By Terrance S. Carter and Urshita Grover

A  U.S. Executive Order issued on February 6, 2025 by the White House signals a shift in how the U.S. government funds nongovernmental organizations (“NGOs”), with potential implications for Canadian charities and not-for-profits that either receive direct funding from the U.S. government, such as universities receiving grants for research projects, or partner with U.S. NGOs that depend upon U.S. funding. The Order directs federal agencies to reassess grants and other forms of financial assistance, citing concerns that some NGOs engage in activities perceived as contrary to U.S. security and economic interests.

Under this Executive Order, U.S. agencies must review existing funding arrangements and ensure that future grants align with the administration’s policy priorities. These priorities include eliminating funding for diversity, equity, and inclusion (“DEI”) and environmental justice initiatives, restricting assistance to individuals without legal immigration status, and reducing foreign aid. While the Order does not identify specific organizations that may be affected, it grants broad discretion to agencies in determining funding eligibility.

As well, on January 20, 2025, the White House issued an Executive Order titled Reevaluating and Realigning United States Foreign Aid, signaling significant policy changes that will impact U.S. NGOs involved in international development and humanitarian efforts.

This Executive Order expresses concerns that current U.S. foreign aid practices may not align with American interests or values, potentially destabilizing international relations. To address this, the Executive Order mandates a 90-day pause on all new foreign development assistance obligations and disbursements. During this period, U.S. government departments and agencies responsible for foreign assistance must review their programs to ensure consistency with the President’s foreign policy objectives and evaluate their efficiency.

Reporting by the Globe and Mail indicates that Canadian universities stand to lose tens of millions of dollars in research funding which they were previously receiving from the National Institutes of Health, a U.S. agency which is now experiencing cuts under the new directives from the White House.

In alignment with the Reevaluating and Realigning United States Foreign Aid Order, on January 26, 2025, Washington paused all foreign assistance provided by or through the State Department and the U.S. Agency for International Development (“USAID”). The accompanying press release indicated that the pause was intended to facilitate a comprehensive review of all foreign assistance programs to ensure they are efficient, strategically aligned with U.S. foreign policy objectives, and serve the “America First” agenda.

Following the January 26th announcement, on February 23, 2025, USAID placed most of its direct hire personnel worldwide on administrative leave, excluding essential staff required for mission-critical functions. USAID announced the initiation of a reduction-in-force affecting approximately 1,600 employees based in the United States. Essential personnel required to continue working were separately notified.

As explained by Cooperation Canada in a statement dated February 10, 2025, the recent suspension of most USAID programs are “costing lives” and “undermining the global rules-based order that Canada has long championed.”

Canadian charities and not-for-profits that receive funding from the U.S. government or work alongside U.S. NGOs involved in international humanitarian projects will want to carefully monitor ongoing developments in the U.S. from the new Trump administration.

​Read the February 2025 Charity & NFP Law Update