In January 2025, the United States (US) administration initiated a sweeping overhaul of foreign aid, closed USAID, consolidating it into the State Department, and froze all aid programmes. By March 2025, the review concluded with the termination of 86% of USAID and 41% of State Department awards, amounting to approximately $80.5 billion in cuts. These decisions dismantled decades of US investment in humanitarian aid, health, education, agriculture, economic development and, most severely, democracy, human rights, governance, and peacebuilding (DRGP) programmes, where 97% of projects were cancelled.
The scale and speed of the cuts have destabilized thousands of organizations worldwide, undermined civil society, weakened independent media, reduced protections for human rights defenders and emboldened authoritarian regimes. The United States, long the largest bilateral democracy donor, has effectively dismantled its global democracy support apparatus in a matter of months. These changes coincide with broader global aid reductions, as several Organization for Economic Co-operation and Development (OECD) donors also announced contractions to their foreign assistance, further widening the funding gap.
The withdrawal of US democracy assistance represents a seismic shift in global development assistance and governance that is having far-reaching consequences for civil society, human rights and democratic institutions the world over. While organizations are demonstrating resilience, the scale of the funding gap to support civic infrastructure is unsustainable without renewed donor commitments. Investing in democracy is not a trade-off, but essential to long-term global stability and sustainable development.
Key Findings:
This report assesses the impact of the foreign aid cuts on the global democracy ecosystem:
- Cuts in numbers. Almost 70% of all US government-funded DRGP awards – more than 1,600 DRGP-related grants worth more than $14 billion-have been terminated, affecting thousands of civil society organizations, independent media outlets, journalists and human rights defenders in more than 120 countries.
- This includes 97% of the number of USAID and 51% of all State Department DRGP awards; all electoral assistance and most funding to independent media have been wiped out.
- Just 10 USAID DRGP governance and human-rights awards appear to have been spared, as well as a number of small State Department awards on free expression, justice, counter-trafficking, anti-corruption, gender-based violence and religious freedom, many of which are set to end soon without an articulated strategy for continuity.
- These cuts are compounded by cutbacks to other tools of US “soft power,” such as Voice of America, which broadcast news in multiple languages in repressive contexts, and the United States Institute of Peace, which supports conflict resolution and violence prevention globally.
- With future U.S. funding for democracy assistance uncertain, even the National Endowment for Democracy’s (NED) $286 million in annual grants to civil society may be at risk (NED Annual Report 2024). Although NED successfully secured its FY 2025 funding through a legal challenge, the outcome of the FY 2026 budget process remains uncertain.
- Nearly half of the surveyed organizations worldwide reported US funding made up 50% or more of their budgets. Cuts have forced widespread layoffs, downsizing, programmes suspensions, and in some cases, closure.
- Broader Ecosystem Effects. The repercussions of the US foreign aid cuts affect democracy and its global ecosystem both directly and indirectly:
- In low-income, fragile, repressive or transitional contexts, the withdrawal of external funding is directly weakening civic infrastructure – both civil society organizations and independent media – that relied heavily on US support to function.
- The erosion of independent media and civil society removes critical voices that verify information and hold governments to account, weakening checks and balances essential to democratic accountability and the integrity of the information ecosystem.
- The cuts have stripped away protections that once shielded vulnerable groups in repressive countries – religious and sexual minorities, and human rights defenders – from persecution and harassment.
- In authoritarian contexts, the cuts have emboldened governments to intensify repression against civil society, while in democratic settings they heighten vulnerability to foreign state-backed disinformation campaigns – most notably Russian propaganda in Europe – that can polarize societies and distort electoral processes.
- As US diplomatic engagement has receded, authoritarian governments seem to have grown more confident in suppressing dissent, facing fewer checks from the international community. Governments have exploited a weakened civil society and diminished US pressure by reintroducing restrictive “foreign agent” laws, further shrinking civic space in El Salvador, Peru and Georgia, among others.
- Together with these interlocking disruptions, these dynamics are impacting the global democratic landscape and risk weakening the broader human rights, governance and peacebuilding ecosystem.
- These shifts may carry longer-term indirect effects. The pullback in foreign assistance could weaken some governments’ ability to deliver basic services or sustain economic opportunities, potentially contributing to eroding public trust in democratic institutions, especially in fragile contexts.
- The weakening of civic infrastructure and independent media is unfolding amid a global democratic decline, a context that is likely to compound these negative trends.
- Resilience Strategies. Civil society organizations are adopting survival tactics such as cost-cutting, reduced programming emergency funding, experimenting with social enterprises and building mutual support networks. However, these efforts fall far short of replacing lost funding.
- Compounding Aid Contractions. Many organizations face parallel cuts from European donors. The OECD is projecting a 9–17% drop in global Official Development Assistance in 2025, intensifying the crisis for democracy-related work.
Recommendations:
The report urges:
- Donors to provide flexible core support, streamline reporting requirements, adopt context-tailored strategies, coordinate funding and programming to enhance effectiveness and avoid duplication, and provide direct grants to local organizations.
- The International Community to identify new democracy champions, including from the Global South to reshape and redefine democracy support, build new multi-stakeholder and inclusive alliances in support of democracy, maintain political pressure to threats in backsliding contexts, and rethink new more horizontal, peer learning-based democracy assistance models.
- Civil Society Organizations to continue diversifying funding sources, more strictly focus on mission-aligned programmes, strengthen collaboration, participate in regional and global networks, reduce costs, leverage digital tools, clearly communicate impact and explore new funding models, such as social enterprises, community foundations, and innovative private-sector partnerships.