BRUSSELS (AN) – The U.N. refugee agency has frozen US$300 million of its budget due to U.S. President Donald Trump's dismantling of U.S. foreign aid, impacting 600 staff to be transferred or lose their jobs.
The budget freeze is part of almost US$700 million that the Office of the United Nations High Commissioner for Refugees already received from the United States. The Trump administration directed UNHCR not to spend any of it while a 90-day pause and review of all U.S. foreign aid is conducted.
U.N. High Commissioner for Refugees Filippo Grandi told a global town hall on Thursday that "all the funds in our possession given by the United States but not yet spent, we were told that we could not spend them without a review" – an amount equal to "a little less than" US$700 million.
"This is unprecedented," he said in Geneva. "We spent months trying to scrutinize the trends of each donor and to establish spending levels on the basis of what we know. But this was something that was beyond what any organization expected. And of course, it has very serious consequences."
The U.S. said that "broad areas" would be freed up for "life-saving activities, repatriation of refugees, and a few other categories," Grandi said. "We interpret this as meaning that progressively, contributions related to those countries and those activities will be unblocked. No money yet has been."
It's unclear what can be unblocked and "what is life saving and what is not," he added. "In our consultations, which are daily, day and night almost, with the U.S. administration, we hear also the different interpretations. I assume that on their side also they are elaborating this review."
Based on its own analysis, UNHCR moved to freeze "activities worth about US$300 million," Grandi said. "I can't tell you for how long this freeze will be in force. A few weeks for sure. It may be longer, a few months, because we believe that this process, especially with U.S. funding, will take time. So we will have to be patient."
The agency says it employs around 20,000 people, of which 87% are field-based. "The estimate of HR is that it's about 600 positions that are impacted," he said, particularly those involved with refugee resettlement programs to the U.S. that Trump has suspended.
"We are trying to minimize, to the extent that we can, the impact on staff," Grandi said. "Unfortunately, some activities are not going to continue. We know that."
As much as possible, however, he assured staff that the agency would work on a case-by-case basis to find alternative positions for staff before letting them go.
"If there are alternatives for the incumbents, we will try to maximize that possibility. And where, unfortunately, separations will be inevitable, we'll try to make them as favorable as possible," he said.
The agency announced in Dec. 2023 that it was cutting around 900 staff due to budget cuts.
The U.S. is UNHCR’s largest donor by far, providing around US$2 billion of its US$4.8 billion operational budget in 2024. The suspended funding is already in the agency's hands and does not involve new contributions; less than half of the agency’s budget for 2025 is funded.
U.S. officials told Grandi’s office this week that certain countries and activities would be exempted, but it was not clear which ones. While UNHCR is in constant contact with Washington, the new administration had not yet appointed “interlocutors” for complex budget discussions, Grandi said.
“Meanwhile, these funds, we cannot use them,” he said. Discussions continue with donor countries to speed up delivery of their contributions and avoid running into problems with liquidity, the most urgent threat to the agency’s work.
The consequences of Trump’s foreign aid suspension “is a shared challenge among the entire system,” Grandi said. “This has increased the uncertainty about our funding situation going forward. Not just ours, but that of the whole aid community.”
‘Not perfect, far from it, but relatively stable’
Anxiety at UNHCR follows a challenging year in 2024 that included what Grandi called “inevitable” staffing cuts and an earlier freeze of around US$180 million over uncertainty about U.S. funding, which has not been previously reported.
Despite the challenges, Grandi said the agency ended the year “in a manner that was not perfect, far from it, but relatively stable.”
The U.S. aid suspension threw that into turmoil, forcing leadership to institute an immediate hiring freeze, ban on international travel, and delay in ordering supplies except for emergencies, among other cost-cutting measures.
“Last year, the uncertainty was about the volume of the assistance that we would eventually get,” Grandi explained. “This year is not only about the volume, although that’s also a question, but it’s also these modalities that may render this assistance a bit more – not a bit – considerably more restrictive.”
The UNHCR is one of the few U.N. agencies that relies almost entirely on voluntary contributions. It receives just 1% of its finance from the U.N. regular budget.
Like most agencies funded by voluntary contributions from states, the vast majority of UNHCR’s funds are earmarked for specific programs, meaning the agency has little to no say over how the money is spent. Less than 10% of its funding is fully flexible.
Earmarking could impact the broader work of the agency. Grandi said he expects the U.S. to come in and strictly dictate how the money can – and can't – be spent. The U.S. contributed US$217 million in flexible funding last year that supported “broad” aspects of the agency, he said, and if that changes “how do we compensate for that?"
The possibility of such a huge loss of support means the agency will have to re-double its fundraising efforts, Grandi said, explaining to staff that its recent high-profile work in Syria and Ukraine “makes it easier to allow me to use a word that I don’t like very much – to market our role, our work and mobilize resources, which is really the big challenge at the moment.”
Uncertainty over U.S. funding and the possibility of hundreds of millions lost threatens to blow apart an already major funding shortfall in the agency’s budget. UNHCR estimates it needed US$10.7 billion to fulfill its mandate in 2024. It received less than half that, at US$4.7 billion.
That funding gap affects the vast majority of UNHCR’s major programs. Eight of the top ten countries for UNHCR operations by expenditure are around one-third funded, according to the agency. Efforts in Yemen are just 19% funded; Lebanon is at 27%; Sudan, 32%.
UNHCR's Global Staff Council hopes Grandi can "find alternative funding or increased contributions from other main donors, so that we can sustain our operations," said Nathalie Meynet, who as the council chair represents all staff and affiliates working in the organization.
"At least we have not been cut like WHO, UNESCO, or other sister agencies like IOM who are cutting thousands of positions. Not mentioning what UNRWA is going through," she told the global town hall, referring to the U.N. agencies for health; education, culture and science; migration; and Palestinian refugees.
"The situation is the worst the U.N. ever faced, and all of us must stay united and focused. We owe that much to the refugees and we need to keep delivering for them," Meynet added. "And we wish that efforts are made across the board so that the field locations will not solely pay the price."
