Vance, Rubio peddle fiction that 88 percent of foreign aid doesn’t go overseas

By Glenn Kessler —

“There are all these humanitarian programs, where we sent money to people for medicine, for food, okay? What I thought, before I got into government, what most Americans think is, okay, so we sent $100,000 to this group to buy food, for like poor kids in Africa, okay? And what actually happens is it’s not $100,000 that goes to the poor kids in Africa. The NGO, the nongovernmental organization, that gets that money, contracts that out to somebody else, … there are like three or four middlemen. What Marco Rubio told me … his best estimate, after having his team look at it, is that 88 cents of every dollar is actually being collected by middlemen. So every dollar we were spending on humanitarian assistance, 12 cents was making it to the people who actually needed it. That’s crazy. There’s a lot of waste.”

– Vice President JD Vance, remarks during interview with Theo Von, June 7

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We thought it would be helpful to display Vance’s full quote, because a social media post that received about 4 million views incorrectly attributed the 12-cents statistic to the U.S. DOGE Service. Instead, Vance said this number was the “best estimate” of Secretary of State Marco Rubio. Indeed, Rubio has used this statistic on Capitol Hill, decrying what he called the “foreign aid industrial complex.”

When asked for the source of this number, Vance’s spokesman did not respond to repeated queries and the State Department provided a nonresponsive statement that the “United States is no longer going to blindly dole out money with no return for the American people.”

Despite the stonewalling, we figured out where this 12-cents figure comes from. It’s a misunderstanding of a number in a U.S. Agency for International Development report issued before the Trump administration took office. That report recorded the percentage of funds that go directly to local entities, bypassing nongovernmental and international organizations. It’s not a new or undiscovered issue, as Vance framed it. In 2023, Samantha Power, USAID administrator in the Biden administration, had decried the “industrial aid complex” and set a goal of directing 25 percent of aid to local entities by 2025, more than doubling the level when she announced the goal.

As is often the case, the Trump administration is reinventing the wheel while misinterpreting the data.

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The Facts

We’re not sure how much Vance knows about business, but it’s simpleminded to believe $100,000 in humanitarian assistance would end up in Africa intact. People who deliver the aid must get paid, for instance, even if they work for nonprofit organizations. These organizations need accountants, lawyers and managers, too. The aid – say, food – may need to be delivered on ships. That also adds to the expenses. Moreover, some contractors who deliver aid are profit-making enterprises, so that’s an extra cut off the top.

A similar thing happens in the opposite direction. A doll might get made for $5 in an African country, but then another $2 is needed for export and shipping costs, and $3 for storage, logistics and profit for the importer. The America retailer then doubles the price – to $20 – to cover store operations, staff, rent and profit. You can’t expect, as Vance apparently does, a cost-free transfer across oceans.

In the case of foreign aid, Congress has set rules that further increase expenses. For instance, food aid must be purchased in the United States and by law must be shipped on U.S. carriers, according to the Congressional Research Service.

For years, foreign-policy experts have argued for more aid to be handled at the local level, thereby saving on overhead. (Washington, D.C., for example, is more expensive than most cities in developing countries in Africa, South America, the Caribbean and Asia.) The Share Trust, which pushes for more local funding, estimated last year that local intermediaries in the Middle East could deliver programming that is 32 percent more cost efficient than international organizations.

Steve Gloyd, a global health expert at the University of Washington, had decried what he calls “phantom aid,” in which he said 30 to 60 percent of the total budget of some global health aid projects never even leave the headquarters of the nongovernmental organization hired to manage the program. International NGOs also can inflate the salaries of local staff, draining health ministries of expertise and raising in-country costs.

Not every country, however, has organizations in place that can take on the job. So, for-profit contractors such as Chemonics ($1.6 billion in 2024) and DAI Global ($500 million) win contracts from USAID to, among other tasks, reduce Ukrainian corruption, create a Famine Early Warning System Network and support democracy in El Salvador, according to Pub K Group, which surveys government contracts.

More than 20 years ago, President George W. Bush set up Millennium Challenge Corp. as a way to get individual countries more invested in using the funds wisely – and building sustainable programs to take on the task after the American contract has ended. (DOGE attempted to shutter MCC, but it appears to have gotten a reprieve.)

