What we heard in Nairobi
Dear Unlock Aid community,
We’re just returning from Nairobi, Kenya, where Unlock Aid had a very productive week meeting with 40+ Global South innovators at Sankalp, Africa’s leading forum for social enterprises working on the Sustainable Development Goals (SDGs).
Here are three things we heard over and over:
1. Confusion about what is “local.” Many global development funders say they want to direct more resources to, in their words, "local" organizations based in the Global South. But the social enterprises we spoke to said one of the most confusing aspects of the international donors' “localization” push is that different funders have different definitions of what qualifies as a "local" organization. For example, many leading Kenyan social enterprises told us that more than 90 percent of their staff live and work in the Global South, including their CEOs and their executive teams, but for business development, legal, or fundraising reasons they decided to register their organization in another country. Would these organizations count as “local”? they asked. Some funders say yes, others say no. Innovative Global South organizations that meet most but not all criteria to be considered a “local” entity said they worry that donors that adopt overly narrow definitions may inadvertently limit their abilities to access public funding.
2. It’s not just about the money. Even though international donors have pledged to direct more money to Global South organizations, many of of the most innovative Global South social enterprises we spoke to said they don’t want it. At least, not until the biggest public funders first make it easier to apply for and comply with their contracts and grants. CEOs from some of the most cutting-edge African organizations we spoke to said they routinely avoid “good fit” opportunities to work with international development funders because of the high perceived business development costs, compliance burdens, and long funding timelines that come with public funding. “It usually costs us more [time, effort, and money] to pursue public funding than it’s worth,” one CEO said, “so we’re not going to respond to any RFPs or try to “team” with bigger partners on these [public] awards until these issues are fixed.”
3. Innovators love USAID’s Development Innovation Ventures (DIV) office. Seven of the Global South social enterprises we spoke to had previously worked with USAID’s DIV office and had great things to say: “It was an extremely good experience,” said one. “We loved working with DIV,” said another. Last year, DIV structured 100 percent of its awards using what are called Fixed Amount Awards (FAA), a contracting vehicle that pays against milestones delivered. FAA recipients do not need to invest in USAID-specific time, human resources, and financial management systems; they just need to show that they achieved the award’s intended objectives. DIV’s focus on performance over compliance was one of the reasons that Global South innovators enjoyed working with the office so much. “I would not pursue a traditional USAID award because of all of the compliance issues,” one CEO said, “but I would work with DIV again.”
There’s an incredible amount of innovation happening in Africa and the rest of the Global South right now. We spoke to one social enterprise that has lifted many millions out of the informal sector into the formal one by using technology to rapidly expand access to no- or ultra-low-interest credit. We spoke to another that has significantly increased agriculture yields by developing new methods to cultivate and store crops.
If you know of other world-class Global South innovators who we should talk to please reply to this email and tell me. We'd love to meet them.
I can’t wait to work with all of you in the weeks and months ahead to make it easier for the world's best innovators to work more closely with major international development funders. We have to if we hope to achieve the SDGs by 2030.
Executive Director, Unlock Aid
P.S. Today, USAID Assistant Administrator Michele Sumilas will testify before the House Foreign Affairs Committee in a hearing entitled: “Shifting the Power: USAID’s Efforts to Support Locally-Led Development.” Given that USAID is the world’s largest bilateral international development funder and its increasing focus on shifting more resources to the Global South, we’ll be watching this hearing with great interest. We hope that you do, too. You can watch it at 2pm ET here, or follow us on Twitter where we’ll be live Tweeting during the hearing.