# US Aid Freeze: 24 Hours In - The System Starts to Break

USAID Freeze
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January 26, 2025

This is Part 2 published on Jan 26th in my ongoing series examining the ongoing US Aid Freeze. For a better understanding, check out the other posts in the series, as I have tried to document this evolving situation:

The theoretical has become brutally real. Within 24 hours of the US State Department Implementing the US President’s Executive Order on Reevaluating and Realigning United States Foreign Aid freezing US foreign aid for 90 days, the global humanitarian system is experiencing an unprecedented shock.

The immediate issuance of FAR 52.242-15 Stop-Work Orders and 2 CFR §700.14 suspensions has paralyzed operations, mandating partners to halt all activities and minimize costs.

As I outlined in my previous post, the United States is the single largest donor to humanitarian aid, contributing a staggering $13.80 billion in 2024, representing 43.04% of the total funding tracked by the UN’s Financial Tracking Service (FTS). This is greater than then next 10 largest donors combined. The sudden cut-off of this funding is not merely a budget adjustment; it’s a seismic event, and we are now seeing the first aftershocks.

I have personally spoken to multiple experts at United Nations agencies and international humanitarian organizations who are reporting that their organizations have received stop-work orders with immediate effect. These are not phased wind-downs, but formal suspension notices for all US-funded programs, instructing organizations to immediately cease spending on any activities supported by US funds. This isn’t hyperbole - it’s what happens when you abruptly cut off 43% of global humanitarian funding.

Immediate Impact: Paralysis and Uncertainty

The consequences of these stop-work orders are immediate and far-reaching. Programs are being forced to shut down mid-implementation. Staff are facing job losses and are being recalled from the field, with reports of aid workers in Juba, South Sudan, struggling to find flights out of the country due to project cancellations and increased demand. In Iraq, Jordan, Afghanistan, Ethiopia, and South Sudan, aid workers have confirmed that their organizations have received these directives. It’s not just implementing partners feeling the strain.

Years of careful work building community trust and support systems are unravelling in hours. In one instance, it has been reported that an organization in Ethiopia is holding meetings to decide whether staff need to be sent home immediately due to the freeze. The situation is particularly dire for national and local NGOs, who, as I highlighted in my earlier analysis, received a combined $1.79 Billion in US funding in 2024, and are most vulnerable to the “subcontracting squeeze” as larger organizations cut back.

Cross-Sector Impact

The freeze’s impact extends far beyond food assistance, creating a ripple effect across crucial humanitarian sectors. Consider this based on FTS numbers:

  • Food Security: 43.2%% of funding comes from the US, 4.2 billion in 2024 out of a total of 10.1 billion.
  • Nutrition: 60% of funding comes from the US, $986,829,563 out of a total of $1,631,240,358
  • Water, Sanitation, and Hygiene (WASH): 38% of funding comes from the US, $536,254,764 in 2024 out of a total of $1,405,472,859
  • Emergency Shelter and Non-Food Items (NFI): 32% of funding comes from the US, $419,676,174 out of a total of $1,319,844,312

These figures paint a grim picture. Essential services like clean water, sanitation, healthcare, and education are all significantly dependent on US funding. The freeze jeopardizes not just immediate survival but also long-term recovery and development efforts.

The “Food Aid” Fallacy

The executive order’s carve-out for “emergency food assistance” is a deceptive loophole that fundamentally misunderstands the multifaceted nature of food security. It creates a dangerous illusion of continued support while, in reality, dismantling crucial programs that address the root causes of hunger. Food security is not simply about providing immediate sustenance; it’s a complex web encompassing access, availability, utilization, and stability of food. It involves livelihoods, agricultural support, market access, and the ability of communities to withstand shocks, as highlighted in the work of organizations like the World Food Programme (WFP). By focusing solely on a narrow definition of “emergency food assistance,” the order ignores this broader context, jeopardizing long-term solutions and undermining the resilience of vulnerable populations. The US provides 54% of the World Food Programme’s budget, amounting to $4.6 billion, this order threatens to undermine a huge amount of their work. The idea that only “food aid” is impacted is misleading. Food security programs, which encompass a wide range of activities beyond direct food distribution, receive a staggering 51% of their funding from the US. This includes agricultural support, livelihood programs, and other interventions crucial for long-term food security, all now at risk.

