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Aid Evolved Podcast: Why Is It So Hard for Local Organizations to Manage USAID Funding?

By Rowena Luk on March 5, 2022

aid evolved podcast

Aid, Evolved is a podcast about technology, poverty, and global health. Every two weeks we bring you a new episode about doing good, better. We speak first-hand with innovators, non-profits, social enterprises, and donors who are trying to make change. As we chat through their hopes and fears, their struggles and triumphs, our goal is to draw out the lessons learned that can guide future work in this sector.

A Conversation with Marie Ahmed

In this episode, we speak with Marie Ahmed, Marie has worked within USAID to strengthen health systems in Nepal, Rwanda, Côte d’Ivoire, and Thailand. She has a long career in the non-profit and public sector, including time with the Peace Corps in Uzbekistan and over a decade with USAID, the largest contributor of foreign aid in the world.

In the excerpt below, Marie shares the juggling act of balancing her accountability to the American taxpayer against the unique needs of different countries which have hosted her. She needs to act according to the policies of the American Congress, while deeply understanding the needs of vulnerable communities that she is trying to serve elsewhere. She tackles head-on one of the common pet peeves people have with aid, opening our eyes to the realities and responsibilities that come with managing public funds.

Note: This was a personal interview with Marie Ahmed about her experience, her perspective, and what it’s like balancing the roles that she’s played over the course of her career. Nothing that she says is representative of USAID or U.S. government and should not be interpreted as such.

Why Is It So Hard to Fund Local Organizations?

Marie: There’s a lot of questions around why don’t we just directly fund local organizations.

Rowena: Yes. There are.

Marie: Instead of using these implementing partners (IPs), large NGOs and things like that. But a big part of the answer is because there’s a LOT of regulations that come with the accountability piece. And that is really important. 

Being accountable for the programs and to the US taxpayer about where this money is going. It’s like… would you rather know where it’s going, and not necessarily love it OR not have any idea where it went or what it did?

Rowena: Oh man. That’s… between a rock and a hard place. Which is where a lot of these decisions end. What a question.

Marie: Exactly. USAID has tried to find the middle ground in this – which is to say, yes, we use our partners to do a lot of implementation and at the same time, we’ve had over the years local capacity building initiatives where we work directly with local organizations to increase their capacity to manage U.S. funding. 

Receiving Funds is a Blessing and a Curse

Marie: Because when we give them money, we ask them for a lot of things.

A small organization that started out helping fellow men who have sex with men get access to treatment wasn’t necessarily thinking about what kind of financial software they need to use to be able to respond to the audits from the U.S. government. Right?.

Rowena: That’s a great example.

Marie: In terms of helping them figure it out, that takes time. Somebody who, initially, their day to day work might have been talking to somebody who is at risk of HIV and trying to get them to come in for testing, might all of a sudden now, years later, be the head of an organization that does that at a  larger scale. But now this person has to understand also how to do annual reports, how to use indicators, how to communicate their story, how to report where all the money went…

Rowena: Yeah, yeah, and maybe maybe their passion and what they’re good at is connecting with men who have sex with men and delivering programs. And maybe they just aren’t great with financial software, or with diligently reporting every week or every month.

Marie: I remember actually at one point I had a conversation with an international partner who had some partners and we said: “Are any of these partners good candidates for direct funding from USAID?” And they said: “Listen, we’re not saying this to you to make this hard for you. But they don’t really want to deal with you.” Local partners are very happy to have us as a buffer. We deal with a donor, we deal with the reporting, we help them keep all their books.

Rowena: Oh, interesting.

Marie: They can do what they’re good at. They don’t necessarily want to deal directly with the donor and all of your demands and you guys calling them and saying, we really need the support or we need this Tweet or we need this fact sheet. Local organizations have to think of their own cost benefit analysis, right.

Rowena: Yeah, yeah, yeah. I was just thinking… is there some way that we could get somebody else to do the financial accounting for these small organizations? And that’s what these big agencies are doing, these large nonprofits, these Beltway Bandits that take all of USAID money. Is part of what they’re doing is to provide that rigor and that reporting so that the small social enterprise or the small nonprofit doesn’t need to figure out the complexities of the US government reporting system. I hadn’t thought about it in that way until… until this exact conversation.

When It Doesn’t Make Sense to Provide Direct Funding

Marie: And it can be overwhelming. Something that really opened my eyes was very recently when I arrived here in Thailand. I’ve been here in Thailand for about two years. And we actually do fund HIV service delivery for key populations like health services here in Thailand. So we have an IP who subsgrants to these local organizations for service delivery, for key populations, for men who have sex with men. And in the discussions we had with our headquarters and also with the office of the Global AIDS Coordinator, they’ve said: “You guys should be funding more local partners directly.” Back to that question of: “Why aren’t you finding more local organizations?”

If we were looking at the way that we’ve been working with these local organizations: we’ve been working with them to develop their services to a level of quality that they can get reimbursed from the Thai government with the National Health Security Office here in Thailand.

Rowena: That makes so much sense.

Marie: And if you look at the trend over time, over the last four or five years, they have steadily increased the proportion of their budget that is coming through reimbursements from the Thai government.

That’s a very clear success story, actually. Some of them are even majority-funded by the reimbursements that they’re getting from the National Health Security Office.

Rowena: That’s awesome. Well done.

Marie: So when they asked us why aren’t we locally funding, I wonder: “why would we inject ourselves at this point to create a system for them to report to the US government, instead of continuing to support their evolution to getting more financing from the Thai government?”

Rowena: Right, right, right.

Marie: Because the US system is… We have a lot of requirements. But these organizations are on a nice glide path already for the Thai government. It just didn’t make sense to me. Anything that we would do at that point is a derailment.

Rowena: Yeah. People don’t realize that there is this whole reporting system that necessarily needs to exist and why it exists and what onus it creates on a small organization. I’m as much a fan as anyone of supporting local organizations. 

But if you tell me that that means that local organizations all need to hire three dedicated accounting or finance people, then I’ll say, no, that’s crazy. A lot of these organizations might be 15 people to begin with! Yeah, I get why it’s hard and I appreciate you pointing that out.

Marie: It’s almost inevitable that… To feed the beast, you have to create a little one. They kind of have to be matched. At a local organization, if the finance person has a question, who are they going to call? Right. They need someone to call.

Marie: The bigger issue for me, especially in Thailand, is… the clarity that I’ve gotten from seeing the situation in Thailand is, really, if USAID or the US government really doesn’t intend to be there forever, then we need to really think about what direction we’re headed in. 

And in some countries that are farther along, like Thailand, for example, we don’t need to be messing with what seems to be working. We want to support that – even though it doesn’t look great honestly. But I hope that when people hear the reason why they understand and can agree. Because I can’t think of a good reason to disrupt what I see as a good trajectory right now.

Rowena: I love the color that you’re providing to this picture. It’s something that the indicators don’t get across: the truth of what’s happening on the ground, the capacity that’s already there. 

To Hear More

To hear more from Marie, listen to the full interview on Aid, Evolved or wherever you get your podcasts.

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Written by
Rowena Luk has spent over a decade deploying technologies, building organizations, and conducting research in digital development in over 18 countries around the world, primarily in Sub-Saharan Africa and South Asia. She also hosts the Aid, Evolved podcast. The views expressed in these conversations belong to the respective speakers. They do not reflect the position of any organization.
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