Filling the USAID gap: How Europe can step up to support democracy

The suspension and slashing of US democracy grants have left a yawning shortfall of approximately $2 billion per year, impacting thousands of civil society organisations and independent media outlets and placing many at risk of closure. Europe has an opportunity to help fill the gap while simultaneously furthering its own interests. But will it rise to the occasion?

Since the Trump administration declared a freeze on federal assistance on January 27, 2025, implementer organisations and local recipients have been scrambling. The executive order, issued a week prior, applies to both new programs of funds that have been authorised and appropriated by Congress and the disbursement of funds already committed under contracts with recipients, many of which have already been spent. While the legality of the executive order is in serious doubt due to recent court decisions, how the administration chooses to implement the rulings is uncertain. Additionally, grey areas create ambiguity, making it unclear whether any democracy-related programmes will survive after the review period. The order did not explicitly cover funding for the National Endowment for Democracy (NED), but the US government blocked the disbursement of its funds and only partially released them in early March.

What is certain is that many organisations have already collapsed, and 83% of USAID’s programmes were cancelled in March.

The impact on global democracy support

The implications of the past six weeks for the democracy support community are enormous. In addition to the loss of funding, the abrupt nature of the freeze, implemented without mitigation measures, has made its impact even more devastating. Trump’s scepticism towards foreign aid was no secret; he had pledged to slash USAID’s budget since his first campaign in 2016, and his firmer control over the Republican party today, as well as his congressional majority, has given him a freer hand. But aid recipients had expected to have more time before drastic measures were enacted. Both the law and US interests indicate that a more gradual and less absolute process would have been merited. The application of the executive order to the disbursement of funds that had already been obligated is a breach of contract that few thought possible, even under this administration.

The rapidity of the freeze meant that the democracy support community could not prepare. USAID workers could not meet with partners, build transition plans, or transfer knowledge to local actors or other aid agencies. Local implementers have been forced to shutter their programmes rather than devise contingency plans, which they would have done had they known such a drastic change was on the horizon. Although advanced notice would not have entirely compensated for the loss of funding, it would have blunted its effect.

For example, safe houses in Thailand, funded by USAID to accommodate opposition politicians from authoritarian Cambodia and Laos, are now being closed, scattering their occupants around Thailand in accommodation without the surveillance cameras and private security they had formerly benefitted from. The Cambodian regime has violently targeted its opponents in Thailand in the past, as recently as February 2025 — a sign of the scale of the risk.

USAID also supported more than 700 nonstate news outlets around the world, and Reporters without Borders has documented some of the fallout among these. An exiled Belarusian outlet said it would not be able to publish after January. A Cameroonian media organisation ceased a reporting project on the upcoming October elections. An exiled Iranian group had to stop all collaboration with its staff. In Ukraine, 9 out of 10 outlets depend on subsidies, and USAID was the primary donor. According to a recent survey, 89% of Ukrainian journalists called the impact of the suspension “significant” or “catastrophic”, threatening many outlets with closure.

The speed of the funding freeze was compounded by its scale. Cancelling all US-funded election programmes, for example, in a country such as Tunisia — once lauded as an Arab Spring success story until the recent undemocratic turn by the ruling party — would dampen turnout, reduce local awareness of abuse, and diminish opportunities for opposition victory. Drastic cuts to US democracy aid means other programmes, such as those fostering independent news sources or labour unions, will not be there to offset the shortfall in mobilisation and information distribution. It means that if one country backslides, without like-minded partners and best practice experience to emulate, civil society in a neighbouring state could falter as well. Both democracy and authoritarianism can have a gravitational pull.

The magnitude is so great that even programmes that do not receive US funding are impacted, either because they are within organisations that have some USAID grants or because their partners are. Much of US civil society ground to a halt in the days after January 27, and now organisations are proceeding with caution due to the possibility of regulatory attacks, the targeting of major foundations, or other autocratic moves from the Trump administration. Overseas, organisations are mourning the departure of respected colleagues and complementary initiatives, which can be highly disruptive in the sometimes small local aid communities.

The slashing of more than $70 billion worth of programming has also led to a massive shrinking of the job market, something that Trump’s coming review of US support for all international organisations is certain to exacerbate. Even if that represents a tiny fraction of the global economy, it is a high percentage of the prospects for people with a particular skills set and expertise. People’s livelihoods were upended at the stroke of the proverbial pen, which has sent massive reverberations throughout the sector.

For example, US funding was supporting NGO monitoring of the Chinese Communist Party (CCP)’s crackdown on minorities, human rights defenders, and lawyers. The work was covert and depended on informal networks connecting individuals in China to activists outside. With this structure, they were both able to expose CCP abuses and indirectly support civil society actors in one of the most repressive and powerful countries in the world. Some of the people working on these programmes were in the US on temporary work visas; without sufficient time to find alternative employment, they now face deportation to China, where they could be targeted by the government. In 2024, US assistance for democracy and rights in China totalled about $5 million.

The fact that dictators from Belarus to El Salvador cheered the dissolution of USAID indicates the impact it was having and the opportunity they now have to tighten their domestic control.

