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Ukraine aid groups cut services, scramble for cash after US funding shock
Published by Global Banking & Finance Review®
Posted on January 30, 2025
4 min readLast updated: January 26, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on January 30, 2025
4 min readLast updated: January 26, 2026
Ukrainian aid groups face a funding crisis after a US aid freeze, impacting critical projects and forcing NGOs to seek new funding sources.
By Olena Harmash
KYIV (Reuters) - Some 150 Ukrainian teenagers from northeastern areas near the frontlines of the war with Russia had already packed their bags to travel west for an educational retreat far from the shelling and fighting. Their plans were abruptly cancelled.
Tetiana Kovryga, head of a Ukrainian NGO called GoGlobal, said she had to suspend the trip for the youths from the Sumy and Kharkiv regions after President Donald Trump paused development assistance from the U.S. Agency for International Development.
"It was difficult. Not only for the children. I had a meeting with the team this morning, and I was very emotional; I carefully chose every word," Kovryga told Reuters.
Sitting in a small room lined with boxes full of goods that had been prepared for the cancelled trip, Kovryga added that she had to pause two other projects and was considering downsizing her team of 50 people.
GoGlobal, an educational foundation that focuses on supporting the young in frontline areas where frequent air raid alerts and Russian bombardments disrupt classes, is one of many in Ukraine affected by the review and 90-day freeze on U.S. foreign aid.
After nearly three years of war against Russian forces, cash-strapped Ukraine channels the bulk of state revenues to fund its armed forces and produce and purchase weapons.
Kyiv relies on foreign aid to pay pensions and public sector wages as well as to finance social and humanitarian projects.
Since the start of Russia's full-scale invasion in February 2022, the United States has been a major supplier of both military assistance and development aid.
USAID has provided Ukraine with $2.6 billion in humanitarian aid, $5 billion in development assistance and more than $30 billion in direct budget support, according to the agency.
Many local communities rely on aid and donor support to fund initiatives in education, health, energy, agriculture and infrastructure.
President Volodymyr Zelenskiy has said military assistance was not affected by Trump's foreign aid freeze, but he voiced concern over the funding pause for what he described as "critically important projects" to support the economy, energy, infrastructure, health and veterans.
"I have already given instructions to do some key things with our internal funds and also to talk to Europeans," Zelenskiy said on Wednesday in his daily address to the nation, adding the government would prioritise economic stability and veterans' programmes.
SCRAMBLING FOR NEW FUNDS
Ukrainian government data shows the United States was a development partner in more than 100 projects ranging from investment and exports to sponsoring media, enhancing energy supplies and supporting veterans, young people and scientists.
With Ukraine's budget deficit running at about $38 billion this year, the number of projects the government can support from its own coffers was likely to be limited, according to economic analysts and NGOs.
Reuters spoke to 10 NGO leaders and representatives from across affected projects. They said the abrupt pause in U.S. funding came as a shock to communities exhausted by wartime challenges, and they were scrambling for new sources of funding.
"We have not been able to pay salaries or any expenses since January 24. It was a big shock for our team because it was very unexpected," Ivona Kostina, co-founder of a group called Veteran Hub that supports war veterans and their families.
Veteran Hub briefly suspended its support hotline serving more than 1,300 people every month, and also shut down one of its two centres in the central town of Vinnytsia where 700 people visited monthly for support and advice, Kostina said.
However, the hub's centre in Kyiv and three mobile support groups operating in six regions were still working and the team was pressing on with research and other projects, she added.
The Veteran Hub, along with some other aid groups and independent media outlets Reuters spoke to, has appealed for private and corporate donations to maintain operations.
Kostina said that the response so far had been "overwhelming", allowing the charity to resume its hotline for now.
But community activists worried about the future of groups serving the public if the U.S. aid freeze becomes permanent.
Ukrainian businesses are struggling with rising costs and lower profits, the population is getting poorer amid double-digit inflation and higher taxes. Many people already donate regularly to support the army.
Even if U.S. aid resumes, several NGOs said it would be a challenge to keep their teams at a time of severe staff shortages in Ukraine as the war drains the labour force.
(Reporting by Olena Harmash; Editing by Mike Collett-White and Frances Kerry)
The funding crisis for Ukrainian NGOs has been caused by the abrupt pause in U.S. development assistance, which has left many organizations scrambling for new funds.
The U.S. aid freeze has led to the suspension of various community services, including educational retreats and support hotlines, as organizations struggle to maintain operations without funding.
President Zelenskiy has instructed the government to utilize internal funds and engage with European partners to address the funding challenges posed by the U.S. aid freeze.
The implications of the U.S. funding pause include potential downsizing of teams and limited support for ongoing projects, as many NGOs are already facing severe staff shortages.
The response from the community has been overwhelmingly supportive, with many individuals and businesses stepping up to donate and help maintain operations amidst the funding challenges.
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