1
usaid celebrated its 60th anniversary in 2021, one of the first, and still the premier, international development agency, currently providing more than usd 20 billion a year in development assistance worldwide. However, the development landscape has shifted since its founding in 1961. In its early years, U.S. development aid dwarfed other means of financial assistance to developing countries and the U.S. was one of the few players in this field. In the intervening decades, the needs of target countries have changed and there is now a greater flow of money to developing countries from international development agencies, accompanied by an exponential increase in private sector investment in development. In response, usaid programs are evolving to most efficiently meet the needs of the worldâs poor by tapping into these additional funding streams, by partnering with other donors and, increasingly, the private sector.
2 A Brief History
Following the end of World War ii in 1945, the U.S. recognized the benefits of rebuilding war-torn Europe, including the bolstering of the U.S. economy. Rebuilding Europeâs industrial and agricultural production capability, and supporting its financial stability, would reduce poverty and unemployment, facilitate international trade and stem the spread of communism in Europe. George C. Marshall, Secretary of State from 1947 to 1949, proposed the first large scale iteration of international development assistance under the European Recovery Program,1 better known as the Marshall Plan, a massive U.S. sponsored program to provide financial and technical assistance to Europe, to stabilize it by rebuilding its infrastructure and economy.
Feeding on the fear of the spread of communism, following the collapse of European economies, as a result of the Second World War, the U.S. Congress passed the Economic Cooperation Act2 (ecca) in April 1948, to implement the Marshall Plan. Providing financial and technical support to other nations, as envisaged by the ecca, was deemed to be in the interest of the United States.
We must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas. More than half the people of the world are living in conditions approaching misery. Their food is inadequate. They are victims of disease. Their economic life is primitive and stagnant. Their poverty is a handicap and a threat both to them and to more prosperous areas. For the first time in history, humanity possesses the knowledge and skill to relieve suffering of these people. The United States is pre-eminent among nations in the development of industrial and scientific techniques. The material resources which we can afford to use for assistance of other peoples are limited. But our imponderable resources in technical knowledge are constantly growing and are inexhaustible.4
The Point Four Program focused on two goals: (i) Creating markets for the United States by reducing poverty and increasing production in developing countries; and (ii) diminishing the threat of communism by helping countries prosper under capitalism.
During its short operation from 1948 to 1951, the eca provided usd13 billion in development aid, the vast majority in the form of direct grants. Such assistance helped strengthen industrial and agricultural production and improved financial stability in Europe. The countries receiving aid under the Marshall
In 1953, George Marshall was awarded the Nobel Peace Prize for his contribution to the recovery of post-war Europe. He was the first general to win the Peace Prize, a controversial choice for that reason.
The eca operated for only three years before being abolished. Its functions were first transferred to the newly created Mutual Security Agency (msa) (1951â1953) and then to the Foreign Operations Administration (foa) (1953â1955). The msa and foa both expanded their purpose, from solely economic support, as was the case with the eca, to coordinating U.S. policy related to the âcooperative development of economic and military strength among the nations of the free worldâ.5 Thereafter, U.S. government international development activities had a six year home in the International Cooperation Administration (ica) (1955â1961), established by the State Department to coordinate non-military security programs and administer/ implement economic assistance and technical cooperation programs.
