Foreign Aid: Sustaining U.S. Investments Overseas

The U.S. government is a world leader in foreign aid contributions; and its voice, support, and convening power are essential to global peace and security. The often cited “3Ds” of U.S. foreign policy—namely diplomacy, development, and defense—highlight the broad aims of U.S. foreign assistance as well as the centrality of aid for development purposes. Foreign aid seeks to support people in the world’s poorest nations through the interventions of NGOs and other actors, which aim to reduce poverty, improve governance, and expand access to education and health care. Concurrently, U.S. foreign aid is deployed to promote American national security, commercial interests, and democratic ideals.

The U.S. is the world’s largest foreign aid donor, providing nearly a quarter of total official development assistance. In FY2015, U.S. foreign assistance was estimated at $48.57 billion, or 1.3% of the total federal budget authority. A percentage breakdown of this total reveals that 43% of this assistance was utilized for bilateral economic development programs; 35% went to military aid and non-military security assistance; 16% to humanitarian activities conducted though NGOs and other partners; and 6% to support the work of multilateral institutions. The U.S. uses a variety of mechanisms to provide its assistance—including cash transfers; infrastructure building; disbursal of commodities and equipment; and other forms of technical assistance.

U.S. spending for development aid has significantly increased in recent years in an attempt to meet the challenges of a globalized world facing instability in various regions. Much of this increase has gone to global health programs fighting disease; security-related assistance to promote stability and combat the threat of terror; and humanitarian aid to address the critical needs arising from man-made and natural disasters. When adjusted for inflation, U.S. foreign assistance funding over the previous decade is the highest it has been since the post-World War II era.  

In terms of the national and regional focus of U.S. foreign assistance in FY2015, allies, partners, and countries in conflict comprised the top five aid recipients, including: Afghanistan, Israel, Iraq, Egypt, and Jordan. Regionally, Africa was the top U.S. aid recipient in FY2015 drawing 32% of assistance, with the Near East garnering 31% and South and Central Asia receiving 23%.

Sustained vigilance should be maintained regarding the assumptions, priorities, and funding levels of U.S. foreign aid with global crises such as conflict, climate change, pandemics, and displacement continuing to ebb and flow. As a world leader, the U.S. cannot afford to divest—even in part—from its support of improved health, education, poverty reduction, and improved governance programs. Continued active partnerships with U.S. civil society actors and multilateral institutions which support these ends is also critical.


InterAction Recognizes

  • U.S. foreign aid is a critical component of U.S. foreign policy. Though foreign policy analysts forecast the rise of emerging national powers and the advent of a multi-polar world, the U.S. remains the indispensable nation to lead global efforts to address the greatest challenges facing humanity. Whether it is humanitarian emergencies, climate change, security, or global health, the U.S. will be called upon as a central actor in the search for resolutions. Maintaining this position and expanding U.S. global partnerships will largely depend on sound foreign policy and effective utilization of foreign assistance.

  • The importance and persistence of the U.S. government’s foreign assistance reform agenda. This includes key aid reform initiatives such as: the Presidential Policy Study Directive on Global Development (PPD); the Quadrennial Diplomacy and Development Review (QDDR); the U.S. Agency for International Development’s reform agenda USAID FORWARD; and the passage of the Foreign Aid Transparency and Accountability Act with bipartisan support.  

  • The NGO sector is concerned by the continued use of Overseas Contingency Operations (OCO) funds to replace base funding for development assistance. While poverty-focused international development and humanitarian funding for FY2016 reached adequate levels, the practice of replacing base funds with OCO funding exposes critical poverty focused programming to future cuts should OCO funds not be available. In recent years, the NGO sector has urged Congress to move OCO funding into the base such as: International Disaster Assistance (IDA), Migration and Refugee Assistance (MRA), and Contributions for International Peacekeeping (CIPA) accounts. Shifting account funding in this manner would help protect life-saving U.S. investments in development and humanitarian assistance overseas, while also benefitting America’s economy and national security.  


Upcoming Opportunities

  • Engagement and advocacy around the annual appropriations process—especially for State, Foreign Operations, and Related Programs [Annual]: The congressional budget and appropriations process runs broadly from February to September of each year. During this cycle, various stakeholders from NGOs, advocacy groups, congressional offices, and lobbyists—review, assess, and advocate for the adequate funding of line items which support effective work in their sectors. For those committed to international development and humanitarian assistance, the primary focus of such advocacy is the appropriation for State, Foreign Operations, and Related Programs. These programs and their component accounts cover a vast array of U.S. foreign operations—including migration and refugee assistance, diplomatic engagement and security, support to multilateral organizations, and international disaster assistance. 

  • Quadrennial Diplomacy and Development Review [By 2019]: The QDDR is joint efforts of the U.S. Department of State and USAID conducted every four years. The purpose of the review is to identify major global and operational trends that constitute threats or opportunities, delineate priorities and reforms, and seek to ensure our civilian institutions are in the strongest position to shape and respond to a rapidly changing world. Engagement in this process allows for the mapping and remapping of longer term strategic goals and thinking in U.S. foreign affairs and assistance. The last QDDR (Enduring Leadership in a Dynamic World) was released in 2015. The forthcoming edition will be under study by the incoming administration and slated for release in 2019.


Additional Materials

  • Adjusting Assistance to the 21st Century: A Revised Agenda for Foreign Assistance Reform, 2014,   brook.gs/2dlSlMr

  • Aid Works: America Making A Difference, 2015, bit.ly/2dotUwO

  • Congressional Caucus for Effective Foreign Assistance, bit.ly/2cwWuYi

  • Foreign Aid 101: A Quick Guide to Understanding U.S. Foreign Aid, 2014, bit.ly/2d16uzj

  • Foreign Aid: An Introduction to U.S. Programs and Policies, 2016, bit.ly/2cXJ9eq

  • Modernizing U.S. Foreign Assistance: Principles for 2016 Campaigns, 2015, bit.ly/2d4cULw

Download This Issue Brief

Download FABB 2016

Foreign Assistance Briefing Book:   2016  |  2013  |  2011  |  2008