US democracy spending: identifying the gap

The US is the world’s largest single provider of development aid, accounting for approximately 40% of the global total. In the last fiscal year, US foreign assistance spending was about $72 billion, with the majority going towards economic, health, and humanitarian assistance. Despite the large sum, foreign aid makes up just 1% of the US federal budget.

Only 3% of the US foreign aid total goes towards supporting democracy, but that has amounted to an average of $2 billion in each of the past 5 years. In the current fiscal year, FY25, the US Congress approved $2.9 billion for democracy programmes, with an additional $315 million for the National Endowment for Democracy (NED), which is not included in the foreign aid budget. Under the umbrella of democracy, USAID and other US government (USG) agencies have funded programmes on election integrity, civil society, independent media, judicial reform, human rights, and good governance. Funding for press freedom, including internet freedom, has increased substantially in recent years — from $155 million in the fiscal year 2021 to $268 million in the fiscal year 2025. The US Agency for Global Media (USAGM) is also funded separately and encompasses the Voice of America and Radio Free Europe/Radio Liberty, which together provide independent news programming in 63 languages to more than 427 million people worldwide.

USG funding has filled important gaps in the EU’s neighbourhood, bolstering fragile democracies, serving as a lifeline for organisations working in repressive environments, funding emergency services in Ukraine’s war-torn areas, and facilitating new ideas and initiatives. Funding programmes have included $32 million for public interest journalism and digital resilience in Armenia, a country pivoting away from Russia and looking to strengthen its ties with the US and the EU. Moldova, also striving to escape Russia’s influence and on the path to EU membership, received $120 million for civil society, media, and justice support. Importantly, Chisinau’s ongoing judicial vetting process, a prerequisite for EU membership, has benefited from significant USG funding.

US aid has been essential for Ukraine, which was the top recipient of USAID funding in the fiscal year 2024. Since the start of Russia’s war against the country, the United States has significantly bolstered Ukraine’s democracy and governance systems. Besides military support and humanitarian aid, over $5 billion in development assistance has been allocated to strengthen civil society, rebuild institutions, and support democratic reforms. USG-funded programmes have helped Kyiv to implement anti-corruption measures, enhance judicial independence, and empower independent media and investigative journalism, which are crucial for exposing corruption and war crimes. Separately, direct budgetary support has allowed the Ukrainian government to sustain its operations, pay state salaries, and maintain essential public services despite the economic strain of war.

The USG has also supported democratic resilience in seven EU member states. In 2022, USAID restarted its Central Europe Program, providing $35 million in grants for civil society, media, rule of law, and civic engagement in Bulgaria, the Czech Republic, Hungary, Poland, Romania, Slovakia, and Slovenia. The decision to reopen funding, more than 20 years after USAID withdrew from the region, was a reaction to increasing threats to both political rights and civil liberties in the region — even though these countries have been EU members for two decades. The Central Europe Program has focused on countering disinformation, promoting election integrity, fostering civic engagement, and supporting watchdogs to combat corruption. While it has operated on a comparatively small budget, the programme has become crucial in funding innovation for independent outlets and NGOs struggling to maintain operations after the COVID-19 crisis.

Europe’s role in supporting democracy

While the US is the single largest provider of development aid, the EU and European countries together surpass US spending on assistance. In 2023, EU institutions and member states collectively spent $100 billion, making them the largest global provider of development assistance. The UK also spends a significant amount on foreign aid; in 2023, this funding totalled $18 billion. But similar to the US, core democracy support funding, specifically focusing on political rights and civil liberties, is a small share of Europe’s total aid budget: between 2014 and 2020, it has averaged around $4 billion per year. EU institutions, Germany, Sweden, and the UK have been the top providers of democracy aid in Europe.

According to a recent assessment by the European Democracy Hub, much of Europe’s democracy aid allocation is not strategic but represents a mix of historical and geographic ties. The EU provides significant funding in its neighbourhood, including in the Western Balkans, Ukraine, and Moldova, while former colonial powers align their programming with their spheres of interest. Instead of focusing on democratic openings or places where they can make the most impact, country allocations also seem to align with general aid budgets.

Recent funding cuts to foreign aid among European governments will negatively affect democracy support, putting Europe’s global leadership at risk. Among countries that have historically been strong advocates of international development, France has significantly reduced its spending over the past two years, while the UK, Germany, and the Netherlands have announced drastic foreign aid cuts for next year. The Dutch budget available for NGO cooperation will be reduced by more than 70%, with programmes on women’s rights and gender equality being stopped entirely; the UK has announced it will slash its aid budget by 40% and reroute the savings towards defence.

EU institutions have also reoriented some of their funding away from democracy, spending more on security and migration instead. However, the EU does have a major initiative: The Citizens, Equality, Rights, and Values (CERV) fund makes $1.6 billion available in grants between 2021-27 for EU members, the Western Balkans, and Ukraine. The establishment of CERV in 2021 was a significant step forward because it allowed organisations working on democracy inside the EU to apply for funding directly. Unfortunately, the programme appears to be ill-suited for quick responses; in particular, its application process is criticised for being overly burdensome and bureaucratic.