In a March 1961 Special Message to the Congress on Foreign Aid, President John F. Kennedy stated that â[t]here is no escaping our obligations: our moral obligations as a wise leader and good neighbor in the interdependent community of free nations â our economic obligations as the wealthiest people in a world of largely poor people, as a nation no longer dependent upon the loans from abroad that once helped us develop our own economy and our political obligations as the single largest counter to the adversaries of freedomâ.6
- (1)the alleviation of the worst physical manifestations of poverty among the worldâs poor majority;
- (2)
the promotion of conditions enabling developing countries to achieve self-sustaining economic growth, with equitable distribution of benefits; - (3)the encouragement of development processes in which individual civil and economic rights are respected and enhanced;
- (4)the integration of the developing countries into an open and equitable international economic system; and
- (5)the promotion of good governance through combating corruption and improving transparency and accountability.8
Until the mid-1970s, U.S. development assistance was focused on large technical and capital assistance programs, primarily, infrastructure loans. With a revision to the faa in 1973, usaid funding became more focused on smaller technical assistance awards, to address âbasic human needsâ, such as: Food and nutrition, population planning, health, education and human resources development.9
In 1973, Congress passed a resolution directing usaid to focus its economic aid on the poorest populations in the poorest countries. Consequently, usaid increased the number of its missions in the 1970s from 38 to 62, with 20 new missions in Africa. Over the next two decades, usaid reaffirmed its commitment to broad-based economic growth, emphasizing employment and income opportunities through a revitalization of agriculture and expansion of domestic markets.
In the 1990s, usaid programs became more holistic, with integrated country programs intended to be more sustainable and to bolster the host countyâs ability to care for its people. The 2000s saw a large increase in U.S. aid, primarily to Afghanistan and Iraq. Consequently, usaid programmed large infrastructure and other projects that were closely aligned with U.S national security policy in the region. It also greatly expanded its stable of implementing partners, to include the private sector, foundations and other donor agencies, thereby increasing the impact of its foreign assistance funding.
Now, 60 years since its founding, usaid is the largest U.S. development agency, accounting for more than half of the total foreign assistance provided by the U.S.10 Currently, usaid provides contracts, grants, and other types of
usaidâs goals have always been two-fold: humanitarian relief to people around the world who are suffering, as well as to advance U.S. national security interests by creating a stable socio-economic and political global environment. From the objective in the initial days of implementing the Marshall Plan to stem the growth of communism, to todayâs efforts to providing people with the means to fight poverty and hunger, and resist a myriad of corrupt and disruptive influences, usaid has advanced U.S. policy objectives through overseas development assistance.
usaidâs programs run the gamut, from traditional agreements,12 supporting an implementing partnerâs program, to more innovative programs13 to support and encourage investments abroad. While all of these programming methods have a place in a comprehensive development system, there is a long-standing recognition that usaid needs to consider the private sector as a valuable development partner. To do this ever more effectively, usaid will need to meet the private sector where they are, which will require a creative use of usaid resources to fit the square peg of the private sectorâs needs, e.g. profit, workforce development etc., into the round hole of usaidâs policies and objectives, as well as its regulatory and statutory framework.
3 usaidâs Legal Framework
Like other U.S. government entities, usaid operates within prescribed regulations. For each project in which it is involved, usaid must have specific authority. While private sector organizations are generally free to do anything
The faa is usaidâs primary statutory authority, providing it with the authority to âtake the lead in concert with other nations to mobilize [resources from wealthy] public and private sourcesâ.14 Its development assistance is to be carried out within its policy parameters to âpromote private sector activity in open and competitive markets in developing countries, recognizing such activity to be a productive and efficient means of achieving equitable and long-term economic growthâ.15 Further legislation over the years have provided usaid with additional authority. This includes:
- âThe Support for East European Democracy (seed) Act of 1989 and the freedom Support Act (fsa) of 1992 (providing support to Central and Eastern European countries following the fall of the Berlin Wall);
- âThe U.S. Leadership Against hiv/aids, Tuberculosis, and Malaria Act of 2003 (the primary legislation behind the Presidentâs Emergency Plan for aids Relief (pepfar), for hiv/aids treatment, prevention, and research); and
- âMost recently, the Better Utilization of Investments Leading to Development Act of 2018 (the build Act) (providing usaid authority to access the tools of the new U.S. International Development Finance Corporation (dfc), such as loan guarantees, loans, political-risk insurance and equity).
Under Section 635(b) of the faa, usaid is authorized to âmake loans, advances, and grants to, make and perform agreements and contracts with, or enter into other transactions with, any individual, corporation, or other body of persons, friendly government or government agency, whether within or without the United States and international organizations in furtherance of the purposes and within the limitations of this Actâ. This provision of the faa is the basis of usaidâs ability to implement foreign assistance through implementing partners.
