How Africa’s health nonprofits are making ends meet after USAID cuts

As Lesley-Ann Foster packs up her office in the South African coastal city of East London, putting years of patient records and funding applications into boxes, her mind wanders to the events that led up to this moment. There was the sudden closure of the United States Agency for International Development the previous January. The reduction in aid from European donors. The layoffs she was forced to enact in November. And finally, the holidays, when Masimanyane Women’s Rights International had to turn away roughly 300 survivors of sexual assault because there simply wasn’t enough staff to care for them.

Foster started the nonprofit three decades ago to address escalating violence against women and children in the region, which is among the poorest in South Africa. Masimanyane initially provided counselling and guidance for about 100 people a month, before expanding its capacity by fivefold. It stationed employees at local hospitals to help trauma victims navigate the system and ran community outreach programs. At its height, it had a network of 14 shelters and offices. Now, that number has fallen to five.

South African activist Lesley Ann Foster. Image: Cebisile Mbonani/Bloomberg

“We were overexposed to US funding,” Foster said, pointing to the end of USAID as the moment when the dam broke. About 30% of her budget disappeared overnight, and that had “a knock-on effect.” Germany and the Netherlands stopped supporting Masimanyane, and other European donors downsized their contributions. Ultimately, only Norway left its funding untouched. With her organisation’s budget reduced by a third, Foster had no choice but to lay off dozens of social workers and administrators. Compared to two years ago, when foreign donors viewed public health funding as an important economic stabiliser, she said, “the global value system has changed.”

This hasn’t only been true at the government level. While countries are by far the biggest international donors, health funding in Africa from private philanthropies has dropped 15% to about R50.46 billion from over R58.8 billion a year ago. That comes as major foundations struggle with weaker endowment returns and greater pressures on domestic spending. A Bloomberg analysis of data from the Institute for Health Metrics and Evaluation found that HIV/AIDS initiatives saw the largest decrease in funding, with countries in sub-Saharan Africa — namely Eswatini, South Africa and Namibia — impacted the most.

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Funding for health initiatives accelerated in the first decade of the 2000s, said Angela Apeagyei, an assistant professor of research at IHME at the University of Washington and one of the authors of the 2025 Financing Global Health report. It began to plateau until the Covid pandemic, then spiked significantly, and started falling again after 2021. Now, she said, “the golden age seems to have ended, but we don’t know which age we are in.”

With South Africa losing R7.4 billion in US federal funding for HIV prevention and treatment programs, according to the country’s health ministry, local organisations are leaning more heavily on existing private funders. But those relationships are also in flux. Western donors are facing their own political and economic pressures, and with resources more limited, nonprofits say that contributions are increasingly targeted to specific programs or initiatives.

The full extent of how much donors have pulled back and where new funding is coming from is extremely difficult to quantify, said Charles Kenny, a senior fellow at the Centre for Global Development. That’s especially true in Africa, as data is often not readily available, and nonprofits are reluctant to discuss their finances in detail out of concern that it could jeopardise existing arrangements. When reached for comment, several of the biggest international philanthropies declined to provide specifics about their funding levels for health initiatives in Africa.

State-level cuts have forced Masimanyane to rely more heavily on private donors, which can pose additional challenges. Struggling with a sales dip, Mercedes-Benz, which manufactures its C-class cars locally in East London and had for years been a generous Masimanyane donor, reduced its annual contribution last year to just a fifth of what it was a year prior, Foster said. (The company declined to comment on the specific amount.) Predictability can also be an issue. A regular R100.9 million donation from a major US donor arrived six months late, Foster said, because the Trump administration insisted on extra compliance checks. Money from South Africa’s National Lottery was delayed by six months due to investigations into alleged fraud, corruption and money laundering at the organisation.

Masimanyane conducts a workshop for middle schoolers on sexual and reproductive health and rights. Image: Cebisile Mbonani/Bloomberg

All this puts Masimanyane in a position that’s increasingly familiar to South Africa’s nonprofits. One nonprofit leader said that her HIV-focused organisation recently began accepting funding from pharmaceutical companies for the first time to close budget gaps. Others have scaled back their work as they wait for grants to come through.

