USAID has repeatedly stated an ambition to fund more locally led organizations, but right now it is giving away a lot of big grants. It is also still awarding large contracts, including the forthcoming NextGen suite, worth $17 billion. Our analyses this week look at top grantees and the history of USAID’s global health supply chain contracts.
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Big is still best at USAID
USAID is one of the biggest players in development funding, and it has made much of its plans to spend more on locally led development. However, my colleague Miguel Antonio Tamonan has carried out an analysis of the top recipients of assistance funding — grants and cooperative agreements — which shows bigger organizations getting a bigger slice of the pie last year.
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According to USAspending.gov, USAID increased assistance spending by $2.8 billion last year, but this is down to COVID-19. All of that increase, and more, went to COVAX funding for Gavi, the Vaccine Alliance. Gavi received almost a quarter of all assistance funding — $4 billion.
It’s not possible to tell how much USAID funding went to multilaterals, since funding is not tagged that way on USAspending.gov. But we know it’s well over half, because just the top 10 multilaterals — mostly U.N. agencies — accounted for 55% of all funding.
The remaining funds went predominantly to implementers — NGOs and contractors delivering projects. Of the top 10 recipients, most were large American nonprofits, and the majority were the same as last year — although one for-profit contractor, Palladium, broke onto this year’s list.
The amount they received also rose sharply. The top 10 implementers shared $2.2 billion, a rise of around 12% on the top 10 in the previous year, which raises questions around how USAID will reverse its current direction of travel and achieve a more locally led approach.
Devex Pro on USAID: Who were the top grantees in 2021?
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Supply chain
USAID is also preparing for its biggest ever set of contracts, the $17B NextGen suite of contracts. (ICYMI, here’s last week’s Pro read on what we know so far about those.) My colleague Michael Igoe has followed this story for years, and takes a look back at the current iteration of the contract.
Looking back: USAID's global health supply chain
Michael and I will continue to cover the NextGen supply chain story in future weeks. If you have any information, please get in touch with me directly: david.ainsworth@devex.com.
Featured opportunity:
Korea’s $1.5B loan to Egypt
Following a visit from the Korean president and a potential trade deal, Korea is set to provide soft loans worth over $1 billion to Egypt during the next five years to finance construction and infrastructure projects, including transport and water infrastructure.
The funding from Korea’s Economic Development Cooperation Fund will also be used to fund new and renewable energy projects. An additional $251.6 million development finance agreement will aim to improve the Egypt-Luxor High Dam railway line.
Funding activity
EBRD. $25M to support women-led small and medium-sized businesses in Armenia.
World Bank. $200M to supply electricity and address the power crisis in Lebanon.
JICA. $86.6M (¥10B) to reform economic and financial policies and institutions in Nepal.
MCC. $20M to encourage sustainable development in the Solomon Islands.
USAID. $9.9M to combat corruption in Indonesia.
Forest funding
A new fund has been set up to make it easier for philanthropists and donors to support those on the front line protecting the world’s forests. The Community Land Rights and Conservation Finance Initiative, known as CLARIFI, was set up by organizations representing more than 250 conservation organizations and groups for Indigenous people. It aims to raise $10 billion to support the recognition of Indigenous land rights by 2030, according to one of the founders.
Innovative finance: New fund aims to raise $10B for Indigenous people to protect forests
Part of the picture
“Everyone wants more local decision-making, but are they willing to change the rules to allow that to happen?”
— Sam Worthington, CEO, InterActionThe push to localization is making big NGOs think about their place in the world. But these organizations will always have a place, cautions the head of the membership body for international development nonprofits in the United States.
Worthington tells me that while power may be localized, much of the funding will always come from “big NGOs [that] are really good at marketing and have huge fundraising engines in the global north.”
Devex Pro: Amid localization, INGOs 'aren't going away,' says InterAction chief
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Education cannot wait
Germany’s new government will commit €200 million ($230 million) more to Education Cannot Wait, a U.N. fund that provides educational services during emergencies and protracted crises. It’s one of the first major announcements of Svenja Schulze, the new minister for economic cooperation and development, and it makes Germany the top donor to the fund, with a multiyear commitment of nearly €319 million.
Devex Pro: Germany commits extra €200M to Education Cannot Wait
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About the author
David Ainsworth@daveainsworth4
David Ainsworth is business editor at Devex, where he writes about finance and funding issues for development institutions. He was previously a senior writer and editor for magazines specializing in nonprofits in the U.K. and worked as a policy and communications specialist in the nonprofit sector for a number of years. His team specializes in understanding reports and data and what it teaches us about how development functions.
