By: Caitlin Baron

Amid widespread criticism that the U.S. Agency for International Development (USAID) was failing to deliver on its promise of localization, the voices of community-based organizations tell a different story. For many of Luminos’ nationally led partners, USAID funding was a vital and growing lifeline.

Earlier this year, USAID canceled more than 5,300 grants, sending shockwaves through the international development sector. The last time I witnessed such upheaval was during the onset of the COVID-19 pandemic, when the world ground to a halt.

Once again, nonprofits, national partners, and governments are navigating a sea of uncertainty, and once again, it is national partners delivering services in vulnerable communities who stand to lose the most.

USAID’s abrupt cancellations jeopardize progress across multiple sectors, including education. A staggering 99% of USAID’s basic education funding has been terminated, with significant implications for access, equity, and learning outcomes.

Broader shifts in international aid will undoubtedly shape the development landscape in the weeks and months ahead. The damage extends beyond budget lines. It also threatens to derail the momentum behind USAID’s bold shift toward localization: an agenda that held promise for reshaping development partnerships and placing greater trust and resources in the hands of national organizations.

During a coaching session, Abba Karnga, former Luminos Liberia Program Manager, provides feedback to Luminos-trained teacher Matthew, who was recruited by community partner LIPACE. (Photo by Mara Chan/Luminos Fund)

Critics have rightly pointed out that U.S. foreign aid too often flowed to large international contractors—the so-called “beltway bandits.” But for Luminos’ partners, USAID’s shift was real. These cuts now jeopardize the hard-won gains.

Localization is smart, sustainable development. This not only benefits historically under-resourced partners, but also brings advantages to the broader development agenda, highlighting the importance of supporting interventions rooted in local realities. When national organizations lead, programs are more relevant, more accountable, and more sustainable.

The latest cuts hit these very organizations the hardest.

dollars of funding terminated in USAID programs

Globally, the U.S. provides 28% of total foreign assistance. In countries like Ethiopia and Liberia, where Luminos operates, USAID is the single largest donor, representing 23% of all foreign aid in Liberia and 27% in Ethiopia. These funds account for 3.5% and 1.1% of GDP, respectively.

These cuts are already being felt across our network.

In March 2025, Luminos surveyed our partners to assess the impact. More than half had active USAID grants outside of the Luminos accelerated learning program. Among those affected, 70% lost over $500,000 in funding, accounting for 10% or more of their budget. Most were forced to stop some programming or lay off staff.

School for Life, a prominent Ghanaian organization and Luminos partner, lost 40% of its total budget – jeopardizing its work with out-of-school children. According to Wedad Sayibu, School for Life’s Director, the organization had been working across 690 underserved public schools to strengthen systems of accountability and improve learning outcomes for over 100,000 learners over a planned five-year period. Unfortunately, the project was cut short after just two years, threatening to reverse significant gains in enrollment, teaching and learning quality, monitoring and supervision, and community engagement in school management and support.

A Broader Crisis in Foreign Assistance

The crisis extends beyond USAID. Across the Global North, foreign assistance is shrinking. Europe is restructuring development priorities, and in February, the UK announced it would lower its Official Development Assistance (ODA) from 0.5% to 0.3% of gross national income. Most countries are falling far short of the longstanding UN target of 0.7%.

We are at a crossroads. The global development sector is being reshaped – less by strategy than by fiscal constraint. The question is whether this reset will undo years of progress toward more equitable, inclusive, and locally led development. Without urgent course correction, the answer may be yes.

Luminos remains committed to the localization principles we have always practiced. But we cannot do it alone. Donors and policymakers must recognize what our partners already know: cutting funding to community-based organizations doesn’t just stall progress – it reverses it.

Caitlin Baron is the CEO of the Luminos Fund, an international education nonprofit dedicated to giving the world’s most vulnerable, out-of-school children a second chance to learn. Luminos’ award-winning program marries the best of global learning science and local insights to enable marginalized children to catch up to grade level and go on to lifelong learning. Under Caitlin’s leadership, Luminos has successfully scaled its education mission across five countries in Sub-Saharan Africa and the Middle East, working in partnership with more than 25 community-based organizations to reach over 377,407 out-of-school children.