Following Elon Musk’s slash and burn of U.S. foreign aid spending — which ushered in Donald Trump’s second term — the U.S. “quietly unfroze” about $870 million in security assistance to Taiwan. But security assistance isn’t the only form of aid the U.S. provides to Taiwan.
The “Department of Government Efficiency” has cut global U.S. Agency for International Development (USAID) contracts by 90% and froze $239 million in funding to the National Endowment for Democracy (NED) — both distribute U.S. money to organizations around the world.
USAID was crucial to Taiwan’s economic development in the decades after World War II. Although Taiwan stopped receiving development aid from USAID in 1965, other kinds of money from the agency passes through Taiwan to this day via joint aid programs and American non-governmental organizations (NGOs) that operate in the region.
Taiwanese NGOs working on topics like information manipulation and disaster preparedness continue to receive American assistance from the State Department and elsewhere, at least until this year. Now, we can expect that many NGOs in Taiwan will be impacted by foreign aid cuts and freezes, but some will hurt (and are hurting) more than others.
First, many China-related NGOs have been affected by the cuts to USAID. According to reporting by Reuters, “the United States pledged $10.7 million in foreign aid for China issues in 2024, mostly through USAID. Almost half of that figure, or $5.2 million, went to projects related to democracy, human rights and governance.” Among those worst affected is a Freedom House project in Taipei, China Dissent Monitor, which has suspended all research.
Other American organizations with offices in Taiwan, including the International Republican Institute and the National Democratic Institute, are also likely affected by the cuts. Last September, the International Republican Institute was awarded half a million dollars in funding to develop a network of journalists with Indo-Pacific expertise in Taiwan, but it appears that the funding has not been dispensed yet and should now be frozen. The organization even shut down its website to mitigate expenses following the funding freeze. The National Democratic Institute likely faces similar challenges in Taiwan, as it also receives essential funding from the U.S. government.
Many local Taiwanese organizations also receive American foreign aid. Publicly available information found on usaspending.gov (which is unlikely to be complete) reveals that American funding benefits a range of organizations at different amounts — some grants are as little as several thousand dollars, while others are well over one million dollars. Recipients include organizations like the Buddhist Tzu Chi Charity Foundation, the Red Cross Society of Taiwan and DoubleThink Lab, which researches Chinese disinformation campaigns.
Last year, the U.S. State Department awarded Doublethink Lab $30,000 to support the Palau government and civil society in building “resilience to disinformation.” Palau is one of Taiwan’s three diplomatic allies in the Indo-Pacific. That $30,000 was part of a larger award for $305,000, the remainder to be spent in Taiwan and South Korea on combatting “foreign information manipulation.” In an interview with CommonWealth, DoubleThink Lab CEO Wu Min Hsuan (吳明軒) said that frozen funding is a significant blow to the entire community engaged in China influence research.
The cut in U.S. support is likely to be most dangerous to those domestic NGOs that focus on “liberal” issues, according to James Kan (甘順基) from Citizen Congress Watch, a Taiwanese NGO that focuses on accountability in the Legislative Yuan. He told Domino Theory that because Taiwanese society is more conservative, NGOs that work on issues like the death penalty, LGBTQ or disinformation need international funding, not necessarily from the U.S., to survive.
Ultimately, the more indirect implications of these cuts may take time to unfold and understand. Hung Kuo-Chun (洪國鈞) is the Chief Operating Officer of Watchout, a Taiwanese NGO that focuses on civil defense. He told Domino Theory that his organization doesn’t receive money from USAID, but does have some cooperation with the American Institute in Taiwan (the de facto U.S. embassy) and with the U.S. Department of State.
Hung said that the funding for a current project hadn’t been cut, but that he didn’t know about the future. “Right now, it’s still working, and we haven’t received any emails telling me that [I] should stop or suspend it yet.” He said losing the funding wouldn’t be the “end of the world” for Watchout itself, but they might have to “lay off maybe one and a half person[s]” if they couldn’t immediately find replacement funding.
What that project is Hung would not reveal, but he said it was similar in scope to the civil defense guide that Watchout co-produced with the U.S. NGO Spirit of America in 2023. Watchout received $55,000 from the U.S. Department of State for that endeavor.
Hung said that some other NGOs in Taipei are more affected than Watchout, losing up to two thirds of their budget in his estimation. If they are working with American NGOs based in Taiwan, especially the International Republican Institute or the National Democratic Institute, there is more chance that their projects will be frozen, so money received cannot be spent.
Even though losing American funding is a concern for Taiwanese NGOs, there might be a silver lining. Hung said that there was a concern in the sector about “li di” (離地) or “being out of touch with the grassroots.” He added that some Taiwanese NGOs only write their reports in English, primarily intended for the U.S. government or American NGOs who funded them. Hung thinks it would be better if they were reporting to Taiwanese civil society instead.
This is an ongoing issue. Many of the NGOs contacted for this story declined to talk, with some explicitly fearing making themselves to be a target. But as the funding squeeze tightens, expect to hear more and more speak up.
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