2025.03.19 USAID Funding Cuts Podcast Episode 1

Elie Hassenfeld: [00:00:00] Hey, everyone. I'm Elie Hassenfeld, GiveWell's CEO and co-founder, and I'm here with Julie Faller. Today, we're going to talk about how we're responding to the US government aid cuts.

Julie Faller: Hi everyone, I'm Julie. I am a senior program officer here at GiveWell.

Elie Hassenfeld: So what I wanted to cover today is start with some basic context and what's happening, then share how we're approaching and thinking about the current moment, and then talk about what we've actually done. So, let's start just with some basic context, like how big a deal are these US government cuts, and what does it mean for aid?

Julie Faller: So I think the US government cuts, both the short term stoppages and any resulting cuts in the long term, are a very big deal. If you look at the amount that US foreign assistance has contributed specifically to global health, it's a little bit hard to get numbers to add up because of definitional issues, but we [00:01:00] think that US funding has contributed about 30 percent of global assistance for health funding generally. And importantly, that varies a lot by country. So one metric that we've been looking to is basically the amount of foreign aid that countries get for spending, and comparing it to the amount that domestic government spends on health.

Elie Hassenfeld: What's happening with the US cuts? Like what does it mean in practice for things functioning or not functioning as the case may be?

Julie Faller: Yeah, so a big thing that our team has been trying to do since these work stoppages were enacted at the end of January is just trying to understand what is actually happening on the ground. So I have a couple different examples from discussions we've had, and I'm going to keep them general just to avoid calling out particular partners in particular countries.
As one example, we heard of a country government that recently brought together stakeholders in the HIV space and said essentially, we have money for either prevention or treatment, we're not going to be able to do both. And [00:02:00] that country government was saying that they would likely prioritize treatment, so HIV AIDS prevention programs would just be cut.

Elie Hassenfeld: And so just to understand that one. So basically, previously, the US government was a major funder of global HIV AIDS programming. Once the freeze was announced, and it was clear that it wasn't going to be extremely short term, the country had to get together and decide how they would respond to the cuts.
And the level of cut that they had to make in their programming was choosing between prevention and treatment. And they basically said, we're just going to stick with providing ongoing treatment and entirely stop providing any prevention.

Julie Faller: Right.

Elie Hassenfeld: And so that activity was happening in a fairly substantial way and now has had to stop because of the cuts.

Julie Faller: Another example would be just thinking about supply chains. So focusing on ready to use therapeutic foods, which are foods that are given to children who are severely acutely malnourished. Basically, there are certain areas where there are producers of these foods, and then they need to be [00:03:00] shipped all over the globe.
And so when the stop work orders started, that meant that the supply chains were just interrupted wherever they happened to be. And so, that could be ready to use therapeutic foods on boats, in ports, in central warehouses, and domestic governments are struggling to even identify where these commodities might be, let alone figure out how to use them in their treatment programs.

Elie Hassenfeld: So why do the cuts make it hard to identify where the commodities might be? And then if they are identified, make them hard to use? What about the cuts creates those two challenges?

Julie Faller: So there are these systems called ELMIS, Electronic Logistics Management Information Systems, which are basically the systems that let you track, where commodities are, all of those kind of operational details. Those were, in many cases, being run or funded by US dollars and then being run by contractors of the US government. So that means when [00:04:00] those dollars stopped and the contractors had to send everybody home, there were just not people left with access to the systems. And so we've heard about again domestic country governments essentially trying to manage their logistics with paper and pen forms.

Elie Hassenfeld: And then if they're able to identify where the food is, in this case, is there anything that's hard then? You know, if they were able to get to the point where they could find the commodity and utilize it, what makes it hard to then deliver it?

Julie Faller: So I think the implementers' understanding of what they're allowed to do has been changing throughout this period, but when they received orders that said stop work, I think there was understandably concern about whether they could then use commodities that were procured under the program that had been ordered to stop work.

Elie Hassenfeld: I guess what you're saying is that even if they knew where the commodities were, there's a question about whether they're allowed to go and get them and do anything with them [00:05:00] because they're being told they're not allowed to.

Julie Faller: Right. And then later, again, this has changed over this period, but, some programs have gotten permission to begin operating again they don't know if they can pay people to go and get them. And then there's also the question of your counterpart on the other end. Is there anybody who can open the warehouse?

