USAID Forward & C apacity B uilding Lessons from USAID/Malawi Beth Deutsch

1. USAID Forward • &Capacity Building • Lessons from USAID/Malawi • Beth Deutsch

2. USAID Forward Key Implementation and Procurement Reform Areas (IPRs) IPR 1: Building Country Ownership and Capacities • Public Financial Risk Management Assessments • Government to Government Funding IPR2: Strengthen Local CSO and Private Sector Capacity • Requires local organizations to receive funds directly from USAID and not through sub grant mechanisms • Building capacity for local organizations to be independent and not just to depend on USAID funding • Diversifying the type of procurement mechanisms to facilitate increased partnerships with local organizations

3. USAID Forward Definition What is a Local organization? • Organized under the laws of the recipient country • Have its principal place of business in the recipient country • Be majority owned by individuals who are citizens or lawful permanent residents of the recipient country • Be managed by a governing body, the majority of whom are citizens or lawful permanent residents of a recipient country • Not be controlled by a foreign entity or by an individual or individuals who are not citizens or permanent residents of the recipient country • Government controlled and government owned organizations in which the recipient government owns a majority interest or in which the majority of a governing body are government employees, are included in the above definition of local organization

4. Responding to USAID/Forward • Mapping all current local sub-partners (under primes) and Identifying those who meet the definition as potential bidders • Planning for and designing new grants/agreements to directly fund potential local organizations • Planning for current primes and their sub relationships to be more focused on capacity building and preparing to transition to sub partners more responsibility of project implementation within existing programs • Building direct capacity: Mission’s Financial Management Office (FMO) providing organizational development trainings to sub - partners

5. PACT: TA and Sub-Granting Model • International prime’s role was to provide technical and organizational capacity building support to 25 local organizations • Focused on 5 technical areas under PEPFAR (HTC, PMTCT, HBC, sexual prevention, youth programming) • Service delivery local organizations solicited locally : support helped them to deliver better services, and manage resources more effectively. • Aim is to prepare local organizations to respond to proposal requests directly

6. AIDSTAR II - TA only Model • No sub-grants provided • Platform of tailor-made TA to local organizations for health advocacy and organizational development • Demand driven: Local APS competed where organizations apply and request specific TA from AIDSTAR II • 14 organizations currently supported • Milestones are specific to each organization

7. GDA’s – Breaking Away from the Norm • GDA = Global Development Alliance is a type of cooperative agreement to strengthen public-private partnerships. • Objective is to have new, different and more partners on board • GDAs require a 1:1 resource match which allows USAID to leverage funds. • GDAs have linked USAID to international NGOs transitioning into locally managed entities • USAID 9 GDA’s: Banja La Mtsogolo, LMRTF, Feed the Children, Partners in Hope, Global AIDS Interfaith Alliance, Dignitas International, Baylor College of Medicine, CRS and Save the Children

8. The APS Model- A more Direct Route • APS = Annual Program Statement • Directly funding local organizations through locally competed grants and cooperative agreements • Mission is planning to announce new APS awards to explore possibility of increasing local primes • Direct OD capacity building will be offered by the Mission to support organizations in • M&E • Financial Management

9. Lessons To Date – Local Organization • Limited capacity of local organizations • Fund absorption capacity: Local organizations tend to be smaller and may not be able to absorb large dollar values. • Geographic limitations and resulting fragmentation of programs due to smaller nature of local organizations • Several awards may have to be made for coverage beyond one district and technical area • Fragmentation could potentially impede USAID efforts for greater integration of technical areas and funding • Vulnerabilities of local organizations • Vicious cycle with local staff trained, who then go out to seek better paid jobs with more financial benefit with training received • Local organizations are vulnerable to funding environment: and so their technical focus changes or continuously expands as they try to follow the money

10. Lessons To Date – Mission • Management burden at Mission • Absorptive capacity and geographic limits means more smaller awards, requiring increased management/oversight capacity by USAID • Financial risks of local organizations • need more oversight to manage processes of project implementation concurrently with capacity building efforts • Measurement of impact of capacity building efforts • Capacity building assessment tools tend to be self reported • Need objective measures that demonstrate real change For more information, see www.forward.inside.usaid.gov