In addition to affirmative authorities for it to operate, usaidâs statutory framework provides numerous prohibitions that must be considered in each program and activity, including a prohibition on aid to certain countries, such
usaid contracts and assistance awards (grants and cooperative agreements) require many standard terms and conditions, which are mandated by statute, regulation, or policy. All usaid contracts are subject to the Federal Acquisition Regulations (far), which provide a regulatory framework for awarding and managing U.S. government contracts. It contains 51 parts addressing issues relating to contract award and management, as well as Part 52, containing over 600 potential contract clauses, and Part 53, providing dozens of government forms. There is also a supplement to the far, which contains additional usaid specific clauses. usaid assistance awards are managed by usaid personnel under the usaid Automated Directive System (ads) 303, which includes sets of standard provisions, to be used depending on the assistance recipient and type of award. Like the far for contracts, this regulatory framework also provides structured clauses to address cost principles, audit rights, reporting, etc., as well as âpower of the purse stringâ clauses that require contractors to maintain a drug-free workplace and reach certain U.S. small business subcontracting goals.
In addition to compliance with the myriad of required terms and conditions, the U.S. government budget process can make it difficult for agencies like usaid to have the right funding available at the right time, to facilitate private sector partnerships, including navigating congressional appropriations, adhering to the timing, purpose and amount of the appropriated funds, which are frequently out of step with private sector needs. usaidâs annual appropriations, which include additional authorities, specify the amount of funding to be allocated to specific types of programming or towards various Congressional priorities. The timing of the U.S. governmentâs budget cycle can be challenging when funding is requested years in advance of when it is received and made available by usaid for disbursement.
4 Structural Impediments
In addition to the legal hurdles, there are also a few âself-madeâ obstacles to engaging the private sector that are attributable to the way in which usaid operates. For example, only very recently has it begun to capture indicators that measure the success of private sector partnerships, which is needed to
Additionally, usaid is very decentralized, with missions in more than 80 countries. This can make it difficult to imbed the cultural shift that is required to include the private sector in a majority of usaidâs programs. usaid also has a lot of staff turnover, with Foreign Service postings lasting one to four years, in addition to political appointments, which change when the administration in Washington changes. Usually, new leadership comes with new or different priorities. Additionally, usaid decisions can be driven by the desire to have an âannouncableâ for a public event, which is not ideal. There has also been an overall low risk tolerance within usaid, which can impede progress and innovation.
5 Expanding the Impact of usaid Funding
usaidâs traditional methods for expending funds operate easily within the parameters of its statutory and regulatory authorities, restrictions, procedural framework, and appropriations cycle. Usually, usaid issues a solicitation for an identified activity, accepts proposals/applications in respect thereof, and ultimately awards a cost reimbursement contract or assistance award following a technical review. Such awards are generally for five years, but may be extended. The implementing partner is paid as funds are expended, and additional funds are allocated to the award each year, as usaid receives its annual budgetary appropriation.
In December 2018, usaid published a Private Sector Engagement Policy (pse Policy), recognizing that the amount of government funding it receives cannot address the full range of issues that developing countries face. Increasingly, with the billions of dollars of private sector funding flowing into these countries, usaidâs goal is to engage in market-based programs, to encourage private sector investment towards desirable development outcomes.
usaid is not new to working with the private sector. Even prior to 2018, it engaged in thousands of private sector partnerships, leveraging billions of private sector dollars, across many sectors, such as economic growth, agriculture, health, education, environment, democracy, water and sanitation, gender issues, and humanitarian assistance. However, usaid is looking to continue to progress across the spectrum of private sector activity, from accessing corporate philanthropy to private enterprise-driven development. Consequently, usaidâs relationship with the private sector has expanded to aligning with its profit-making motivation where it intersects with usaidâs development goals.
