How many of the people implementing a USAID-funded project in-country should actually be from that country? Should technical experts be flown in from abroad for a five-year stint, or to check in with our clients and projects every quarter?

In the past few months, I’ve had the opportunity to visit Palladium’s offices in Indonesia, Kenya, and Nigeria and those questions were at the front of my mind as I saw our commitment to ‘localization’ in practice. In Nigeria, 99% of our staff is local and in Kenya, 95% are Kenyan. The experts across these offices bring a depth of knowledge, contextual insights, and solutions that are unparalleled.

But more so, our locally driven approach ensures that more programs reflect local voices and solutions, we partner with more local organizations, and more revenue stays in country. All of this adds up to more sustainable, effective programs.

And yet, in the recent release of USAID’s Localization Progress Report for 2023, we learned that USAID is not achieving its localization targets.
This has me thinking not only about what’s working for us, but our role in growing a strong local development ecosystem and advancing USAID’s goals in the name of good development practice.

In 2021, USAID set a bold goal – 25% of all money by 2025 would go directly to local organizations. It’s an admirable goal, but as we’re seeing, it’s not necessarily realistic.

A lot of the reason why comes down to capacity building and a lot of it comes down to partnership – two areas where we’re pushing the boundaries. The reality is that a lot of local organizations are intricately familiar with the challenges being faced in their country; they know the best solutions for those problems; and they have the technical expertise to execute on those solutions. But they struggle with the ‘back end’ when it comes to working with USAID or other donor organizations.

Be it financial reporting, grants management, measuring and evaluation, or HR, many of these ‘back office’ functions are not strengths for small, local organisations and it puts them at a disadvantage when USAID is looking to award a project. At the same time, many of those awards outpace a small organisation’s ability to manage.

So, what’s the solution?

For Palladium, the solution lies in the way that we’ve always done business. For nearly 60 years, we’ve committed to having offices led by local staff, but with the back-office support and depth of bench and talent around the world to back them up.

The same mentality goes into the way we work with our local partners.
Recently I heard one of our team members say that USAID is throwing local organizations into the deep end and organizations like Palladium end up being their floatation device. It’s a compelling image and in many ways, it’s true.

However, I’d like to think that at the same time, we’re intentionally teaching those local organisations to become better swimmers. Because of our history and because of our breadth of projects around the world, we know the local ecosystems and we have to be intentional about growing and strengthening those ecosystems by strengthening our local partners.

Ultimately, it means that we’re helping development funding to go further and to be more effective, because who knows how to better address local problems than local organizations?

When there are gaps in an organization’s capacities, especially around financial management, that’s when big funders balk and that’s where they stumble on awarding local organizations with projects. That also impedes USAID reaching their ambitious targets.

As we look forward, I think we have a critical role to play in the future of development. In some areas of the world, it’s a role we’re already playing (I call it Palladium+). It’s our ability to execute and deliver on our client and funder’s goals, while at the same time building the capabilities of local partners on the ground. We offer those partners the back-office support they need so that they can focus on delivering tailored, localized solutions.

At the risk of putting us out of work, an ideal future state is building those capacities up to the point where they too become a trusted USAID or donor partner and can manage large awards and projects. As USAID takes a close look at how to reach their ambitious localization goals in the next year, our teams are thinking about how to best support them on that journey responsibly.

Given the size of the challenges being faced in the countries where we operate, true sustainable impact will only be achieved by mobilizing entire ecosystems. A mandate isn’t enough. Meeting targets isn’t enough. As responsible development practitioners, we have to work with local partners and cultivate their ability to successfully manage programs and deliver results.

Localization is the anchor of sustainable development. It’s the heart of what we do around the world, and I’ve seen firsthand how it can work and create truly successful, prosperous ecosystems and economies. Because of that, I’m confident that USAID can reach its targets and we’re committed to helping them develop strong local ecosystems while they do.

For more information, contact info@thepalladiumgroup.com.