Background: The U.S. Agency for International Development (USAID) has been the primary funding source for Armenia’s civil society since the 1990s. In the past five years, USAID’s programs have supported many Armenian NGOs, independent media outlets, and community initiatives, with an estimated $20 million allocated annually to civil society projects. These funds have strengthened key sectors, such as civic engagement (e.g., election monitoring, youth advocacy), education (curriculum reforms, youth programs), and environmental protection (community conservation projects). However, the sudden closure of USAID operations in 2025—part of a broader freeze on U.S. foreign aid—has shocked Armenia’s non-governmental organizations (NGOs). This policy insight examines the immediate impacts of USAID’s departure on Armenian civil society organizations (CSOs) and explores how they can adapt to maintain Armenia’s democratic development and sectoral resilience.

Quantitative Impact: The scale of USAID support in Armenia was significant. From 2018 to 2023, annual U.S. assistance to Armenia grew from about $26 million in FY2018 to over $70 million by FY2023,^[1] with a large portion directed toward democracy and civil society programs. For instance, in FY2023, Armenia received $71.7 million in USAID obligations—more than triple the amount it received in 2018. Approximately 100 to 150 Armenian CSOs benefited directly from USAID funding annually through grants and partnerships in civic participation, media development, education, and environmental advocacy. USAID’s Civil Society in Action project alone, launched in 2022, committed $7.7 million to strengthen local CSO capacity, while a five-year Media Program (2023–2028) provided $15 million—the largest-ever USAID investment in Armenia’s media sector. In education, USAID introduced civic education into schools and funded innovative labs (e.g., a $1.8 million STEM lab at AUA). USAID projects are often integrated with community development in the environmental, climate, and rural community sphere, ranging from eco-tourism in rural areas to energy efficiency initiatives.

In 2024, Armenia received $110 million instead of the $250 million provided under the grant agreement with the USAID to develop cooperation with the United States^[2]. The Armenian Ministry of Foreign Affairs noted that all foreign aid programs funded by the U.S. Department of State and the U.S. agency have been frozen, and the Ministry no longer has joint programs with the agency. “As of 2024, $110 million out of $250 million has been allocated, of which about 49 million has been allocated to support democratic reforms,” the Armenian Foreign Ministry explained. Within the framework of this initiative, five programs were implemented in Armenia: “Rule of Law and Human Rights” ($6.6 million), “Effective Governance” ($18.9 million), “Political Competition and Consensus Building” ($8 million), “Civil Society and the Media” ($13.6 million) and “Humanitarian Aid” ($1 million)^[3]. Thus, about $29.8 million was allocated to increase the private sector's productivity, about $3.2 million for workforce development, and about $25.8 million for energy services. About $60 million was distributed among programs to increase Armenia's economic security. Finally, about $29.8 million was allocated to increase productivity^[4].

With USAID’s exit, these funding streams have dried up. Preliminary data suggest that 40% or more of Armenian NGOs relied on USAID grants for a substantial portion of their budgets. Multiple grassroots initiatives have already halted their activities and cannot cover basic costs like rent and staff salaries. Larger, well-established NGOs are also affected: many have been forced to scale back programs, freeze new projects, or seek bridge financing. The numbers tell roughly $20–25 million in annual civil society funding has been withdrawn. Important civic programs – such as voter education, municipal transparency projects, and environmental conservation grants – face suspension. For example, the HETQ Media Factory (a journalism training initiative) and Factor TV’s watchdog program have reported immediate funding gaps.^[5] This sudden contraction poses a risk of sector-wide regression, undoing years of capacity-building investment.

