WASHINGTON – Last year, a significant division within the U.S. Agency for International Development (USAID) faced elimination due to funding cuts imposed during the previous administration. On Thursday, that division, known as Development Innovation Ventures (DIV), was reborn as the independent nonprofit DIV Fund, enabling continuation of its international development efforts under a new operational model.
This transformation was made possible by a $48 million contribution from two private philanthropic sources, an exceptional achievement during an era when U.S. foreign aid experienced unprecedented reductions. Under the Trump administration, all foreign funding from USAID was suspended, and a government efficiency initiative led by Elon Musk dismantled the agency that had been the primary channel for American foreign aid for six decades. The closure led to the loss of tens of thousands of jobs worldwide and adversely impacted numerous developmental initiatives.
In response to these disruptions, various private sector entities have taken up efforts to preserve the extensive data and institutional knowledge cultivated by USAID, assist ongoing recipients to maintain critical programs, and reimagine approaches to international development. However, among these initiatives, few have attracted the magnitude of philanthropic financing secured by the DIV Fund.
On Thursday evening, staff members of the DIV Fund along with previous program beneficiaries and philanthropists convened in the glass-walled penthouse of a prominent Washington think tank to celebrate this new phase. The gathering reflected a resolute and optimistic spirit, underscoring their success in finding continuity amidst broad disruptions to the field of international aid.
Michael Kremer, the DIV Fund's scientific director and Nobel laureate economist, acknowledged the formidable impact of losing U.S. government support, describing it as a substantial setback. He expressed appreciation that private donors have stepped forward to partially mitigate this loss, though highlighting that current funding fills only a fraction of the previous gap.
Several leaders instrumental in the nonprofit’s formation were also involved in channeling approximately $110 million from private philanthropic sources over the past year to projects left unfunded after USAID’s withdrawal. The DIV Fund now plans to award about $25 million in grants annually, representing just over half of the budget that DIV operated under within USAID.
Effective Fundraising Fueled by Focus and Relationships
The DIV Fund’s fundraising achievements stem from multiple factors. Functioning as a research and development hub, the nonprofit specializes in identifying low-cost, high-impact intervention strategies and facilitating their scale-up, resulting in a comparatively modest budget relative to large-scale programs addressing issues such as HIV treatment or famine relief.
Prior to its departure from USAID, DIV had already attracted external philanthropy, including a $45 million grant from Coefficient Giving, a San Francisco-based foundation now serving as one of the nonprofit’s principal donors. An additional donor remains anonymous.
Kremer further noted that the projects supported generally secure supplementary funding from local governmental bodies or generate their own income streams, reducing reliance on continued donor country financing—a critical attribute given sharp cuts to foreign assistance by several long-standing donor nations.
Continuing Innovation Beyond USAID
To date, the DIV Fund has allocated $20 million of its raised capital to former grantees, retaining $28 million to finance new initiatives. They anticipate issuing an open call for proposals this year, a process valued for uncovering innovative ideas. While part of USAID, DIV could influence other agency sectors and facilitate additional backing for endorsed projects. Operating independently now, the DIV Fund intends to collaborate with major international donors such as the World Bank and governments worldwide to encourage analogous innovation funds.
Otis Reid, executive director of Global Health & Wellbeing at Coefficient Giving, emphasized that with shrinking official development assistance budgets, ensuring the remaining resources are allocated to highly effective interventions is increasingly vital. He asserted that DIV’s role is critical in advancing projects along a spectrum from marginally effective to highly impactful.
Many DIV-backed initiatives undergo validation via randomized controlled trials (RCTs), a research method that measures effectiveness rigorously. Kathryn Oliver, a policy evidence expert from the London School of Hygiene and Tropical Medicine, acknowledged RCTs as the gold standard for measuring intervention effectiveness compared to standard treatments but cautioned they do not answer comprehensive policy questions, such as acceptability or alternative approach comparisons.
Uncertain Prospects for Future U.S. Government Collaboration
As an independent entity, the DIV Fund remains open to partnerships with the U.S. government. However, skepticism about USAID persists within senior officials, including statements by Secretary of State Marco Rubio characterizing the agency as inefficient and fostering dependency. Despite significant foreign aid cuts enacted in 2025, Congress allocated $50 billion for varied international assistance programs, notably exceeding executive branch requests.
DIV’s original work garnered bipartisan backing in part due to the strong return on investment achieved by its programs, a metric appealing to both government and philanthropic funders. While the DIV Fund does not aim to replace financing for large, well-established programs—such as those with extensive evidence bases or costly humanitarian responses—it nevertheless urges donor nations to maintain support for these critical initiatives.
Executive cofounder Sasha Gallant emphasized the imperative of delivering comprehensive interventions that improve livelihoods, save lives, and keep children in education on a large scale.
The DIV Fund’s journey exemplifies a novel model for sustaining development innovation post-USAID defunding, relying on private philanthropy and strategic partnerships to continue advancing cost-effective international aid solutions amid an evolving funding landscape.