations in 2024.
The funding, less than 1% of its total budget, is instrumental in Washington's effort to build alliances around the world, reinforce its diplomacy and counter the influence of adversaries such as China and Russia in the developing world.
Esther Zeledon said she and her husband lost 95% of their income as a result of Trump's executive orders targeting foreign assistance and diversity measures. Zeledon worked part-time as an institutional support contractor for USAID and also had other contracts, while her husband, Paul Rivera, was a full-time institutional support contractor for the agency.
They are unsure if they will have to move in with Zeledon's mother and father in a couple months and have been discussing measures such as taking money from their 401(k) retirement plan to meet payments on continuing expenses.
"It's horrible, because we had planned our entire year with our finances... there's so much uncertainty," Zeledon said.
On Monday, dozens of USAID staff, contractors and Democrat lawmakers protested outside the agency's offices in Washington after the staffers were told that the headquarters building would be shut for the day.
Among the crowd was Amanda Satterwhite, whose job is on hold without pay after she received an order last week to cease her job as an independent contractor, where she identified local groups abroad to which USAID could steer assistance rather than U.S.-based organizations in an effort to spend more efficiently.
Satterwhite said she isn't certain how she and her husband will make their mortgage payments and she has already begun looking for a new job, because "no one is sure in what state the aid industry is going to return."
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