Elie Hassenfeld: I found it really hard to follow all the shifting news about funding. Like there was a pause, a stop work order. There were waivers. Then there were statements that there was a waiver, but the funds weren't flowing. Then there were orders to release funding through a certain date. There were contracts that have been canceled. How do you synthesize all of that, what does that all mean for where we are today?

Julie Faller: I think all of those words that you just laid out there are just symptomatic of the real confusion over this period, and that's part of what's hard, is information's in really short supply, and people aren't sure what their status is. I think what it boils down to now is that [00:06:00] there's a set of programs that have received permission to continue to operate, and they believe they may receive funds, and we're still trying to figure out if those funds are going to actually start flow or not. And there are other programs where they have not received permission.

Elie Hassenfeld: How big a deal is this? We framed it in terms of proportion of our global health aid spending and also global health aid spending with respect to the domestic government spending. Is there some way of speaking quantitatively or qualitatively about the level of change that these cuts represent to the global health world?

Julie Faller: So one thing that's important to distinguish is right now we have this short term disruption period where programs are stopped. And then we have the question of what comes next. What will US foreign assistance look like long term? I think if US foreign assistance and health spending was reduced dramatically in the medium or long term, it would be [00:07:00] really disruptive for the reasons that the stories that I told you laid out. Things like supply chains, funding for salaries, commodities themselves, planning, have really benefited from US foreign assistance health spending.

Elie Hassenfeld: It's a combination of the fact that many programs are delivered directly as a result of the spending, and then also, what I'm taking away from what you're saying is that a lot of the programs, even when they're not directly delivered via US government spending, are in some way reliant on infrastructure supported by the US government. For example, the systems to track supplies.
And so there's also just this huge challenge of potentially reorganizing the health system with different underlying funders, which I guess in a world of really substantial long-term cuts would be necessary.
So how are we, GiveWell and the research team, how are we trying to deal with it?

Julie Faller: So I think there's several different prongs to our approach. The first is [00:08:00] trying to hear from implementing partners about gaps that we think are likely to persist in programs that we might want to fund, both in the really short term and in the longer term. So that's kind of like ground up talking with implementation partners and other stakeholders to figure out what's happening on the ground and what do they think are really pressing.
Secondly, we're trying to do this kind of top down analysis to understand if there were long term cuts in US health spending, especially in programs that we prioritize, what would that imply about levels of need and about where we could be focused shifting our teams potential grant making efforts in the medium and long term.
And then I think the third is just trying to understand how likely it is that there will be these long term cuts, and whether there's any opportunity to inform discussion around what US foreign assistance looks like going forward.

Elie Hassenfeld: Can you just talk a little bit more about the first one [00:09:00] of those to start, the ground up right now? What are we hearing? What are we seeing? What are we doing?

Julie Faller: We have had many, many conversations over the last roughly two months to talk with implementers and understand gaps. And through those conversations, we've identified large potential gaps in funding in the short term.
I think there's two factors that have made us not rush in and fill all of those gaps right away. One of those factors is that, as we just discussed, there's been a lot of confusion over the past two months, and so it's taken some time just to sort out what programs are being affected. Are there actual opportunities to implement? And how are implementing organizations weathering this situation?
And then the second is that if you look at the magnitude of US foreign assistance and health spending, again, it depends on how you slice and dice different definitions, but we've seen figures on the order of $12 billion dollars a year annually in spending. [00:10:00] And these are gaps that are just enormous and far, far outstrip the ability of GiveWell or any private philanthropic actor to actually fund. So I think we want to be really careful about not creating an impression that we are able to step in and fill these gaps, because we're simply not, in terms of order of magnitude.

Elie Hassenfeld: Can we walk through the first one of those first? You said there's a lot of confusion to sort out whether there are opportunities to implement. Could we walk through some broad examples of what kinds of opportunities we're seeing, what is the gap, and then why we're not just saying, oh, it's obvious that these groups need funding immediately, and we should direct it to them so they can keep operating.

