Opinion: We have seen the future of development and it is community-led

Could the limits of foreign aid and charitable giving be reflected in the dismantling of USAID and the sunsetting of the Gates Foundation? We are a wealthier world than we’ve ever known, but wealth isn’t solving our development challenges. The answer to our lack of progress may lie in the fact that, globally, less than 1% of the $212 billion in development aid directly reaches communities. There has been much hand-wringing over what a post-USAID, post-Gates Foundation world might look like. We have the opportunity now to reorient development investment to build trust, confidence, and capabilities nearer to the challenges, opening new and significant investment channels directly to communities within emerging economies. Lessons from Malawi, one of the countries hit hardest by foreign aid cuts, are applicable to this time of historic change, when both the aid and charity industries are in limbo, and development will need to be driven from within. In a study just published in World Development Perspectives, researchers, including a co-author of this article, make it clear that Malawian communities have the capacity and desire to lead development from the inside. Our data from co-investing in development with Malawian communities support this finding. It is time for funding to shift to locally led development. How aid has become its own enemy Direct funding to local communities to enable self-development may sound easy. Samantha Power, who last led USAID before its dismantling in January, worked as hard as anyone to push for more local development investment. Yet during her tenure, the agency only gained a few percentage points in direct investment to local partners, from 10.5% in 2023 to 12% in 2024 — against a goal of 25%. Despite noble intentions and high-caliber public servants, aid can become its own enemy when it doesn’t move fast enough and leverage existing capacity. Slow progress, in turn, frustrates both donors and recipients. Resentment manifests from what Malawian communities call “orphaned projects” — projects that stagnate without ownership. A vicious cycle of donors giving what they think is needed and recipients required to accommodate donors to keep money flowing places donor interests first and local priorities second. A better way is through community-led development. Successful locally led development As the leader of a global network of locally led development hubs and chief architect of one of these hubs, we want to share the results we have experienced from investing $8.8 million in 2,104 community-led development grants over the past 20 years. Ninety-three percent of the communities we co-invest with accomplish their development goals, leading to sustained impact in health, education, and economic opportunity for nearly 4 million people worldwide. Communities have co-invested $2.5 million of their own money into their projects and raised an additional $10 million from other investors. This is not charity; this is co-investment. We routinely see an exciting and promising social investment market and want to encourage others to invest — now is the moment. Locally led development hubs show promise as social investment vehicles. Mudzi Connect, a local NGO in Malawi that grew out of this social investment model, has made 316 grant investments, improving life for around 750,000 Malawians and leveraging over $520,000 in local cash and in-kind contributions, as well as over $340,000 in locally raised funds to advance self-development. We are now replicating this locally led development hub model in Rwanda, Guatemala, and New York City to demonstrate the wide applicability and replicability of this approach to development, and not just in low- and middle-income countries. A necessary shift to focusing on results, not charity Before the aid cuts, many Americans believed their government spent 25% of its budget on foreign aid, when in reality, U.S. foreign aid spending was closer to 1%. Those of us working in aid and development must focus on results over process; too much aid was evergreen contracting, and progress wasn’t clear and swift enough. Success shouldn’t be measured by the heights of our generosity — we are a world spending close to $1 trillion annually in charity and foreign aid — but by our effectiveness. We have long known that communities are the most effective stewards of development resources, but the progress we seek will be elusive without investing cash. With USAID dismantled so quickly and the charity industry under threat, we will miss a moment for progress if we don’t appreciate what we’ve done wrong in building the aid and charity sectors and build better for the future. The impact of foreign aid cuts is being felt in hunger, poor health, jobs lost, programs halted ,and, most tragically, lives lost — 103 people per hour according to Boston University. These aren’t problems on the other side of the world. Unaddressed crises elsewhere eventually touch us all and get more expensive to solve the longer they fester. Infectious diseases cross continents, economies are intertwined, and the hungry and homeless will not stop seeking food and shelter until they are fed and safe. At World Connect and Mudzi Connect, we’ve witnessed a phenomenon that gives us hope and optimism in the face of changing global power dynamics and aid cuts, and this is the power inside communities. Communities have the power to drive their own development because they are motivated to do so. Investing in development is in our interest and creates goodwill. There is a way forward, and it is clear where and how to invest. We have seen the future of development, and it is community-led.