Despite localisation featuring in global development commitments for more than a decade – from the Grand Bargain to donor policy pledges – actual shifts in funding practise have remained minimal and direct funding to local organisations remains a small slice of donor portfolios.

In May, Publish What You Fund released Metrics Matter III: Counting local, our latest analysis tracking how much direct funding is reaching local organisations. The findings are stark: across five major donors (Australia-DFAT, Canada-GAC, Netherlands-MFA, UK-FCDO, and USAID), in 2024 only 5.5% of project-type funding was channelled directly to local organisations.

Across the five donors, local organisations received only $287 million out of $5.2 billion in total project funding reviewed. This is all against a backdrop of low levels of transparency about direct funding to local organisations as detailed in our Promises Versus Progress and Commitments Without Accountability reports.

It is worth emphasising, that while our research focuses on tracking direct funding, it makes clear that money alone does not define localisation. Without consistent, transparent data on who receives funding, it will remain hard to verify progress on localisation, and donor commitments risk becoming rhetorical rather than real.

Metrics matter – But they’re just the start

The findings from our report provided the evidence to inform a broader conversation among civil society leaders, donors, and policy experts. In our recent webinar, Localisation Re-imagined: Funding for local actors in a changing aid landscape, we were joined by Sarah Rose (former Senior Advisor for Localization, USAID), Gunjan Veda (Global Secretary, Movement for Community-Led Development), Dylan Mathews (CEO, Peace Direct), and George Ingram (Senior Fellow, Brookings Institution). Drawing on the panellists’ experiences, the discussion reflected on what’s holding locally led development back – and what needs to change.

There was broad agreement that funding is just one part of a much bigger puzzle. While metrics such as measuring direct funding can reveal a lack of progress, they also help to ground deeper questions about the system we’re working in.

As Sarah Rose noted, it’s not just about where the money goes – it’s about how decisions are made, who sets the priorities, and how power is distributed – “If you shift funding in the absence of shifting decision-making power, this is not locally led development.”

So why isn’t change happening? Rose pointed to the complex realities inside donor agencies: limited staff time, multiple competing priorities, risk-averse cultures, and incentives that reward compliance over collaboration. All these factors often hinder any real progress. Without leadership backing and clear accountability, it’s easier to stick with familiar partners – often larger, international organisations. George Ingram captured this reality well: “Trying to change the direction of a battleship is hard.”

“We are operating in a system that was never designed for localisation. We operate in a system that was never designed for trust, respect for local knowledge, and mutual accountability, which are some of the founding principles of localisation. You cannot have localisation without that” – Gunjan Veda, Movement for Community-Led Development

A system not designed for localisation

There was consensus among the panel that the current system is not designed to enable localisation. The panellists pointed to donor-led structures, power imbalances, rigid compliance requirements, and a lack of trust in local knowledge as fundamental barriers. As Gunjan Veda from the Movement for Community-Led Development put it: “We are operating in a system that was never designed for localisation. It wasn’t built for trust, mutual accountability or respect for local knowledge.”

This reality underpins why, after two decades of talk, progress on locally led development remains minimal. As our panel debated, rather than redesigning the system, efforts have focused on adapting local organisations to fit into donor-driven structures. The result? Rather than reforming structures, the burden falls on local actors to navigate complex contracts, foreign languages, and compliance mechanisms that rarely reflect their context or strengths. This dynamic is then further compounded by attitudes within the system. As Dylan Mathews argued, localisation emerged from a technocratic push for efficiency – not a serious effort to redistribute power.

A call to re-imagine, not reform

The need for a new approach is clear. The current system is being stretched by ODA cuts, global crises, and by a growing recognition that business-as-usual cannot deliver equitable outcomes. This is not a new critique – but it remains a relevant one. However, reform is now no longer enough. As our speakers made clear, we need to re-imagine the system.

That starts with honesty. “If the purpose continues to be maintenance of power, it is not going to let us reimagine the system,” Veda said, “it’s going to continue the cycle of dependence.” Donors, INGOs, and funders must confront the underlying logics that shape how aid is delivered.

It also requires a shift in mindset – from technical efficiency to solidarity, from controlling risks to enabling leadership. That means involving local organisations and communities in setting the agenda, building relationships over time, and letting go of power. As Mathews put it, “when we’re talking about locally led development, we’re talking about something much deeper-rooted. Really changing the system in favour of local efforts, which really centres on their dignity and their agency. That can’t be done with tweaking at the margins, or at the edges of the system. You’ve got to get into the roots of it.”

Local actors are no longer waiting for donors to define a way forward. Global South civil society networks are leading new initiatives that call for a re-imagined aid system – one based on solidarity, agency, and shared responsibility. The Stand with Civil Society open letter, signed by over 700 organisations, calls on donors and INGOs to work in partnership with local actors to co-create a more equitable system.

Local organisations are ready for change

With cuts to ODA, there is a risk that locally led development will be side-lined. As our speakers spelled out, it must instead be seen as a central solution. To respond to today’s challenges not by retreating to old models, but by investing in more just, effective, and inclusive approaches.

Locally led development must be about transforming relationships, shifting power and resources, and building a system that trusts, values, and invests in local organisations and knowledge. Locally led development isn’t just good practice, it’s the only way to build systems that last, and work for the people they are meant to serve. With honest dialogue, collective action, and continued pressure for transparency and accountability, it can happen.

Local organisations are ready. Civil society is already proposing new models. The question is whether donors, INGOs, and other funders are prepared to listen, learn, and act.

You can watch the full discussion below: