USAID asked local leaders what needs to change. This is what they said

Power imbalances and language barriers. A lack of trust and an aversion to risk. The U.S. Agency for International Development has just one year to meet its lofty target of providing a quarter of eligible funding to local organizations. But according to a report released by the agency earlier this month, these challenges — and a myriad of others — are still standing in the way. At an event last June, USAID asked 300 local partners, international organizations, agency staff, and local groups not working with USAID to dig into the barriers of localization and find ways to combat them. In January, a report on that event was released, entitled “Partners in Localization: Designing for Change,” containing a slew of recommendations for how things could change. Participants were asked what they would most like to change, and they made five core suggestions: • Procurement models that pay local organizations for being involved in the design of projects, as well as delivery. • Stronger co-creation processes to help local organizations decide what projects are implemented in their area, and how they are implemented. • Bidding structures that are better designed for local organizations, including dedicated funding only open to local organizations, and measures to cut red tape. • More scope for local organizations to submit unsolicited bids for USAID funds, and easier ways to award money to those bids. • Making it easier for local organizations to recover all of the costs of delivering services, including proposals to claim overhead costs of up to 20%. Procurement was seen to be a huge pain point among local leaders, who noted that complex applications and strict requirements often blocked organizations from bidding. Those at the event suggested dividing the procurement process into two parts — with phase one paying for program research and design, and phase two paying for actual implementation. At present, a common criticism is that local partners are involved in the design of a project they would like to work on, but have no guarantee of receiving funding when an award is made. Other recommendations for procurement redesign were also offered up, such as swapping large contracts for smaller, more digestible ones, and banning exclusive partnerships on bids — where a local partner is asked by a prime contractor to work only with them. Leaders also focused on the importance of co-creation, where local organizations have a more active leadership role in the design of USAID projects. By embedding inclusive program design into different phases of a project’s cycle, event participants hoped local organizations could take a more sustained lead on delivering solutions — especially if the co-creation process was funded by USAID itself. Participants recommended creating an advisory group of local organizations to decide who should take the lead on certain projects. Participants also suggested other ways to ease the co-creation process, such as creating a special localization fund to offset co-creation costs, and asking missions to host regular co-creation sessions with local organizations. Increased support for local organizations was highlighted too, including creating dedicated funding pots for local organizations, limiting competition among international organizations, and reducing administrative and reporting requirements for local groups. Additional recommendations included offering long-term funds to build the capacity of local partners or placing a USAID staff member in each country to advise local organizations about working with the agency. The last recommendation related to funding, and giving local organizations flexible, unrestricted dollars — and the ability to apply for unsolicited proposals — to encourage innovative financing at the local level. Earmarked funding for local organizations, the event participants said, could include reduced administrative and reporting requirements, and allow organizations to target the problems they’re seeing in their communities. In the report, USAID stated the agency is already moving ahead with many plans to amp up support for local organizations — from engaging with languages other than English to being more flexible with requirements, report formats, and previously required information. “We do have further to go, and the conversation that took place during the workshop will inform next steps,” the report read. For years, organizations within the United States government have been pushing for a more direct approach to funding local organizations — a move that’s been particularly successful across the U.S.-funded health sector. But when Samantha Power, USAID’s administrator, set the agency’s localization targets in 2021, just 7.4% of eligible funding was going toward local organizations across the world. The following year, the agency released a new set of numbers: USAID had managed to increase the percentage of eligible funding going toward local partners to 10.2%. But even so, this month’s report illustrated the continued challenges around localization, from USAID staff feeling international partners were safer than local ones, for example, to international organizations saying they felt obligated to train local staff — despite lacking the time or resources to do so. For local groups, there were an entirely different array of challenges. Complex application processes, hefty compliance requirements, and fierce competition with international agencies hinder organizations’ abilities to battle for funding, the event’s participants said. Staff from local organizations also mentioned a deep gap in understanding the local context, with funding solicitations rarely reflecting what communities actually need. “We hope future discussions can follow up on some of these key recommendations while continuing to engage partners and stakeholders around ways that the development and humanitarian industry at large can advance locally led development,” wrote Sumilas and Allen in the report.