The next phase on the spectrum of public-private partnerships, beyond charitable giving and corporate social responsibility, requires usaid to identify the shared values between its corporate partners and usaidâs development goals, to co-create partnerships that address long-term strategic business interests, while also creating sustainable development impact. Such co-investment by the private sector and usaid can accommodate the private sectorâs expectations of a reasonable return on investment, as a core objective of the partnership, alongside sustainable development. Such mutually beneficial projects, tapping into commercial, market-based solutions, can mean more sustainable initiatives beyond usaidâs traditional 5- to 10-year programs.
Intersection of business and development goals
6 New Models of Development
Years ago, traditional international foreign aid (ifa), i.e. development funding from public entities, was the largest source of external funding going into developing countries. Now, in some countries, private investment dwarfs aid from public sources. According to the Global Philanthropy Tracker 2020, international private sector funding going into target countries was more than three times the amount of ifa received. Aid agencies want, and need to tap into these private sector funds to supplement and enhance funding from public sources.
It is important to view international private sector funding as an additional source of development funding, to augment the impact of ifa rather than supplant it. In some developing countries, international private sector funding is not effective, because there isnât a functioning legal or economic structure to support it, including laws addressing tax and intellectual property, a sufficiently trained work force or a viable value chain infrastructure. ifa can help fund programs to support the building blocks to a strong economy, so that international private sector funding can reach its full potential.
Even within the confines of the statutory and regulatory infrastructure that determines what it can and cannot do, usaid is able to employ a wide variety of methodologies to address market constraints, create incentives for private sector investment and otherwise leverage the private sectorâs unique expertise to solve development and humanitarian challenges more efficiently, and sustainably, than development agencies can do alone.
As detailed below, usaid employs unique models of development to tap into the billions of dollars of foreign investment in developing countries, using innovative blended-finance and investment-mobilization platforms to raise private capital at scale to accomplish ambitious development goals. Working alongside private sector actors, with a profit motivation, provides many benefits to usaid, and to development as a whole, beyond just the additional resources that the private sector can bring to bear. usaid can encourage and help the private sector to promote more inclusive and sustainable business practices. In return, the private sector can provide usaid with additional
7 What usaid Has to Offer the Private Sector
The work that usaid accomplishes and supports furthers a strong business environment. Health, education, and gender programs all help to provide a healthy and productive workforce. Democracy and economic growth programs help develop a strong and sustainable political and social framework that is integral to a productive private sector. Equally, energy and infrastructure programs provide valuable resources for business ventures.
usaid also partners with host governments and civil society organizations.17 Private sector entities partnering with usaid can leverage these deep and long relationships to strengthen their in-country presence and aid in effective use of host government systems. Partnering with usaid can establish and grow strong brand recognition and goodwill for such entities.
usaid has many programs focused on reducing market barriers and risks to investment. usaid works not just at the systemic and governmental level, but also has programs designed to reduce investment risk in individual projects. usaid programs create new markets and customers for the private sector.
