Practical Guidelines for Supporting Locally Led Development

7. Action area: Reimagined roles for international intermediaries

Abstract

A significant share of development co-operation is and will continue to be channelled through international intermediaries. This action area explores options for evolving the roles of intermediaries, shifting from predominantly implementing and fund-management functions towards increasingly advisory, accompaniment and backstopping roles that strengthen local actors’ agency. It outlines approaches for embedding policy commitments to locally led development within partnership frameworks with intermediaries.

What is the issue?

As of 2025, most civil society funding and humanitarian assistance still flows through international intermediaries, leaving only a small share that is directly provided to or implemented by local actors.1 However, data on onward or sub-awards to local organisations remain partial and uneven across development partners, limiting visibility into how much funding is ultimately passed through to local actors and under what conditions. This constrains development partners’ ability to assess how intermediaries advance locally led development (LLD) in practice (ALNAP, 2025[1]). Limited transparency can also create principal-agent challenges, including situations where international contractors adopt the appearance of prioritising local actors to retain funding without substantive shifts in power (Ingram, 2022[2]). 

International civil society organisations (ICSOs) often act as intermediaries and are better able to access funding because they are aligned with donor rules and expectations. This can sideline local civil society organisations, whose knowledge and community legitimacy may be overlooked. To secure funding, local organisations often have to adjust to donor requirements, which can divert scarce resources from their core work. Similar pressures can also affect intermediaries themselves, many of whom must align with upstream donor requirements, shaping their priorities and those of their partners. This dynamic raises concerns about fairness, representation and the incentives built into current funding models (Van Selm et al., 2025[3]). In addition, bypassing national authorities can create parallel systems and inadvertently undermine their legitimacy, especially when ICSOs are seen to be delivering services in areas where the public sector is absent or under-resourced.

Intermediaries, including ICSOs, United Nations (UN) agencies and contractors, will remain essential for playing an important advocacy role on the international stage, for connecting development partners with diverse local actors at scale, managing risk and reducing transaction costs. However, without deliberate safeguards, their roles can unintentionally reinforce power imbalances and vested interests rather than shift leadership to local actors. This can position them as gatekeepers rather than enablers, creating barriers for local actors and slowing progress on shifting power.2 The transformation required is not to eliminate international intermediaries but to redefine their role, not as conduits for delivering development efforts but as change agents and mentors of local partners.

Where to start

Embedding development partners’ LLD commitments and related requirements directly into partnership frameworks with intermediaries can be a practical step towards incentivising more equitable partnership arrangements between intermediaries and their local partners. Such equitable partnership agreements could i) encourage channelling more funding to local actors via time-bound minimum thresholds, and ii) ensure funding to local actors allows for full cost recovery, including indirect cost recovery. Establishing parity in overhead and indirect cost coverage by explicitly sharing local operating expenses in grant agreements helps create fairer and more sustainable partnerships (NEAR, 2019[4]). Operational costs include overheads and set-up expenses, assets and operating costs essential for implementation and safety, and core functions linked to organisational strengthening (IASC, 2022[5]; NEAR, 2019[4]). This could be complemented by annual reporting on prime and sub-grants, local funding shares, overhead allocations and LLD practices, including through existing mechanisms such as the Grand Bargain self-reporting exercise (IASC, 2024[6]). This also entails partnership agreements that clearly define the partnership type (framework agreements, strategic, subcontractual, project-focussed, etc. ), set out periodic quality reviews and provide channels for secondary local partners to provide upstream feedback to development partners on their partnership with the contracted intermediary (NEAR, 2019[4]). The latter requires local partners to have the same access to a programme or project information as the non-local intermediary, including in their own language.

• Denmark requires its strategic civil society partners to report on the share of funding channelled to local organisations and on measures to strengthen local leadership (DANIDA, 2022[7]). Its current strategic partnership guidelines also provide dedicated overhead support for Danish INGOs alongside additional administrative funding to cover local partner overheads.

• The Norwegian Agency for Development Cooperation (Norad) has launched a 2025 pilot project to test a new model for passing through indirect costs to local sub-partners via prime recipients (Norad, 2025[8]).

• The guidance note on promoting equitable partnerships by the Directorate-General for European Civil Protection and Humanitarian Aid Operations (DG ECHO) includes a clear commitment to ensuring that local and national actors receive a fair share of overhead costs (European Commission, 2023[9]). This equitable overhead sharing with local partners can be transposed into development partner templates.

• A rising number of UN agencies and INGOs (like Oxfam and CARE) have adopted new overhead policies for local partners, which can serve as references for updating partnership clauses. The Development Initiatives data tool can provide specific insights into how various development partners, UN agencies, INGOs and Red Cross organisations handle overhead and indirect costs in local partnerships (Development Initiatives, 2024[10]; IASC, 2022[5]; Development Initiatives, 2023[11]).

