Going Local: Is your organization benefiting from changes in USAID funding policies?
USAID’s localization policy and local partners' adaptation to funding changes
October 11, 2023 | Sakil Malik, GCFIL USA
International donors have rightly identified the need to fund, collaborate with, and build the capacity of local actors, including NGOs, government, and the private sector. As such, USAID has designated more funding to go to local organizations.
- 25% of USAID funds are mandated to go to local partners by end of 2025
- 50% of funding to go to local actors by 2030
The question is, which local agencies will be prepared to successfully obtain these funds?
Why is this happening?
Donor agencies are more frequently recognizing that funding of large organizations in developed nations is not successfully building the necessary capacity for funded programs to become self-sustaining at the local level. They have rightly identified the need to fund, collaborate with, and build the capacity of local actors, including NGOs, government, and the private sector.
How will this happen?
USAID’s new policy on localization is a practical response to this identified program, putting local actors in the lead of development efforts in their countries.
They and other donors are following through on this commitment by dramatically increasing the funds that should go directly to local organizations, while ensuring appropriate use of funds and documentation of desired outcomes. However, mandating the funds is not enough.
As these efforts move forward, local actors are striving to draw on these new increased funds.
However, they are also recognizing that they do not yet have the capacity to effectively bid and receive contracts, nor do they have the capacity to execute contract requirements to USAID standards.
To be awarded contracts, local partners need support to build capacity in two key areas.
Business development, including how to network and communicate with prospective funders, has been identified by many local development professionals as an area of weakness. This has traditionally been handled by international implementing partners and is essential in winning funding from USAID and other international donors.
Grant proposal writing is intricately tied into business development and is another area in which local actors need to improve their skills to develop successfully proposals
Shifting increased funding to local development organizations provides an opportunity for local actors to transition into leadership roles and create sustainable development in their countries.
The way to achieve this transition is to seek out and engage in high quality, up-to-date training that meets international standards.
Sustainable development can only be achieved when local communities and individuals lead the way.