When Project Rozana received a multimillion-dollar grant from USAID in 2022 to support its work training Israeli and Palestinian nurses side by side, the NGO’s leaders called it a chance to “move people forward positively from fear and distrust to hope.” 

A year later, that hope was tested, when the Oct. 7 Hamas terror attacks upended the Middle East and dramatically changed Project Rozana’s work, forcing many of its trainings to shift online as Israel placed more stringent restrictions on Palestinians coming from the West Bank into Israel for work. 

But in recent weeks, Project Rozana was making progress in again bringing the nurses together, coming from four Israeli hospitals and four Palestinian hospitals in the West Bank and east Jerusalem. Project Rozana planned a major educational event about diabetes at Israel’s Sheba Medical Center for later this month. But when President Donald Trump paused nearly all of USAID’s funding in late January, the training had to be canceled.

“We were just starting to ramp up the in-person work again when the freeze came,” said Kenneth Bob, chair of Project Rozana’s U.S. affiliate. The organization received a stop-work order from the U.S. Agency for International Development on Jan. 25, and since then it has had to stop operating the program for nurses. It has also not been able to pay the salaries of employees who staffed it. “It’s had a devastating impact on us,” he added. The organization is still waiting on a payment of $120,000 for work it completed in January before Trump took office.

In the name of shrinking the federal workforce and cutting off U.S. dollars going abroad, Trump and top deputy Elon Musk have all but shuttered USAID, whose $40 billion annual budget supports humanitarian projects internationally. Secretary of State Marco Rubio, who is now the acting administrator of USAID, has pledged to make sure USAID’s spending reflects U.S. priorities. 

USAID has for decades supported both Israeli and Palestinian organizations in the Middle East, with a particular emphasis on humanitarian support for the Palestinians. But the agency has also faced scrutiny for a perceived lack of vetting and transparency about the organizations it funds. 

Some in both the public sector and civil society have raised concerns that, while USAID does support important institutions and legitimate peacebuilding efforts, U.S. taxpayer dollars may be reaching other organizations with ties to terror or with an anti-Israel agenda. One organization that received USAID funds directed $2 million to another group that arranged meetings between Palestinian teens and convicted terrorists. Another USAID grantee produced a documentary criticizing U.S. anti-BDS laws.

All recipients of USAID funding — the good, the bad and the ugly — have been affected by the funding freeze, and organizations like Project Rozana are left scrambling. 

“We get a lot of questions about if we have money, can we spend it? Can we pay salaries?” said a senior employee at an American organization that works with NGOs in the Middle East, who requested anonymity to discuss their work with USAID-funded organizations. “Our advice to them has to be, ‘You need to get a lawyer … try to make the best decisions you can, and then just document everything.’”

In addition to Sheba Medical Center, USAID has also provided funding to top Israeli medical institutions including Shaare Zedek Medical Center and Hadassah hospitals in Jerusalem. Shaare Zedek’s American fundraising arm called its relationship with USAID “a beautiful partnership.” 

“The uncertainty of USAID funding directly impacts Hadassah,” Elizabeth Cullen, the organization’s government relations director, told Jewish Insider.

Rep. Mike Lawler (R-NY) on Tuesday slammed USAID for its “payments to [an] organization headed by [a] vicious anti-Israel rapper,” referring to a Palestinian musician who in a song called Israelis “cannibals” and “animals,” and compared Gaza to Auschwitz.

One Hadassah program now on hold “fosters collaboration between Israeli and Palestinian mental health professionals to better serve children and adolescents suffering from emotional trauma,” Cullen said. 

That program, like the Project Rozana training for nurses, is funded by the Middle East Partnership for Peace Act, a bipartisan bill signed into law by Donald Trump in 2020 that committed $250 million to supporting grassroots programs that build ties between Israelis and Palestinians. Like other USAID funding, it is appropriated by Congress. “It’s not for one person just to decide, ‘You know what? We’re gonna just ban USAID and fire everybody,’” said Dave Harden, the former USAID mission director for the West Bank and Gaza.

In Jerusalem, Middle East Entrepreneurs of Tomorrow is waiting on $1 million promised to them by USAID through the MEPPA program, which makes up nearly a third of its annual budget. The organization builds bridges between Jewish and Palestinian Jerusalemites by teaching teenagers about computer science and entrepreneurship.

“We ask questions, and we’re not getting answers,” CEO Yaniv Sagee said on Monday. 