It is necessary to plan from the outset, in partnership with local actors, how partnerships with intermediaries will evolve over time, including the transition from implementation to advisory or backstopping roles as local capacity grows. This requires clear milestones and mutually agreed “graduation” strategies or exit plans that support the transfer of leadership (IASC, 2022[5]; KPSRL, 2024[12]). Such joint reflection can help clarify which roles local actors wish to lead immediately, which they aim to develop over time and where international partners can add value, often through functions such as convening, advocacy or risk buffering, while avoiding the creation of parallel systems and strengthening existing national and local mechanisms.

• CDA has a set of case studies and tools under their Stopping as Success: Locally Led Transitions in Development (SAS+) project for helping partnerships to transition responsibly to open doors for local leadership in the development space (CDA Collaborative, 2023[13]).

Development partners can pilot new intermediary models in which international intermediaries act primarily as technical advisors and capacity strengtheners for local partners rather than fund controllers, such as advisory consortia, tiered funding models or locally managed pooled funds. Such approaches enable intermediaries to shift from directive delivery roles to more supportive functions that enable local actors to lead on programme design, priorities, budgets and implementation, while providing complementary expertise, flexible support and access to networks.

• The Danish Emergency Relief Fund provides rapid, flexible grants channelled through Danish CSOs to local leadership and partners, with progress and LLD indicators tracked in its annual report (Danish Emergency Relief Fund, 2023[14]).

• The GOAL’s Global Partnership Centre (GPC), supported by Ireland, identifies local organisations for strategic, long-term partnerships and provides tailored advisory services, leadership and governance support, and flexible organisational development financing. By combining executive coaching, mentoring and peer learning across regions, the GPC helps build resilient local institutions and a stronger ecosystem of actors capable of driving sustainable, community-owned change.

• Oxfam’s partnership-centred response in Ukraine allowed it to shift from direct programme delivery to a service function for local partners. Local organisations led programme design, priorities, budgets and implementation, while Oxfam provided flexible funding, technical support and access to networks (Oxfam International, 2026[15]).

Furthermore, Development Assistance Committee (DAC) members can use their board positions to embed LLD in multilateral systems by setting clear expectations and monitoring progress. This includes advocating for LLD commitments in system-wide frameworks such as the UN Quadrennial Comprehensive Policy Review, ensuring that strategic plans and board decisions include explicit LLD objectives and requiring regular reporting on funding flows to local actors. Members can also promote transparency and learning by pushing for harmonised corporate-level data on who receives resources, the type of support provided and the sectors targeted (OECD, 2024[16]).

• Belgium's Humanitarian Aid Strategy (2026) includes using Belgium's seat on the boards of UN organisations, within development partner groups and in fora such as the European Union, to advocate for advancing progress on LLD in a context of decreasing humanitarian funding threatening progress.

• During its Presidency of the Council of the European Union, Spain led the development and adoption of Council Conclusions on Localisation, which were subsequently endorsed by all European Union Member States (OECD, 2023[17]).

• UNICEF’s Executive Board update on humanitarian action reported that 39% of its funding went to local actors, exceeding the Grand Bargain’s target of 25%. It also provides 7% overhead to local partners. It highlights the role that board-level influence can have in embedding LLD in strategic plans (UNICEF, 2023[18]).

Additional resources

• The Active Learning Network for Accountability and Performance (ALNAP) study on intermediary models for locally led humanitarian action identifies and analyses promising structures, including locally led intermediaries and pooled funds, as well as reformed international models that better support locally led approaches.

• The Terre des hommes Partnership & Localisation Policy repositions the INGO’s role towards technical advice and advocacy support (Terre des hommes, 2023[19]). It provides useful language for “advisory/backstopping” clauses and partner “graduation” plans. 

• Peace Direct sets out nine useful roles for INGOs as intermediaries, as they seek to localise and/or step back from direct implementation (Peace Direct, 2023[20]).

References

[1] ALNAP (2025), Global Humanitarian Assistance Report, ODI Publishing, https://alnap.org/help-library/resources/global-humanitarian-assistance-gha-report-2025-e-report/.

[13] CDA Collaborative (2023), Stopping as Success: Locally Led Transitions in Development (SAS+), https://www.cdacollaborative.org/wp-content/uploads/2023/12/SAS-overview.pdf.

[7] DANIDA (2022), Guidelines: Strategic Partnerships 2022-2025, With Danish Civil Society Organisations, Ministry of Foreign Affairs of Denmark, https://reliefweb.int/report/denmark/guidelines-strategic-partnerships-2022-2025-danish-civil-society-organisations.

[14] Danish Emergency Relief Fund (2023), Annual Progress Report 2023, https://cisu.dk/media/rupbpquf/bilag-103-derf-aarsrapport-2023.pdf.

[22] Development Initiatives (2024), Falling short? Humanitarian funding and reform, https://devinit.org/resources/falling-short-humanitarian-funding-reform/.

[10] Development Initiatives (2024), Indirect Costs Policy Mapping, https://devinit.org/resources/indirect-costs-policy-mapping/.

