THE FUTURE OF U.S. FOREIGN AID. DOES THE U.S. ITSELF KNOW? Newswire from Devex, written by Michael Igoe.

The first half of 2026 has been defined by one overarching question: What does American foreign assistance look like after USAID?

Answering that question has been far from straightforward.

The future of U.S. global development engagement is not being written in sweeping policy announcements, but instead through a steady accumulation of decisions about organizational charts, hiring, budgets, contracts, and authorities that together are reshaping how the U.S. government delivers foreign assistance.

The center of gravity in that process is the State Department, where Secretary of State Marco Rubio says he is bringing U.S. diplomatic and development priorities into closer alignment.

Does that mean rebuilding long-term development as a foreign policy goal inside State? Or does it mean reshaping development programs into transactional tools that can help advance short-term diplomatic wins? The jury is still out.

But we have seen some major new funding announcements, and a flurry of bipartisan global health agreements — some more controversial than others.

Major changes are also underway in other parts of the U.S. development architecture.

The U.S. Department of Agriculture has taken over America’s flagship international food assistance program — Food for Peace — against a backdrop of staffing concerns. (Congress still needs to act to make the move permanent.) And the U.S. International Development Finance Corporation is supersizing its investment portfolio — while raising questions about its institutional commitment to development impact.

Does all of this add up to a functional new system for delivering effective U.S. foreign assistance around the world? Given the relatively small amount of money that is actually going out the door, it seems like the answer is: not yet.

But in some eyes, the announcements and initiatives we have seen point to a direction of travel — private sector-led, cofinanced, faith-networked, made in America. It will take a lot of convincing, though, to prove that the new system is better — or even meaningfully different — than the one it replaced.

On that point, there’s an awkward reality hanging over this effort to replace USAID: The agency still legally exists, and it hasn’t paid its bills.

The process for closing out USAID’s terminated awards continues to drag on under the supervision of the White House Office of Management and Budget, or OMB. And it looks like closure might be hard to come by.

The new model?

A year ago, if you’d asked how Trump officials planned to replace USAID’s development and humanitarian funding model, few would likely have answered: by sending billions of dollars to the United Nations and making large awards to big international NGOs. And yet, here we are.

The State Department’s humanitarian assistance strategy has revolved around a steady drumbeat of “macro awards,” intended as flexible funding instruments to “trusted and vetted partners.”

The centerpiece of those is the Trump administration’s surprisingly close partnership with the U.N. Office for the Coordination of Humanitarian Affairs, to which it has directed or pledged $3.8 billion. That money comes with some strings attached — it’s earmarked for specific countries — and Trump officials have characterized it as an endorsement of UNOCHA’s ongoing reforms.

But it is also exempt from some ideological policy restrictions, such as the Trump administration’s Promoting Human Flourishing in Foreign Assistance Policy, a sweeping rule that bars American funding from groups that touch abortion, gender identity, or diversity, equity, and inclusion.

Now, the same administration that attacked USAID for its alleged left-wing agenda is taking heat from some critics on the right, who accuse Trump’s State Department of “once again funding an ideologically radicalized web of U.N. agencies.”

Additional “macro awards” have gone to UNICEF, the World Food Programme, Catholic Relief Services, Samaritan’s Purse, the International Committee of the Red Cross, the International Federation of Red Cross and Red Crescent Societies, and Operation End Starvation, a newly created nonprofit public-private partnership focused on ready-to-use therapeutic foods and prenatal vitamins.

Some experts have argued that by dismantling USAID and eliminating the vast majority of its workforce, the Trump administration limited its own options for spending money, with big awards to a handful of organizations being one of the few viable paths. Jeremy Lewin, the State Department official in charge of humanitarian assistance, says that is a false media narrative.

Other defenders of the approach see these awards as an evolution from USAID’s model — rather than a return to it.

“I think there’s a real difference between INGOs, particularly faith-based INGOs, which have a continued presence on the ground, multiple sources of revenue, the ability to be sustainable, and local knowledge, compared to implementers that kind of parachute in and parachute out if and when they get awards,” Daniel Handel, executive director of The New Foreign Assistance, tells my colleague Elissa Miolene.

Either way, it hands a lot of responsibility to that group of handpicked partners, who are now the backbone of the U.S. government’s humanitarian response.

The ghost of USAID

While most of the focus has been on where the State Department takes U.S. foreign assistance, USAID has not faded away as smoothly as some in the Trump administration would like. Congress has yet to officially abolish the agency as a legal entity, and it currently stands as a testament to the scale of disruption that was unleashed by Elon Musk and the Department of Government Efficiency in 2025.

After terminating roughly 5,600 USAID funding awards, the U.S. government faces a gargantuan task in settling its accounts with former partners. And it’s not exactly smooth sailing.

By the latest count, the USAID legacy unit — which is overseen by the White House OMB — has closed out about 1,100 terminated awards. That leaves roughly 4,500 more to go, and multiple sources have told me that the remaining settlements are significantly more complicatedthan those that have been completed.

As a result, the timeline for closing out awards keeps getting pushed back. The OMB officials in charge of the process had insisted it would be done by March 7, 2026, at which point USAID’s remaining staff would be terminated. Then they were forced to extend those contracts until Sept. 30 — while enlisting an outside firm to hire institutional support contractors to help. One caveat: None of these hires could have prior USAID experience.

Last month, Eric Ueland, the OMB official serving as acting USAID administrator, told the legacy unit team that their employment would be extended until June 30 of next year. But even that seems like a stretch to people who are tracking the process closely.

“I think more than finishing it quickly, they don’t want to pay people,” a congressional staffer tells me.

For some, the fact of USAID’s stubborn perpetuation raises the unavoidable question: If Democrats gain greater political power in November’s midterm elections — or win back the White House in 2028 — might they seek to reestablish the agency?

“If people want to advocate for that, more power to them,” Jim Richardson, a former senior USAID and State Department official, told me in a recent episode of Theory of Change, my weekly podcast. But they should know, he said, that doing so would require taking on a deep-seated institutional desire inside the State Department, which “has always wanted USAID.”

“They wanted the money so badly.”