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0:00 Introduction
1:53 Trump Cuts Impacting Education
6:46 Will There Be Support Under Trump USAID Cuts?
16:57 Advice To Small Business Owners Under Trump Cuts To Budget
23:34 How To Be Smart About Scaling Your Business In This Economy
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0:00 Introduction
1:53 Trump Cuts Impacting Education
6:46 Will There Be Support Under Trump USAID Cuts?
16:57 Advice To Small Business Owners Under Trump Cuts To Budget
23:34 How To Be Smart About Scaling Your Business In This Economy
Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:
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Stay Connected
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More From Forbes: http://forbes.com
Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.
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LifestyleTranscript
00:00Hi, everyone. I'm Maggie McGrath, Senior Editor at Forbes. In February, the Trump administration
00:09cut more than 90 percent of USAID's contract and aid to the world. It's a more than $60
00:19billion cut to global programs, but the effect is being felt here at home. Joining us now
00:26is a founder and president of a North Carolina-based company that is one of those local American
00:33companies that is feeling the effects of these USAID cuts. She is Mary Faith Mountcourse.
00:39She's the president and founder of Ed Intersect. Mary Faith, thank you so much for being here.
00:46Thank you for having me.
00:48So as I framed in this conversation, you are based in North Carolina. You are the founder
00:52and president of something called Ed Intersect. Just for our audience, can you give the 60-second
00:57explainer of the work that your company does?
01:01Certainly. Yes, we work in basic education. We do system-strengthening work in partnership
01:11with governments in the countries in which we are working. So most of our work has been
01:18with USAID, so we see it as part of our service to the U.S. government that we are working
01:25with our counterparts in, for example, our projects, our current ones were in Malawi
01:32and Tajikistan. And a lot of the work that Ed Intersect does as part of a larger implementation
01:38is research and evaluation in early reading and math. And we, as I said, develop these
01:47systems in partnership with the governments in the countries we are working with.
01:53And you founded Ed Intersect 12 years ago. You've had successful projects through USAID,
02:00through UNICEF, again, based on focusing on education. Where do the Trump cuts leave you
02:07with your work in Malawi and Tajikistan right now?
02:12So both of our current projects have been terminated. And at this time, that means that
02:22our work even for December and January that we had already completed with the U.S. government
02:29has not been remunerated. We have not been paid for that work. We also do not have any
02:37portfolio going forward. So our current projects are gone and we don't know in what ways we
02:47might be able to recover. But you can imagine any small business and maybe even a larger
02:53business. I mean, you don't have six months or 12 months of capital just sitting there.
03:01I mean, we we need to be bringing in revenue in order to pay the folks that that work on our
03:08technical team or work on our ops and finance. So we are looking at, you know, potential, you
03:17know, failure to continue. And it is hard. It's hard because it is a company that that I
03:25founded and that I believe in our mission. And I believe that we made a very important
03:33contribution on these larger projects. And our focus has always been on excellence in our work, not
03:42necessarily growth or aggressive market share, but doing the work well. And, you know, if U.S. foreign
03:52assistance is no more than essentially, how do we move forward? I think we talked about, you know, how
04:01we are in conversation on some small amounts of foundation funded work. But that is not the same as,
04:11you know, working on behalf of the U.S. government, building the trust and the relationships and the
04:16stability that goes into that as a small business.
04:21There's, of course, the financial angle of the USAID partnerships. There's the logistical angle. But just to
04:26pick up on what you said about the foundations, I think, you know, you are speaking to the Forbes
04:31audience who might think, you know, there are a ton of philanthropists out there. There are a ton of
04:34foundations out there. Can the financial piece at least be compensated by the existing charitable
04:41structure within the U.S.? What would your response be to that question?
04:45Well, I think, I mean, that conversation has obviously been going on for a number of years about how bilateral
04:55aid works in complementarity with foundations. I think one of the things is that there is a role, especially
05:06on them bringing particular expertise. It's never been about them bringing a large, maybe large dollar
05:15amounts of funding, but more about particular expertise that complements bilateral donors like USAID.