[11] Development Initiatives (2023), Indirect costs for local and national partners: A mapping of the current policies and practices of UN agencies and INGOs, https://reliefweb.int/attachments/58f3350a-8855-47eb-9685-8b7197e5b1d3/Indirect_costs_for_local_and_national_partners_%20%281%29.pdf.

[9] European Commission (2023), Promoting Equitable Partnerships with Local Responders in Humanitarian Settings, https://ec.europa.eu/echo/files/policies/sectoral/dg%20echo%20guidance%20note%20-%20promoting%20equitable%20partnerships%20with%20local%20responders%20in%20humanitarian%20settings.pdf.

[6] IASC (2024), Grand Bargain Self-Reports 2024, https://interagencystandingcommittee.org/grand-bargain-official-website/grand-bargain-self-reports-2024.

[5] IASC (2022), Guidance on the Provision of Overheads to Local and National Partners, IASC Results Group 5 on Humanitarian Financing, https://www.icvanetwork.org/resource/iasc-guidance-on-the-provision-of-overheads-to-local-and-national-partners/.

[2] Ingram, G. (2022), Locally driven development: Overcoming the obstacles, Brookings Institution, https://www.brookings.edu/wp-content/uploads/2022/05/Locally-Driven-Development.pdf.

[12] KPSRL (2024), Locally Led Development: KPSRL Distilling Series 2021-2024, https://kpsrl.org/sites/kpsrl/files/2024-11/FINAL%20-%20LLD%20-%20KPSRL%20Distilling%20Series.pdf.

[4] NEAR (2019), Localisation Performance Measurement Framework, https://static1.squarespace.com/static/5fc4fd249698b02c7f3acfe9/t/6011621dba655709b8342a4c/1611751983166/LMPF+Final_2019.pdf.

[8] Norad (2025), Norad tests new model for support to local sub-partners, https://www.norad.no/en/news/news/2025/norad-tests-new-model-for-support-to-local-sub-partners/.

[21] OECD (2025), Total official development assistance (ODA) to and through civil society organisations (CSO), Development Assistance Committee (DAC) Members, https://www.oecd.org/en/topics/development-co-operation.html.

[16] OECD (2024), From global to local: Multilateral actors and the pivot to locally led development, DCD(2024)23, https://one.oecd.org/document/DCD(2024)23/en/pdf.

[17] OECD (2023), Risk management and locally led development: Understanding how to better manage risk for sustainable impact, DCD(2023)48, OECD, Paris, https://one.oecd.org/document/DCD%282023%2948/en/pdf.

[15] Oxfam International (2026), Learning from Oxfam’s partnership-centered response in Ukraine, Oxfam GB for Oxfam International, https://doi.org/10.21201/2025.000114.

[20] Peace Direct (2023), The Nine Roles that Intermediaries Can Play in International Co-operation, https://www.peacedirect.org/content/uploads/2023/09/The-nine-roles-that-intermediaries-can-play-in-international-cooperation-2.pdf.

[19] Terre des hommes (2023), Partnership and Localisation Policy, https://somaha-stiftung.ch/wp-content/uploads/2024/08/Localisation_Policy_Final.pdf.

[18] UNICEF (2023), Report on the implementation of the quadrennial comprehensive policy review of operational activities for development of the United Nations system, UNICEF/2023/EB/10, https://www.unicef.org/executiveboard/media/16086/file/2023-EB10-QCPR-development-UN-system-EN-2023-05-01.pdf.

[3] Van Selm, G. et al. (2025), “Northern NGO-centrism in localisation processes: Reproducing power inequities in the aid field”, Development in Practice, pp. 1-11, https://www.researchgate.net/publication/394470196_Northern_NGO-centrism_in_localisation_processes_reproducing_power_inequities_in_the_aid_field_Northern_NGO-centrism_in_localisation_processes_reproducing_power_inequities_in_the_aid_field.

Notes

← 1.  Based on 2023 data, only 1% of DAC members’ bilateral ODA goes directly to low- and middle-income country CSOs, with 11% of ODA flowing through partner country CSOs (OECD, 2025[21]). Former Development Initiatives found that most humanitarian funds are channelled through multilateral organisations, followed by international non-governmental organisations, IFRC/ICRC and pooled funds, with only a small share reaching local and national actors. Their research also highlights a lack of detailed data on the recipients of intermediary funding, underscoring the need for greater transparency in how funds flow from intermediaries to local implementers (Development Initiatives, 2024[22]).

← 2.  This perspective was also reflected in consultations conducted by the Movement for Community-led Development (MCLD) and Peace Direct with civil society organisations (CSOs) across Africa, Asia and the Pacific, Europe, Latin America, and North America. CSOs often mentioned the power asymmetries among intermediaries and CSOs. They highlighted how international civil society organisations and large local CSOs often capture funds, visibility, and decision making power, acting as gatekeepers between development partners and communities.