Qualitative Impact on Key Sectors: Beyond the numbers, the quality and vitality of civic activism in Armenia are at risk. The civic engagement sector, including election observers, pro-democracy groups, and community advocacy, will be hardest hit. These groups have supported Armenia’s democratic process, especially after the 2018 Velvet Revolution. USAID-backed programs helped institutionalize citizen oversight of elections and policymaking, for instance, training hundreds of election monitors and supporting local councils through the Civic Engagement in Local Governance project. With funding withdrawn, Armenia’s watchdog capacity and grassroots mobilization could weaken. Fewer resources for town hall meetings, policy research, and civic tech mean less citizen input in governance. Organizations that once facilitated dialogues between communities and officials may struggle to maintain that platform. This comes at a delicate time: Armenia’s democracy score had been improving (Freedom House noted incremental gains in civil society, from 4.50 to 4.75 in its rating in 2023). The lack of funding jeopardizes and threatens to stall or reverse these gains, risking a decline in government accountability and public trust.

The loss of USAID support is equally troubling in the independent media and information sector. USAID’s media program was building the sustainability of non-partisan journalism through training and grants. Its suspension is already “a severe blow” to independent outlets. Without alternative support, investigative journalism units may downsize, and fewer impartial news sources could leave an information void. Media experts warn of an “increase in non-transparent funding flows” and influence from less democratic actors filling the gap. This would undermine the informed civic discourse necessary for a healthy democracy.

The education and youth sector faces setbacks, too. Projects like the USAID-funded Armenia Civics for Engagement (ACE) integrated civic lessons into schools and supported youth-led initiatives. With grants frozen, planned rollouts of new civic curricula and extracurricular civic clubs are on hold. This curtails the momentum in empowering Armenia’s next generation of active citizens. Similarly, NGOs focusing on environmental protection and community development – many of which benefited from joint USAID/environment programs – must now find new sponsors for their initiatives as Armenia prepares to host the UN Biodiversity COP17 in 2026, a moment when strong civil society participation in environmental policymaking is crucial. Conservation groups worry that without sustained funding, they may not effectively contribute to COP17 preparations or leverage the conference to advance domestic environmental reforms.

Democratic Development and Resilience: In the broader context, USAID’s departure raises concerns about Armenia’s democratic resilience. Over the past five years, civil society and government reformers have often worked together, supported by donors, to implement changes, from anti-corruption measures to human rights protections. Those efforts could lose momentum without civil society partners to advocate for and monitor progress. Civil society organizations (CSOs) guard Armenia’s democracy, offering policy expertise, watchdog functions, and civic education. Their weakening may embolden anti-democratic tendencies. Indeed, the timing is precarious: Armenia is facing security pressures and post-conflict recovery, making the role of independent civic voices in policy debates even more crucial. If NGOs contract significantly, the space for public discussion and pluralism will diminish, potentially skewing the balance in favor of government narratives and reducing scrutiny of power.

Notably, the shock also underscores structural vulnerabilities in Armenia’s civic sector, such as an over-reliance on external donors. Both observers and CSO leaders recognize that heavy dependence on foreign aid made the sector “vulnerable and unstable.” When a major donor like USAID pulls out suddenly, local civil society has few immediate safety nets. Domestic funding in Armenia remains limited; while some ministries and communities fund CSOs for service delivery, there is scant public or private sector support for advocacy-oriented NGOs. Philanthropy is nascent, and corporate sponsorships favor charitable projects over watchdog activism. Thus, USAID’s exit, however disruptive, is forcing a reckoning: Armenian civil society must diversify its support base to become more self-sustainable.

Adaptability and Future Strategies: Armenian CSOs are not standing idly by. Leading organizations are urgently strategizing ways to adapt and survive post-USAID. Key avenues being pursued include:

