Beyond Localisation Rhetoric: Why Major Donors Must Reform How They Fund Grassroots Actors
Localisation has a credibility problem
For years, major donors have said they want more locally led response. Yet many of the rules set by agencies such as Sida, FCDO, Norad, GIZ and others still make it extremely difficult to fund the grassroots organisations that are closest to crisis-affected communities.[1]
This is not only an INGO problem. It starts further upstream.
When major donors impose rigid due diligence, formal banking requirements, audit expectations and compliance-heavy grant structures, those conditions are passed down the chain. INGOs then reproduce them in their own partnerships, often with little room to adapt. The result is predictable: local organisations with the least formal infrastructure carry the heaviest burden, while the largest and most institutionally legible actors remain the easiest to fund.[2]
Why grassroots organisations are still excluded
Many grassroots organisations are not absent from response. They are absent from donor comfort zones. Some are unregistered. Some cannot open bank accounts. Some work in politically restrictive environments where formalisation creates risk rather than safety. Some have trust, access and legitimacy, but not the paperwork or systems that major donors expect before a first grant is even possible.[3]
Too often, that exclusion is treated as prudent risk management.
It is not. It is a funding design choice.
The current model confuses formal compliance with operational relevance. It assumes that actors are fundable only once they already look like traditional grant recipients. That logic guarantees that localisation will continue to favour the already visible, already registered and already banked.
How donor rules shape INGO partnerships
INGOs should not be excused, but the article should be honest about where much of the rigidity comes from. Many are willing, if not always eager, to support informal and emerging local actors. What stops them is that donor regulations often leave little room for proportionate adaptation. In practice, this turns many local actors into subcontractors rather than genuine partners.[4]
If major donors are serious about localisation, they need to stop asking only whether grassroots organisations can comply with existing rules. They need to ask whether those rules are fit for the realities of crisis response.
In many cases, they are not.
What a more proportionate funding model could look like
There are workable alternatives. Simplified applications, local-language access, conversational due diligence, tiered compliance, due diligence passporting, microgrants, fairer overhead coverage, flexible grant-making and stronger local intermediary mechanisms are all already in use somewhere in the system.[5]
The point is not that accountability should disappear. It is that accountability should become more proportionate, more context-sensitive and less dependent on whether a local actor already resembles a fully formalised prime recipient.
What major donors need to change
Major donors now face the real test of whether they are willing to move beyond localisation rhetoric and reform the rules that keep grassroots organisations at the margins of funding. This means simplifying and harmonising compliance, creating more proportionate funding pathways, backing local intermediaries, sharing risk more fairly, and recognising that credible frontline actors will not always look like fully formalised grantees from the outset.[6] Until those changes are made, localisation will continue to reward institutional form over frontline relevance, and the organisations closest to communities will remain the least likely to be funded. The central question is no longer whether grassroots organisations matter, but whether major donors are prepared to change the systems that continue to exclude them. Until they do, localisation will remain more selective than serious.
Footnotes
[1] Posada et al., Intermediary Models to Advance Locally Led Humanitarian Action, 2025.
[2] ICVA, Donor Due Diligence, Compliance and Risk Sharing, 2025.
[3] Sturridge et al., The Failure to Fund Refugee-Led Organisations, 2023.
[4] ICVA, Donor Due Diligence, Compliance and Risk Sharing, 2025.
[5] Posada et al., Intermediary Models to Advance Locally Led Humanitarian Action, 2025; Hughes et al., Risk Sharing in Pooled Funds, 2025; ICVA, Donor Due Diligence, Compliance and Risk Sharing, 2025.
[6] ICVA, Donor Due Diligence, Compliance and Risk Sharing, 2025.