- Geoff Bennett:The U.S. has long been one of the world’s largest donors of foreign aid, but, in recent years, its effectiveness has been called into question by a chorus of critics, who say the impact of assistance programs falls well short of their intended goals. They blame what some have called the aid industrial complex.Fred De Sam Lazaro begins the first of three reports now. It’s part of his series Agents for Change.
- Fred De Sam Lazaro:It is the softer side of American foreign policy and power, seen in the world’s most distressed places, its message from the American people on every bag of grain, every can of cooking oil, on posters in remote health centers.And at barely 1 percent of the federal budget, it’s a good bargain for the American taxpayer, says the head the U.S. Agency for International Development, USAID, the primary conduit for foreign aid.
- Samantha Power, USAID Administrator:Americans have so much to be proud of.
- Fred De Sam Lazaro:At this Senate hearing, Administrator Samantha Power cited a program that has provided antiretroviral drugs to HIV patients for two decades.
- Samantha Power:PEPFAR, George W. Bush’s tremendous creation, 17 million people alive today, lives saved because of the generosity of the taxpayer.
- Fred De Sam Lazaro:But overseas assistance programs have long come under fire from some conservatives, like Kentucky Republican Senator Rand Paul, who see them as wasteful and misplaced.
- Sen. Rand Paul (R-KY):We should be conserving our resources, conserving them for our country. There is not a great deal of evidence that the money that we launder throughout the world really over time has been of benefit to us. There’s a great deal of evidence that much of it has been stolen. We mentioned corruption.
- Fred De Sam Lazaro:The criticism no longer comes just from some Republicans, but increasingly from those who strongly favor foreign aid. They say it helps buy goodwill, helps America’s standing vis-a-vis Russia or China, keeps infectious diseases at bay, and helps turn dependent countries into trading partners. At least, it’s supposed to do that.But, these critics say, only a small portion of aid dollars are actually spent in the countries targeted for help.
- Walter Kerr, Co-Executive Director, Unlock Aid:It’s actually less than 10 percent of our foreign assistance dollars flowing through USAID is actually reaching those communities.
- Fred De Sam Lazaro:Walter Kerr is with a group called Unlock Aid, formed in 2021 to draw attention to a system in which a relative handful of private companies called implementing partners are awarded most contracts by USAID.
- Walter Kerr:One of the best things that government can do is to move away from measuring success in terms of outputs, how much money do we spend on a particular problem, and moving toward an orientation of results.
- Fred De Sam Lazaro:A lot of people will be shocked to hear that that’s not the case.
- Walter Kerr:Well, it’s true. About 98 percent of USAID grants pay for activities and not results.
- Fred De Sam Lazaro:And the results are not flattering, according to the agency’s own inspector general’s office, which studied USAID awards for three years, 2017 to 2019.
- Walter Kerr: Forty-three percent of them failed to achieve about half of the intended results. But in spite of that, they still got paid in full almost every time and sometimes more.
- Fred De Sam Lazaro:He says one reason for these poor results is that implementer companies rarely work with the communities targeted for help or with local aid groups.
- Walter Kerr:One study found that, when working with a local partner, as opposed to an international aid contractor, you could find savings upwards of 32 percent alone. And that’s a conservative estimate.
- Fred De Sam Lazaro:And one reason that doesn’t happen is compliance with strict guidelines written by Congress.Here’s Idaho Republican Senator Jim Risch.
- Sen. James Risch (R-ID):Corruption with U.S. dollars will not be tolerated, and I’m glad to see detailed information that gives me confidence that our money is being used appropriately.
- Justin Richmond, Founder, IMPL. Project:They went to the groups that can absolutely deliver on a contract every time, so that no one in this mix is accused of fraud, waste or abuse.
- Fred De Sam Lazaro:But it’s compliance. It’s not delivering results that improve people’s lives.
- Justin Richmond:And that’s the quiet part that no one wants to say out loud.