• Pivoting to Alternative Donors: The European Union, United Nations, and other international donors are immediate targets to fill the funding gap. The EU, in particular, has an existing civil society support framework in Armenia (e.g., the EU’s €25M “Civil Society Facility” programs). Armenian NGOs are preparing new proposals for EU grants and contacting European embassies for short-term bridging funds. However, these processes take time and often involve bureaucratic delays. Still, the EU and others have signaled their intent to step up assistance, and coordination is underway to expedite some funding to the most at-risk NGOs.
• Engaging the Armenian Diaspora and Private Sector: With foreign governments’ aid in flux, Armenian CSOs are increasingly looking to the global Armenian diaspora, known for its charitable giving, as a source of philanthropic funding. Some NGOs have already launched crowdfunding campaigns and diaspora appeals to cover operational costs for the coming months. Additionally, there is a push to cultivate support from the local private sector. Armenia’s business community has historically been neutral or distant toward civil society. Still, now some NGOs are pitching CSR (Corporate Social Responsibility) partnerships, such as environmental groups collaborating with IT companies on green initiatives. While private domestic funding will not replace USAID overnight, even modest corporate grants or service contracts can help organizations stay afloat. Over the longer term, establishing endowment funds or community foundations could provide more stable local funding mechanisms for Armenian civil society.
• Coalitions and Cost-Sharing: Another adaptive strategy is increased collaboration among CSOs. Rather than each organization individually bearing the shock, NGOs are forming alliances to pool resources and expertise. For example, several human rights groups are co-locating in shared office spaces to reduce rent expenses, and regional NGO networks are considering merging certain functions (such as joint training centers or shared IT support). The recent crisis has, in a way, fostered solidarity: stronger NGOs are informally mentoring smaller ones on fundraising and management without USAID. By consolidating efforts and avoiding duplication, civil society can maintain many activities even with fewer resources.
• Government Engagement and Policy Change: There are also calls for the Armenian government to take a more active role in sustaining civil society. Options mentioned include providing temporary tax relief to NGOs, creating a state matching fund for grants, or, at a minimum, removing administrative hurdles for foreign funding. Thus far, the government’s response has been cautious, likely due to political sensitivities and a desire to maintain distance from independent NGOs. Yet, as one analyst noted, ensuring the survival of a vibrant civil society aligns with Armenia’s democratic development goals. A constructive state-civil society dialogue could yield measures (like simplifying grant registration processes or offering small grants for social services) that help NGOs weather this period. In the run-up to COP17, for example, the government could involve environmental NGOs in planning committees, giving them a formal role (and possibly budget support) in shaping the conference agenda. Such collaboration would demonstrate the value of civil society expertise and potentially attract new resources tied to high-profile events and reforms.

Comparative Outlook – Georgia and Azerbaijan: Armenia is not alone in facing donor funding challenges, but the context differs across the South Caucasus. Georgia, which historically had one of the strongest civil societies in the post-Soviet space, is also grappling with the halt of USAID aid.^[6] In 2024, Georgia was the top regional recipient of U.S. aid (about $114 million in U.S. assistance) allocated for civil society and governance. Georgian NGOs active in human rights, anti-corruption, and service delivery are experiencing similar funding shortfalls. However, Georgia’s civil society operates within a contrasting political environment: in recent years, the ruling party in Georgia has become increasingly antagonistic toward Western-funded NGOs. In early 2023, the Georgian parliament even attempted to pass a “foreign agents” law targeting NGOs, mirroring Russian-style restrictions, before massive public protests forced its withdrawal. This political pressure has led to a downgrade of Georgia’s civic space rating to “Obstructed” by CIVICUS. While comparatively large and experienced, Georgian civil society faces internal challenges stemming from polarization and government hostility.^[7] The loss of USAID support in Georgia exacerbates an already tense situation – NGOs have to find new funding and fight for their legitimacy against smear campaigns. On the positive side, Georgia’s NGO sector has somewhat diversified funding (with support from European and private foundations). It has a proven capacity for mobilizing citizens (as seen in the successful protests against the foreign agent law). This resilience suggests that Georgian civil society may withstand the aid cutoff, though at the cost of scaling back some programs. Even as they adjust budgets, Georgian NGOs will likely double down on advocacy to protect civic space. In short, Georgia’s civil society environment is a mix of robust citizen activism and growing government constraints – a stark contrast to Armenia, where government-CSO relations are less openly hostile but financial dependency is higher.

