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Foreign Aid 101 Cover Image

Foreign Aid 101: A quick and easy guide to understanding US foreign aid

Foreign aid contributes to global poverty reduction, helps protect basic rights and liberties, and benefits America’s interests – all for less than one percent of the US federal budget.

5th edition, published 22 March 2021

3 things you may not know about US foreign aid:

1. Americans vastly overestimate how much the United States spends on foreign aid.


Surveys show that Americans think the US spends as much as 26 percent of the federal bud­get on foreign assistance - more than on Social Security or Medicare. But the reality is that just 0.49 percent of the US federal budget is devoted to poverty-focused foreign assistance, or $29.5 billion in FY 19-20.

2. Development aid is not wasted by corrupt governments.

The US does not directly provide most of its poverty-reducing aid to foreign governments, but instead through US-based government contractors and NGOs. The US government has checks in place to minimize the risk of fraud and abuse and if done right, foreign assistance can actually push local institutions (foreign government agencies, private sector firms, and local nonprofits) to do the right thing and increase accountability to both their citizens and US taxpayers.

3. Americans spend more on candy, sporting goods, and jewelry than the US government spends on poverty-reducing foreign assistance.

The US government spends about $65.41 per American each year on development aid. Compare that to what Americans spend each year: $268.13 per person on Halloween Costumes, $158.44 per person on sporting goods, and $173.67 per person on jewelry.

Need we say more?

Oxfam's Foreign Aid 101 is a quick and easy guide that dispels the common myths around US foreign aid to developing countries, answers some fundamental questions as to why the US provides it, and how it can be more effective.






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