Julie Faller: Yeah. So one sort of class of programs is seasonal malaria chemoprevention, which are programs where basically you distribute medicine door to door in a campaign to households where you have very young children who are particularly vulnerable to malaria, and you distribute this medicine [00:11:00] during the rainy season when malaria cases are concentrated.
There are potential gaps here because the President's Malaria Initiative, PMI, is a large funder of these kind of campaigns. And that means that when the stop work orders took effect, and with the subsequent changes in status, there was a lot of uncertainty about whether programs would be able to operate. And so these have been gaps that we've been following along with.
I think the best outcome for this is that the US government money that's been allocated for these programs is used to support these programs. That's what we would like to see. I think absent that, we're considering whether there are opportunities for us to step in to provide funds that would let implementers act if they have permission to carry out these campaigns but just haven't received the funds yet. So we're thinking about what is the right funding structure for that, including considering forgivable loans.
We're also trying to think through, are these implementers that had been contracted to [00:12:00] carry out these campaigns actually able to do so? This matters because the foreign aid freeze has caused widespread layoffs among implementing organizations within this field. And so you might be able to say, yes, we could provide funding for this org to do this small thing, it's just like one component of what it previously did as an organization. But the question is, does it have the organizational capacity to be able to carry that out now? If layoffs happened previously, or if it's facing broader risks of insolvency.
So those are the kinds of due diligence questions that we're asking as we're looking at these campaigns.

Elie Hassenfeld: So let me see if I understand that. So in the case of seasonal malaria chemoprevention. We might observe implementers that were expecting to receive money from the US government to deliver an SMC campaign, and now they're not, first, potentially because of a stop work order, but then later because they literally need the cash to be able to [00:13:00] pay workers to run the program. But reason number one to be at least judicious is we don't want to step in and deliver them cash when there's a pretty good chance that the obstacle is a cash flow issue. So we want to make sure we've structured support for them to address the cash flow issue, but not, give money that may not be necessary in the next couple of months. And so that just requires effort on our side to make sure we've understood the situation and figured out how to provide that type of funding. So that's like issue number one.

Julie Faller: Yeah, I think that's right.

Elie Hassenfeld: And then another kind of issue is the organizations that we work with are more broadly reliant on US government funding across their entire organization. And so there's also some possibility that layoffs or staffing losses occurred. And so there's just a question of practically speaking, even if we were to direct them X dollars for it's specific program, we want to make sure that they're actually able to deliver the program. And there's some risks they're not able to because of the broader [00:14:00] effects of the cuts on them institutionally.

Julie Faller: Yeah, that's right.

Elie Hassenfeld: How are we making progress on addressing these challenges, both in areas that we know well, so malaria is an area we know well. And then there are areas that we have really not focused on at all historically, something like HIV AIDS. I'm just curious, where are we on sorting out the answers to these questions so that we're in a position to direct funding where it's needed?

Julie Faller: So I think we started our potential grant making or funding efforts by focusing on areas that we know relatively well. In looking into those gaps, we're trying to answer the questions that you just laid out about, like can we structure an investment in a way that minimizes risk of crowding out the funds that have already been allocated for it, creating forgivable loans and thinking about our disbursements, making sure that we disperse money when it's needed and not ahead of when it's needed.
On the question of whether these programs can actually be implemented, we're talking with both the potential grantees and other stakeholders in the area who understand the operational complexities to try to figure [00:15:00] out if they can be carried out. So that's on a funding gap by funding gap case.
To try to get a hand on what's happening in areas that we haven't historically funded a lot, we're doing a version of that by talking with stakeholders to try to get the bottom of sense of how do these programs operate and what are the risks with much less US foreign assistance, so just a lot of calls with a lot of people. And then we're also doing a kind of top down where we're looking at, what is the effectiveness of these interventions? What is the burden of the disease that they address? And what kind of good do we think could be done by funding them?

Elie Hassenfeld: What is your guess about the number of grants and amount of funding we will direct in the next couple of months? And I know that this is not something that we know, but how would you guess this would play out if you had to guess today?

Julie Faller: I think in the next couple of months we could direct up to $20 million dollars in funds for those seasonal malaria chemoprevention campaigns that I talked [00:16:00] about that would be across many countries. As I said before, our first hope would be that that money either wouldn't be needed at all because the cash flow issues are resolved, or that it would eventually be repaid.
And I think we could potentially grant around that same amount or a bit less in bed nets, which is another malaria intervention. I think it's likely that we'll fund a number of other grants that are much smaller in other non malaria intervention spaces. And we've got a number of those that we're currently considering.

Elie Hassenfeld: Yeah, maybe just to give like, two or three more examples outside of malaria of other things and rough magnitude.

