5 things you need to know about foreign aid

July 20, 2017

Foreign aid faces huge cuts in the Administration’s 2018 budget, despite the fact it makes up a tiny fraction of government spending and a growing number of humanitarian crises has created an unprecedented level of need. But what exactly is foreign aid and how does it work? We break it down for you.

1. It’s not just money

Broadly speaking, foreign aid is anything that one country gives to — or is provided for the benefit of — another country. That includes money, but also goods such as food, or even technical support.

foreign aid

2. It meets many kinds of needs

About two-thirds of foreign aid is managed by the State Department or related agencies like USAID and provides political, development, and humanitarian assistance. This assistance can take many forms, from food distributions in famine zones to money for rebuilding homes after a natural disaster.

foreign aid spending graph

The remaining 35% of US foreign assistance comes from the Department of Defense and is used to strengthen the military of our allies, or to increase our national security by bolstering foreign counter-terror or anti-narcotic missions that are in our interest.

3. It doesn’t just go to governments

Foreign aid can be provided in the form of money or “in kind” donations of goods or services. Sometimes it’s given directly to foreign governments, but the majority of State Department and USAID-administered assistance is channeled to non-governmental organizations (NGOs) — such as Concern Worldwide — or United Nations agencies — such as World Food Programme, UNICEF, or UNHCR — that work in the target country.

What US foreign aid makes possible

4. It helps others — but it also helps us

As a humanitarian organization, we at Concern believe that there is a moral imperative to alleviate human suffering wherever disaster strikes. We think the entire world benefits when more of its people are lifted out of poverty and have the opportunity to live healthy, productive lives. So we believe foreign aid is worthwhile for these reasons alone.

But there are also many more pragmatic arguments for foreign assistance. The world is more interconnected than ever, and what happens in far-flung parts of the globe can now have direct impacts in the US. If disease outbreaks elsewhere aren’t contained, they can make their way to American shores. Environmental issues traverse national borders. Instability in other countries can endanger American interests and investments at home and abroad. Conflict and disaster can send waves of refugees across the world. In almost every case, it’s more effective, cost-efficient, and sustainable to help address these challenges at the source through foreign assistance.

In fact, there are so many reasons why foreign aid is important that we couldn’t possibly cover them all here! Check out this list for more:

5. The US gives much less than you might think

Many Americans think we spend about a quarter of the national budget on foreign assistance. In actual fact, it’s just 1.3% — and that includes security and defense assistance. Humanitarian and development assistance makes up just 0.8% of overall spending — less than a penny on the dollar. So even if foreign aid was cut completely, it would do very little to reduce the United States deficit of approximately $587 billion.

It’s true that in absolute dollars the United States gives more to foreign assistance than any other country. However, when calculated as a proportion of our gross domestic product it’s only 0.17%, which places us 20th out of 28 countries in terms of generosity (measured on the latest Organization for Economic Co-operation and Development index).

Digging boreholes in CAR

Concern team members operate a mobile drilling kit, funded by USAID/OFDA, to provide new water sources for conflict-affected communities in Kouango, Central African Republic. Photo: Kieran McConville

How Concern uses foreign aid

Concern is currently running several projects that are funded by the US government, and many more have already been successfully completed. These projects take a variety of different forms.

  • Direct programming: This is where Concern operates a program itself, interacting with communities directly.
  • Through local partners: Where smaller, local organizations and NGOs have the capacity to do their own programming, Concern will often choose to partner with them rather than directly program. Local partners have invaluable local knowledge, and can often gain access to areas we can’t reach. Concern provides support to these partners, such as technical expertise to scale up existing programs, and financial resources. Concern’s RAPID project in Pakistan is a great example of this.
  • In partnership with other large organizations: Sometimes Concern will work with other organizations in a consortium to run big or complex projects. For example, Concern currently leads a consortium of agencies that are improving water, sanitation, and hygiene conditions in the Democratic Republic of Congo.

We’re proud of the transformative impact we’ve been able to achieve with the help of US foreign assistance.

Explore these videos to see some of what US foreign aid makes possible:

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