A Legacy Worth Reclaiming: After the Dismantling—Rebuilding a Smarter, Stronger USAID

OHK reflects on its decades of involvement supporting the agency and offers perspective on what it will take to rebuild USAID

As U.S. global development leadership recedes under the current administration, many in the field recognize what amounts to a quiet wind-down of USAID. Programs have been frozen or downsized, leadership gaps are growing, and the agency’s strategic influence has diminished. But this is not necessarily an ending. For many, including OHK, it’s a pause—one that will likely be followed by a return after the current administration’s term. The purpose of this article is to reflect and present a forward-looking vision for the reconstruction of USAID. Drawing on OHK’s decades of collaboration with the agency and experience in international development, the piece examines how a return offers not just a chance to restart, but to reimagine USAID’s role in global development—restoring technical leadership and embracing a more values-driven, responsive, and equitable approach. It argues that this moment is an opportunity to reclaim USAID’s credibility and relevance in a rapidly evolving global landscape.

At OHK, we are not passive observers in the development space—we are long-time partners and believers in the purpose and potential of USAID. Over the decades, we have worked alongside the agency through moments of great progress and periods of deep re-evaluation. We have seen how USAID, when empowered and grounded, can be a force for transformative change: not only through its financial muscle, but through its ability to convene, build trust, and deliver lasting results in places that matter. It is precisely because of this history, and our enduring belief in the agency’s mission, that we are equally strong believers in its return. We do not believe the current phase is the end of USAID, but rather a pause—albeit a painful and revealing one. What has been lost is significant. But what remains is a deep well of experience, values, and partnerships that can—and should—be drawn upon when the moment for reconstruction arrives.

This article is offered not from a place of criticism, but of care. It is not an exhaustive blueprint for reform, nor a judgment of those who have worked tirelessly within the agency under difficult constraints. It is a reflection, shaped by observation, partnership, and conviction. We write this because we believe USAID still matters—not just as an American institution, but as a vital part of a global system of cooperation, equity, and progress. And we write it because we believe what comes next could be stronger, smarter, and more locally grounded than what came before.

Reading Time: 13 min.

The Reality of Dismantling—Let’s name what has happened: USAID has not just been paused or downsized under the current administration—it has been functionally dismantled. Critical development programs have been halted, budgets slashed, field missions weakened, and internal talent depleted. In many partner countries, the once-visible footprint of USAID has faded, leaving a gap in both presence and influence. This wasn’t the result of one decision, but of a series of deliberate moves that deprioritized international development as a pillar of U.S. foreign policy. What remains today is a hollowed-out agency, still formally present but stripped of much of its capacity, coherence, and momentum. And yet, for those of us who have worked alongside USAID for decades, we believe this is not the end. OHK believes agency will return—likely after the current administration’s term ends. The real question is: What kind of USAID should return?

What follows is not a call to restore the past, but a candid reflection on what was lost, what endured, and what must change.

For those who have worked closely with USAID over the decades, this moment invites both honesty and hope. The dismantling of the agency has exposed long-standing weaknesses—from an overreliance on large U.S. contractors to the erosion of mission autonomy and the growing disconnect from local priorities. And yet, embedded within this rupture is an opportunity: to rethink the delivery model, restore field leadership, reinvest in technical capacity, and engage more meaningfully with the actors already shaping development in their own contexts. This article traces where USAID went off course, what still works, and how the next chapter can rebuild not just a stronger agency—but a more responsive and relevant one.

This is not intended as an exhaustive account of USAID’s evolution, nor a comprehensive critique of its operations. Rather, it is a reflection shaped by OHK’s decades of close observation and partnership—an attempt to capture recurring patterns and felt realities that, in our view, warrant rethinking. It is offered with humility and deep respect for the many individuals—within missions, bureaus, and implementing teams—who have put their heart and soul into making USAID’s mission matter. Their commitment is not in question. But as the agency faces the possibility of renewal—something OHK believes will happen in 3-4 years from now, it is also time to engage honestly with the lessons of the past and imagine a model that is more resilient, responsive, and locally grounded.

