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MFAN Calls for a Clear, Agency-Wide Definition of Local Entity in USAID’s Localization Work

January 31, 2022

The Modernizing Foreign Assistance Network (MFAN) celebrates Administrator Power’s vision for a more locally led future for foreign assistance, as laid out in her address at Georgetown University in November of 2021. To realize these reforms with transparency and accountability, MFAN recommends that USAID create a clear and consistent definition of “local entity,” which eliminates the category of “Locally-Established Partners” in all current and/or pending regulations.

Setting a USAID definition of “local entity” applicable to all Bureaus and initiatives would increase the Agency’s ability to track progress towards Administrator Power’s laudable goal that 25% of USAID’s funding will be awarded to local entities by 2025.  Inconsistent definitions of “local” across various USAID initiatives, as well as insufficient visibility of sub-awards, mean it is currently far too complicated to measure funding going either directly or indirectly to local development and humanitarian entities.

Moreover, in that overarching definition of “local entity,” organizations that currently qualify as “Locally-Established Partners” or “LEPs” under the New Partnerships Initiative should not be counted as local entities. Including the LEP category as local would allow organizations that are actually international to access funding specifically geared towards national- and community-based organizations. It would also allow USAID to count LEP awards towards its localization targets, making the 25% goal easier to reach, but far less transformative.

The double-impact of service delivery and sustainability that Power highlighted in her Georgetown speech is much more likely to be achieved by working through truly local entities. There is convincing evidence demonstrating that foreign assistance is more likely to be effective, with lasting results and strengthened local systems, when it is driven by local organizations and local priorities. As USAID takes steps to implement this bold vision for inclusive development, MFAN stresses the importance of doing so in alignment with principles of aid effectiveness, accountability, and sustainability.

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