05:24And there's always been that impetus there to work with private sector partners as well. And so I think,
05:33you know, large, larger foundations, maybe like Gates Foundation, can try to step into the breach more if they
05:39choose to. But they're still not the U.S. government. They're not going to be playing the same role in building
05:49trust and stability between the two countries, but also globally. I think also there are maybe high net worth
06:00individuals that, you know, obviously if they want to step in more, then that could be something potentially
06:10transformational. But I have not, again, seen that yet. I'm trying to keep abreast of potential funding opportunities.
06:21And I do, the flexibility maybe of foundations has grown even more, I think, over the past decade. But as far as
06:31replacing the U.S. government or filling the tremendous gap left by the retreat of the U.S. government, I don't know
06:40if, even in a forward thinking structure, if that's possible.
06:45Now, the structure of your education programs is such that you're working in early childhood education, often using
06:53the local language before English, French, or a more, quote unquote, international or colonized language is used. Where
07:02does the suspension of this work leave the kids that you were working with? Were local teachers able to continue? Or
07:10are they just left with free time and no support?
07:15Well, you know, the hope that I have, that we have, is that, for example, you know, the work we were doing with the
07:24government in Malawi, that everything we've done up to this point, that they're carrying that forward. And I would expect
07:32that to be the case. I don't know what it will mean for, you know, access to school or quality moving forward, because
07:40those were some of the areas where one would hope the USAID partnership was making a big difference. There are also
07:49things that occurred that affect the ability of children and teachers to get to school, such as, you know, an epidemic or a
07:59natural disaster, which USAID was also there to help handle. So you think about the compounding issues of USAID
08:08departing, and departing so suddenly, that all of those factors play into whether kids are able to get to school, whether
08:18they're able to go consistently, whether teachers are. So all of those factors surrounding school are going to be magnified, as
08:28well as what's happening in the classrooms. But I do hope that like the assessment systems we've been building for the past two
08:36years, hand in hand with the government of Malawi, that those are up and running and, you know, continuing. They, for
08:45example, though, I don't know, for example, tablets that were going to be used more and more. I don't know. I mean, this
08:53happened so suddenly that I know that, for example, in Tajikistan, math materials and math manipulatives that had been
09:02developed over the past year had to be put in a warehouse, stored, so they weren't even able to get to schools. So, you know, I
09:10don't know exactly what's happening in these systems, because it was a sudden departure. So I don't know.
09:19Now, of course, a lot of this is under the name of costs cutting to the US government. There are some political arguments that
09:26our focus should be on what happens in America and not beyond our borders. What is your response to these cuts? And those arguments
09:35for those cuts? Is there any merit to that?
09:39Well, I know that if anybody is looking at the debt and deficit, I'm sure you've seen the figures on this that all of even just the
09:49federal jobs that are being cut. All of those combined would only result in one day of interest to our national debt. So they do not affect
10:05that. And so using those in an equation towards lowering debt or deficit is misinformation. It's just not the case. And if it's about
10:20efficiency, this has been very inefficient and continues to be very inefficient. And for the small business community, I mean, just
10:31speaking from my point of view, and other colleagues that are small business owners, this is, we're looking at dissolution. I mean, so what
10:40will we do? What will the people that were depending on our firm for further income, what will they do? What will this do to, I'm in North
10:50Carolina, what will this do to the consumer economy here? I already know of people who are putting their house on the market. People who are
10:58looking at, you know, two incomes gone from their home, who work in international development. Universities are freezing on their on hiring. So
11:10where do people go to look for jobs, for example, in education? There's a big global health community here. There's a lot of agriculture that is
11:20connected to USAID here in North Carolina. What is going to happen to those farmers and those crops? So there's so many ripple effects. It's so
11:31multisectoral. And also one of the things that I think is important is stability. We are destabilizing our economies here, but we're also
11:42destabilizing economies in all of these contexts in which we were working. So beyond just the trust that we had been building that has been
11:54eliminated, we are destabilizing, which will have effects, follow on effects to our context and our economy as well. So I think the destabilizing
12:07factor of this is maybe we need to explain better, but it's just going to keep compounding over time. So I think that maybe if I've been trying to
12:19find the best ways to explain that to family and friends and connections and just to help people understand the immediate and the effects going
12:34forward.