The MPC Dilemma: Undermining Effective Aid Within an Already Narrow Framework

Within this already limited framework, the executive order’s silence on Multi-Purpose Cash (MPC) is particularly damaging. While it is not known for certain what the definitions of the waiver are, the order ignores the reality that a substantial % of global food assistance in 2024 was delivered through cash or vouchers, not direct food distribution, with agencies such as WFP confirming this. They are the largest provider of humanitarian cash assistance. In 2023 alone, WFP transferred a staggering US$2.9 billion in cash and vouchers across 76 countries, reaching 51.6 million people. In 2024 WFP assisted over 7 million people in Sudan in 2024, with 2 million of those individuals receiving assistance through cash-based transfers (CBT). In Jordan, In December alone, WFP provided monthly food assistance via cash to 310,000 refugees in camps and communities.

This reliance on cash is not arbitrary; it’s the preferred method for recipients, it’s more efficient, and it bolsters local economies. Aid workers in Ukraine confirm that Multi-Purpose Cash (MPC) is the primary tool for addressing food insecurity there, highlighting its widespread use.

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Ukraine: Cash Working Group (CWG) | ReliefWeb Response

MPC, a form of cash-based assistance, exemplifies the effectiveness of this approach. It provides recipients with the flexibility to prioritize their most pressing needs, including food, shelter, healthcare, or education. This flexibility is not only more dignified but also more efficient, allowing aid to reach further and have a greater impact.

The potential exclusion of MPC under the “emergency food assistance” waiver has profound implications:

  • Cost-Inefficiency: As WFP’s own operational structure demonstrates, purchasing and distributing physical food is significantly more expensive than providing cash transfers. Shifting away from MPC will drastically reduce the number of beneficiaries who can be reached, meaning fewer people get the help they desperately need.
  • Loss of Agency and Dignity: Millions who rely on cash, including MPC, to purchase food and meet their basic needs will be stripped of their agency and dignity. The abrupt shift to in-kind food distribution, even if logistically feasible, removes their ability to choose what they need most, forcing them into a passive recipient role. They face not a “choice,” but a complete disruption of the support systems they depend on, with no say in the matter.
  • Market Destabilization: The sudden withdrawal of cash programs, particularly MPC, risks destabilizing markets that have adapted to this form of assistance, harming local economies that benefit from the injection of cash, a point also underscored by WFP’s data on supporting smallholder farmers.
  • Uncertainty and Anxiety: Communities accustomed to predictable cash assistance, often through MPC, are left in limbo, unsure if they qualify under the vague “emergency food assistance” definition, creating widespread fear and anxiety.

The “food aid” exception, particularly with its ambiguity surrounding MPC, offers no real solution. It’s a fallacy that masks the devastating impact of this funding freeze on proven, effective mechanisms that address not just immediate hunger but also the underlying causes of food insecurity. The lack of clarity is not just an oversight; it’s a direct threat to the lives and well-being of millions who depend on these programs, and a significant step backward in the global fight against hunger. The abrupt removal of MPC support will have immediate and devastating consequences for those who rely on it, leaving them with no viable alternatives in the face of this sudden policy shift.

A Logistical Impossibility

The notion of suddenly shifting from established cash-based assistance to direct food distribution is not just difficult; it’s a logistical impossibility in the given timeframe. It represents not merely a change in tactics, but the dismantling of functional, efficient systems in a desperate attempt to erect entirely new, unworkable ones from scratch, all while the needs of vulnerable populations remain unmet. It’s not simply about handing out food instead of cash; it requires a complete overhaul of existing infrastructure, a task akin to rebuilding an entire supply chain network overnight. Consider the monumental challenges:

  • Warehousing: Securing sufficient warehouse space that is currently either non-existent or already in use for other purposes. This would require rapid procurement and setup in potentially insecure or hard-to-reach areas.
  • Supply Chains: Establishing entirely new supply chains capable of procuring, transporting, and storing massive quantities of food, often in challenging environments.
  • Staff Retraining: Retraining staff accustomed to cash programming to manage the complex logistics of food procurement, storage, handling, and distribution, a vastly different skill set. This also includes hiring and training additional staff to deal with the increased workload.
  • Government Agreements: Negotiating new agreements with governments to allow for the importation, transportation, and distribution of food aid, navigating complex legal and bureaucratic hurdles.
  • Security Protocols: Developing and implementing new security protocols to safeguard food convoys and distribution sites, which could become targets in conflict zones.
  • Beneficiary Agreements: Establishing completely new systems and agreements for registering and verifying beneficiaries for in-kind food aid, a time-consuming process.

Even under ideal circumstances, the largest and most experienced organizations would need a minimum of 3-4 months to execute such a transition. In conflict zones or complex emergencies, like Ukraine, this timeframe extends to 6 months or more. Expecting this to happen overnight, as a result of the funding freeze, is simply unrealistic and will inevitably lead to gaps in aid delivery, putting lives at risk.