What was dismantled cannot simply be restored. The next phase demands more than staffing up—it requires rebuilding systems, relearning purpose, and resisting the temptation to return to outdated structures. USAID’s revival must be deliberate, strategic, and future-oriented, not just a reaction to past erosion.

Transition Is Not a Switch—It’s a Process—Rebuilding USAID will not be a matter of flipping a switch. A meaningful return will require a deliberate, phased transition—one that reckons with the depth of what has been lost. Much of the institutional brainpower that once gave USAID its edge has been drained. Career staff with decades of technical expertise, regional knowledge, and policy continuity have been laid off, reassigned, or chosen to leave. Field missions, once the backbone of the agency’s presence and strategic insight abroad, have seen significant downsizing or closure. These missions aren’t just local offices—they are engines of strategy development, relationship building, and program implementation. Their staff shape country development strategies, assess needs in coordination with local partners, and craft multi-year plans that align U.S. policy goals with real-world challenges. In many countries, these capacities have either disappeared or been stripped to their administrative shells.

Equally concerning is the dismantling of core USAID mechanisms that, while imperfect, enabled a functioning ecosystem of aid delivery. For decades, the agency operated with a predictable system: missions would identify development priorities through a consultative strategic planning process, often involving years of local engagement and research. These priorities would then guide project design and procurement—often involving multiple stakeholders and layers of approval. While the model was complex and sometimes bureaucratic, it ensured that development efforts were grounded in local context, strategically aligned, and informed by experience. Much of that structure has now been unraveled. Key frameworks that shaped development assistance—sector assessments, performance plans, program cycle tools, and mission-level portfolios—have been frozen or eliminated altogether. In many places, the reset won’t just be about hiring new people or reopening offices; it will mean rebuilding the very systems by which USAID sets goals, allocates resources, and measures impact. Restarting these mechanisms from scratch could take years. And so, this moment requires more than restoration. It demands rethinking how USAID can operate in a way that is less vulnerable to political swings, more flexible in structure, and better equipped to empower missions, technical staff, and local actors to lead from the ground up.

Amid the unraveling, certain programs held steady—not because they resisted reform, but because they operated with field-level insight, local trust, and technical focus. These surviving models show that embedded expertise, flexible tools, and long-term commitment still work—and should serve as foundations, not exceptions, in the road ahead.

Preserving the Pillars: What Still Works—It is important to recognize that not everything collapsed. A handful of programs, particularly in the global health and humanitarian sectors, have remained both operational and widely respected. These initiatives not only delivered results under pressure but also offer key lessons for how USAID can rebuild in a more resilient and effective form. Foremost among these is PEPFAR, the President’s Emergency Plan for AIDS Relief. While PEPFAR is led by the Office of the Global AIDS Coordinator at the U.S. Department of State, USAID plays a major role in implementing PEPFAR programming, particularly through its missions and health teams. USAID manages significant PEPFAR budgets, oversees local implementation partners, and contributes technical leadership in HIV prevention, care, and treatment. In many countries, USAID is the primary U.S. government implementer on the ground for PEPFAR. Even during periods of political volatility, PEPFAR has continued to demonstrate what successful, sustained U.S. development assistance can look like. Its achievements—in terms of lives saved, health systems strengthened, and partnerships fostered—are measurable and undeniable. Much of PEPFAR’s success stems from how it was structured: with strong country ownership, long-term commitments, and real coordination between U.S. missions and partner governments. It was also allowed, to a large extent, to operate outside the rigid procurement and contracting systems that have constrained other sectors. Field offices had more autonomy, technical staff held significant decision-making power, and success was tied to outcomes rather than overly prescriptive compliance frameworks.

