International donors that are committed to putting local organizations in control of their own communities’ development may find the key to that elusive goal in the nimble model of the Inter-American Foundation, which has been making small-dollar grants to local groups in Latin America and the Caribbean for 50 years.
Many grantees consider IAF — a U.S. foreign assistance agency with $121.1 million invested in fiscal year 2021 — the gold standard for development lending because it allows community groups to submit their own proposals, receive manageable dollar amounts, and build organizational capacity to ensure their sustainability.
Larger bilateral donors can award contracts for hundreds of millions — or even billions — of dollars. But with an average grant amount of just $310,000, according to Daniel Friedman, managing director for external and government affairs at IAF, and sometimes as little as just $25,000, IAF can deliver the type of support that bigger donors, such as the U.S. Agency for International Development — which has an annual budget exceeding $20 billion — simply cannot.