Azerbaijan, by contrast, presents a far more restricted civic landscape. Independent civil society in Azerbaijan was decimated by a government crackdown starting in 2014, when draconian laws on foreign grants and NGO registration were introduced​.[8] Many Azerbaijani NGOs had their accounts frozen, leaders jailed or exiled, and foreign organizations (including USAID partners) were forced to shut down. As a result, USAID’s role in Azerbaijan has been minimal in recent years, limited mainly to apolitical sectors such as health and rural development. In FY2023, U.S. assistance to Azerbaijan was only $21.9 million (a fraction of that for Armenia or Georgia), directed at basic health services, economic growth, and some government capacity-building. Virtually no independent advocacy NGOs could openly use U.S. funding for democratic reforms. Therefore, the impact of USAID’s closure on Azerbaijan’s civil society is relatively limited, simply because the regime had already closed off that space. Azerbaijani activists note that they lost access to USAID and other Western funds years ago; those who continue to work in human rights do so through informal networks or from abroad. In essence, Azerbaijan today serves as a cautionary tale: its civil society environment is “closed” (CIVICUS score 20/100), demonstrating how government repression can preemptively eliminate the benefits of international support. Ironically, the broader USAID freeze might embolden Baku’s narrative that Western aid is unreliable or driven by hidden agendas. Yet it might also spur Western donors to reconsider how to support Azerbaijani civil society in exile or through regional initiatives, since traditional channels have been blocked.

Way Forward for Armenian Civil Society: Armenia stands at a crossroads. On one path, the sudden aid cutoff could lead to a lasting contraction of civic space, characterized by fewer active organizations, reduced watchdog capacity, and greater influence from undemocratic forces. On the other hand, this crisis could catalyze reforms and innovations that render Armenian civil society more resilient and locally grounded. The coming months will be critical. Already, we observe early signs of adaptation as described. The international community, for its part, is watching closely. Coordination among remaining donors is improving; for example, the EU’s delegation in Yerevan is convening meetings with major European donors and foundations to synchronize their support efforts in place of USAID.^[9] 

For Armenian CSOs, a key strategy will be to demonstrate impact and build public trust within Armenia. Historically, NGOs have sometimes been unfairly accused of serving foreign agendas. Now is an opportunity for civil society to visibly align with citizens’ needs by continuing critical services and advocacy, even amid funding cuts. Successful examples, such as community-driven crowdfunding for local charities or tech NGOs generating revenue by offering training courses, can inspire a new model of civic engagement that is less dependent on government or foreign largesse. As one civil society leader said, “We must not only look for new donors, but also rethink our role – to become indispensable to our communities so that support will follow.” Building stronger constituencies at home can translate into political capital that encourages the government and businesses to invest in the sector as a domestic priority, rather than just a donor-driven activity.

Conclusion: The closure of USAID operations in Armenia is undeniably a major setback for civil society, but it need not spell disaster. Armenia’s NGOs have proven their creativity and commitment through past challenges. With Armenia gearing up to host COP17 and aiming to deepen democratic reforms, a vibrant civil society is needed now more than ever – to hold authorities accountable, engage citizens in decision-making, and ensure inclusive development. Safeguarding this progress will require collective action: remaining donors must coordinate to fill critical gaps and perhaps reconsider abrupt funding freezes in unstable regions; the Armenian government should recognize civil society as a partner in nation-building and enable alternative support; and CSOs themselves must accelerate their shift toward diversified funding and local engagement. In the words of Shushan Doydoyan of the Freedom of Information Center, the situation, while a “cold shower,” is also an opportunity for civil society to “mobilize its resources” and innovate.^[10] If Armenian civil society can emerge from this crucible and become more self-reliant and connected to its citizen base, it will not only survive the exit of USAID but also chart a more sustainable future for the country’s democratic development.

Author: Verej Isanians, PhD, ORCID: https://orcid.org/0009-0008-1145-9251. Nexus Intellect Research.