“I thought that the USAID procedures for vetting participants were poor and that they made some mistakes,” said Elliott Abrams, the Republican foreign policy mainstay who until January sat on the advisory board that weighed in on MEPPA grants. 

The U.S. government has spent more than $6 billion in aid to Palestinians in the West Bank and Gaza since 1993. USAID has at times faced scrutiny, including from lawmakers, for supporting organizations and projects that have ties to terror groups or have espoused extremist anti-Israel rhetoric. 

Rep. Mike Lawler (R-NY) on Tuesday slammed USAID for its “payments to [an] organization headed by [a] vicious anti-Israel rapper,” referring to a Palestinian musician who in a song called Israelis “cannibals” and “animals,” and compared Gaza to Auschwitz. The rapper, Raffoul Saadeh, is the executive director of a Palestinian NGO called Tomorrow’s Youth Organization, according to his LinkedIn. Tomorrow’s Youth received $3.3 million from USAID for a MEPPA-affiliated program that trains female entrepreneurs. (He is not listed on the organization’s website, and a representative for the group did not respond to a request for comment.)

“I thought that the USAID procedures for vetting participants were poor and that they made some mistakes,” said Elliott Abrams, the Republican foreign policy mainstay who until January sat on the advisory board that weighed in on MEPPA grants. 

USAID has not always been transparent about the projects it supports in the region. According to NGO Monitor, an Israeli organization that tracks the activity of civil society groups, USAID spent $198 million in 2024 on “miscellaneous foreign awardees” in the West Bank and Gaza, but did not name the organizations that received the money.

“This lack of transparency is particularly concerning given the threat of aid diversion by Hamas and other malign actors in Palestinian areas,” NGO Monitor stated in a December press release.

NGO Monitor has for years tracked USAID funding to pro-Hamas and anti-Israel groups. In 2022, USAID provided $78,000 to the Community Development and Continuing Education Institute, three years after the group’s board chair participated in an event honoring the Popular Front for the Liberation of Palestine, a U.S.-designated terror group. Between 2009 and 2012, USAID provided $1.1 million to Just Vision to produce “short films.” In 2021, Just Vision released a documentary called “Boycott” that criticized U.S. laws targeting the Boycott, Divestment and Sanctions movement. 

A 2021 report from the U.S. Government Accountability Office said USAID should do more to increase oversight of grantees to ensure that they do not use American money to fund organizations that would run afoul of USAID’s anti-terrorism policies. Juzoor for Health and Social Development, a Palestinian NGO that received more than $2 million as a sub-grantee of a USAID project between 2013 and 2017, ran a program that arranged for Palestinian teenagers to meet convicted terrorists. 

“Providing assistance is intended to help foster a more stable economic and political environment, which can be a stabilizing influence and a conflict-lowering element in Israeli-Palestinian relations. Generally the IDF and COGAT agreed with that assessment,” said Dan Shapiro, the former U.S. ambassador who oversaw the Middle East portfolio at the Pentagon in the Biden administration.

“[USAID] might see that an NGO has the technical capacity to engage in some project but overall are not the right partner for U.S. taxpayer funds and may be harmful to the U.S. overall,” said Yona Schiffmiller, director of research at NGO Monitor. “They need a broader fundamental review of whether organizations advance U.S. goals and values.”

One argument from the Trump administration is that the U.S. has no need to fund far-flung projects across the world when the federal budget is already so bloated. 

Dan Shapiro, the former U.S. ambassador who oversaw the Middle East portfolio at the Pentagon in the Biden administration, argued that building up Palestinian institutions and helping meet Palestinians’ basic needs can help lower the temperature in the region, which is in Washington’s interest.

“You don’t cut the funding and then do the review,” said Kenneth Bob, chair of Project Rozana’s U.S. affiliate. “It’s that old expression that I was brought up on, throwing the baby out with the bath water.” 

“Providing assistance is intended to help foster a more stable economic and political environment, which can be a stabilizing influence and a conflict-lowering element in Israeli-Palestinian relations. Generally the IDF and COGAT agreed with that assessment,” Shapiro said, referring to the Israeli army and its humanitarian arm.

The organizations affected by the USAID pause — and even some critics of USAID’s funding in the Middle East — say that a review of funding priorities is appropriate, but that it should have been done differently. 

“You don’t cut the funding and then do the review,” said Project Rozana’s Bob. “It’s that old expression that I was brought up on, throwing the baby out with the bath water.” 

Abrams, who observed the USAID funding process on the MEPPA board, said he is “willing to accept that an enormous amount of money is wasted.” But, he added, “the way this is being done is brutal.”