usaid is driven to finding new, innovative solutions to development concerns, as evidenced by the newly formed Bureau for Development, Democracy and Innovation (ddi), which includes the Innovation, Technology, and Research Hub (itr), to lead âusaidâs work to identify, research, explore, integrate and experiment with innovative technologies, processes, and practices that amplify the success of usaidâs programming. ddi/itr develops and maintains technical expertise and partnerships critical to supporting and accelerating modern and ever-evolving approaches and solutions, from concept to
8 How usaid Is Overcoming Obstacles to Development
We will co-design and co-invest with private-sector entities that promise to leverage or mobilize additional resources or expertise to amplify the impact of our work, while recognizing that sometimes such partners will fail to mobilize promised capital, or deliver on commitments.18
9 How usaid Engages the Private Sector
usaid has various institutional means to engage with the private sector. The Global Development Alliance (gda) is usaidâs flagship private sector program, established in 2001. The gda aligns the U.S. government and private sector interests, and crafts an activity that benefits both. Generally, this involves a private sector partner who provides resources in support of the relevant activity, and an implementing partner who implements the activity with the help of usaid funding. The activity in question is âco-createdâ by usaid, along with the resource and implementing partners, to achieve both business and
usaid has greatly increased its use of co-creation, to collaborate with the private sector and other stakeholders, in order to âcrowd-sourceâ solutions to identified problems. While usaid has the necessary technical expertise, it recognizes that incorporating varied perspectives and motivations can yield better development results. Much of usaidâs formal âco-creationâ has occurred through Broad Agency Announcements (baa). baas are solicitations for research and development, to address a stated problem or challenge. baas ask for short submissions providing potential solutions.19
Frequently, these submissions form the basis for usaidâs decision regarding who is qualified to help craft a solution. Those with expertise to contribute are invited to participate in a facilitated âco-creationâ event to discuss and brainstorm the issues. Ultimately, with a baa, some of the participants may be asked to submit concept papers to be funded. The âco-creationâ event also serves as a networking opportunity for future endeavors or to receive funding from usaid as part of a consortium. For instance, in 2015, usaid issued a baa, looking to âcollaborate in the research, development, piloting, testing, and scaling of innovative, practical and cost-effective interventions to catalyze private investment in developing countriesâ. Over a dozen companies were represented at the resulting âco-creationâ workshop, where usaid noted that this was not âbusiness as usualâ, and that it was seeking creative solutions to support investments. The result was a contract that included opportunities for many of the workshop participants to receive usaid funding, and created a network of partners for usaid missions to tap into the right expertise to support future local investment opportunities and prepare the investments to receive private sector funding by reducing entry barriers and investment risk. Meanwhile, the prime contractor facilitates knowledge management, through which information is shared and best practices are identified, and provides proper monitoring and evaluation. Awards such as this tap into a broad range of stakeholder expertise and are structured to capture and respond to lessons learned from the experience of past projects.
usaidâs Development Innovation Ventures (div) program funds solutions to development problems and helps scale-up those with strong evidence of positive impact and cost-effectiveness. div provides various levels of funding
For many years, usaid has also been funding loan guarantees using its Development Credit Authority (dca), to reduce the risk of lending to underserved markets, to establish new relationships with financial institutions and to demonstrate the viability of lending to the development community. From 1999 to 2018, dca made usd 5.5 billion worth of credit available in 80 countries. Loan guarantees, backed by the full faith and credit of the U.S. Treasury, are an effective development tool on their own or as a companion to other development financing. Additionally, the build Act of 2018 created the dfc, which combined the Overseas Private Investment Corporation and usaidâs dca authority to consolidate certain finance solutions, including loan guaranties, direct loans, equity investments, and political risk insurance. usaid is able to access these products through the dfc.
As stated above, many of usaidâs funding activities are usually on a reimbursement basis, where the implementing partner is reimbursed for all reasonable, allowable, and allocable costs incurred. While this is a viable option for some awards, using a fixed-priced, milestone-based funding approach can frequently lead to better results. In a milestone-based approach, usaid only pays as the milestones are met. However, the contractor is not paid anything if the milestones in question are not met. Additionally, while usaid does not
usaid has creatively used this fixed-price model for a number of successful projects, including development impact bonds and prizes. âDevelopment impact bondsâ (dibs), also known as âsocial impact bondsâ (sibs), are not âbondsâ in the traditional sense, but a fixed-priced model where, in addition to the funding and implementing party/ies, there is an investor who is willing to provide the money up-front to the implementing party, with the promise of being repaid by the funding when the milestones are met. This basic model can get more complex as more parties are added, including potentially a third-party evaluator and intermediary. Like other models of development, dibs/sibs are but one tool in the toolbox, and are most effective when they are the right tool for the desired outcome.