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With so much uncertainty hanging over the sector, African governments and regulatory bodies are exploring ways to minimise reliance on foreign donors. Both the World Health Organisation and the Africa Centres for Disease Control and Prevention have expressed support for so-called “vice taxes” on alcohol, cigarettes and sugar to cover health care costs, and some countries are already testing them out. Nigeria is expected to increase excise duties on tobacco, alcohol, and sugary beverages this year, and Rwanda substantially raised taxes on cigarettes — and less substantially on beer — in early 2025. Ethiopia is moving ahead with similar measures. Africa CDC has also encouraged taxing airline tickets to subsidise health care, which countries including Cameroon and the Republic of Congo already do. South Africa is channelling national lottery funds to HIV/AIDS programs affected by cuts.

But critics have described such efforts as stopgap measures at best. After decades of currency depreciation, wild swings in the prices of exports like cobalt, cocoa and gas, and the rising cost of servicing debt, bigger outlays are needed, and many countries on the continent have little fiscal room to manoeuvre. Over 30 African nations spend more on servicing their debt than they do than on their health budgets, noted Harald Nusser, the Global Health & Health Equity Team Lead at Merck, adding, “some form of external debt forgiveness is essential.”

On the international stage, an emphasis on self-sufficiency is also taking hold. Many European countries are moving away from the traditional donor-recipient model towards strategies based on “health sovereignty,” which focus on funding country-level digital health initiatives, pharmaceutical manufacturing and creating unified regulatory environments for medicines. The EU is also embracing a so-called “blended” approach, which combines development-focused grants with loans from the European Investment Bank and private capital. African governments are also being asked to do more — Botswana, Cabo Verde and Rwanda are currently the only countries on the continent that spend at least 15% of all government revenue on health care.

Read More: WHO’s Dr. Tedros: ‘Viruses Get the Advantage When We Are Divided’

Kimberly Bayer, deputy vice president for international programs at the Ford Foundation, observed that with the traditional charity model of international aid falling apart, discussions are moving towards new funding models. She pointed to groups such as the Global Public Investment Network, which encourages individual nations to contribute to a central development fund, as well as borrowers’ clubs, which allow countries to negotiate loan terms as a unified bloc rather than forcing them to face creditors on an individual basis.

A year after putting USAID into “the wood chipper,” the US has restored some health care funding in Africa, but at largely lower levels and with a more limited scope. Under the America First Global Health Strategy, countries can enter into multi-year bilateral deals with the US so long as they also invest in their own health systems. So far, two dozen countries have signed such agreements, which come with US contributions of between $106 million and $2.1 billion.

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As Western governments fundamentally rethink their approach to philanthropy, new funders are also stepping up. Last April, the Mohamed bin Zayed Foundation for Humanity, which is run by Abu Dhabi’s government, announced the launch of an initiative to fight maternal and infant mortality in Africa. The foundation, in tandem with more traditional philanthropic donors, have committed to spending $600 million over the next five years. China has also pledged $3.5 million to support HIV prevention programs in South Africa.

In the meantime, however, nonprofits are focusing on funders closer to home. In August, Masimanyane launched a local fundraising drive in East London, appealing to lawyers, doctors, banks, insurers and the Johannesburg-listed grocer The Spar Group. “Money is beginning to slowly, slowly trickle in,” Foster said, though not at the scale she’d typically get from overseas donors. Fifteen percent of the nonprofit’s budget now comes from local sources, up from 5% a year ago.

Flavirina, a transgender sex worker in Cape Town, started going to a public clinic for her antiretroviral medication after the nonprofit clinic she had relied on was closed. While the intense discrimination she encountered initially convinced her to go off her treatment rather than return, a bout of serious illness changed her mind. With no other alternatives, she knows she’ll have to keep going back.

“Last year,” she reflected, “it all became harder and harder.”

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