Kenya’s NGO sector lost more than $835 million (roughly Ksh108 billion) in terminated USAID contracts and grants in 2025, and the replacement funding model rolling out through 2026 — a bilateral US-Kenya health agreement signed in December — is structured to bypass most of the civil society organisations that used to deliver the work. For NGOs, donors, and program staff trying to plan a 2026 budget, the practical question isn’t whether the funding landscape changed. It’s how much is actually left, who still qualifies for it, and what to do next.
What did Kenya actually lose when USAID pulled back?
The scale caught even seasoned sector veterans off guard. A March 2025 USAID report on terminated awards confirmed the agency had ended roughly 80 projects in Kenya — 57 major development programmes and 23 administrative ones — worth over $835 million combined. The Kenya Health Partnerships for Quality Services programme alone absorbed more than $95 million in losses, with immediate disruption to HIV treatment and maternal health services.
Two other terminated awards show how directly this hit frontline programming: the Tujitegemee OVC and DREAMS activity in Mombasa and Kilifi counties ($23 million, supporting orphans, vulnerable children, and adolescent girls) and the Tujenge Jamii activity ($40.6 million). Both wound down services for groups that are expensive and slow to re-reach once support lapses.
- $835 million+ — USAID contracts and grants terminated in Kenya, confirmed March 2025
- 80 projects affected — 57 major development programmes, 23 administrative
- $95 million+ — losses to the Kenya Health Partnerships for Quality Services programme alone
- 1,714 service sites — closed globally after PEPFAR award terminations, per a 2026 implementing-partner survey presented at AIDS 2026
What is the new US-Kenya HIV funding deal, and why are NGOs worried about it?
Kenya signed a bilateral memorandum of understanding with the United States on HIV, TB, and malaria funding on December 4, 2025 — the first of what are now 34 such agreements the US has signed worldwide. Analysis presented at the International AIDS Conference in July 2026 found the model is a deliberate departure from the old PEPFAR approach: funding flows government-to-government rather than through implementing partners, declines by roughly a third compared with 2025 levels over the life of each five-year agreement, and largely leaves civil society and key-population-led organisations out of the programming template altogether — Nigeria’s agreement is the only one of the 28 reviewed that writes in a role for faith-based groups.
Kenyan civil society organisations didn’t wait to see how it would play out. Within a week of the deal being signed, they had filed suit, and by December 10, 2025 the High Court had ruled that implementation could not proceed. The government appealed, and implementation is now continuing while the case works through the courts — meaning the legal status of the funding model Kenyan NGOs are supposed to plan around is still unsettled as of this month.
How is this showing up in Kenya’s health data?
The numbers are starting to move in the wrong direction. External health funding to Kenya fell from Ksh126 billion in the 2024/25 financial year to Ksh54 billion in 2025/26, according to a 2026 study published in BMC Public Health. The Global Fund separately cut its HIV allocation to Kenya by 18.2% for the 2026–2028 grant cycle. New HIV infections rose from 16,752 in 2024 to 19,991 in 2025 — the first reversal after a run of progress that had cut new infections by more than 67% since 2010.
Programmes flagged as “non-critical” in the reshuffle tend to follow a pattern: HIV prevention services for key populations, support for orphans and vulnerable children, voluntary medical male circumcision, gender-based-violence response, and harm-reduction services for people who use drugs have all seen cuts or suspensions, while basic HIV testing and PrEP have generally been kept running, just at reduced scale.
Is the PBO Act making this harder?
Timing has not done Kenyan NGOs any favours. The same period has seen the sector working to meet its Public Benefit Organizations Act compliance obligations — new governance, financial reporting, and registration requirements that took effect through 2026 (see our full breakdown of what the PBO Act actually requires). As of a May 2026 sector review, only around 8,458 of an estimated 14,700 registered PBOs had completed the transition process. Building out the audit trails, board structures, and reporting systems the Act demands costs money and staff time — exactly the resources a funding shock leaves organisations shortest on.
How are Kenyan NGOs actually coping in 2026?
There isn’t one silver-bullet response, but a pattern is emerging among organisations that are holding steady. Groups that had already diversified their funder base before the crisis — rather than depending on one or two large bilateral grants — are weathering it noticeably better than those that hadn’t. Several are also restructuring around a narrower core mission rather than trying to sustain every programme at pre-2025 scale, and pooling functions like compliance, finance, and advocacy with other organisations instead of duplicating overhead.
Global philanthropic giving would need to more than double from its 2024 levels to fully replace what government funding has withdrawn, so diversification is not a quick fix — but organisations that started building relationships with a wider mix of foundations, corporate donors, and domestic philanthropy in 2025 are the ones with room to manoeuvre now. For groups still hunting for near-term funding, our running list of open grant calls is updated as new ones surface.
| Metric | Figure |
|---|---|
| USAID contracts/grants terminated in Kenya (2025) | $835 million+ (~Ksh108 billion), 80 projects |
| Kenya Health Partnerships for Quality Services losses | $95 million+ |
| External health funding, Kenya (FY2024/25 → FY2025/26) | Ksh126 billion → Ksh54 billion |
| Global Fund HIV allocation cut (2026–2028 cycle) | -18.2% |
| New HIV infections in Kenya (2024 → 2025) | 16,752 → 19,991 |
| PBOs that had completed PBO Act transition (as of May 2026) | ~8,458 of an estimated 14,700 |
The downstream effects reach beyond health programming into the community-development work covered in our look at what’s still working in poverty alleviation this year — funding pressure on health-focused NGOs tends to squeeze shared infrastructure, like community health volunteer networks, that other sector programmes rely on too.
Frequently asked questions
How much USAID funding did Kenya actually lose?
USAID’s own March 2025 report on terminated awards puts the figure at over $835 million (about Ksh108 billion) across roughly 80 projects, though the full picture — including awards that were reduced rather than fully terminated — is larger still.
What is the new US-Kenya HIV funding agreement?
A bilateral memorandum of understanding signed December 4, 2025, setting out a five-year plan for declining US health funding, with Kenya’s government expected to increase its own contribution as US support tapers. It was the first such agreement the US signed with any country; 34 have now been signed globally.
Are Kenyan NGOs shut out of the new funding model entirely?
Largely, yes, as designed — funding flows government-to-government rather than through implementing partners. Kenyan civil society organisations challenged this in court within days of the deal being signed, and the case is still ongoing, so the model’s final shape isn’t settled.
Which programmes have been hit hardest?
HIV prevention for key populations, orphan and vulnerable-children support, adolescent girls’ and young women’s programmes, voluntary medical male circumcision, gender-based-violence response, and harm reduction have all seen cuts or suspensions. Basic HIV testing and PrEP have mostly continued at reduced scale.
What can Kenyan NGOs do to diversify funding in 2026?
The organisations coping best started building a wider donor base — foundations, corporate partners, domestic philanthropy — before the crisis hit, rather than scrambling afterward. Pooling compliance and finance functions with other organisations, and narrowing focus to a core mission rather than sustaining every programme at once, are also showing up as workable strategies.
By the NGOs.ke Editorial Team.
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