The US Agency for International Development (USAID) has goals for both (i) small business utilization and (ii) direct spending on local organizations. Specifically:
- USAID’s FY24 goal for prime contracts is for 13.75% percent of total value to be awarded to small businesses, with a 16% subcontracting goal.
- USAID’s FY25 goal is to channel at least a quarter of its funds to local organizations.
While some may question whether both goals can be achieved simultaneously, these goals are not in conflict. As LINC knows from first-hand experience, direct spending on local organizations is not only good development, but can also provide meaningful opportunities for US small businesses to learn, grow, lead, and do good development work. There is room for both – and in fact, the two goals complement one another.
Make no mistake, LINC firmly supports USAID’s small business targets. As the US Small Business Administration (SBA) says, the US Government is committed to buying from small businesses for a number of reasons, including to gain access to the new ideas that small businesses provide and to support small businesses as engines of economic development and job creation. As small businesses and USAID know well, small businesses offer specialized and innovative capabilities and expertise not often found in larger organizations. Small businesses increase innovation, provide new approaches, and bring diversity of thought and a strong technical focus. We can also move fast and nimbly. All of these are characteristics that are also necessary for the shifts required to promote localization.
At the same time, direct spending on local organizations is an important part of locally led development (but not the only part). Directly engaging local partners meaningfully in implementation ensures local actors play a leading role in development activities in their countries, and it contributes to rich contextual perspective and sustainability.
These two important USAID goals can and do work together, and partnerships between local organizations and US small businesses can be productive in a number of ways. Throughout LINC’s history, we have engaged in partnerships with local organizations that helped LINC grow, while also producing good development results. Such partnerships do not always require the US small business to lead. For instance:
- LINC’s first clients in 2013 were non-governmental organizations (NGOs) and civil society organizations (CSOs) based outside of the US and Europe, in places like Kenya and Mexico, who engaged LINC to help with program design, participatory action, strategic planning, and institutional capacity-strengthening. It was only years later that we received our first funding from a “traditional” donor institution.
- On the USAID/Vietnam Local Solutions for Plastic Pollution (LSPP) Activity, LINC served as a subcontractor to Vietnamese NGO GreenHub, providing them with technical support in a number of areas, including facilitating a systems mapping workshop to identify causal factors and leverage points related to plastic pollution in Vietnam, conducting a social network analysis to identify and strengthen collaboration among the network of organizations working to address plastic pollution, and training Vietnamese NGOs on applying systems practice to their work in local communities and the local context.
- On the USAID/Mexico Multi-Stakeholder Strengthening Activity, LINC worked to co-implement a crime and violence prevention project with two Mexican NGOs. The project was co-funded by USAID and the two NGOs, and LINC worked in equal partnership with the NGOs to implement the program. This kind of flexibility and collaboration is why small businesses are the right partners to support localization. We produced a lessons learned report after the program ended to share our thoughts on ways to make these equal partnership work.
- Currently, LINC serves as a subcontractor to, and as a technical advisor for, the Philippine NGO Gerry Roxas Foundation on the USAID Community of Practice for Effective Partnerships (COPE) Activity, a three-year program designed to foster south-south cooperation and create a more structured avenue for organizations from Asia and Latin America to learn from one another and use systems thinking to innovate, share, and practice while addressing local development challenges. LINC supports COPE and its network of 16 CSOs across Asia and Latin America by providing training, technical assistance, and capacity-strengthening on systems thinking, collective action, communities of practice, and monitoring and evaluation.
These activities have enabled us to develop technical skills, work in new geographies, formalize new partnerships, and also share some of our organizational expertise and USAID experience with local partners. We make strong and effective teams and increase the long-term sustainability of results. It also demonstrates why US small businesses are uniquely positioned to be the best able to support donors and local partners through the challenges of localization/locally led development.
Many US small business get their start, and grow, by subbing to larger implementers. But subbing to local organizations can also help these small businesses gain technical and geographic qualifications, while also doing good development work. I’d encourage all small businesses to explore these sorts of opportunities.
This post was authored by Patrick Lohmeyer.
