The Impact of US Aid Cuts on Lebanon’s Non-Profit Sector

Reeling from back-to-back crises and the most recent Israeli war on the country, Lebanon’s humanitarian and development needs are at an all-time high. 

To make matters worse for the country’s poorest and most vulnerable groups, the United States administration under President Donald Trump has decided to suspend most funding toward development and humanitarian work. The US has always been one of the biggest donors to Lebanon, with the country receiving $644 million USD in 2023 alone.

The decision goes hand-in-hand with political trajectories in other Global North countries, such as the United Kingdom and the Netherlands, to decrease funding for aid. A few weeks ago, the UK government stated that it will reduce aid spending to 0.3% of gross national income in 2027 (the lowest level since 1999).

The Impact on Lebanon

The impact of the US aid cut on Lebanon was immediately noticeable, across a variety of different sectors and particularly on non-profit actors. From laying off staff to moving offices as salaries and rents become financially unsustainable, many organizations had to undergo drastic changes. This includes both big UN entities, which rely on pooled funding from different donors, and small, medium-level organizations, that rely on funding from states that undertook the funding cuts.

USAID, on its part, directly employed around 2,000 individuals in Lebanon, not to mention the thousands of others who worked on projects directly or indirectly funded by the US agency, in addition to thousands of students in private universities.

Lebanon’s education sector was highly affected by the aid cuts, which impacted programs such as the Tomorrow’s Leaders program, part of the Middle East Partnership Initiative (MEPI). This program provided scholarships to around 54 postgraduate students and a substantial number of undergraduates. On a broader level, organizations working on youth and children’s rights, such as Save the Children and the United Nations Children’s Fund (UNICEF), were also heavily impacted by the cuts.

Essential sectors, such as the Water, Hygiene and Sanitation (WaSH) sector, where many of these organizations also operate, were also heavily impacted. 

The US has provided around 20% of the funding received so far for the Lebanon Response Plan (LRP) in 2024 ($329 million USD). The LRP is an integrated humanitarian response plan that brings together the government, the United Nations and non-governmental organizations under a two-year humanitarian-stabilization framework to provide immediate assistance and protection to vulnerable populations. 

The aid cuts also had a severe impact on regular and non-regular staff, who had to face abrupt mass lay-offs. Small organizations and recent start-ups have been hit particularly hard, especially those with already little resources.

“For the last two or three months, our main job has been to look at alternative funding with different international NGOs, mainly from Europe, looking to tweak our offering to fit the different requirements,” explains Ibrahim Jouhari, a consultant and co-owner of Elka, a research and capacity-building initiative launched in 2022.

A Hurtful Yet Necessary Wake-Up Call?

For initiatives that focus on localizing aid, development, and non-profit work and that seek to break away from dependency on Western donors, the aid cuts could represent a hurtful yet necessary wake-up call, a call to break from the current dependency on “Rich North” country funding, and to establish more local sources of self-funding that on one hand provide for the organizations’ operations in a sustainable way, and that on the other provide these actors with independence.

Before Trump’s decision, many organizations already refused to receive funding from the US, or had already made this switch toward self-sustainability, at least partially through hybrid sources of funding. This is not only the case for small, local initiatives, but also ones that have a major national, regional, and international presence such as independent news platforms like Megaphone, which started off as a volunteer-led project and expanded to include 20+ people today.

While Megaphone receives funding through grants from human rights organizations such as the Samir Kassir Foundation, Porticus, and others, the organization has also established a donation box for crowdfunding purposes. The platform allows people to donate on a one-time basis, or periodically as in each month, quarter, or year, and has allowed the organization to raise more than $27,000 through donations alone.

Jibal, an environmental justice organization that works on food sovereignty, education and the creation of alternative economies for the food sector in collaboration with local farmers, is also an organization that refuses to receive funding from the US and that is seeking to expand its crowdfunding portfolio.

During the latest Israeli war on Lebanon, Jibal was among the many organizations that worked on responding to the rising humanitarian needs. Among their efforts, the group sought to support community kitchens in shelters hosting displaced people, where they worked on writing community kitchen guidelines, distribution and other forms of endeavors.

“We’re working on crowdfunding on many levels,” explains Ounsi El Daif, co-founder of Jibal. “Now we’re preparing a more organized campaign and we want to transform it into a membership or yearly crowdfunding”.

El Daif explains that funding cuts were already impacting the non-profit landscape years before the Trump administration’s decision. Multiple events, such as the beginning of the Russian-Ukrainian war, the Israeli war on Gaza, and the escalations in Lebanon, already decimated support for Lebanon.

“Becoming [...] independent from donors is something that we have long dreamed of, and now it’s time”.

While crowdfunding itself is limited in ensuring sustainability of an organization, the type of organization matters in the opening of other viable avenues for fundraising. One model that remains viable and active today is that of social enterprise spin-offs and locally owned cooperatives that are directly tied to an NGO’s mission. 

While no major, prominent non-profit organizations currently use the model in Lebanon, previous experiences proved very successful, such as Dammeh Cooperative, established by and for local feminist groups, migrant domestic workers, queer individuals, and marginalized groups in the country. The coop managed to ensure not only an alternative, self-sustaining space, but was also able to create a community and a relatively safe space for marginalized groups in the country, lasting several years and hosting recurrent meetings before, during, and after the 2019 uprising.

Lessons for the Government

Whether Lebanon’s non-profit sector sees a renewed wave of funding or whether the downward trend will continue remains dependent on a number of factors. However, what is sure is that the country’s recurrent crises, both sectoral and national, highlight the need to break away from a dependency on foreign aid. For the non-profit sector, this could mean either diversifying sources of funding, or developing sizeable self-funding mechanisms.

Such a line of thought also has its applications on a state level in Lebanon as the country continues to rely on sporadic foreign aid initiatives to overcome its back-to-back crisis, from the Paris Conferences to Gulf funding, all the way to deals with international financial institutions such as the World Bank and the International Monetary Fund. 

This logic of operation based on aid dependency leaves unused an arsenal of potential national sources of income. Establishing a more progressive and efficient taxation system could be one avenue, and empowering local agricultural and industrial production could be another.

On one hand, Lebanon continues to overwhelmingly rely on indirect taxation, which overwhelmingly burdens low- and middle-income population groups. Indirect taxation increased from 56% of total tax revenues in 2019 to 76% in 2024, according to the state budget. Meanwhile, wealth taxes and vacant property taxes remain completely absent, despite the potential they hold for improving state income generation and wealth equality in the country.

On the other hand, local production remains continually stifled as a result of political economy decisions favoring rentier economic activity. Large swathes of agricultural land in Lebanon remain either unused or geared toward exportation, instead of local self-sustenance. This is particularly the case with large landowners, with Lebanon observing a notable concentration in land ownership as 1% of landowners control nearly a quarter of the country’s total agricultural land, while 10% control two thirds.

These are some of the many quintessential examples of an operational model that keeps Lebanon in a consistent loop of aid dependency amid evaporating self-sustenance structures. The same general description applies to local NGOs, which urgently need to break away from aid dependency and head toward local, grassroots and human-rights centered ownership and governance.

Moving forward, independence and sustainability remain two key titles for the non-profit sector in Lebanon and the country as a whole in the upcoming years, and their achievement depends not on coincidence, but on the intentional choices that the country’s national and sectoral leaders take.