The elimination of US democracy grants, such as the Central Europe programme, is already making its impact felt. According to early estimates, the disappearance of USG funding will lead to a substantial reduction in resources in Central Europe: as little as 10-30% of previous funding levels are expected to be available compared to three years ago, when USAID restarted its programme. In Hungary, which has seen the most significant democratic deterioration in the region, civil society organisations and independent outlets are squeezed from all sides. The drop in funds is exacerbated by a sharp rise in attacks from the government, which has announced it will “sweep” them out. Prime Minister Viktor Orban has accused the EU (as well as the Biden administration) of attempting to topple his government, and Budapest is working on prohibiting foreign funding and banning the annual Pride march.

For recipients of EU grants, the suspension of US funding has led to a compounding of anxiety. Many have not only lost a significant portion of their budgets, but it is unclear whether the elimination of US money disqualifies them from benefiting from EU grants, which typically require co-financing from another source. French NGOs working on emergency support, for example, are estimated to receive 30-40% of their funding from US sources, with another 30-40% from EU funds, and the rest from French sources. The European Commission has reassured organisations that support will continue, but it has clearly stated that the EU cannot fill the gap by itself, and the rules have not yet been formally changed.

The way forward

It is obvious that European entities cannot single-handedly fill the gap left by the suspension, and likely long-term disappearance, of US funds. The EU and European governments face other challenges, from rising far-right support to anaemic economic growth to an emboldened Russia — all problems that the Trump administration is actively making worse. But it is also clear that the weakening and, in some places, potential disappearance of the democracy ecosystem runs counter to the interests of a continent that has benefited tremendously from a US foreign policy that had worked to promote and protect democracy, from the opening of borders to the signing of trade agreements. It is, therefore, firmly in Europe’s interest to strategically save organisations in a mutually advantageous way.

Although some policymakers may be reluctant to increase democracy support at a time where there are so many competing priorities, it would represent a small percentage of governmental budgets. Foreign aid is very economical compared to defence spending. According to calculations by Bloomberg Economics, Europe’s potential defence bill in response to Russia’s war on Ukraine could reach as much as $3 trillion over the next decade.

There is an inherent tension between the strategic thinking needed to generate lasting value from democracy support and the urgency created by the Trump administration’s actions. The sector’s needs also potentially clash with some of the priorities of EU institutions and European governments, raising questions about what Europe should focus on and how swiftly it can act. Yet, the transformation of the US government from a champion of global democracy to a force that is undermining it should clarify the stakes.

Bearing this in mind, below are a few suggestions for where Europe can have the greatest impact through prompt action.

In the short run, European donors should:

Focus on preserving the current ecosystem so that skills, knowledge, and best practices are not lost.

• Donors should make emergency budgets and short-term funding available. Many organisations will disappear within a few months without additional resources, and news of those worst hit continues to emerge. Donors should be prepared to act quickly when they learn of valuable organisations in need.
• Donors can also invest in tools that can help affected organisations come together and share knowledge with each other and donors. This may include secure digital communications and encrypted platforms in some environments.

Divide up responsibilities.

• Private philanthropy can move faster than governments and may be best placed to respond in the short term.
• Meanwhile, European governments can help incentivise the private sector to step in. The current move away from values-driven engagement within private companies risks further funding reductions, and this should be reversed.

In the medium to long run, European donors should:

Focus on the institutions that will best support democracy.

• Although democracy is much more than elections, elections are fundamental to democracy. European donors should consider upcoming national elections and ensure that there are robust oversight mechanisms and independent monitoring in place. Improving election integrity and empowering citizens to participate are crucial for maintaining trust in democratic institutions, and many examples prove that every election is an opportunity for a change of government, no matter how repressive the society.

Concentrate on sectors where it can benefit Europe most.

• The EU is currently working on two initiatives: the European Democracy Shield, which will counter disinformation and foreign interference, and a civil society strategy to reverse shrinking space. The United States has left a particular gap in funding for both independent media and civic space. Stepping up support in these two areas naturally aligns with European priorities.

Look for areas where additional money can multiply impact, and don’t forget the countries and sectors that are hardest hit.

• Countries at a democratic turning point can benefit disproportionately from an influx of aid. When looking beyond Europe, this may mean doing risk-benefit analyses to focus on a few strategic cases.
• Authoritarian-minded governments have been emboldened by Trump’s actions and are moving to restrict space for dissent further. Human rights defenders working in closed spaces and LGBT+ activists operating in hostile environments are disproportionately affected.

Support sustainable funding models.

• Encouraging funding diversification is good policy in the current global environment. The donor-driven funding model has long been criticised, and most aid providers have been moving towards localisation. The cessation of USG funding lays bare the dangers when civil society relies too heavily on one or two funders. Overdependence on foreign funding is also increasingly risky as authoritarian governments are openly moving to restrict such sources.
• In places with little disposable income, pooled funding may be the most viable route to diversification. Crowdfunding and support from local communities are also possible, but they will never be the primary source of income in poorer areas or for work requiring significant resources. But ultimately, local civil society and good-faith government actors will need to develop new models that are less dependent on foreign funding.