The first âsocial impact bondâ (sib), the Peterborough Social Impact Bond, was developed in part by Social Finance,20 in 2010, in the UK. The Peterborough sib was a six-year project, whereby Social Finance would be paid based on its ability to reduce the rate of recidivism for certain prisoners, with a goal of reducing recidivism by 10%. Social Finance was free to determine what interventions it deemed would be effective. The investors paid for the services and would only be repaid if re-offending was reduced by at least 7.5%.21 Social
The use of dibs and sibs is most appropriate when the entity that will benefit from the outcome, generally the host government in the development context, is actively involved in the dib/sib in question. Hence, in the UK example, it would make sense for the âoutcome funderâ to be the government entity that would accrue significant savings from a reduction in recidivism (i.e. they would not have to pay the high costs of incarceration for repeat offenders), than for a development agency to fund the relevant project in that role. This is because, in a dib/sib, there is also an investor involved who stands to make a return on its investment. Therefore, if the outcome funder agrees to pay usd 100 for each person who does not go back to prison, and the implementer ends up spending usd 90 on interventions for each person who does not go back to prison, then the investors earn a usd 10 profit. If the outcome funder is the government agency that pays usd 200 for each person who returns to prison, they are happy to pay usd 100 to keep them out of prison â that is a huge win. If the outcome funder is a development agency, then it may be that they could have simply reimbursed the costs to the implementer and paid only usd 90, instead of usd 100. However, there may be other reasons for the development agency to entertain a dib/sib; perhaps to encourage other investors to the table.
usaid has a significant role to play in private sector impact investment in developing countries, where the investment achieves a positive social and/or environmental impact, in addition to the financial upside for investors. usaid can contribute by advancing a healthy business environment, through an active civil society and stable government regulation, that mitigate risks to individual investments. usaid is able to support investment funds, which combine resources from many investors, to provide much needed capital to small and medium sized enterprises. A recent example is the Althelia Biodiversity Fund (abf), a usd 100 million, 11-year impact investment fund for Brazil. Through a usaid implementing partner, the International Center for Tropical Agriculture (ciat), usaid was able to have a seat at the table in a project to provide technical expertise and to ensure that the fund furthers biodiversity conservation and sustainable development goals in the Brazilian Amazon. Mirova Natural Capital eventually aims to raise usd 100 million from private sector impact investors to invest in sustainable activities that will
As another example of usaid creatively supporting the private sector with the creative use of its authorities, usaid determined that a major impediment to effectively addressing the Ebola crisis in Liberia was the lack of an internet infrastructure; It partnered with Google to replicate the success of previous Google efforts in Ghana and Uganda to make âcommercially driven investments in broad-band enabled infrastructureâ.25 usaid was able to provide milestone-based funding directly to Google to support its efforts in a way that would lead to positive development outcomes, including ensuring reliable internet connectivity to key government ministries and health facilities, as well as the University of Liberia.
Prizes and âchallengesâ are another way that usaid uses a fixed-priced structure to support the private sector to achieve positive development impact. At its most basic level, a prize is a thing of value provided for meeting a set goal or for winning a competition. There are two sides to the prize equation: The âaskâ, which is the action required by the offeror to be taken in order to be considered for the award, and the âprizeâ, which is the thing of value provided to the winner. Selection of the winner may be random, based on meeting certain criteria, or a combination of the two.
The âaskâ can be as simple as inviting submission of an entry to a competition, or it may require fulfilling certain criteria, for example, from merely submitting your entry to the Publishers Clearing House (and maybe ordering a magazine subscription or two) to being the first non-governmental organization to launch a manned spacecraft into space (as with the Ansari X prize). The âaskâ might be something that the offeror is itself seeking, for instance a prize for an application or piece of equipment, but, just as often, it may confer an incidental benefit to the entity running the prize, for instance, building a valuable mailing list from the information obtained in the entry process. Or in the case of the Ansari X Prize, to encourage private investment in the space
When determining if a prize is the right method for usaid, usaid must, as with all programming, determine the desired outcome. A prize can be a useful means for generating enthusiasm or interest in a certain area of development, or it may provide usaid a solution that it is looking for to address a given development challenge. At its best, a prize would accomplish both ends, i.e., spur interest amongst a large number of potential solution providers as well as multiple solutions for the challenge(s) at hand. Of course, usaid must also determine the prize itself. As stewards of taxpayer resources, usaid must ensure that the value of the prize yields equivalent value to usaid. In some cases, there may be ample participants in response to offers of recognition or just the opportunity to participate in an event. However, where there is a significant investment required in order to participate, recognition alone may not be enough to incentive participation. A prize with monetary value may be required, in essence to pay for the participation. Such prize may be a lump sum or the promise of future funding, such as the award of a grant.
