Foreign aid is one of the strongest ways the US influences the world. America provides money, food, medicines, training, or essential supplies to other countries to build alliances, prevent conflicts, support humanitarian relief, and stabilise fragile regions.
Beyond helping others, foreign aid also serves America’s own interests, which means fewer conflicts, smoother global trade, better security cooperation and stronger diplomatic relationships.
Besides charity, foreign aid acts as a strategic investment that shapes global partnerships and advances US foreign policy goals.
What does foreign aid include?
Foreign aid is the US helping other countries grow stronger, safer, and more stable, which also helps the US in the long run. The US provides financial assistance to countries to support affected countries.
It includes development assistance such as education, health, water, humanitarian relief, security and military assistance in times of crisis. The US also provides training, equipment, and support to allied countries to strengthen security and combat terrorism.
Who allocates foreign aid?
Foreign aid is part of the US federal budget. Every year, the US government has to decide how much money to spend on foreign aid. To do this, the State Department (which handles America’s relationships with other countries) works with USAID (the agency that manages most aid programs) to prepare a plan called the Congressional Budget Justification, or CBJ.
The CBJ is like a detailed request to Congress, which explains how much money the US needs for foreign aid, what the money will be used for such as health programs or education and which countries or regions will get aid.
Even though foreign aid makes up less than 1 percent of the entire federal budget, it plays a big role in America’s global influence and diplomacy.
The Foreign Assistance Resource Library (FARL) is like a public guidebook for US foreign aid which includes information such as the strategies that guide how the US gives foreign aid, how aid programs are planned and developed and whether these programs are actually working.
How Is The Budget For Foreign Aid Developed?
The US government’s budget is prepared mainly by the Executive Branch, which includes about 58 federal agencies. The Office of Management and Budget (OMB) gives general instructions to all agencies on how to prepare their budgets.
Agencies figure out how much money they need and create budget proposals based on OMB’s guidelines. These proposals are sent back to OMB for review and after internal checks, OMB combines everything into the President’s Budget Request, which is then sent to Congress.
Congress then divides the federal budget into 12 appropriations bills, each funding different parts of the government. Normally, these bills should be approved by September 30 of the previous fiscal year, but recently, approval has often been delayed until February or March.
Once Congress approves the budget, the Department of State (DoS) and USAID work to decide how the foreign aid money will actually be spent. They submit plans and notifications to Congress for some programs, explaining how funds will be used.
After Congress reviews these plans, the money goes through a procurement process when they figure out who will get the money and how it will be spent.
Who Monitors Foreign Aid?
Once the foreign aid is allocated, US aid is distributed through various departments and agencies such as USAID, State Department, Defense Department, Treasury and the USDA. Each agency manages its own programmes, contractors, and partnerships with NGOs, UN agencies, or local governments.
USAID (United States Agency for International Development) manages most US foreign aid programs and conducts regular audits, on-site checks, and evaluations of projects.
Another department that monitors foreign aid is the Department of State (DoS), which oversees diplomatic and strategic aspects of foreign aid and also ensures that aid aligns with US foreign policy priorities.
The International Monetary Fund (IMF) is an organization that monitors the international financial system, which includes the fostering of international trade, poverty reduction, stability in world markets, and sustainable economic growth.
Us Invests In Food And Health Programs Annually
Around $7 billion is allocated through Development Assistance and the Economic Support Fund. These programs focus on food security, agricultural development, democracy, environmental protection, and basic education worldwide.
The US invests $8.7 billion annually in health programs, supporting maternal and child health, nutrition, family planning, vaccines, and prevention and treatment for HIV, malaria, and tuberculosis.
In fiscal year 2023, the US spent about $99.9 billion on foreign aid, which was only about 1.5 percent of the total federal budget.