Shifting Power: The Next Phase of U.S. Foreign Assistance

Commentary by Hadeil Ali and Andrew Friedman

Published October 7, 2025

This analysis is part one of a three-part series covering the need and urgency to center rightsholders in the future of U.S. foreign assistance. In a moment of tremendous influx, these commentaries offer analysis and recommendations for a new model rooted in local consultation and input from those most impacted by foreign assistance.

Introduction

The beginning of the second Trump administration rapidly entailed cuts to U.S. foreign assistance, including the dismantling of the U.S. Agency for International Development (USAID). The administration cited budgetary and programmatic inefficiencies, the spread of a "woke" agenda, and the lack of return on investment to U.S. strategic interests. In announcing the dissolution of USAID, Secretary of State Marco Rubio described that the administration's goal was to make "America safer, stronger, and more prosperous." This rollback is not unique to the United States. Other major Western donors have decreased their official development assistance (ODA) in favor of other priorities.

Traditional recipients of U.S. foreign assistance have not stood back and waited for a return to large-scale foreign assistance. Instead, they have worked to imagine what a post-foreign assistance world could look like. "We are called to build systems that do more than respond to crises-we must build systems that generate resilience, produce equity, and amplify dignity." These are the words of President John Dramani Mahama at the historic Africa Health Sovereignty Summit in Accra this past June. While the comment was intended to specifically address the need for Africa to drive the best vision for its own health ecosystem, the underlying sentiment is the need for a new model that is equitable, just, and sustainable.

For decades, the U.S. foreign assistance ecosystem has suffered deep structural critiques from the design of its programs to the efficiency of the overall model and the resistance to a more local agenda. The recent USAID closure and international drawback of ODA have injected new urgency into a conversation around the inefficiencies of the previous model from both Western and Global South countries. President Trump's U.S.-Africa policy approach, rooted in "trade, not aid," has been framed through peace, stability, and mutual prosperity. This framing has resonated with some across the Global South who have perceived the aid and development structure historically as extractive and colonial.

Areas of Criticism

• Colonial Power Dynamics: International nongovernmental organizations (NGOs) and donor agencies have often designed and implemented programs without genuine community consultation, missing key opportunities to ensure a localized lens. While this issue can be attributed to an operational structure, the real question is whether organizations have the full intent and willingness to shift the power structures. David Beasly, the former executive director of the World Food Programme (WFP), has said that the success of aid programs and institutions like WFP depends on their not existing anymore. The challenge is whether these entities are designed to address the root causes and end the cycle of continuous aid.

• Poorly Defined and Implemented Localized Agenda: U.S. commitments on localization have spanned administrations of both parties. Locally led development was an "underlying principle strongly reflected in the Bush administration's creation of the Millennium Challenge Corporation (MCC) and the President's Emergency Program for AIDS Relief (PEPFAR), even though it was not codified or articulated as a stand-alone policy by the administration." Subsequent administrations have been far more explicit in their commitments, with the Obama administration setting a 30 percent goal, the Biden administration setting a 25 percent goal that would balloon to 50 percent by 2030, and the first Trump administration pioneering the "journey to self-reliance" that worked with local partners from government, civil society and the private sector to reduce dependency on U.S. assistance and improve its capacity to "solve its own development challenges." There have also been major international efforts, including the Paris Declaration on Aid Effectiveness and the Grand Bargain agreement to adopt a locally led development agenda, but progress has been limited.

  Despite these efforts, only 2.1 percent of donor funds currently reach local organizations directly or indirectly. The limited progress can be attributed to several factors. What is considered a local actor has often been defined by Western donors and entities, which prevents an inclusive and holistic approach. The challenge is not just in the definitions, but also in the accountability structures. Typically, aid bureaucracies are accountable to donor governments for the usage of taxpayer money, not to the recipient communities, creating a deep imbalance of power. The resistance to localization is also rooted at times in the framing of local actors as corrupt and incapable and international or Western organizations as efficient and capable, creating a false dichotomy of where the knowledge and capabilities sit.

• Bureaucratic Inefficiencies and Complexities: Foreign assistance programs have been criticized for having too many components, objectives, and stakeholders, making them hard to implement and evaluate. From a budgetary standpoint, USAID and other similar organizations have come under attack for the overhead and indirect costs. USAID's implementing partners can charge 30-50 percent of budgets as overhead. The high operational costs of international operations-including the salaries and benefits of expatriate staff-have undermined cost-effectiveness and perceptions of value. Global studies have suggested that local organizations could deliver programming that is 32 percent more cost-efficient than international organizations that bring large overhead and salary costs. This issue has been used to discredit development institutions and highlight how much Western entities benefit at the expense of resources reaching the most vulnerable. The story is a nuanced one, but what remains true is the opportunity to build a leaner and more efficient system.