Julie Faller: So one example is GiveWell has funded Evidence Action to carry out programs designed to prevent the transmission of syphilis from mothers to babies - syphilis can cause stillbirth or neonatal death if babies are born with it, or if their mothers have it. And so this program looks like helping governments use a test that [00:17:00] tests for both HIV and syphilis during prenatal visits, instead of just HIV, and then providing treatment for mothers if they test positive for syphilis.
The reason that these kind of programs could be affected by US government cuts is because PEPFAR, which is a vehicle that directs about $5 billion dollars in US funding toward HIV AIDS program has also been helping support the purchase of these dual tests and training healthcare workers to be able to use those commodities appropriately.
So we have recommended funding for about $150,000 dollars for Evidence Action to be able to take over training healthcare workers on how to use these commodities that have already been procured in partnership with the government of Zambia. And I think it's possible that we could consider other either training or commodity procurement gaps for programs like that.
Another example is in the nutrition space where we're considering funding community management of acute malnutrition programs [00:18:00] and other programs that are often co delivered with that particular program element in humanitarian context, basically context with really high need. It often makes sense to do a bunch of stuff, not just do one kind of thing when you're talking about delivering programs. And so we're looking at potentially stepping in to keep those kinds of programs going for a short period of time as we try to understand if funds are likely to flow in the future, and that would be a couple million dollars.

Elie Hassenfeld: In that program, community management of acute malnutrition, we're talking about young children, under the age of five, who are extremely malnourished, often extremely sick, and this is a program that gives them nutrients and other health care that children in that condition really benefit from.

Julie Faller: Right, and most kids are actually significantly younger than that. I think the modal age is around two. So, very young kids, and yes, often it would be antibiotics, other treatments to help address the fact that when you get that malnourished, your immune system functioning declines a [00:19:00] lot.

Elie Hassenfeld: And so it sounds like in total, you could imagine GiveWell directing $50 million dollars or so more than we had previously expected to direct, because these programs are emergent needs that are particularly time sensitive and particularly cost effective.
I'm wondering, how do you think about this whole situation over the long run. So we think it's fairly likely that we'll direct this additional funding now. Presumably, we'll continue to see, unless things change, hopefully they do, but unless they change, continue to see these very large gaps. And so we're trying to put additional funding to work against those needs today. Curious about your thoughts about how this all looks going forward.

Julie Faller: Yeah, so I think $50 million dollars seems plausible to me. I think we still have really wide uncertainty about that, because of the question of, do funds start flowing for these programs that either have been given permission to operate, or it seems reasonable to think of them as lifesaving or humanitarian [00:20:00] programs, which are the programs that have been prioritized throughout this process.
First best option again is that those programs get permission to operate and that funds start flowing, and then we don't have to fill those urgent gaps. I think even if that happens, those gaps that we're talking about are for money that was already allocated, contracts that already were signed, and so then there's the question of, what happens next year and beyond?
And we're trying to get a sense of how US foreign assistance could look. And I think there's still really wide uncertainty about that as well, but the general sense we're getting is that there's worry about cuts to foreign assistance overall, certainly, and potentially even within these life saving buckets, both from the US and from other governments. For example, European governments that have also been major contributors to these kinds of programs. So I think two years out, if US foreign assistance and European countries' foreign assistance have dropped a lot, then we're potentially looking at very large [00:21:00] gaps, including for programs that we think are really cost effective.
My best guess is that we would be facing even more need in two years than we are right now.

Elie Hassenfeld: Hey, everyone. It's Elie again. Thank you for listening today. I wanted to wrap up with just a few thoughts. First, one of the questions that we have gotten consistently from donors over the past month is: Where should we give now to respond to the present moment?
Our recommendation remains to give to GiveWell's Top Charities or to our All Grants Fund. With the emergence of larger funding gaps, we expect our Top Charities to have cost effective needs into the future, and so we think funds to them will do a great deal of good. The All Grants Fund and donations there gives us the opportunity to respond flexibly to urgent needs as they appear, even if these needs go beyond our set of Top Charities. So [00:22:00] donating to either fund would be much appreciated in the present moment.
This is the first time that we're recording something like this, so if you have any feedback, please share it at info@givewell.org. If there is content that was particularly useful, please let us know. If there are questions we didn't answer, please send them in. And if there's anything you'd like to see in the future, please send it to info, I N F O at givewell.org.
Thank you very much for listening. We really appreciate it.