- Fred De Sam Lazaro:Justin Richmond is an army veteran who later worked with USAID in Afghanistan. In 2015, he founded a nonprofit that collects and analyzes data on conditions in conflict-torn areas, working with local community leaders to learn what they see as the most pressing needs and to learn the root causes of the conflict or suffering.He says he’s found few takers among aid companies
- Justin Richmond:The for-profits aren’t properly subcontracting down to the experts. They’re keeping everything in-house, because, again, no one is checking on them. No one is trying to have impact.
- Fred De Sam Lazaro:Richmond told me he once shared findings gathered in the conflict-ridden Sahel region of West Africa with the largest aid implementing company, Chemonics, data that he said would be useful to improve the outcome of development projects.
- Justin Richmond:She looked at it and at the end said: “This is phenomenal work. You should really be proud, especially where you collected it. Incredible. But you got to tell me, why would we ever do this?”I was speechless. And she said to me: “If USAID isn’t paying us to do that, we’re not going to do that.” The client didn’t even ask for it.
- Fred De Sam Lazaro:We invited Chemonics to comment. They declined, as did the main trade group of aid implementing companies.
- Samantha Power:Moving forward, we are going to provide at least a quarter of all our funds directly to local partners over the course of the next five — next four years.
- Fred De Sam Lazaro: At the time Administrator Power made that pledge in 2021, local partners got just about 7 percent of award dollars. The agency has moved to simplify the grant process, also requiring some new contracts to phase in locally-led control. That percentage has since hovered near 10 percent, still well short of the target. Power declined our request for an interview, as did Mark Green, her predecessor from the first Trump administration.
- J. Brian Atwood, Former USAID Administrator:It’s not easy. It takes time. Four years isn’t enough time.
- Fred De Sam Lazaro:Brian Atwood was USAID administrator during the Clinton administration. He traces some of the agency’s current problems back to his tenure at the end of the Cold War.
- J. Brian Atwood:People said they wanted a peace dividend. The peace dividend didn’t come out of the Defense Department. It came out of USAID. And so I lost 10 percent of our employees.
- Fred De Sam Lazaro:At the same time, the agency added all of Europe’s former Eastern Bloc nations to its workload, which continued to grow, he says.
- J. Brian Atwood:When I was AID administrator, the overall budget was around $12 billion. It’s now more like $38 billion. And we haven’t seen an equal increase in the amount of staffing, what they call operations expenses. And so the consequence was, they had to push everything out the door to larger organizations.
- Fred De Sam Lazaro:That outsourcing has become the norm today, Atwood says, and it’s easier to manage fewer, and, therefore, larger grants with companies familiar with the process.All this has had the effect of shutting out a lot of innovation that could improve people’s lives, says Unlock Aid’s Walter Kerr.
- Walter Kerr:You can look at some of the amazing organizations, entrepreneurs that are already active in Africa, Asia, Latin America, and deliberately identify them and begin to scale up their impact. They’re out there.Gregory Rockson, Founder, mPharma: We are able to trace every single drug in this warehouse right to the patient’s home.
- Fred De Sam Lazaro:One example he cites is mPharma, a chain of pharmacy-based clinics across Africa.Founder Gregory Rockson says the big USAID contractors are not focused on delivering results, but rather on writing grants and glossy reports.
- Gregory Rockson:The goal was never to eradicate the problem, it was to create the appearance of eradicating that problem.
- Fred De Sam Lazaro:That keeps the spigot of foreign assistance open, he says, but the dollars flowing mostly between the U.S. government and companies, most based in Washington, D.C.In following reports, we look at some Africa-based start-ups that have won praise for delivering aid.For the “PBS News Hour,” I’m Fred De Sam Lazaro in Washington.
- Geoff Bennett:Fred’s reporting is a partnership with the Under-Told Stories Project at the University of St. Thomas in Minnesota.
The Money Trail
evaluating impact
The U.S. has long been one of the world’s largest donors of foreign aid. But in recent years, its effectiveness has been called into question by a chorus of critics who say the impact of assistance programs falls well short of their intended goals. They blame what some have called the “aid industrial complex.” This is the first report in our three part series investigating the effectiveness of USAID dollars and highlighting locally-led groups that achieve results with no foreign assistance.
10%
of USAID awards go to local country partners
