📩 A world without grants

DEAR READER,

Daylight savings (in Europe) is back, and while some of us are still adjusting, the EU is once again discussing the idea of ditching it for good. With its six-month presidency of the Council of the EU, Poland has put ending the twice-yearly clock change on the agenda, and the European Commission is on board. But to be fair, this debate pops up every March, only to be forgotten until we wind our clocks back in October. So let's see where this takes us.

Meanwhile, last week I had a chance to meet some of the organisations that have been affected by the US funding freeze. As I walked through their offices, the mood was mixed – there was a lot of uncertainty, but also resilience. Many of these institutions, including independent media, have prioritised their mission over revenue; but as funding disappears, business models and subscriber conversions might have to be brought back to the table. And those who adapt could emerge even stronger. However, it is still too early to talk about the next golden age of independent media.

In this week's expert opinion, we will examining the funding freeze. Adam Reichardt, Editor in Chief of New Eastern Europe, has prepared a deep dive after talking to some of the people who were directly affected.

Enjoy reading this week’s “brief”!

— Giorgi Beroshvili, Editor

Almost immediately after taking office, the new US administration under President Donald Trump began scrutinising government spending both domestically and abroad, with foreign aid being the first target. On January 24th US Secretary of State Marco Rubio suspended all foreign aid managed by the State Department, particularly funding through USAID (US Agency for International Development), for 90 days to review its alignment with the administration’s policies. Some exceptions were made for military and humanitarian aid, but only in select cases. This effectively froze billions of dollars in ongoing projects around the world. The newly established US Department of Government Efficiency (DOGE), led by Elon Musk, continued the review by identifying international aid organizations funded by US sources and implementing sweeping funding cuts.

The funding freeze has had a devastating effect on civil society in Central and Eastern Europe, akin to an earthquake whose aftershocks are still being felt. Reports of suspended projects began appearing in the media, while informal discussions among those working on US-funded initiatives revealed deep uncertainty. Many organizations have been forced to reassess budgets, lay off staff, delay activities or shut down entirely. Concerns over long-term sustainability and democratic resilience continue to mount.

To grasp the scale of the impact, I reached out to my network for first-hand accounts of how the "stop-work" order was affecting the region. The picture that emerged was dire. Hundreds, if not thousands, of livelihoods are at risk and critical initiatives aimed at improving governance, human rights and stability are now in jeopardy. Then, on March 15th, a Saturday, the crisis deepened. The US administration announced severe restrictions on the Voice of America, effectively placing its workforce on administrative leave, while also halting grant funding for Radio Free Europe/Radio Liberty (RFE/RL).

According to USAID STOP-WORK, a website created to track the fallout, over 166,580 jobs have been lost globally as of March 25th. While a court order initially attempted to reverse the USAID funding freeze, an appeals court later overturned the ruling, paving the way for the agency’s dismantling.

Other US-funded soft power institutions, such as the National Endowment for Democracy (NED), the International Republican Institute (IRI), and the National Democratic Institute (NDI), have also faced severe funding cuts or outright shutdowns. IRI and NDI, both of which have been instrumental in supporting democracy and political party development in the region, have closed their offices and laid off their staff. While NED managed to restore partial funding, it has warned grantees not to expect grant payouts, leaving many NGOs in financial limbo. RFE/RL is still awaiting funding and has vowed to pursue legal options.

In Ukraine, where civil society is a pillar of resilience, organizations have lost millions in support overnight, some up to 90 per cent of their funding. Affected initiatives include humanitarian response efforts, recovery programmes for children abducted by Russia, independent media outlets, sociological research and medical aid programs. These funding losses, combined with relentless Russian aggression, pose a severe threat to Ukraine’s ability to continue to defend its sovereignty.

The cuts have also hit Georgia, where an increasingly hostile government has created a difficult environment for civil society. Independent media outlet OC Media, for example, has warned it may have to close due to losing over $250,000 in US funding.

Belarusian opposition groups in exile, which have relied on US-based support to organize and sustain civil society efforts, have also been left stranded, many now face unemployment and financial insecurity and without a home to return to.

The collapse of American soft power institutions, those that have championed democracy and freedom for over 75 years, leaves little room for optimism. As one former senior official from a now-defunded organization told me anonymously: “If there was a vision of what might replace it, one that is more effective and efficient, that might be of comfort. But I don’t believe there is any evidence for that. It’s just burn it all.” In essence the US has abdicated its role as a champion of democracy in this region, and in fact the world. America First appears to mean everyone else last.

This vacuum raises an urgent question: Who will fill the gap left by the US withdrawal? Certainly Russia has no plans to shut down RT or Sputnik; and China will only continue to expand its influence in Africa, Latin America and elsewhere. Authoritarian regimes have celebrated the US retreat, with Russian Foreign Ministry spokesperson Maria Zakharova stating that the USAID was "anything but an aid, development and assistance agency,” and rather “a mechanism for changing regimes, political order [and] state structures” and concluding that “the only thing we take a certain satisfaction from is that everything we said turned out to be true”.

Meanwhile, informal discussions with European Commission officials offer little hope. They acknowledge the EU lacks the financial capacity to replace US funding, especially with defence priorities increasing under the ReArm Europe initiative.

Ultimately, the full impact of these funding withdrawals remains unclear as the dust is still continuing to settle. However, their consequences are already being felt.

— Adam Reichardt, Editor in Chief at New Eastern Europe