Lessons on Localization
After years of contemplating and testing what Localization looks like, the development community is beginning to hone in a common definition of Localization or at least the metrics behind it. USAID defines Localization as locally led design, implementation, and monitoring of development assistance. Their outcomes of interest are the transition of funding and decision-making to be in the hands of those who will influenced most by the decisions. Indeed, one of USAID’s four lines of effort in its vision for Localization is to “channel a larger portion of assistance [to local partners]” (Power, 2022). Dissanayake (2024) pushes us to look beyond funding and decision-making power and consider “Optimal Political Localization” as a third outcome of interest. Foreign assistance brings with it a history of political antecedents. Assistance can be used to scale-up nationwide best practices or to push a foreign agenda. And yet this political element behind localization is often not deliberated. Development funds presented from government-to-government have a different agenda and impact than when funds are dispersed directly to civil society organizations. But this is a topic for another day.
USAID’s Localization objectives include an ambitious target to provide a least one-quarter of all its programming funds directly into the coffers of local partners by October 2025 (Power, 2024). Using this metric, PEPFAR is the darling of Localization will a laudable success rate of 55.2% of its funding programmed to local partners in fiscal year 2022. (Kaliel, 2023). Notwithstanding, it has fallen short of its goal. In 2016, PEPFAR set a goal for 70% of its programming funds be managed directly by local partners by 2020 (Birx, 2023). PEPFAR’s approach to Localization is accomplished through ‘transition awards’ whereby an international prime leads the activity or project for the first few years and then transitions over its prime role to one or more of the sub-awardees before the project/activity ends. Following is some of Effaced’s lessons learned on localization to add to the discussion of USAID/PEPFAR Transition Awards:
Assess Prime Readiness with Bespoke Tools
Before investing time and resources into capacity building, take stock of the baseline. If a local partner is considering whether to be the prime recipient of US government funding, they could take a readiness assessment that reflects the highest reporting and compliance regulations required by the US government. Effaced developed and implemented its Prime Readiness Assessment Tool (PRAT) to make such an assessment. Composed of ten metrics, the tool relies on quantitative and more nuanced qualitative measurements.
Building Capacity to be the Prime
Effaced has learned that building capacity to be a well-performing sub-recipient does not equate with preparing a local partner to be a prime awardee of US government-funded project. For local partners wishing to be USAID prime recipients, it is essential to understand specific requirements as delineated in the Code of Federal Regulations and its FAR and USAID’s Automated Directive System (ADS) among other references. Drawing from PEPFAR’s lessons (Kaliel, 2023), capacity development should be focused on low-risk appetite areas such as financial management and internal controls.
Localization Starts Now
With any new skill, practice makes perfect. Combine practice with commitment, motivation, and accountability and you have the essential elements for a successful transition from sub-awardee to prime. Learning new skills and absorbing new information to become a prime recipient takes time. This argues for starting the transition on day one through learning-by-doing modalities. Current sub-awardees on who have demonstrated prime readiness could practice writing the first drafts of quarterly reports and complete US government standard forms on behalf of the consortium.
First Things First
The current cadre of international primes have had ample opportunity to glean a host of skills and practice. However, not all those skills are needed to be successful as a new prime recipient of one project. “Triage” is the operational word here. Capacity development is a journey not an isolated event and as such, the requisite skills and experiences need to be prioritized. Avoid overwhelming an organization with information not needed to successfully implement one project. Topics selected for capacity building should be prioritized according to the USAID’s risk appetite and organized around NUPAS’ functional areas and their associated policies, regulations, and practices.
Practice Makes Perfect
With any new skill, practice makes perfect. Combine practice with commitment, motivation, and accountability and you have the essential elements to a successful transition from sub-awardee to prime. Localization takes time which argues for an early start for subs to start learning-by-doing from day one of the award. International primes who provide their local partner sub-recipients with the US government de minimis to cover their indirect costs are helping the local partners to disaggregate direct and indirect costs—this an important skill to possess in order to mature as a prime recipient of USAID funds. To monitor indirects, local partners might need to upgrade their accounting systems. Such a major organizational change takes time to implement and acculturate and therefore are best instituted during the first year of the transition award. This will allow time to practice using the new system and will minimize the learning demands after the transition to prime takes place.
This is the first of a series of Lessons on Localization. Please contribute to the conversation, challenge us, and keep the conversation going!
References
Birx, D. L. and Steigler, W. R. (2023, February). PEPFAR and Communities: A Report on Lessons Learned from PEPFAR Success. George W. Bush Institute. https://www.bushcenter.org/publications/pepfar-and-communities
Dissanayake, R. (2024). Localization in Theory and Practice. CGD Policy Paper 346. Washington, DC: Center for Global Development. https://www.cgdev.org/publication/localization-theory-and-practice
Kaliel, D., et al., (2023, June). Midpoint Reflections on USAID HIV Local Partner Transition Efforts. Global Health: Science and Practice. 11 (3): e2200338; https://doi.org/10.9745/GHSP-D-22-00338
Power, S. (2022, August). Localization at USAID: The Vision and Approach. USAID https://www.usaid.gov/sites/default/files/2022-12/USAIDs_Localization_Vision-508.pdf