Q&A: Can large NGOs lead a development transformation?

The COVID-19 pandemic, a new U.S. administration, and long-standing criticisms of a foreign assistance model dominated by U.S.-based organizations have coalesced into a moment of transformation for the global development community. For Tessie San Martin, a former head of Plan International USA, it is also a moment of transition. She was recently appointed as CEO at FHI 360, a North Carolina-based nonprofit that took in more than $585 million from the U.S. government last year and implements programs in health, education, research, and a wide range of other development sectors. Devex spoke with San Martin — who also co-chairs the Modernizing Foreign Assistance Network — about what NGO leadership looks like at a time when many are calling on large organizations to hand over power to the communities they serve. “It's not just about building local capacity to do somebody else's bidding. … Localization is really about strengthening the local voice to make sure that local priorities are what prevail.” --— Tessie San Martin, CEO, FHI 360 This conversation has been edited for length and clarity. What excites you about taking the helm of FHI 360 at this particular moment? I think that we're at an inflection point in our industry. There are a lot of things that we've been talking about for a long time, like locally led development and localization. To a certain extent, you can say there's a lot of talk and nothing happens. But I do believe that the COVID pandemic demonstrated to funders and implementing partners alike that just because we had been doing things a certain way for the last many decades, that didn't mean that we were going to continue to do them the same way nor that we needed to do them the same way going forward. Actually, it didn't matter what kind of gigantic infrastructure you had built across how many countries. When the lockdown came — and it came down everywhere — everybody was paralyzed. So what counted were those local players, local NGOs, civil society organizations. We all became very dependent on that “last mile.” We all also learned that we don't have to get on an airplane to go do whatever it is that we were going to do. One of the things that's also different is that it's not just the [U.S. presidential] administration that's talking about it. The talk on [Capitol] Hill about these issues is also quite serious. ... I [recently] attended a meeting on [congressional] directives and earmarks — really sort of transforming the ways that we've been doing business for a long time. We don't need the past to be a guide to the future. I think that FHI 360 has a unique opportunity to not just transform itself, but help the sector see how it can transform itself. I'm very excited by that. Do you think the development industry has been permanently changed by COVID-19, or is it going to snap back to its prior way of doing business at some point? I don't think it's going to snap back, because I don't think that donors necessarily are going to snap back to whatever it is that they were doing. But let's be realistic. We have seen a large increase in appropriations in the [foreign assistance budget] and so a lot of pressure on USAID [the U.S. Agency for International Development] and other parts of the U.S. government to spend quickly. So the short term is, I would imagine, a huge pressure to rely on your biggest implementing partners to continue to deliver work. But we also know that AID is rethinking and reengineering how it does business and looking at how it might use [foreign service nationals] to be agreement officers and contracting officers and changing procurement rules. So there is a process that, over time, will lead to different results. Does that mean preparing an organization like FHI 360 for a future in which U.S.-based international NGOs are getting less donor funding because more of it's going to local organizations? U.S.-based organizations are going to get less donor funding to do what local organizations are going to do. [U.S.-based organizations] will continue to get funding to do what they might be seen as being best equipped to do. I think what we're not going to be in the business of is service delivery. We might be in the business of research, very specific types of technical assistance. But [in the] longer term, I don't see a big future in service delivery. How genuine are organizations in facilitating this kind of transition? It seems like there are ways to give the appearance of being a great local partner but not really committing to a serious level of change. One of the things that I'm excited about doing at FHI 360 is having a good conversation about what we think localization is, because as many people as there are, there are definitions. And they include “let's build a local affiliate” — whatever that means. My view is that's not necessarily what localization is, and this organization needs to have a very clear perspective and point of view. A lot of times when people talk about localization, they talk about local capacity building. That's super important, but that's not it. It's not just about building local capacity to do somebody else's bidding. To a certain extent, localization is really about strengthening the local voice to make sure that local priorities are what prevail when allocating assistance and resources. So in concrete terms, what does that mean? We need, at FHI 360, to align around that. And as an industry, we need to align around that. Do you have a clear understanding of where USAID leadership is right now in this process of thinking about localization and trying to put it into some sort of concrete terms? In depth, I don't. They've brought in [former USAID Deputy Administrator] Don Steinberg to help them think through these issues. We've had a couple of conversations with them. Based on those conversations, it seems to me that they're focused on all the right things. But remember, it's a long list of things that they need to address, from “do we have enough contracting and agreement officers?” to “what do we do about earmarks and directives?” It's a really long laundry list. Some of it they can do themselves, but large bureaucracies are difficult to change. And then for some of this, they're going to need Hill support. There are good, strong coalitions of implementing partners that want to work together with the administration to help make this happen. I think they have a lot of the right people on it right now, and they're certainly asking a lot of the right questions. So I think they're on a good path, but let's recognize it's a long list of things that need to happen. Your sense is that they're taking a top-to-bottom approach and trying to work on all of those things? That was my sense. This is not just "let's look at this little bit." I also like the fact that they're looking at big-ticket items — directives and earmarks — and then smaller things that we can tackle on a bit-by-bit basis, because you have to be able to work on both levels. Otherwise you can get paralyzed.