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The Global Campaign for Aid and Development Transparency

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Localisation

The movement to localise humanitarian and development assistance has gained momentum in recent years – with increased focus on shifting power and resources to local organisations and communities in the global south. Many donors and international non-governmental organisations have goals to increase their local spending. Since 2022, Publish What You Fund has been looking into the transparency of commitments to direct more funding to local organisations, how progress is measured and reported, and the underlying data that supports this. Our work provides insights into why transparency around approaches to measurement and monitoring of funding to local organisations is vital to hold donors accountable to promises they have made on fair resource distribution.

While our work has focused on tracking funding goals, we recognise that issues including power dynamics and decolonisation also impact progress on localisation. Our expertise lies in tracking funding flows, while other organisations are better placed to address these important wider issues. We hope our research contributes to the larger localisation conversation and offers knowledge that can be used as an advocacy tool to hold donors accountable for directing more funding to local organisations.

Commitments Without Accountability

Launched in December 2024, our Commitments Without Accountability: the challenge of tracking donor funding to local organisations report has built on our Metrics Matter series by exploring the macro-level approaches and commitments of five bilateral donors on their funding to local organisations.

 

Local Funding Matrix comparing 5 bilateral donors in their progress on tracking and monitoring funding to local organisations. Each donor is assessed against 8 questions: definition of localisation or locally led development; definition of local and national organisations; target or indicator on quantity of local funding; methodology to track local funding; clarity on denominator; publishes data on local funding flows; strategy on approach to localisation or locally led development; and has funding initiatives that prioritise/require local partners. USAID is the only donor to be marked with a tick for all 8 questions. Australia gets a tick for 3 questions - definition of localisation or locally led development, strategy on approach to localisation or locally led development, and has funding initiatives that prioritise/require local partners. Canada and the Netherlands are marked with only 1 tick for having funding initiatives that prioritise/require local partners. UK has no ticks.

 

We developed a Local Funding Matrix to compare donors’ readiness to track and implement localisation practices. We also assessed how many commitments to localisation have translated into practical changes in how agencies measure and report their funding to local organisations. In undertaking this work, we looked at five donors which are leading voices in the locally led development space: Australia (Department of Foreign Affairs and Trade), Canada (Global Affairs Canada), Netherlands (Ministry of Foreign Affairs), UK (Foreign, Commonwealth and Development Office), and US (United States Agency for International Development). Key findings include:

  1. Donor commitments vs practice: While the donors reviewed have endorsed localisation commitments, there is a notable gap between these pledges and practical evidence of increased local funding.
  2. Tracking and transparency: Few donors have taken steps to define, measure and report on their funding to local organisations. USAID stands out as the only donor with a comprehensive target and public data measuring its progress toward local funding goals.
  3. Opportunities for improvement: The report underscores the potential for donors to enhance their tracking methodologies, policies, and transparency. By setting defined targets, improving data reporting, and learning from USAID’s structured approach, other donors can align more closely with their localisation promises on providing more funding to local organisations.

Our Metrics Matter III report, expected in Spring 2025, will extend our analysis to include the five donor agencies discussed in this report.

Metrics Matter Series

In November 2021, USAID Administrator Samantha Power set out her vision to make aid more accessible, equitable, and responsive. A key part of this vision is the commitment to the localisation agenda: by 2025, 25% of USAID’s funding will go directly to local partners.

Publish What You Fund has undertaken detailed research into USAID’s local partner funding goal to establish an independent, credible, and replicable measurement approach to track funding for local partners. Through our Metrics Matter series, we have evaluated USAID’s progress in directly funding local organisations and assessed the suitability of USAID’s measurement approach to achieve its stated goals. Ultimately, the definition and the approach used by USAID to track direct funding need to support its overall vision, including its goal to diversify its in-country partner base and to lift-up under-represented voices.

Our Metrics Matter I and Metrics Matter II reports have examined USAID funding in 10 sample countries (Bangladesh, Ethiopia, Guatemala, Haiti, Jordan, Kenya, Liberia, Moldova, Nepal, and Zambia) and compared our own measurement approach with the approach adopted by USAID to determine the difference in funding amounts currently directed to local partners and the amounts that would be needed to reach the 25% target.

Our research to date provides two main takeaways:

  1. USAID is a long way from meeting its 25% goal of directly funding local organisations.
  2. How USAID defines and measures its 25% goal is working against its own progress. It is allowing perverse incentives – such as affiliates of international organisations to be counted as local – and leaving significant funding opportunities – such as projectised funding that currently goes to UN agencies and multilaterals – untapped for local partners.

Metrics Matter – Our approach

We used publicly available International Aid Transparency Initiative (IATI) data to analyse USAID disbursements from US FY 2019 to FY 2023 in 10 countries.

We used this data to assess how much funding is being directed to local organisations using the USAID measurement approach (its definition of local and its chosen denominator – the 25% of what). We compared this to the Publish What You Fund approach – for Metrics Matter II we used the Inter-Agency Standing Committee (IASC) definition of local and a broader denominator which includes all project funding flows to the relevant countries.

We feel the IASC definition best reflects USAID’s vision to diversify its partner base, it has been independently developed by the Grand Bargain community, and it has been adopted by USAID for Grand Bargain purposes. For Metrics Matter I, we compared USAID’s definition of local with a variety of bespoke definitions which reflected the priorities of stakeholders at the time.

Download our methodology paper for full details of our research approach and what is included in the numerator and denominator of the USAID and Publish What You Fund measurement approaches. You can also download our full dataset.

Supporters

Our Metrics Matter series was supported by CARE, Catholic Relief Services, FHI 360, Global Communities, Modernizing Foreign Assistance Network (MFAN), Oxfam America, and Save the Children US.