Similarly, programs focused on food security and emergency response—such as those under the Feed the Future initiative or disaster response funding through the Office of Foreign Disaster Assistance (OFDA)—managed to retain a level of integrity and mission alignment. USAID is the lead U.S. government agency for Feed the Future, the U.S. government’s global food security initiative. It coordinates programming across agencies (like USDA, MCC, and State), but USAID designs and implements the majority of country-level activities, often in collaboration with national governments, NGOs, and local institutions. Also, OFDA was formerly a distinct office within USAID responsible for international disaster response. In 2020, it was merged into the USAID Bureau for Humanitarian Assistance (BHA)—making USAID the official home for all U.S. humanitarian relief overseas, including emergency food, shelter, water, and health services. BHA is a core part of USAID and remains very active.These programs remained responsive to urgent needs, maintained partnerships with both international NGOs and local delivery systems, and frequently drew on in-country expertise. They serve as models not just for what USAID did right, but for how certain principles—flexibility, mission autonomy, local engagement, and technical leadership—can be preserved and scaled across other sectors. What these success stories have in common is a departure from the more centralized, consultant-driven model that took hold in other areas of the agency. They were less burdened by the weight of Washington and more empowered at the field level. They invested in systems, not just outputs. And perhaps most importantly, they built trust—with host governments, local communities, and implementing partners—by staying committed for the long haul.

As USAID prepares for what we hope will be a return and reset, these pillars offer critical guidance. Rebuilding the agency does not mean starting from scratch. There are pockets of strength, credibility, and institutional knowledge that must be protected and expanded. Rather than isolate these programs as exceptions, the agency should ask: What made them work—and how can that be the standard, not the anomaly? In an era when development resources are scrutinized and political support is fragile, showcasing and replicating what has worked is not only strategic—it’s essential. These programs are the living proof that USAID can still deliver on its mission when grounded in values, empowered by expertise, and anchored in true partnership.

Where USAID programs remained mission-led and grounded in field realities, they delivered. Where implementation was outsourced and abstracted, impact faded. This is not just a delivery issue—it is a structural design flaw that now demands a complete rethinking of how aid is conceived, contracted, and executed.

The Contract-Led Model Must Be Rethought—One of the most urgent areas of reform is USAID’s delivery model, which over the past two decades has become increasingly dominated by a small circle of large U.S.-based contractors. This contract-led approach has prioritized administrative compliance, reporting, and scale over adaptability, value-for-money, and long-term impact. While intended to streamline delivery, the result has been a system that lacks competition, limits innovation, and sidelines many capable regional and local actors.

In its current form, the model creates a closed loop in which U.S. taxpayer dollars largely flow back into the U.S. economy, subsidizing a development consultancy industry centered in Washington. What was once a field-oriented agency focused on building infrastructure, delivering services, and supporting tangible projects—often involving local construction firms and on-the-ground partnerships—has shifted into a model where aid is increasingly abstracted into frameworks, strategies, and workshops. This shift from bricks-and-mortar development to paper-based consulting has diminished the visible economic footprint of USAID in the very countries it seeks to assist. Local contractors, engineers, and workers are now less likely to participate in or benefit from U.S. aid spending, as implementation is increasingly funneled through U.S. consulting firms.

This model has come under criticism not just for its inefficiency, but for distorting the core purpose of development aid. The dominance of a handful of firms reduces market competition, limits fresh thinking, and undermines the principle of country ownership. A modernized USAID should work to open the field to a more diverse and competitive group of implementers—including local and regional firms—who can lead, not just subcontract. Reorienting away from a consultancy-first mindset and toward models that empower local capacity, deliver tangible results, and strengthen country systems will be critical to restoring USAID’s credibility and effectiveness.

What is striking is that, apart from the well-regarded health delivery programs—particularly in areas such as HIV/AIDS—there has been relatively little public outcry from recipient governments over the loss of other USAID-funded initiatives in sectors like governance, democracy, and institutional reform. This silence does not necessarily signal disinterest or satisfaction. Rather, it reflects a deeper disconnect. Over time, the contract-led model has distanced many sovereign recipient governments from the agency’s missions and programming decisions. In several countries, frustration has grown over how large contractors operated—often with limited transparency or sustained engagement—and how little benefit was perceived to reach local priorities, institutions or communities. While these concerns were not always openly voiced, they have shaped the quiet response to USAID’s withdrawal. Rebuilding the agency’s presence, therefore, must include a genuine recommitment to partnership, one that prioritizes mutual respect, shared planning, and visible value for host countries.