12:36Well, I think it might be easy for people to hear USAID for international development, right? It sounds international. And people might not make the
12:46connection between a community in North Carolina or several communities in North Carolina and all of this international aid, and maybe budget cuts that, you
12:56know, depending on the news source that they're watching, they hear budget cuts, and they think, great, that will help. But I just want to dig into the
13:03point that you just made about your local community. Can you talk a little bit more about the number of businesses and the number of people that you see
13:12that are affected by USAID or have businesses like yours where these cuts are really threatening the life of the business?
13:20Sure. Here in North Carolina, we have two large organizations that do a lot of important USAID work, and that's RTI and FHI 360. Those have not been, those are not our
13:36current partners. Our prime organization is in the D.C. area, Comonix International, are the ones that I've already told you about that were terminated. But RTI
13:49I know, like even, I think it was yesterday, they had permanent terminations of 177 people, in addition, here in North Carolina, and 340 total employees that were,
14:03some were in other states. That is almost, I think that's a huge, huge number out of their international development group and international education
14:14specifically. And I think, you know, they'll probably have further cuts once they close out the rest of their programs because they've been terminated. And then at an
14:25organization like RTI, they're also doing domestic education research. And with the closure, or the, I guess, intended closure of Department of Education, there
14:36are already awards being terminated there, research that's in, you know, U.S. schools. So they're going to be terminating more people that are working
14:46domestically as well. And then at FHI 360, you know, there's been tremendous layoffs as well. There are also other small businesses like mine. You know, I was
14:58just talking to a colleague yesterday, a small business owner who has had to lay off people and is scrambling to find more work to try to bring some people back on. And, you
15:10know, there are people who work in water and sanitation and other, you know, other small business owners who, depending on how much diversification they have, you
15:21know, they're laying off maybe direct USAID people who were funded on a USAID award that's been terminated and keeping as many as they can that have other funding. In our case, as I said, you know, our
15:36current awards were all with USAID. So we, we need, I mean, we're starting over, you know, to try to build essentially a new business the way it was 12 years ago when I started. So, you know, for me, I've
15:53got to really look realistically at the timeline ahead and at the job market. So it's, I think, you know, I think we're the fourth largest economic hit in terms of the USAID closure as far as, you know, states in the United
16:12States. But it's pretty extensive. I mentioned agriculture. And there's also faith-based organizations here. I think one of them just maybe had some work that was restored. But, you know, there's people all over the state affected by this and in universities. I mean, the University of North Carolina lost, they've laid off, last time I talked to them, it was like 35 people in the
16:42Carolina Population Center. So it's, it's hundreds and thousands of people as it gets, as time moves on, it, the numbers get larger.
16:56And you just alluded to it, but some of the organizations and academic institutions that could perhaps step in for USAID, a lot of them are not spending money they have, they're kind of pulling back and pulling in because no one knows about future budget cuts. So how are you looking at rebuilding your business? What are the steps you're taking? And do you have a deadline in your mind for when you're going to, if you're going to call it?
17:26Um, I, as an, as a small business owner, I, I do feel an obligation to due diligence on keeping a light on, as I say, through the end of this calendar year. And I have some hope that maybe as, as some new or afterworld to this starts to emerge that
17:56potentially we could build some small pieces of work and maybe rebuild a portfolio. I have been talking with, for example, a couple of foundation funded small pieces of work to see if those could pan out and how many people and types of people on our team we might need for a small piece of work.
18:25So I think it would, it's not going to replace the type of work we were doing on a consistent manner on a five-year award, for example, with, with USAID. I think it's going to be more piecemeal. So as to whether that will allow the small business to be sustainable, I don't know yet, but I want to give it the due diligence and the time.