References:

1. U.S. Embassy in Armenia. “United States Announces Assistance Increase for Armenia.” U.S. Embassy in Armenia, April 19, 2024. https://am.usembassy.gov/assistance-increase/.
2. News.am. “USAID Manages to Transfer About 50% of Pledged $250M to Armenia.” News.am, March 20, 2025. https://news.am/eng/news/869538.html.
3. CivilNet. “The US Has Frozen Foreign Aid: How Does This Affect the Armenian Media?” CivilNet, February 27, 2025. https://www.civilnet.am/en/news/814706/the-us-has-frozen-foreign-aid-how-does-this-affect-the-armenian-media/.
4. United States Agency for International Development. 2022 Civil Society Organization Sustainability Index for Central and Eastern Europe and Eurasia. 26th ed. Washington, DC: USAID, November 2023. https://www.fhi360.org/wp-content/uploads/drupal/documents/csosi-europe-eurasia-2022-report.pdf.
5. CIVICUS. “Georgia.” CIVICUS Monitor. Accessed April 28, 2025. https://monitor.civicus.org/country/georgia/.
6. Geybullayeva, Arzu. “2014: The Great Azerbaijani Crackdown.” Osservatorio Balcani e Caucaso Transeuropa, February 2, 2015. https://www.balcanicaucaso.org/eng/Areas/Azerbaijan/2014-The-great-Azerbaijani-crackdown.​
7. EU Neighbours East. “Call for Proposals for Civil Society in Armenia: Grants up to €3 Million.” EU Neighbours East, accessed April 28, 2025. https://euneighbourseast.eu/opportunities/call-for-proposals-for-civil-society-in-armenia-grants-up-to-e3-million/.
8. Panorama.am. “Freedom of Information Center Head: Suspension of USAID Programs Is a Cold Shower for Civil Society.” Panorama.am, January 29, 2025. https://www.panorama.am/en/news/2025/01/29/suspension-USAID-programs/3107734.
    

[1] U.S. Embassy in Armenia. “United States Announces Assistance Increase for Armenia.” U.S. Embassy in Armenia, April 19, 2024. https://am.usembassy.gov/assistance-increase/.

[2] News.am. “USAID Manages to Transfer About 50% of Pledged $250M to Armenia.” News.am, March 20, 2025. https://news.am/eng/news/869538.html.

[3] Ibid.

[4] News.am. “USAID Manages to Transfer About 50% of Pledged $250M to Armenia.” News.am, March 20, 2025. https://news.am/eng/news/869538.html. Note: The Ministry of Foreign Affairs of Armenia reported this in response to a written request from Sputnik Armenia.

[5] CivilNet. “The US Has Frozen Foreign Aid: How Does This Affect the Armenian Media?” CivilNet, February 27, 2025. https://www.civilnet.am/en/news/814706/the-us-has-frozen-foreign-aid-how-does-this-affect-the-armenian-media/.

[6] United States Agency for International Development. 2022 Civil Society Organization Sustainability Index for Central and Eastern Europe and Eurasia. 26th ed. Washington, DC: USAID, November 2023. https://www.fhi360.org/wp-content/uploads/drupal/documents/csosi-europe-eurasia-2022-report.pdf.

[7] CIVICUS. “Georgia.” CIVICUS Monitor. Accessed April 28, 2025. https://monitor.civicus.org/country/georgia/.

[8] Geybullayeva, Arzu. “2014: The Great Azerbaijani Crackdown.” Osservatorio Balcani e Caucaso Transeuropa, February 2, 2015. https://www.balcanicaucaso.org/eng/Areas/Azerbaijan/2014-The-great-Azerbaijani-crackdown.​

[9] EU Neighbours East. “Call for Proposals for Civil Society in Armenia: Grants up to €3 Million.” EU Neighbours East, accessed April 28, 2025. https://euneighbourseast.eu/opportunities/call-for-proposals-for-civil-society-in-armenia-grants-up-to-e3-million/.

[10] Panorama.am. “Freedom of Information Center Head: Suspension of USAID Programs Is a Cold Shower for Civil Society.” Panorama.am, January 29, 2025. https://www.panorama.am/en/news/2025/01/29/suspension-USAID-programs/3107734.