When deliverables became reports instead of infrastructure, and contractors replaced engineers and field specialists, USAID lost its tangible impact—and with it, its presence, credibility, and influence. The result is a brand once respected, now often invisible, even in countries with long-standing U.S. partnerships.

Losing Ground: How USAID’s Local Brand Faded—Despite years of effort by USAID to position itself as a trusted development partner, its brand has significantly diminished in many countries. OHK has observed this shift firsthand, having worked extensively on USAID-funded projects while strictly following the agency’s detailed branding policies and visibility guidelines. These branding strategies were designed to emphasize U.S. commitment, highlight tangible impact, and reinforce the idea of partnership. Yet despite adherence to these frameworks, the intended perception often failed to materialize locally. Over time, the reputation of USAID on the ground has eroded—and this decline is rooted in two interconnected shifts: the changing nature of USAID’s programming, and the evolution of its contracting model.

In earlier decades, USAID was closely associated with large-scale, physical infrastructure projects—efforts that were clear, measurable, and visible. In Egypt, for example, one of USAID’s most significant projects in the early 1990s involved a $300 million initiative to expand Cairo’s water supply system. It was also one of OHK’s team’s first involvements with a major USAID-funded initiative. Projects of this scale typically relied on engineering and construction firms with defined deliverables and tight oversight. The outcomes—whether water tanks, pipelines, or treatment facilities—were impossible to miss. For citizens and governments alike, the message was simple: this was a U.S.-backed project delivering real, physical value.

Over the past two decades, however, USAID shifted much of its focus to “soft” sectors such as governance, civil society, democracy promotion, and institutional reform. In turn, consulting firms replaced engineering companies as the dominant implementers. Unlike infrastructure, which produces fixed assets, consulting work often results in intangible or loosely defined outputs—training workshops, strategy papers, assessments, and capacity-building sessions. These are important in principle, but they are less visible to communities and far harder to evaluate. Contractors operating in this space also had more flexibility in how deliverables were framed or interpreted. The contrast was stark: instead of a water system, a workshop; instead of a school, a report.

The result has been a widening gap between what USAID intends to convey and how it is actually perceived. Despite consistent branding on signage, documents, and communications materials, the visible impact on the ground has become less clear to local populations. In some cases, host governments themselves questioned the value or relevance of programs, especially when they appeared disconnected from pressing national priorities. Rebuilding USAID’s brand—and trust—will require more than visual visibility. It will demand a renewed emphasis on meaningful, grounded results that communities can recognize, appreciate, and associate with American partnership.

Field autonomy once allowed USAID to respond with nuance and adapt to shifting local conditions. That autonomy has been steadily stripped away, replaced with centralized models that often ignore local realities while chasing thematic mandates designed far from the communities they are meant to serve.

Losing the Local Edge: How Centralization Weakened USAID Missions—Initially, USAID missions operated with considerable autonomy, allowing them to tailor programs to the specific needs of host countries. However, starting in the late 1990s and early 2000s, there was a shift towards greater centralization. Notably, in 2006, the establishment of the Office of the Director of U.S. Foreign Assistance within the State Department aimed to coordinate foreign aid but also led to increased oversight over USAID's operations. This move, while intended to enhance efficiency, often resulted in reduced flexibility for missions to design and implement programs responsive to local contexts. The centralization trend continued with the introduction of standardized planning and reporting requirements, which, while promoting accountability, also constrained the ability of missions to adapt to rapidly changing circumstances on the ground. The emphasis on uniformity often overlooked the unique political, economic, and social landscapes of individual countries, thereby limiting the effectiveness of USAID's interventions. The reduction in mission autonomy has had tangible effects on development outcomes. Field missions, once empowered to engage directly with local stakeholders and tailor initiatives accordingly, found themselves navigating a more rigid framework that prioritized centralized directives over localized insights. This shift not only affected the relevance and sustainability of programs but also impacted the agency's ability to build trust and partnerships within host countries.