18:51And, and I'm hopeful that maybe something, as things shift out and people start gaining footing, I think there's, the footing is not solid right now. So I don't think that the whole industry and other potential funders have yet determined even their course of action.
19:16So, but in the meantime, as you know, I think I mentioned, you know, I have to, on a household level, find ways to try to replace the half of the household income that's been taken with, with this sudden closure. So I am trying to look at adjacent opportunities, but
19:39because the landscape of, for example, in the education sector has been decimated, I don't know if looking domestically will actually yield any real opportunities because of the retraction there as well.
19:55Even if a hire was expected, for example, at a university, it might not be able to happen because the cuts are starting to happen or are imminent there. So it's, it's just a time of every day, what's happening today, and what might, how might that shift the way I'm looking at this week?
20:23That's, that's kind of like, it's a day to day situation.
20:28One day at a time.
20:30A lot of this conversation has been with the goal of educating the public, because as I, as I framed at the top, I think people hear international aid, international development, and might not make the connection to how it affects people here in the States.
20:44But Mary Faith, I want to ask you, is there any other aspect of your experience or these cuts to USAID that you think the public doesn't understand or that the media is missing that you would raise to us right now?
20:58I think, you know, for basic education and in other sectors, there are similar laws in place, but for basic education, the READ Act is a law that was reauthorized in December, has always had strong bipartisan support, and is a national security imperative for the United States.
21:25Right now, with congressionally appropriated funds through existing laws, like the READ Act, being diverted or stopped, you know, one of the questions that, that I have and that we have is where is this congressionally appropriated money?
21:45And so we've been, you know, talking with our representatives here in North Carolina to ask that question.
21:53But the Congress has the power of the purse. And so the question is, do they still have that? And how do we find out where that taxpayer, where that taxpayer money is that was appropriated for that specific national security imperative by Congress?
22:13So I think, you know, that is one grand question about the way our government functions.
22:21We were doing this work for a reason. And without this work, the follow on effects are going to continue to be dire. I mean, for our country, in addition to other countries.
22:40And restructuring and rethinking how we do this work, I am 100% behind. But when we're in a phase like this, where everything has been turned off, and companies and organizations will have to shut their doors, you know, I don't know if we can even talk about a restructuring.
23:06I mean, restructuring, while we are still viable, would be really great. But so as it stands right now, I think as a US taxpayer, I do want to understand not only why we're doing this, but where are our taxpayer dollars that were appropriated for this purpose?
23:32Where is the money? That is a good question for perhaps Forbes reporters to dig into any other messages to the Forbes audience or to our reporting team, any assignments you want to make?
23:45Well, you know, the other thing on a grander scale that we tend to try to remind people of is that, you know, we have like a three pronged way that the US engages with the world, you know, there's defense, diplomacy, and there's been development, and those three work in complementarity.
24:07And so our area is really about what we call soft power. And so what we're already seeing is that, you know, China has taken over, specifically projects that were USAID.
24:22I mean, we had a specific case of, you know, one of our colleagues here in North Carolina, you know, a Cambodia project that China literally just took the same text and put out, you know, the exact same text in a press release about the China Cambodia program on water.
24:43So the stepping in has already occurred. And again, that was part of the reason this was a national security imperative, not only our basic education work, but other sectors work.
24:56And, you know, so the soft power piece of this, like the seeding of that soft power space to other global powers like China and Russia, is also another area where I think we need some answers.
25:15And so keeping that conversation going with our elected officials about if we were planning to face up to China's Belt and Road Initiative, and now we're not, why aren't we and why does that matter or not matter to you as someone representing us in Congress?
25:39So I think the soft power piece and how that safeguards the U.S. and our national security is an area that, you know, U.S. citizens can dig into and ask their elected officials about.
25:59Mary Faith Mountcourse, president and founder of Ed Intersect. Thank you so much for joining us today. I know it's been an uncertain and trying time for you and your business, and we really appreciate you joining us.
26:12Thank you. Thank you very much for having me.