A good example of usaid promoting private sector innovation through a prize competition is the usaid Global Health Savings Lives at Birth (slab) challenge, started in 2011, that has been held each year since. slab uses a prize-like competition to provide funding for innovations that address health risks during childbirth and in the days immediately thereafter, a time when mothers and babies are at much greater risk of death. To date, slab has funded 120 innovative tools and approaches, which is a significant proportion of all early-stage innovations funded worldwide, that are estimated to be benefiting about two million women and children. usaid multiplied the power of its impact by partnering with other development funders, such as Grand Challenges Canada, the Bill and Melinda Gates Foundation, the U.K. Department for International Development and the Korea International Cooperation Agency. The unique features of slab are the specificity of the outcome sought and the breadth of innovation that could potentially deliver it. The goal is to reduce the risk of maternal-child death and disease at birth, but innovation run the gamut, from identification of information to dissemination to new device technologies. Each year, slab holds a multi-day conference, featuring its finalists as part of the competition. In addition to the potential for funding, the participants are provided a public venue at which to showcase their innovations. slab provides funding at three levels, early-stage seed, proof of concept, and transition
10 Conclusion
The above are but a few examples of usaidâs role in partnering with the private sector. While many of these unique structures are accomplished by using usaidâs traditional awards â cost reimbursement contracts and cooperative agreements â to achieve non-traditional results, usaid continues to explore its unique authorities to maximize the impact of both development and private sector funding to address the worldâs development needs. As usaid continues to better understand the private sectorâs needs, drivers, capabilities and hurdles, it expects to identify even more robust opportunities for collaboration and delivery for development.
Gayle Girod is Chief Innovation Counsel and the Assistant General Counsel for the Bureau for Development, Democracy, and Innovation (ddi) at usaid, ggirod@usaid.gov. Gayle joined the usaid Office of General Counsel in May 2011 after working for three years at World Vision as Associate General Counsel, advising on compliance, policy, and operational issues, primarily related to U.S. Government grant matters. Prior to World Vision, Gayle practiced government contracts law in Washington, D.C. (Reed Smith â 2003 to 2008, Morgan, Lewis and Bockius â 1996â2003, and Howrey & Simon â 1995â1996), advising clients on contract and grant compliance matters, and representing companies in contract negotiations and litigation, including claims and bid protests. Gayle clerked for the Honorable Kenneth R. Harkins, Court of Federal Claims (1994â1995). Originally from Michigan, Gayle is a graduate of Michigan State University and the University of Toledo College of Law. The opinions and views expressed are those of the author and not those of usaid.
According to the Council on Foreign Relations, the United States spent usd 13.2 billion on the Marshall Plan from 1948 to 1952. See <
The European Recovery Program (erp), informally known as the Marshall Plan, was legislated as Title I under the Economic Cooperation Act.
See Harry S. Truman Inaugural Address, January 20, 1949. See <
See Letter to Secretary Dulles Regarding Transfer of the Affairs of the Foreign Operations Administration to the Department of State, April 17, 1955, <
President Kennedy Special Message to the Congress on Foreign Aid, March 22, 1961, <
The Foreign Assistance Act of 1961 (p.l. 87â195; 22 u.s.c. 2151 et seq.).
The Foreign Assistance Act, section 101 (22 u.s.c. 2151).
âWith a budget of over usd 27 billion, usaid is one of the largest official aid agencies in the world and accounts for more than half of all U.S. foreign assistance â the highest in the world in absolute dollar termsâ. <
See usaid Fiscal Year 2020 Agency Financial Report <
usaid has traditionally used cost reimbursement grants and cooperative agreements to support implementing partners in executing their programs.