While it came at the expense of institutional dismantling, budget cuts, resource depletion, and the rapid and chaotic nature led to untold pain, including deaths, this moment creates an opportunity to view aid differently and consider aid recipients as true partners with vision, priorities, and agency.

This moment of tremendous flux creates an existential question for development practitioners. That is, will the same model move forward, content to do "less with less," or will a new model take hold that aims to maximize the available resources through a new approach? While the authors would posit the importance of the latter, either effort requires considerable consultation and input from those most impacted by foreign assistance.

Less with Less

The impacts of U.S. foreign assistance cuts were immediately felt; however, the long-term impacts are still taking shape. Recent survey data from the International Foundation for Electoral Systems puts a fine point on the current and future gap. Of the civil society organizations surveyed, 87 percent had already been able to find some new source of funding; however, only 5 percent reported that the funding was able to fill the gap. More than a third of the organizations surveyed did not believe they would be able to provide the same services two to three years down the line. Further polling from Accountability Lab has more than half of respondents have laid off employees, making the same level of work difficult to envision, if not untenable. In short, no new funding stream is coming to fill the hole left by U.S. retrenchment.

That reality, where less work is feasible, requires prioritization. When not all issues can be addressed, it is necessary to determine which issues will take precedence. The realities of prioritization have always been a complex element of international development. Mixed constituencies, including the populations of donor states, and various industries and ecosystems of implementing nonprofits, companies, consultants, and government agencies, muddle the needs, demands, and priorities of impacted populations. This issue is far starker when the total funding is both far smaller and far less predictable.

A renewed effort to center the development priorities of local groups and host states protects this low and unpredictable funding. To start with, it improves development outcomes where they are most needed, in areas local populations understand to be the most impactful. Additionally, they are protected against foreign assistance's unpredictable future because programming that addresses local priorities is the most likely to be taken up by host governments if assistance funding should falter. While a large development project whose selection and design were driven by international consultants may be discontinued if donor country funding priorities change, smaller projects that are asked for and codesigned with local populations are far more likely to be prioritized and funded locally should international funding fall away.

In one representative example, USAID and Ghana worked with 10 representatives of the Ghanaian government to fund, pilot, and design a case management system that would improve the efficiency of the Ghanaian judiciary. The system was not only needed, with previous iterations of Ghanaian court management done in an inefficient, analog manner, but was lauded by individuals affiliated with the Ghanaian courts. When the program ended, the Ghanaian government took over management of the system, continuing its important work.

New Model

It is outside the scope of this article to suggest what a new model for foreign assistance might look like. Many discussions and research efforts are currently ongoing to build and develop capabilities that improve the lives of individuals across the globe through ODA, remittances, private sector intervention, and others. However, the vision of a new model necessarily envisions improved outcomes or greater return on investment. Given trends across the globe, the likely reality is that ODA will not return to previous highs for the foreseeable future. That means that any new model would likely have less funding than previous iterations of foreign assistance delivery.

Taken together, this asks for improved results despite a smaller budget. In contrast to the "less for less" reality above, a new model, in whatever its form, would ask for at least "the same for less" or, more likely, "more for less." This cannot be accomplished using the same approaches as before.

Despite the challenges outlined above, localization remains one of the most effective means for improving efficiency and development outcomes. As mentioned previously, it is estimated that funneling foreign assistance through local organizations is 32 percent more efficient than utilizing international NGOs. Another analysis estimates that "redirecting emergency aid through local organizations, such as local churches, can cut costs by half and produce better results."

Previous efforts have failed in part because they have focused on shifting funding, not shifting power and decisionmaking. The strategy determinations have still largely been made in donor countries. As one analyst described, "it is about what they are willing to give away, and when, and on what terms." Without an agenda that truly takes into account the needs and priorities of the most impacted populations, the localization agenda will continue to be rife with inefficiencies and redundancies, as well as significant administrative burdens, all of which stand in the way of full realization of the savings and efficiencies that could come through large-scale localization. Whether the goal is improved prioritization or the greater efficiency of localization, local actors should be a part of planning from the start and at all stages.

Hadeil Ali is the chief of staff of the Global Development Department at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Andrew Friedman is a senior fellow in the Human Rights Initiative at CSIS.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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