The erosion of technical capacity and mission autonomy has had tangible consequences. Field offices that once led collaborative, technically sound initiatives became nodes for contract management, bound by procurement rules and quarterly reporting. This shift affected not only program relevance and sustainability but also USAID’s credibility with local stakeholders. Trust, which had been built through long-term presence and technical collaboration, became harder to sustain when local partners perceived U.S. aid as distant, transactional, and inflexible. Recognizing the importance of restoring mission autonomy is critical for USAID’s future effectiveness. Rebalancing the relationship between headquarters and field offices—by re-empowering missions with technical staff, decision-making authority, and flexible tools—can rebuild the agency’s responsiveness and local legitimacy. USAID’s success depends not only on the scale of its funding, but on the integrity of its approach. Restoring technical depth and field leadership will be central to making that approach credible again.

Development is most effective when it responds to national context, not global trends. Yet time and again, USAID programming has prioritized visibility and alignment with donor narratives over local needs—leaving talent unused, markets misunderstood, and policy windows missed.

Global Agendas, Local Disconnects: The Challenge of Context in USAID Programming—USAID has historically been critiqued for implementing thematic programs aligned with global priorities—such as energy, democracy promotion, and climate change—without adequately tailoring them to the specific contexts of recipient countries. For instance, USAID's climate initiatives, including the 2022–2030 Climate Strategy, aim to address global emissions and promote resilience. While these objectives are globally significant, challenges arise when such programs are not sufficiently adapted to local conditions, potentially leading to misalignment with the immediate needs of communities. Similarly, in the realm of democracy promotion, USAID has faced criticism for focusing on procedural aspects—like elections and technical projects—without fully engaging with the local political and cultural nuances. This approach can result in limited effectiveness and sustainability of democratic initiatives. Recognizing these challenges, USAID has acknowledged the need for more locally driven development. Efforts have been made to increase direct funding to local partners and involve them in program design and implementation. However, transitioning from a top-down approach to one that genuinely empowers local actors remains an ongoing process.

OHK has often opted not to partner with USAID contractors when it believed that programs were misaligned with local priorities or disconnected from the political and social realities of the host country. One notable example is the wave of post-Arab Spring programming in Egypt, particularly in the years following the 2011 revolution. During that period, significant U.S. funding was channeled into democracy and civil society initiatives that, while well-intentioned, were largely shaped by global narratives and donor priorities rather than a grounded understanding of the evolving political climate in Egypt. Programs frequently focused on NGO capacity-building and rights-based advocacy, which clashed with government sensitivities and were viewed as external interference. As a result, these efforts strained relations, drew political backlash, and in many cases failed to achieve sustainable outcomes. A more effective approach, in OHK’s view, could have been to focus on supporting governance through technology upgrades, municipal service delivery, and institutional strengthening—areas that could have advanced reform while staying within the political bandwidth of the moment. This example illustrates the importance of aligning development assistance with the nuanced priorities, capacities, and constraints of sovereign partners on the ground. In summary, while USAID's alignment with global development goals is commendable, the effectiveness of its programs can be compromised when local contexts are not sufficiently considered.

As USAID centralized and outsourced more of its programming and delivery, the role of local actors shifted from trusted experts to implementers on the periphery—visible in delivery but absent from decision-making. This structural imbalance has quietly undermined the very localization agenda USAID seeked to champion.

Local Expertise, Limited Voice: Rethinking the Role of National Partners—As USAID’s contracting model evolved, the role of local contractors and national staff within U.S.-led implementation consortia has become increasingly complicated. While localization is often cited as a key objective in development strategy, the day-to-day reality of many projects reflects a different picture—one where local expertise is underutilized, and local actors are structurally sidelined.