As described below, usaid is using its authority, including grants and cooperative agreements, in new and creative ways, e.g. milestone based awards, to achieve greater impact.
The Foreign Assistance Act, section 102(a) (22 u.s.c. 2151 et seq.).
The Foreign Assistance Act, section (b)(14) (22 u.s.c. 2151 et seq.), added by section 301 of the International Security and Development Cooperation Act of 1985 (Public Law 99â83; 99 Stat. 190).
According to Investopedia, â[c]orporate social responsibility (csr) is a self-regulating business model that helps a company be socially accountable â to itself, its stakeholders, and the public. By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental. To engage in csr means that, in the ordinary course of business, a company is operating in ways that enhance society and the environment, instead of contributing negatively to themâ, <
While there are many ways to define civil society, the United Nations states, â[a] civil society organization (cso) or non-governmental organization (ngo) is any non-profit, voluntary citizensâ group which is organized on a local, national or international level. Task-oriented and driven by people with a common interest, civil society organizations (csos) perform a variety of services and humanitarian functions, bring citizensâ concerns to Governments, monitor policies, and encourage political participation at the community levelâ, <
See U.S. Agency for International Development Risk Appetite Statement â June 2018, p. 8â9, <
See far Part 35.016.
Social Finance is a non-profit organization specializing in impact investing. See <
The project, split into two cohorts, achieved sufficient results to trigger an outcome payment, with an overall reduction in recidivism in the sample population of 9%. See <
See <
Mirova is an impact investment manager. See <
Environment Finance is an online news and analysis service reporting on sustainable investment, which provides annual awards in a number of categories, recognizing excellence in sustainable investments. See <
See <
References
Economic Cooperation Act of 1948, <https://www.marshallfoundation.org/wp-content/uploads/2014/06/California_The_Economic_Cooperation_Act_of_1948.pdf>, accessed 30 November 2021.
Eisenhower D D, Letter to Secretary Dulles Regarding Transfer of the Affairs of the Foreign Operations Administration to the Department of State, (17 April 1955), <https://www.presidency.ucsb.edu/documents/letter-secretary-dulles-regarding-transfer-the-affairs-the-foreign-operations>, accessed 30 November 2021.
Federal Acquisition Regulation, far Part 35.016., <https://www.govinfo.gov/content/pkg/CFR-2011-title48-vol1/pdf/CFR-2011-title48-vol1-sec35-016.pdf>, accessed 30 November 2021.
Kennedy J F, Special Message to the Congress on Foreign Aid, (22 March 1961), <https://www.presidency.ucsb.edu/documents/special-message-the-congress-foreign-aid-1>, accessed 30 November 2021.
The Foreign Assistance Act of 1961, <https://www.foreign.senate.gov/imo/media/doc/Foreign%20Assistance%20Act%20Of%201961.pdf>, accessed 30 November 2021.
Truman H S, Inaugural Address, (20 January 1949), <https://www.bartleby.com/124/pres53.html>, accessed 30 November 2021.
United States Agency for International Development (usaid), usaid Risk Appetite Statement â June 2018, (2018) <https://www.usaid.gov/sites/default/files/documents/1868/USAID_Risk-Appetite-Statement_Jun2018.pdf>, accessed 30 November 2021.
United States Agency for International Development (usaid), Fiscal Year 2020 Agency Financial Report, (2020), <https://www.usaid.gov/sites/default/files/documents/USAID_FY2020_AFR-508.pdf>, accessed 30 November 2021.
US Congress, Public Law 93-189 / Amendment Foreign Assistance Act of 1973, (17 December 1973), <https://www.govinfo.gov/content/pkg/STATUTE-87/pdf/STATUTE-87-Pg714.pdf#page=1>, accessed 30 November 2021.
US Congress, Public Law 99-83 / International Security and Development Cooperation Act of 1985, (8 August 1985), <https://www.govinfo.gov/content/pkg/STATUTE-99/pdf/w-99-Pg190.pdf>, accessed 30 November 2021.