Small Business Owner Describes The Devastating Immediate Impact Of DOGE Cuts On Her Company

Key Concepts

USAID cuts and their impact on US-based businesses
The role of small businesses in international development
The interplay between bilateral aid and philanthropic foundations
The destabilizing effects of sudden aid withdrawal
The importance of the READ Act and congressional appropriations
The concept of "soft power" and its implications for US national security

Impact of USAID Cuts on Ed Intersect and North Carolina

Mary Faith Mount Kors, president and founder of Ed Intersect, a North Carolina-based company focused on basic education and system strengthening in developing countries, discusses the devastating impact of the Trump administration's USAID cuts on her business and the broader community.

Project Termination: Ed Intersect's current projects in Malawi and Tajikistan have been terminated, and the company has not been paid for work already completed in December and January.
Financial Strain: The company faces potential failure due to the loss of revenue and the inability to cover operational costs and technical team salaries. Small businesses typically don't have 6-12 months of capital reserves.
Mission Disruption: The cuts undermine Ed Intersect's mission of providing high-quality education services and building trust with partner governments.
Foundation Funding Limitations: While foundation funding is being explored, it cannot fully replace the role and stability provided by USAID partnerships. Foundations often bring specific expertise rather than large dollar amounts of funding.
Local Economic Impact: The cuts are causing job losses and economic hardship in North Carolina, affecting families, universities, and related sectors like agriculture and global health. People are putting their houses on the market due to loss of income.
RTI and FHI 360 Layoffs: Large organizations like RTI International have already experienced significant layoffs (177 permanent terminations in North Carolina, 340 total) due to USAID program closures. FHI 360 has also experienced tremendous layoffs.
Small Business Struggles: Other small businesses in the international development sector are also facing layoffs and struggling to find new work.
North Carolina's Ranking: North Carolina is the fourth largest economic hit in terms of the USAID closure.
University Impacts: The University of North Carolina laid off 35 people in the Carolina Population Center.

Consequences for Education Programs and Beneficiaries

The sudden suspension of USAID-funded education programs has significant consequences for children and teachers in the affected countries.

Disrupted Learning: While there is hope that partner governments will continue the work, the cuts will likely affect access to school and the quality of education.
Exacerbated Challenges: The departure of USAID will magnify existing challenges, such as epidemics and natural disasters, that affect children's ability to attend school.
Lost Resources: Math materials and manipulatives developed for Tajikistan had to be put in a warehouse and were not able to get to schools.
Assessment System Uncertainty: The future of assessment systems developed in collaboration with the government of Malawi is uncertain.

Arguments Against the Cuts and Their Justification

Mount Kors refutes the arguments used to justify the USAID cuts, highlighting their ineffectiveness and broader implications.

Debt Reduction Misinformation: The cuts will not significantly reduce the national debt, as the savings are equivalent to only one day of interest on the debt.
Inefficiency: The sudden and disruptive nature of the cuts is highly inefficient, leading to business dissolution and economic instability.
Destabilization: The cuts destabilize both the US economy and the economies of partner countries, undermining trust and long-term development efforts.
Congressional Appropriations: Questions are raised about the whereabouts of congressionally appropriated funds for programs like basic education under the READ Act. "Where is this congressionally appropriated money?"
Soft Power Implications: The cuts cede "soft power" to other global powers like China and Russia, undermining US national security interests.

Rebuilding Strategies and Future Outlook

Ed Intersect is exploring strategies to rebuild its business, but the future remains uncertain.

Due Diligence: Mount Kors feels obligated to keep "a light on" through the end of the calendar year.
Foundation Funding Pursuit: The company is pursuing small, foundation-funded projects to potentially rebuild a portfolio.
Piecemeal Work: Future work is expected to be more piecemeal and less stable than the previous five-year USAID awards.
Household Income Replacement: Mount Kors is seeking adjacent opportunities to replace lost household income.
Domestic Market Challenges: Opportunities in the domestic education sector are limited due to budget cuts and retraction.
Day-to-Day Uncertainty: The situation is highly fluid, requiring constant adaptation and reassessment.

Key Questions and Concerns

Mount Kors raises several key questions and concerns regarding the USAID cuts:

Where is the congressionally appropriated money for programs like basic education?
Why are we ceding "soft power" to other global powers like China and Russia?
How can we restructure international development efforts while ensuring the viability of organizations and businesses involved?

Soft Power and National Security

Mount Kors emphasizes the importance of "soft power" in safeguarding US national security.

Three-Pronged Approach: US engagement with the world relies on defense, diplomacy, and development, which work in complementarity.
China's Influence: China is already stepping in to fill the void left by USAID, replicating US-funded projects in countries like Cambodia.
Belt and Road Initiative: The cuts undermine the US's ability to compete with China's Belt and Road Initiative.
Citizen Engagement: US citizens should engage with their elected officials to discuss the implications of the cuts for soft power and national security.

Conclusion

The USAID cuts have had a devastating impact on Ed Intersect, the broader community in North Carolina, and the beneficiaries of education programs in developing countries. The cuts are not only economically damaging but also undermine US national security interests by ceding "soft power" to other global powers. The future remains uncertain, but Mount Kors is committed to exploring strategies to rebuild her business and advocate for a more effective and sustainable approach to international development.