In many large USAID programs, U.S.-based firms seek local subcontractors or hire national professionals during the bidding process to strengthen their technical and contextual credibility. These local partners often bring deep understanding of the political, social, and operational landscape. They offer access to local networks, cultural fluency, and on-the-ground implementation knowledge—precisely the elements needed for successful development programming. However, once the award is secured, the role of local partners too often shifts from strategic collaborators to peripheral implementers. OHK has observed that many local staff—despite being highly experienced and closely connected to realities in the field—are hired on short-term or dependent contracts managed by the prime U.S. contractor. Their formal reporting line and salary are tied to the U.S. firm, creating an uneven power dynamic. While they may offer valuable insights on political risk, program feasibility, or community reactions, their ability to influence strategic direction is limited. In practice, their role is often constrained to operational delivery and data collection, while key decisions are made by home-office staff who may have limited exposure to the local context.

This disconnect is not always due to malice or neglect. U.S. contractors often operate under pressure to meet predefined deliverables, timelines, and compliance requirements, which can lead to rigid management structures and resistance to adapting plans mid-course. However, when feedback loops from the ground are weak, the result is a loss of learning and flexibility—often at the expense of program relevance and effectiveness. In some cases, local subcontractors also face a conflict of interest: they are expected to deliver candid assessments of project risks or performance issues, but doing so may jeopardize their relationship with the prime. As a result, national actors are caught in a delicate position—responsible for local delivery, yet disempowered to shape or question the strategic approach. This not only undermines the spirit of partnership but can also affect the overall integrity and accountability of the development effort.

Addressing this challenge requires structural change, not just better intentions. USAID and its implementers must create space for local voices to be heard—not just during project design, but throughout the program cycle. Mechanisms for shared decision-making, clearer accountability lines, and protections for local professionals to offer dissenting views without fear of repercussion are essential. Only then can localization move beyond rhetoric and begin to restore balance in the implementation chain.

When development lags behind the market, it becomes obsolete. True relevance comes from listening, adapting, and supporting what local actors are already doing well.

Recognizing the Gaps: When Development Misses the Market—Over the past three decades, OHK has witnessed significant changes in the development landscape—and with that, recurring patterns where donor-led programming has not kept pace with local sectoral growth. In areas such as tourism, energy, housing, and financial inclusion, the role of development contractors has sometimes lagged behind the realities on the ground. Despite good intentions and well-structured programs, USAID and its implementing partners have often missed the boat—offering support in ways that feel out of step with the current capabilities and priorities of local markets.

This is a reality OHK has seen repeated in country after country. In the 1990s, many countries where USAID operated lacked basic infrastructure and institutional systems. Today, some of those same countries have highly capable private sectors and institutional players. In tourism, for example, local developers and hospitality operators in countries like Egypt, Jordan, and Morocco are now deeply integrated into global value chains. They possess sector expertise, manage large portfolios, and often advise their own governments on policy. Yet development programs in these same countries have sometimes relied on U.S.-based consultants with less sectoral depth or outdated frameworks—leading to disconnects between donor efforts and actual market dynamics. The result: programs that feel redundant at best, or disruptive at worst.

The same is true in energy and housing. In many middle-income and emerging economies, renewable energy developers, housing finance institutions, and private investors are already driving innovation and scale. When donor programs approach these sectors with legacy models—focusing on basic access or small-scale pilot projects—they risk overlooking ongoing national efforts or crowding out local investment. In such cases, the added value of USAID programming becomes unclear. A particularly striking example is in financial inclusion. For years, USAID and other donors have invested in programs designed to “bank the unbanked.” But in markets across Africa, the private sector—particularly telecom companies—has already stepped into this space. Mobile money products, digital wallets, and fintech platforms are not just widespread; they are the primary tools for financial access in many countries. Development programs that continue to build parallel systems or support outdated delivery channels often struggle to demonstrate relevance in these fast-moving environments.

OHK recognizes that these gaps are not the result of poor intentions but of outdated assumptions. The development model has not always adapted quickly enough to evolving market conditions, nor has it consistently prioritized learning from local actors already leading in their fields. A future-facing USAID must move beyond the idea of delivering solutions to the Global South and instead position itself as a facilitator—one that listens, aligns, and supports where real value can be added. In sectors with strong local capacity, USAID’s role may be to unlock policy reform, catalyze investment, or support regional platforms—not to reintroduce models that local actors have already outgrown.