This brings us to the 12-cent statistic. We scoured for estimates of how much aid money is lost to fees and expenses. There’s no overall number, and the amount varies from program to program, with some highly efficient. But it’s not an 88 percent loss overall. Instead, Vance and Rubio are referring to a report issued under Power assessing progress on her goal of delivering 25 percent of funds to local aid organizations.

In the 2024 fiscal year, “USAID provided $2.1 billion directly to local nongovernmental, private sector and government partners, or 12.1 percent of USAID’s acquisitions and assistance (A & A) and government-to-government (G2G) funding,” the report said. Additional aid given to regional partners brought the percentage to 12.6. The Trump administration deleted the report, which noted that USAID for 15 years has sought to direct more aid to local entities, but it can still be found on the Wayback Machine internet archive.

Publish What You Fund, a group advocating for greater transparency in aid funding, disputed USAID’s methodology, saying the figure is just 5.1 percent, though no major donor country does well. (The Netherlands tops the list at 6.9 percent.)

But, again, this is not what Vance said – “Every dollar we were spending on humanitarian assistance, 12 cents was making it to the people who actually needed it.”

The misunderstanding may have started, as these things do, with a tweet by billionaire Elon Musk. On Feb. 1, as Musk led DOGE’s dismantling of USAID, he elevated a quote from a PBS interview with Walter Kerr, co-executive director of Unlock Aid, a D.C.-based nonprofit that aims to improve American aid effectiveness. “The level of corruption and waste is unreal!” Musk posted.

Kerr was quoted as saying: “It’s actually less than 10 percent of our foreign assistance dollars flowing through USAID is actually reaching those communities.” Kerr told The Fact Checker he had been interviewed in August, and he was referring to a previous report issued by USAID on the percentage of funds going to local aid organizations. His organization issued a statement saying the quote had been taken out of context – a graphic in the PBS segment made clear what he meant – but the genie was out of the bottle.

When Rubio testified before the Senate on May 20, asserting that “at USAID, 12 cents of every dollar was reaching the recipient,” some Democratic lawmakers called him out.

“It would certainly shock Americans to hear that only 12 percent of our foreign aid reaches recipients, needy recipients on the ground, the people who need the help,” said Sen. Chris Murphy (Connecticut). “That is not actually an accurate number. That is the amount of aid that goes directly to local groups on the ground. But as you know, most of our aid runs through bigger international organizations like Save the Children. Those entities are getting somewhere around 80, 85 percent of the aid we give them directly to recipients on the ground.”

Rubio did not respond.

Then Sen. Brian Schatz (Hawaii) followed up.

“It is just not true that only 12 percent of the aid reaches recipients. … That is excluding the World Food Program, that is excluding Catholic Relief Services,” he said. “I will just say if there’s an enterprise to reduce overhead, count me in, but it is not 88 percent overhead. That’s not what’s happening.”

This time, Rubio answered. “That number, just to clarify, was actually Samantha Power’s number,” he said, without admitting error. “And she regretted that one of the things she was unable to do at USAID is improve upon that number.”

Rubio may have trouble improving on that number as well.

The foreign-aid cuts under President Donald Trump have significantly tilted the percentage of foreign-aid awards toward U.S.-based institutions, according to an analysis by the Center for Global Development, a think tank. “Given how scandalous members of the administration appeared to find the fact that only about ten percent of USAID awards went to prime awardees based in recipient countries, it is surely disappointing their ‘reform’ efforts have further decreased that percentage,” the analysis said.

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Four Pinocchios

There’s a good case that too many foreign-aid dollars get spent inside the Beltway, and that more funds should be directed to organizations on the ground in recipient countries. After years of debate, the Biden administration set a goal for improvement.

But Vance and Rubio are undermining the case for reform when they twist statistics and make outlandish claims in interviews and in congressional testimony. Rubio, in his testimony, appeared to acknowledge that he was citing a number generated by the Biden administration – but he failed to admit error. And apparently he failed to tell the vice president that “his best estimate” was false.