Moving Toward a Model of Locally Led Development: FY 2022 Localization Progress Report

"Today's global development and humanitarian challenges are vast, demanding, and complex. They are also inherently local, shaped by the unique histories, power dynamics, and other factors specific to each context in which they occur. Our responses to these challenges must build on the priorities, knowledge, and aspirations of the people who live them every day and know them best." - from Localization at USAID: The Vision and Approach [PDF]



Localisation at the United States Agency for International Development (USAID) is defined as intentional changes to policies, processes, staffing, and funding decisions to support partnerships and programmes that equitably empower local actors, strengthen local systems, and facilitate local leadership so that development and humanitarian assistance are more effective and sustainable. In November 2021, USAID Administrator Samantha Power announced two targets for USAID in pursuit of its localisation goals. First, by Fiscal Year (FY) 2025, USAID will direct at least 25% of its funding directly to local partners. And second, by 2030, at least 50% of USAID programmes will create space for local actors to exercise leadership over setting priorities, designing and implementing activities, and defining and measuring results. This report provides the first status update on USAID's progress toward these targets.



The rationale behind these two interconnected, Agency-wide goals is that making engagement more inclusive, equitable, and responsive to the needs, priorities, and solutions/ideas of the communities, organisations, and people in the countries in which USAID works is both the right thing to do and a smarter use of resources. When USAID efforts are responsive to local priorities; draw upon local capacities, diverse networks, and resources; and are accountable to local communities - and when USAID empowers local actors - the expectation is that the results are more likely to be sustained by local organisations and institutions. USAID's role is to support and catalyse local change efforts and processes, thereby elevating the voices of marginalised populations who have long been silenced.



To advance localisation, USAID is pursuing four lines of effort:

1. Adapting policies and programme practices to foster locally-sustained change that is tied to each country's unique political, social, cultural, economic, and environmental conditions, while targeting the drivers of and barriers to change. Progress will depend on the effective application in USAID processes and programmes of three mutually reinforcing practices:

• Locally led development: The process by which a diverse group of local actors set their own development agendas; develop and implement solutions; use their capacities, leadership, and resources to promote equitable change; and ensure that positive outcomes can be sustained by local actors, for local actors.
• Local systems practice: The lens USAID uses to understand development results and suggest interventions to achieve sustainability. Improving development and humanitarian results requires strengthening system performance by developing local capacities, deepening interrelationships among local actors, improving equity, and aligning the incentives that shape the system.
• Local capacity strengthening: A set of approaches that supports local actors to achieve their own mission; take actions to design and implement equitable responses to local challenges; learn and adapt; and innovate and transform over time.

2. Shifting power to local actors and ensuring they have a meaningful seat at the table. Localisation requires integrating a diverse group of local voices and leadership into all aspects of the work. USAID is paying particular attention to elevating the voices of underrepresented populations: women and girls; LGBTQI+ people; persons with disabilities; Indigenous Peoples; marginalised racial, ethnic, and religious populations, internally displaced persons, youth and elderly; and other socially marginalised individuals and groups.



3. Channeling a larger portion of assistance directly to credible local partners while ensuring accountability for the appropriate use of funds and achievement of development and humanitarian results. In addition to efforts such as Local Works, the New Partnerships Initiative, and the Cooperative Development Program, USAID is promoting regional initiatives, such as Centroamerica Local, a 5-year US$300 million programme to put local actors in the lead in addressing the root causes of irregular migration from El Salvador, Guatemala, and Honduras. Notably, while providing direct funding to local partners is an important pillar of USAID's localiation efforts, it is, by itself, a partial approach.



4. Catalysing a broader shift to locally led development by serving as a public advocate and thought-leader at the global and country level, using USAID's convening authority, partnerships, voice, and the power of example. These efforts will highlight leadership for coalitions of Southern-led civil society actors.



The progress report documents growing momentum toward the two goals in FY 2022. Here are four highlights:



1. Committing to direct local funding: A key component of USAID's approach to localisation is to channel more funding directly to the local actors who are positioned to drive change in their communities. In FY 2022, direct local funding - to individuals, organisations, or corporations based and legally organised in a country where USAID works - reached nearly US$1.6 billion, or 10.2% of obligations. Over a one-year period, direct local funding increased by US$623 million, a 66% year-over-year increase in dollar value and a 38% increase in the percentage of funding going to local partners. USAID's Missions and other overseas units collectively directed 18% of their funding to local partners in FY 2022. USAID provided another US$57 million to partners working regionally. The Africa region led the way, with nearly 25% of Mission and overseas office funding going to local partners during this period.



2. Partnering with governments: USAID partners directly with select governments to help strengthen their systems and support their capacity to deliver public services. In FY 2022, USAID provided US$199 million in government-to-government assistance to 17 countries, the majority of which (77% in FY 2022) supported health objectives. (Within the health sector, the President's Emergency Plan for AIDS Response (PEPFAR) has long been a leader in localisation, with 34% of their attributable FY 2022 obligations going to local partners.)



3. Measuring local leadership: The report outlines a new way to track progress toward the objective of shifting power and enabling more local leadership of USAID-funded programming across the many ways USAID engages with local actors, whether they are recipients of direct funding, subcontractors or subrecipients to an international partner, participants in a USAID programme, or members of a community affected by USAID programming. The indicator, which was developed based on input from local partners and community-based organisations, US-based implementing partners, and USAID staff, tracks the use of 14 good practices across four categories: (i) working directly with local partners, (ii) creating effective local partnerships, (iii) recognising, leveraging, and strengthening local capacity, and (iv) engaging communities directly.



4. Looking forward on localisation: In the year since Administrator Power's announcement, USAID created or revised several key policies and strategies, developed new tools, and taken steps to strengthen and grow its workforce - all designed to help underpin and facilitate future progress toward the Agency's localisation goals. Examples include:

• A Policy Framework that reinforces the Agency's commitment to working with local actors, and articulating how it will do so;
• An updated Acquisition and Assistance (A&A) Strategy that outlines the shifts needed in USAID's business practices to better enable sustainable, inclusive, and locally led development;
• A revised Risk Appetite Statement to clarify the level and type of risk the Agency is willing to accept in pursuit of locally led development;
• A Local Capacity Strengthening Policy to establish Agency-wide principles centred around the priorities, know-how, and existing capacities of local organisations;
• Specific questions in the 2022-2026 Agency Learning Agenda to spark ideas for how best to engage with local partners and understand how these partnerships contribute to sustained development results;
• WorkWithUSAID.gov, a website seeking to provide clear and accessible information in multiple languages on navigating how to work with USAID; and
• USAID's integration of localisation into Agency guidance, training, and resources to equip staff with the information and skills necessary to advance locally led development. Click here and scroll down to Related Resources for access.

In issuing this progress report, USAID is holding itself accountable for implementing its commitment to a model of more inclusive, locally led development and humanitarian assistance. In the spirit of transparency, USAID has also published the underlying data for the analysis presented in this report. "While the data presented here are an important aspect of how USAID tracks and advances its localization goals, they do not capture the entirety of the Agency's efforts. Localization is also about systems and culture change - about how USAID engages as a partner, with a commitment to diversity, equity, and inclusion and with respect for the local changemakers driving progress."

Editor's note: This is an Agency-wide document with no available contact person. We have included a Communication Initiative staff member here, but visit the USAID website for further options for follow-up with USAID.