A Devex PRO special report
The localization agenda 1.0
This reported was updated in March 2024. Access the new report here.
Editor’s note
The humanitarian and global development sectors have been talking about “localization” — shifting power to the countries and communities where aid work is implemented — for a decade or more. But turning that talk into action has proven a challenge.
The “Grand Bargain” — agreed between some of the world’s largest donors and humanitarian organizations at the World Humanitarian Summit in 2016 — envisioned that at least 25% of humanitarian funding would be allocated to local and national responders by 2020.
In reality, research found that just 3.1% of global humanitarian funding went directly to local and national groups that year, a figure that had barely changed from 2016.
That doesn’t tell the whole story — some indirect funding, which is harder to track, also counts toward the Grand Bargain target. But there is also a lot that the numbers don’t reveal, including what is understood to be a “local” group, the nature of the funding, and where the decision-making power lies.
Calls for action on localization are growing, amid mounting pressure around equality and decolonization, and frustration about the slow rate of progress. The past year has seen a renewed push from some organizations, but many obstacles remain.
What is the state of localization today, and what are donors and other organizations doing to push the agenda forward?
Devex reporters have been exploring these questions intensively over the past year. Let’s take a look at what they found.
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The need for localization
Let’s start with the basics. The idea behind localization is that aid work should be locally led, enabling communities to be the drivers behind the programs and services that support their own needs.
For many, leaving the power in the hands of Western donors and international organizations represents a form of neocolonialism and hinders effective development work.
Some say that putting money directly in the hands of local groups is also more efficient; others that it could even reduce the risk of abuses in aid work by rebalancing power and improving accountability.
In a recent Devex Pro Live, Gunjan Veda, a senior manager from the Movement for Community-Led Development, said: “There is absolute empirical evidence that locally-led development ... is a) more cost effective, b) it’s more efficient, c) it’s sustainable ... because the local organization is so much more attuned” to the needs of the community.
Case study: Why localization is the only way forward in Haiti
The obstacles
For a decade, development leaders have been talking about the need for localization.
So why hasn’t it happened in any significant way?
Experts told contributing reporter Lisa Cornish that a lot of it comes down to the dominance of Western cultures and perspectives in global development — from hiring practices to leadership models — and entrenched ways of doing things, such as funding in ways that favor large organizations (jump to the next chapter for more on that).
While “capacity building” is often cited as a barrier, Tanvi Nagpal, a senior fellow at Johns Hopkins University, wrote in an op-ed for Devex that we may simply need to redefine what we think of as “capacity.”
“Local groups are always the first to respond when disaster strikes ... Changing the narrative about their ‘limited capacity’ is critical to decolonizing development,” she wrote.
Of course, many people argue that, despite all the talk in favor of localization, those people and organizations that currently have the power are keen to hang on to it.
“Everyone wants more local decision-making, but are they willing to change the rules to allow that to happen? The answer is usually ‘somewhat’ but rarely entirely,” Sam Worthington, CEO at InterAction, told Devex.
At the same time, Worthington is among those who contend that even with more effective localization, there will continue to be a role for international organizations, since these groups have more ability to raise funds in the global north and to provide specialized expertise across geographies.
Discover: What’s stopping localization in the humanitarian sector?
Opinion: Why a ‘Grand Bargain’ on localization keeps falling short
The funding trap
Although it is not the only issue at play, many of the discussions around localization come down to funding, which is still mostly going to INGOs and contractors based in the global north.
There are various reasons for this. At the moment, access to funding from big donors typically involves stringent application and reporting requirements, which aren’t feasible for smaller organizations.
Grant sizes often aren’t appropriate for them either, although large grants can make life easier for the donor. And donors typically prefer to fund groups they’ve already worked with, which are seen as tried and tested but which also hampers change.
Even where funding is directed toward local organizations, there are questions about what that means, and whether the money is truly going to locally led groups.
A Devex analysis found that the U.S. Agency for International Development’s top 10 partners for acquisition spending based in lower- and middle-income countries, three were local affiliates of international organizations.
Some say that donors based in the global north simply don’t trust local implementers.
“It eventually comes back to this root of power and racism and bias … If funders have not come to understand the power problem, [they] will continue to perpetuate inequities,” Katie Bunten-Wamaru, co-CEO at the African Visionary Fund, which channels funding to African social entrepreneurs, told Devex Senior Reporter Catherine Cheney.
Key issue: Donors — here's how local NGOs want you to fund
Read more: How funders are trapping local NGOs in a starvation cycle
In focus: USAID
Amid these challenges and changes, the world’s biggest bilateral donor is having another go at localization.
Last year, USAID Administrator Samantha Power set out the details of her plan to direct a quarter of the agency’s funding to local organizations by 2025 — even as assistance funding for local partners fell in 2021.
With previous administrators failing to achieve similar goals, big changes will have to happen at the agency to make this work.
The co-chairs of the Modernizing Foreign Assistance Network told Devex that the changes will need to cover acquisition and procurement, contract sizes, staffing, and risk appetite as new methods are tried out.
A key litmus test will be the $17 billion NextGen global health supply chain contracts — the biggest suite of contracts that USAID has ever issued.
Following Power’s pledge, localization advocates are keeping a close eye on NextGen to see how accessible the contracts are for groups that haven’t worked extensively with USAID in the past.
Business Editor David Ainsworth reported that delays to the publishing of the contracts may have been caused by a dilemma over how far to go with that, and an analysis of one of the contracts by Unlock Aid, a coalition pushing for aid reform, found mixed results.
Watch: Can USAID make localization work this time?
Funding analysis: How USAID awarded $1.1B in grants to local partners
Experimentation
While progress on localization across the aid sector has been limited, some organizations are taking big steps and experimenting with how to make it work.
Last year, two U.S.-based organizations were among those to shut down their overseas work entirely, handing the reins to local groups instead.
Beyond USAID, some U.S. government agencies are having reasonable success with their localization efforts.
To understand how that has been achieved and what lessons can be learned, Devex Senior Reporter Michael Igoe looked at the case of the U.S. Centers for Disease Control and Prevention, which directs 70% of its global funding to local partners. Teresa Welsh explored the Inter-American Foundation’s model, which allows community groups to submit their own proposals, receive manageable dollar amounts, and build organizational capacity to ensure their sustainability.
We also met a group of aid workers that is undertaking targeted experiments aimed at overcoming specific barriers to localization — from increasing local leadership to untying aid.
The group’s founder, Deborah Doane, said that the current system suffers from “functional inertia.”
“There were a lot of systemic factors at play [preventing change] — donor rules, business models, legal issues,” she told Devex. “We wanted to stop putting out reports talking about what was wrong. We’ve seen too many reports that explain the problems but don’t lead to change. We wanted to do practical work and find solutions.”
Read: 7 experiments tackling the barriers to localization
Case study: How CDC directs 70% of its global funding to local partners
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