Given Ethiopia's history of turmoil from drought, conflict, and disease, the USAID-managed Displaced Children and Orphans Fund (DCOF) began its operations in Ethiopia in 1988. The mandate of DCOF is to develop and support programs and methodological approaches that strengthen the capacity of families and communities to provide the necessary care, protection and support for displaced children and orphans. DCOF gives priority to the following categories of such children:

In 1996, USAID's implementing partner Pact, Inc. began to work with Ethiopian NGOs involved to help them better address the needs of this special population. As of 2001, Pact was working with 25 local NGOs with DCOF support. These NGOs carry out non-formal education and serve about 10,000 children who are at risk of becoming street children. The non-formal education has lessened the number of children migrating from rural to urban areas and helped keep them off the street. The NGOs work toward increasing the economic status of at risk- families through support for income generation programs. In some cases, they de-institutionalize children who are currently in orphanages through support for family reunification programs. The NGOs also enhance the skills of street children and orphans to become economically productive and eventually self-supporting.

The partner NGOs working with the DCOF target children lack technical and material support, so Pact has provided training and capacity building interventions. Types of training provided to the NGOs include: strategic planning and management; financial systems; project design, monitoring, and evaluation; board development, etc. Pact also provides training in health and education training; micro-enterprise; establishment of NGO networks; and policy advocacy on behalf of Ethiopian children.

A recent evaluation of the DCOF program in Ethiopia found that the partner NGOs have substantially increased and diversified their funding, with an increase of over 120% in the annual budget of 11 of the 25 NGOs. These increases enabled the NGOs to expand the number of children receiving supported up to 21, 000 by the end of FY 2001.