If you follow Publish What You Fund, you’ll know that we’ve been tracking USAID’s localization journey since Administrator Samantha Power first announced the agency’s intention to provide 25% of its funding to local organizations in 2021. Our work has focused on the issue of how much money is actually channelled directly to local organizations. Our Metrics Matter reports (1 & 2) concluded that both USAID’s definition of “local” and the denominator it was using—only 43% of USAID’s total resources—left significant room for improvement. In December 2024 we released our latest piece, Commitments without Accountability, which contrasts USAID’s localization measurement approach with that of four other Development Assistance Committee  (DAC) donors and illustrates that USAID is leading the way in tracking funding.

In this article, we reflect on USAID’s new FY 2024 localization progress report, highlighting where USAID  is leading the way, identifying areas that still need attention, and looking ahead to what’s next. Although USAID still has more progress to make, it’s worth noting that the commitments made by the agency were ambitious and not easy to implement. As our Commitments without Accountability report demonstrated, despite commitments by a number of leading donors to fund more locally led development, only USAID set specific targets, measured its progress, and publicly released its reports and the underlying data. USAID thus set the standard for how other donors can move from committing to locally led development to implementation.

What does the new USAID report say?

On January 14th, USAID released its Localization Progress Report for FY 2024, providing updates on its two major localization targets:

1. Funding Goal: To direct 25% of funding directly to local partners by the end of FY 2025.
2. Leadership Goal: To ensure at least 50% of USAID programs empower local actors to lead on priority setting, design, implementation, and evaluation by 2030.

Key findings from the report include:

• In FY 2024, USAID provided $2.1 billion directly to local non-governmental, private sector, and government partners, representing 12.1% of USAID’s acquisitions and assistance (A&A) and government-to-government (G2G) funding. This marks an increase from 10.5% in 2023 and 11.3% in 2022[1].
• Encouragingly, the number of new awards to local and regional partners increased by 87% since FY 2021, with the number of unique local and regional partners rising by 48%.
• For the 50% leadership goal, 35% of activities met the full criteria for the Locally Led Programs indicator in FY 2024.

Where is USAID doing well?

Many bilateral donors have pledged to support locally led development and increase funding to local partners. However, our new study, Commitments Without Accountability, reveals a significant lack of transparency and accountability. Four out of five DAC donors analysed lack clear localization strategies, definitions, targets, or methods to track funding shifts. Without transparent measurement, it remains impossible to determine if localization commitments are being fulfilled.

USAID stands out as the only donor with a comprehensive target and public data tracking its progress. While still far from achieving its goal of allocating 25% of direct funding to local partners by 2025, its structured approach offers valuable lessons for other donors on tracking local funding. The study’s Local Funding Matrix assessed each donor against eight key criteria, with USAID being the only donor meeting all benchmarks.

Where can USAID do better?

As we have outlined in our Metrics Matter reports, USAID’s measurement approach will have major implications for the success and acceptance of its wider localization efforts.

Our analysis of USAID’s approach highlights ongoing concerns regarding measurement challenges. The definition of “local” still lacks critical elements such as local governance and staffing, and includes entities affiliated with global brands. This raises concerns about the authenticity of recipients and the potential for international organizations to establish “local offices” simply to meet funding eligibility criteria. USAID has been conducting manual checks to counter this, but it does not appear to be systematic.

Moreover, USAID’s calculation of the 25% goal is based on a limited portion of its budget—just 43% of total resources in 2023—excluding significant funding streams and thus limiting opportunities for local organizations. As USAID establishes its baseline, ensuring a credible, transparent, and replicable measurement system is crucial. Addressing these gaps will enhance accountability and support long-term localization efforts that genuinely shift power to local actors.

What next?

While USAID has made commendable strides in setting localization goals and reporting progress, significant challenges remain in refining its measurement approach. The agency should tighten its definitions and ensure a broader share of its total resources is considered for localization efforts.

With donors worldwide under increasing pressure to deliver on their commitments, USAID’s example provides both lessons and warnings. Other donors must step up, adopting clear localization strategies and transparent tracking mechanisms to ensure that commitments translate into meaningful action.

We encourage stakeholders to engage with our upcoming research, including the launch of Commitments Without Accountability at a virtual event on 12th February which will provide an opportunity to discuss the reasons to track local funding, some of the challenges, and how donors are addressing these. We will release Metrics Matter 3 in the spring of 2025, which will further examine the progress of USAID, Australia (Department of Foreign Affairs and Trade), Canada (Global Affairs Canada), Netherlands (Ministry of Foreign Affairs), and the UK (Foreign, Commonwealth and Development Office).

For more insights and to register for our event, click here.

[1] Note that previous USAID reports only reported local A&A funding (thus excluding G2G). In FY 2024, USAID provided $1.9 billion to local partners, or 11.2 percent of its acquisition and assistance (A&A) funding; this was up from 9.6% in 2023 and 10.2% in 2022.