Nowhere is the misalignment more obvious than in innovation. Entrepreneurial ecosystems cannot be built through compliance-heavy consulting contracts. They need capital, risk-tolerance, and authentic engagement with those already building solutions on the ground. USAID must stop funding innovation rhetorically—and start enabling it meaningfully.

Innovation Without Innovators: Rethinking USAID’s Approach to Entrepreneurship Ecosystems—One of the clearest examples of the disconnect between development practice and market reality is in the field of innovation and entrepreneurship. In recent years, USAID has increasingly embraced innovation as a thematic focus—recognizing its role in job creation, competitiveness, and economic transformation. Yet the way the agency approaches this space often falls short of the very principles it aims to promote.

Despite the sector’s fast-changing nature, innovation programming is frequently awarded to the same circle of large, generalist contractors. These firms often have limited or no substantive experience in startup ecosystems, venture finance, or technology-based entrepreneurship. Yet they are entrusted with multimillion-dollar contracts to build or support innovation ecosystems in developing countries. This “one-size-fits-all” contracting mindset overlooks two critical realities.

First, in many of the countries where USAID operates—particularly across Africa, the Middle East, and Southeast Asia—local innovation ecosystems have already begun to emerge over the past decade. While they may not yet rival those of Silicon Valley or Berlin, these ecosystems are real. They include early-stage investors, local accelerators, growing pools of talent, and sector-specific innovators solving real-world problems. These are not blank slates waiting for development blueprints—they are nascent markets needing targeted, catalytic support. Unfortunately, USAID’s top-down, contractor-driven models often fail to identify, listen to, or integrate with the local players who are already taking risks and building infrastructure.

Second, and perhaps more consequential, is the question of how resources are being deployed. Large innovation-focused contracts often revolve around organizing convenings, writing reports, and setting up temporary hubs—all under heavy administrative and compliance requirements. The bulk of funding goes to overhead, consulting fees, and managerial layers, not to the startups or entrepreneurs who actually drive innovation. OHK has observed that in many contexts, the bottleneck is not the lack of a framework or innovation strategy—it is the lack of access to capital. Startups struggle to raise even small seed rounds, early-stage investors face liquidity constraints, and local funds lack the institutional capital to grow. In such an environment, allocating $10 million to a multi-year consulting contract may do far less good than channeling that same amount into a blended finance facility or direct grant mechanism.

Supporting innovation should look more like investing and less like traditional development contracting. It requires nimbleness, sectoral expertise, risk tolerance, and proximity to entrepreneurs. It also means breaking the pattern of awarding ecosystem-building roles to firms without track records in innovation. USAID does not need to be the innovator—but it must be willing to engage those who are. That means working with local venture capitalists, accelerators, angel networks, and entrepreneurs as partners, not recipients. Without that shift, innovation programming risks becoming yet another development fad—heavy on narrative, light on results, and out of sync with the very ecosystems it claims to support.

Sustainability should not as an add-on, but a foundational requirement—because long-term success in development depends not only on what is delivered during the life of a program, but on what endures after USAID steps back. Sustainability must be embedded from the start, supported through institutional depth, financial strategy, and local trust—not treated as an afterthought or final milestone.

The proof could not be more evident now: when USAID’s operations came to a near-halt in 2025, the global repercussions were profound. Entire sectors and institutions found themselves unable to function, revealing just how dependent many had become on external support without self-sustaining mechanisms in place. In some cases—such as direct healthcare provision to underserved areas—sustainability may never have been structurally feasible without continued subsidy. But in many other areas, the failure to build in long-term capacity, financial resilience, or institutional ownership reflected a deeper design flaw. This moment has underscored the urgent need to rethink how sustainability is planned, resourced, and measured across all programming.

Sustainability Is Not an Exit Strategy—It Must Be Designed from Day One

Sustainability Without a System—While the term “sustainability” is ubiquitous in development language, its practical integration into USAID program design has often been ad hoc, reactive, or symbolic. Too many projects have prioritized successful launch over long-term viability, only to collapse or stagnate once donor funding ends. In the later years of many USAID initiatives, implementers were increasingly pressured to demonstrate sustainability—but the agency offered little by way of structured guidance, technical support, or realistic transition planning.

