Nearly one year ago, the Trump administration shuttered the U.S. Agency for International Development and terminated more than 80 percent of U.S. foreign aid grants and contracts. Since then, other major donors such as the United Kingdom and Germany have also stepped back. The United Nations’ humanitarian funding has been slashed by nearly 40 percent compared to 2024, totaling only $15 billion in 2025. Today, Americans collectively spend more on Halloween candy than tax-funded humanitarian assistance.

Now is a good time to take stock, address the fictions about foreign aid that contributed to its dismantling, and embrace a reform agenda that can truly fix a beleaguered aid system.

Nearly one year ago, the Trump administration shuttered the U.S. Agency for International Development and terminated more than 80 percent of U.S. foreign aid grants and contracts. Since then, other major donors such as the United Kingdom and Germany have also stepped back. The United Nations’ humanitarian funding has been slashed by nearly 40 percent compared to 2024, totaling only $15 billion in 2025. Today, Americans collectively spend more on Halloween candy than tax-funded humanitarian assistance.

Now is a good time to take stock, address the fictions about foreign aid that contributed to its dismantling, and embrace a reform agenda that can truly fix a beleaguered aid system.

The human cost over the last year has been dramatic. The Center for Global Development estimated that up to 1.6 million lives could have been saved if U.S. funding wasn’t cut. The Gates Foundation recently found that, for the first time this century, global child mortality is rising. The Lancet reported that approximately 23 million lives could be lost in 93 low- and middle-income countries by 2030 due to defunding trends.

For the International Rescue Committee (IRC), which I lead, 2 million clients lost services completely, and 6 million suffered service reductions over the past year. More than half of the health facilities that the IRC runs in crisis zones with the U.S. government’s support have closed or lost critical services.

For decades, the United States was an anchor in humanitarian aid, steadying supply chains, underwriting emergency response, and setting global standards. Now, the anchor is gone. Although they cannot compare with Washington’s past support, two recent multibillion-dollar commitments from the United States to the U.N. Office for the Coordination of Humanitarian Affairs and the Global Fund are welcome and have the potential to address growing needs if they are outcome-oriented and focused on delivering results.

This is a real-world demonstration of the Kindleberger Trap, an idea popularized by the late political scientist Joseph S. Nye Jr. and based on the ideas of economist Charles Kindleberger. The concept describes a moment when the world lacks a dominant power with the means and willingness to provide global public goods that benefit everyone.

The shock could not have come at a worse time. With around 60 wars underway in 2025, there is more conflict today than at any point since World War II ended. More than 122 million people have been forcibly displaced, close to 40 million face severe hunger, and some 239 million are in humanitarian need. The world is more dangerous, more fragmented, and more climate-stressed than it was a decade ago—just as the safety net has been pulled away.

The story of the last year reveals a crisis of perception, reform, and focus. A majority of Americans think far too much is spent on foreign aid, with many telling pollsters they believe that a quarter of the federal budget goes overseas. In reality, it is around 1 percent—a figure that nearly nine in 10 Americans say is the right amount.

These perceptions are exacerbated by persistent fictions about what aid does and does not achieve. Many believe that aid funding is wasteful; others believe that it makes no difference.

Yet there is more data today on what works in aid delivery, and how it changes lives, than ever. For instance, global immunization efforts have saved an estimated 154 million lives over the past 50 years. The President’s Emergency Plan for AIDS Relief, spearheaded by the George W. Bush administration, has saved more than 25 million lives alone.

Alongside evidence of the impact of foreign aid, there is new data on cost effectiveness. For example, IRC programs have delivered 24 million vaccine shots to children under the age of five in six war-torn countries for close to $2 a shot. An uninsured parent would pay $75 for the same vaccine at a local pharmacy in New York.

Scrutiny clearly proves that claims of rampant waste and abuses are false. But the political resonance of those fears points to a deeper truth: The system has been too slow to reform.

In recent decades, the geography of poverty has shifted, demanding a new approach to aid and development. In 1990, less than 10 percent of the world’s extreme poor were in fragile and conflict-affected states. Today, more than half live in these states, including in places such as Sudan, where 30 million people are affected by the largest humanitarian crisis in modern history.

Yet only around a quarter of global aid flows to those countries. The IRC’s 20 Emergency Watchlist countries, which account for nearly 90 percent of humanitarian need, receive only 14 percent of official development assistance.

Meanwhile, 44 percent of global aid goes to lower- and upper-middle-income countries for issues such as social and economic infrastructure and climate mitigation. Around 13 percent of donor aid budgets is now spent in rich countries on domestic refugee integration. Health and humanitarian interventions—those with the strongest public support among Americans and the highest impact—receive just 24 percent of total spending.

Aid is not the main driver of development, which is instead supported by factors such as good governance, anti-corruption measures, property rights, and well-functioning markets. Yet when it comes to individuals in crisis-affected states, aid is a literal lifesaver.

This makes the case for reform. The median aid project is worth under $100,000 and tries to do too much with too little. As Rachel Glennerster, president of the Center for Global Development, has argued, aid would go further with radically simpler interventions in far fewer places that need it the most.

The IRC has conducted more than 400 cost-efficiency studies showing the same thing: Proven interventions can scale and save more lives with growing efficiency. Consider the case of malnutrition. Today’s fragmented global aid system leaves nearly 80 percent of children in conflict zones without access to malnutrition treatment. But interventions can improve cost effectiveness by up to 30 percent, allowing the same resources to reach millions more children. Those measures include treating all forms of acute malnutrition with a single product and having community health workers take services to clients, rather than expecting the poorest people to trek across war zones to a clinic.

Innovation has also lagged. Never in history have we had more tools to deliver better results. Predictive forecasting, for instance, enables anticipatory cash assistance before floods hit. The IRC is training artificial intelligence to diagnose infectious diseases. New cold-chain technology allows vaccines to travel farther. Yet only a tiny fraction—less than 1 percent—of the global aid budget is spent on anticipatory action.

Financial innovation is scarce, as well. There has never been a humanitarian debt swap, despite 54 poor countries being classified as “debt distressed,” spending more on debt interest payments than health care. And parametric insurance—funds that are released when a climate disaster trigger is met—is only just taking root.

These are just some of the issues that should be at the heart of a new consensus about how global aid should work. Regardless of the final shape it takes, any reformed system should be centered on accountability for outcomes and not inputs, focused on war-torn states and not spread thin across countries that are on the way up. It should also mobilize new resources for innovation.

We can’t turn back the clock on the abolition of USAID. But we can decide what comes next: further retreat or reform with purpose.