What Locally Led Development Requires of Funders
Lessons from a decade of practice inside USAID
Locally led development has always been urgent. Now, it is unmistakably so. American and Western funders are being called on to not only talk about locally led approaches, but to practice them. As the foreign assistance landscape continues to shift dramatically, private philanthropists and foundations have an opportunity to act boldly. They also have a responsibility to do so thoughtfully in true partnership with the Majority World.
Good intentions alone are not enough. Locally led development requires funders to work differently: not just to fund new things, but to fundamentally change how they engage.
We spent ten years building and running Local Works at USAID, supporting locally led development across 64 countries and managing over $600 million in alignment with community priorities inside what was the world’s largest bilateral donor. These are some key lessons we'd offer any donor serious about doing this well.
Listen deeply, practice humility, and jump in
Locally led development is first and foremost a moral obligation. At the most basic level, it’s how we’d want our own families and communities to be treated by external funders.
It is also more durable. Lasting change must be driven by those closest to the challenges. Critiques of aid and philanthropy rightly scrutinize extractive processes (such as top-down strategy development, onerous due diligence, and restrictions on funding for essential operation expenses) that are disconnected from community realities.
Our experience demonstrates that, with equitable and intentional approaches, locally led development is achievable at scale. While political and legislative constraints limited the extent to which we could advance locally led development approaches within USAID, we were still able to shift practice in ways that empowered locally rooted organizations to lead impactful work.
We began with intentional listening grounded in respect and inclusion. We convened diverse stakeholders to engage in joint visioning sessions, “Whole System in the Room” workshops, and more. These participatory processes surfaced unexpected and shared community priorities, forged new relationships and networks, and enabled diverse voices to guide program design in ways that desk research never could alone.
We understand the constraints are different, but they can be navigated with the right incentive structures. That flexibility is necessary.
Invest in trust and act on it
Local Works achieved what it did at scale because we acted with trust in local change agents, local leaders, and existing community networks and ecosystems.
In each country, our team engaged directly with local individuals and organizations: listening first, building relationships, and sharing decision-making authority before we co-designed an award. This approach helped us identify strong collaborators and gain a grounded understanding of local context.
Just as important, we acted on what these collaborators wanted from us as donors. This meant simplifying application and compliance processes wherever possible, investing in partner-defined capacity strengthening, and adapting funding structures to better align with how local organizations operate.
Trust is a practice. The relationships built through genuine listening are the foundation on which everything else rests.
Reverse the standard grantmaking process
Conventional grantmaking typically begins with a donor-defined problem, and then seeks solutions through a predetermined lens. This approach limits who participates, frames conversations around donor priorities, and reproduces existing power imbalances.
We took a different approach with Local Works. We started with listening, relationship-building, and community engagement. We convened local stakeholders to collectively identify challenges, co-design solutions, and decide how they would put them into action.
This sounds like common sense, and it is. In practice, however, it was more challenging. We were embedded in an institutional culture that valued and reinforced “expert” driven solutions.
Funders must actively reward listening, resist the impulse to prescribe solutions, and incentivize programs grounded in local knowledge and lived experience. Approaches like whole-systems convening, community-led collective action design, and participatory monitoring helped us to actually operationalize shifting power to local actors.
Enable communities to define what matters
Measurement in international development often reflects what donors can count rather than what communities value.
Shifting toward community-defined objectives and metrics supports organizations to focus on their own priorities and track progress in ways that are meaningful to them. It also means exploring and strengthening trusted accountability systems that already exist within communities, rather than layering on irrelevant reporting requirements or other compliance burdens.
This shift requires expanding what counts as “evidence.” Oral and written stories or testimonies, observable shifts in relationships, and accountability that flows to affected communities rather than to funders are valid and important forms of impact.
This was a challenging argument to make inside USAID; it may likely be in many foundations, too. But there are proven tools and adaptable practices that make it possible.
Systemic change takes longer than most grant cycles. Its outcomes are less visible than short-term, high-impact outputs that address symptoms rather than root causes. Funders who are serious about locally led development need to be honest with themselves about whether their measurement and reporting systems are designed for the work they claim to support and be willing to change what isn't.
Embrace bureaucratic entrepreneurialism
Every institution has barriers, but are they treated as permanent or as problems to solve?
At USAID, we built a local support infrastructure through trial and error. We encouraged colleagues to question standard practice, leveraged leaders with higher risk appetites, and provided political cover from Washington to enable innovative ways of working to take hold. Often, we assumed risk ourselves so that partners didn't have to.
We also created spaces where partners identified their own organizational capacity strengthening priorities, and dedicated resources to their growth. We celebrated success not by the volume of money moved, but for the strength of relationships built and the sustainability of community-led impact.
Foundations and other funders can do this too. The mindset required for organizational change is the same: find the boundaries of what your institution allows, push them thoughtfully, and document what works so others can follow.
Lead courageously and openly
Courageous leadership means taking a principled stand, being open to failure, and acknowledging you don't have all the answers. It means intentional experimentation with a commitment to learning and adapting over time.
Most importantly, it means celebrating the staff and partners who take thoughtful risks and learn from them. A culture that tries new approaches and learns from failure will produce the kind of adaptive, community-responsive programming that locally led development requires.
Locally led development is fundamentally uncontroversial. Foundations are well positioned to use their voice to normalize these approaches and to stand with civil society actors operating in increasingly constrained environments.
This kind of leadership is urgently needed now.
A final note
None of this is simple. We learned as much from what didn't work as from what did.
Locally led development has always worked. The question is whether funders are actually willing to align their own systems, incentives, and behaviors to support it. This requires courage, humility, and a genuine commitment to following the lead of the communities they seek to support. When funders do, they can amplify the power of community leadership in truly transformative ways.
Local Works Global supports funders, implementers, and institutions working to advance locally led development. Get in touch to learn more about how we can help.
Author: Meg Smith