Unanswered Questions and Mounting Dread

The executive order’s vagueness fuels the crisis, leaving critical questions unanswered and amplifying the sense of dread within the humanitarian sector. The lack of clarity is not merely an oversight; it’s a source of profound instability for organizations and the people they serve.

  • The Fate of MPC: Does humanitarian Multi-Purpose Cash (MPC), often primarily used for food, qualify as “emergency food assistance” under the waiver? The silence on this is deafening.
  • Integrated Programs Dismantled?: What happens to integrated programs that combine food assistance with other vital support, such as healthcare, shelter, or education? Are these life-saving programs now on the chopping block?
  • Duty of Care Abandoned?: How can organizations uphold their duty of care to staff when faced with abrupt program shutdowns and potential layoffs? The human cost extends beyond beneficiaries.
  • Years of Investment Lost?: What becomes of the infrastructure, partnerships, and local expertise built over years of investment in cash-based programming? Is this progress to be simply discarded?
  • Survival of Local Partners?: How will the most vulnerable local organizations, already operating on razor-thin margins, survive this sudden funding shock? Will they be forced to shut down, leaving a void in service provision?

These unanswered questions create a climate of fear and uncertainty, paralyzing organizations and jeopardizing the lives of millions who depend on humanitarian aid. The ambiguity is not just frustrating; it’s actively harmful.

The Next 90 Days: A Precipice

The next three months are not just important; they are decisive. The humanitarian sector stands on the precipice of a catastrophe, and the actions taken in this short window will determine the fate of millions. Whether we can mitigate the damage caused by this freeze, or whether it will lead to devastating outcomes, hinges on three critical factors:

  • Immediate and Unambiguous Clarification of the Waiver: The US government must immediately and clearly define the scope of the “emergency food assistance” waiver. Will it include cash and vouchers, the most efficient and dignified form of aid? How will integrated programs, providing a lifeline of multiple services, be treated? What criteria will be used to define “emergency” status, and who decides? This clarity is not optional; it is essential for any semblance of planning.
  • Organizational Survival and Staff Safety: Organizations are facing an existential crisis. Can they maintain core operations despite the funding freeze, or will they be forced to make devastating cuts? What happens to specialized programs that fall outside the narrow definition of “emergency food assistance,” even if they are life-saving? How can organizations ensure the safety and well-being of their staff during these rapid and chaotic shutdowns? The ability of agencies to weather this storm is paramount.
  • Systemic Adaptation and Global Response: Can the international community, including other donor nations and private foundations, step up to fill the immense void left by the US? How quickly can alternative funding streams be secured and new delivery systems be created, if at all? What will become of the intricate coordination mechanisms built around existing US-funded structures? The global response in these next 90 days will determine whether the humanitarian system can adapt or whether it will crumble.

The clock is ticking. These next three months will define the humanitarian landscape for years to come. Failure is not an option.

The Unfolding Catastrophe: A System on the Brink

This crisis is not simply about a budget shortfall; it’s about the systematic dismantling of a complex, interconnected humanitarian system, painstakingly built over years. The damage inflicted by this abrupt freeze goes far beyond immediate program closures. Even if funding were miraculously restored in 90 days, the erosion of trust, the loss of skilled staff, and the crippling of organizational capacity will take years, if not decades, to repair. The humanitarian community faces a horrific dilemma: gamble on maintaining programs with no guarantee of future funding, or execute immediate shutdowns, both of which guarantee severe humanitarian consequences.

The crisis is not on the horizon; it is here and now. We are witnessing the real-time unravelling of a vital safety net for millions of the world’s most vulnerable people. The only question that remains is the scale of the devastation we will allow to unfold.

This analysis is grounded in direct conversations with aid workers on the front lines and reports from humanitarian organizations operating across multiple countries and regions. While specific organizations and locations have been withheld for security and confidentiality, the message is clear and consistent: the situation is dire.

We cannot afford to stand idly by. Urgent and decisive action is needed from all corners. The international community, including other donor nations, foundations, and private sector actors, must step up and mobilize resources to fill the gaping void left by the US. The US government, in particular, must immediately address the crippling ambiguity surrounding the “emergency food assistance” waiver and the devastating impact its actions are having on life-saving programs globally. We must collectively prioritize the needs of the most vulnerable and ensure the continuity of assistance. The time for handwringing is over. We must act now to avert a full-blown humanitarian catastrophe.

#HumanitarianAid #AidFreeze #HumanitarianCrisis

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