This gap has proven especially consequential in government-led or institution-based programs, where fragile operating environments and bureaucratic hurdles make sustainability difficult even under the best circumstances. Institutional weakness is not just a risk factor—it is a known cause of project failure. Yet the agency’s response has too often been limited to mandates rather than meaningful assistance. Local institutions were asked to take over service delivery, operations, or maintenance without adequate restructuring, financial planning, or staffing capacity. Programs that survived usually did so not because of USAID’s approach, but in spite of it—driven by partners who were willing to innovate internally and persuade the agency to support institutional reform.

A future-facing USAID must go beyond sustainability as a reporting metric. It must treat it as a core design principle: embedded from the outset, supported with technical expertise, and aligned with host-country capacities. This includes flexible mechanisms to support operational transition, robust financial modeling, and realistic timelines for exit. Otherwise, the agency risks repeating a familiar pattern: short-term success, followed by long-term erosion.

From Match-Funding to Meaningful Financing—Reframing the Sustainability Conversation

The Match-Funding Mirage—Over the past decade, match-funding emerged as a dominant feature of many USAID agreements—often framed as a marker of local buy-in and leverage. In theory, it encourages ownership and co-investment. In practice, it has sometimes produced the opposite effect: implementation delays, funding gaps, and administrative paralysis. For projects operating in politically or economically constrained environments, the scramble to secure counterpart financing has become a primary barrier to execution—not a bridge to sustainability.

Many implementers have found themselves diverting time and energy away from design and delivery just to meet rigid match-funding thresholds. This has frequently delayed contract finalization, reduced momentum, and complicated stakeholder relationships. While USAID may view match requirements as a safeguard, they can, in fact, crowd out smarter financial planning and reduce the space for innovation.

Instead of defaulting to match-funding as a gatekeeping tool, USAID should refocus its approach toward supporting long-term financial strategies that enable sustainability in context. This means helping partners develop revenue models, policy frameworks, and institutional pathways that gradually reduce reliance on donor funding—rather than expecting counterpart contributions as a precondition for partnership. Sustainability is not a one-time transaction; it is a financial and operational journey that requires early design, calculated risk-taking, and flexibility.

Sustainability Begins with Trust—The Role of Field Officers in Enabling Risk and Innovation

Trust at the Front Lines—One of the most overlooked factors in USAID’s historical successes has been the discretion and judgment of field mission staff. In many countries, the most ground-breaking projects—those that took real risks, pushed boundaries, or redefined what development could look like—succeeded because local officers were willing to trust their partners and make difficult calls.

This is not romanticism; it’s operational fact. Field officers who understood the local environment and had authority to act within it often made the difference between rigid compliance and responsive problem-solving. They saw potential where headquarters saw deviation. They backed unorthodox proposals. They navigated political sensitivity with nuance. And in doing so, they made U.S. assistance more relevant, more impactful, and more legitimate in the eyes of local actors.

Over time, however, that space for professional discretion has narrowed. Centralized control, rigid procurement templates, and increasing risk aversion have made it harder for field staff to approve bold ideas—even when those ideas were grounded in local evidence. USAID must reverse this trend. Rebuilding the agency means reinvesting in mission-level autonomy, empowering field officers with flexible tools, and trusting their proximity to inform both risk and strategy. If USAID wants to be a credible partner for innovation, it must start by trusting its own people—those on the ground, in the room, and closest to the complexity of change.

As the development community looks ahead, the question, in OHK' thinking, is no longer whether USAID will return—but how. At OHK, we believe that a smarter, more grounded, and more trusted agency is not only possible, but necessary. Rebuilding USAID offers a rare opportunity: to recommit to the values that once defined it, to listen more closely to the partners it serves, and to deliver development in ways that are more relevant, resilient, and real. Please reach out to OHK to get more information or discuss how we can help.