Frequently Asked Questions From Business Leaders

USAID works with all types of businesses including for-profit, commercial entities and their affiliated foundations; financial institutions, investors, and intermediaries; business associations and cooperatives; micro, small, medium, and large enterprises; and American, local, regional, and multinational businesses.

USAID implements projects and programs in emerging markets, collaborating closely with micro, small, and medium-sized enterprises (MSMEs) to accomplish shared objectives. We also partner with MSMEs through larger partnerships and programs. We strongly encourage businesses of this nature to initiate contact with the USAID Mission, or country office,  in their respective countries, fostering a dialogue on potential collaborations. 

USAID Mission Directory

USAID collaborates with businesses beyond traditional funding to achieve meaningful results:

• Join an existing project or program that delivers mutual results
• Participate in cross-industry coalitions
• Collaborate to advocate for policy changes
• Share resources, expertise, and/or skills to help meet development and social impact goals

Each partner organization has various roles and responsibilities. Here are a few examples of roles and responsibilities associated with formal collaborations between the private sector and USAID.

Example Businesses Roles and Responsibilities

Businesses bring resources, skills, and market links to transform traditional development projects into dynamic partnerships that can also benefit the private sector.

• Identify strategic intersections with USAID development and humanitarian initiatives.
• Sell the partnership and associated activities internally, from the headquarters to the local/regional level.
• “Interpret” USAID and other partners for colleagues.
• Coordinate local and regional business unit staff to ensure their engagement.
• Facilitate access to and training on the company’s relevant products, services, and skill sets for community members, implementing partners, and other relevant stakeholders.
• Prioritize market access for program participants when relevant. 
• Identify opportunities to contribute company resources other than cash.
• Mobilize corporate communications teams to publicize the objectives, activities, and impact of the alliance.

Example USAID Roles and Responsibilities

Donor agencies such as USAID bring resources and expertise to help companies understand and address critical development needs and priority issues at a country level. 

• Create and disseminate accessible information about development strategies and intersections with business to promote partnerships. 
• Engage with companies to identify shared development priorities. 
• Provide technical analysis of ideas from a development perspective. 
• Facilitate access to relevant people and departments within USAID. 
• Coordinate oversight and logistical requirements for the partnership, such as the selection of program implementers and applications for funding, with transparency and efficiency. 
• Ensure that development interests are preserved alongside business strategy objectives.

Example Implementing Partner Roles and Responsibilities

Implementing partners manage the implementation of project activities associated with the partnership. 

• Oversee implementation of all activities on time, within budget, and in pursuit of identified objectives. 
• Measure and report on impact achieved to support internal and external communications about the partnership. 
• Facilitate relationship between company and donor agency, such as USAID. 
• Foster a close relationship with your company’s local and headquarters staff to share successes, challenges, and future opportunities. 
• Identify unexplored business and development opportunities.

As a public agency and steward of taxpayer dollars, USAID seeks responsible partners whose financial, social and environmental policies and practices are consistent with USAID’s mission and values, as well as our obligations under relevant law and policy. Feel free to review USAID’s due diligence protocol online.

Due Diligence Guidance

• Individual engagements are aligned with the business’s commercial interests and core capabilities.
• Long-standing relationships exist between USAID and the business, even outside of specific collaborations.
• Businesses have a collaboration concept in mind and bring that concept to USAID to understand whether it aligns, or not, with development priorities and existing projects and programs.
• All parties to the engagement meet regularly to collaborate and make joint decisions.
• The collaboration actively monitors progress - meeting agreed-upon targets.
• Businesses plan on sustaining or scaling activities after the engagement with USAID ends.
• Host governments are involved to help facilitate policy changes, integrate outcomes/activities in national-level systems, and access additional funding to continue activities.
• Stakeholders – including local ones – are included in the design of the collaboration.
• Awareness building activities are incorporated into the collaboration to facilitate behavior change. 

Overseas country offices, or Missions, publish Country Development Cooperation Strategy (CDCS) documents, which are available on usaid.gov. We recommend researching Mission priorities to understand whether alignment might exist between your business goals and USAID initiatives in that country. Use the Mission Directory below to research country priorities.  

USAID Mission Directory

USAID’s major organization units are called bureaus. Each bureau houses staff responsible for major subdivisions of the Agency’s activities. USAID has both geographic bureaus that are responsible for the overall activities in countries and functional bureaus that conduct Agency programs worldwide or across geographic boundaries.

USAID Organizational Structure

APS Annual Program Statement: A call to action that describes the need for specific types of programs. The “round” or “addendum” is the funding opportunity to address that need. The APS and any addenda or rounds contain important information to help you understand the specific expertise needed to address the challenge we want to solve.

CDCS Country Development Cooperation Strategy: The strategy of a USAID Mission, or country office — usually a five-year plan—that provides a road map for development goals and projects. The RDCS — Regional Development Cooperation Strategy — is the same as a CDCS, but for a region. 

Collaboration: “Collaboration” with the private sector entails the sharing of information and ideas, and the coordination of efforts to achieve shared values and common goals, which can, but need not, include financing.

Enabling Environment (for business): The context in which commercial firms operate. It includes laws, regulations, policies, international trade agreements, and public infrastructure that affect the movement of a product or service along its value chain. The business enabling environment at the national and local level encompasses policies, administrative procedures, enacted regulations, and the state of public infrastructure. In addition to these more formal factors, social norms, workforce skill levels, business culture, and local expectations can be powerful aspects of the business-enabling environment. (Source: Modified from Market Links)

Impact Investments: Investments made with the intention to generate positive, measurable, social and environmental impact alongside a financial return. Core characteristics include intentionality (i.e., an investor intends to have a positive impact); return expectation on capital, or at a minimum, a return of capital; and, measurement of social and environmental impacts. (Sources: GIIN and OECD DAC, Peer Inventory 1: Private Sector Engagement Terminology and Typology)

Investor: Any person or organization who commits capital with the expectation of financial returns. Investors make up a diverse group, each of which operates with different mandates, constraints, and risk-adjusted return preferences. Investors include the following: 

• Owners of assets (e.g., commercial banks, pension funds, sovereign wealth funds, insurance companies, and endowments); 
• Managers of assets (e.g., private equity and venture capital funds); and
• Individual investors (e.g., “angel” investors and family offices). (Source: Adapted from Convergence, “Who is the Private Sector? Key Considerations for Mobilizing Institutional Capital through Blended Finance”) 

Leverage: For the purposes of this policy, the term “leverage” describes non-U.S. Government resources, including cash and in-kind gifts and services provided through private sector partnerships, with the exception of cost share. Leverage directly contributes to a USAID project or activity, or augments its results by making it more sustainable or effective. Leverage must meet all of the following criteria: 

• It is verifiable from the records of the contributor, the recipient, or other entities that access and use the resources; 
• It is measurable;
• It creates a tangible and intended impact under a project; (Source: Appendix B: Key Definitions USAID Private Sector Engagement Policy 45)  
• Its availability is attributable to USAID’s engagement; and 
• It is not counted in the approved budget as cost-share, as defined in 2 CFR 200.29. Leverage can originate from any non U.S. Government source, including, but not limited to, private sector entities, foundations, nongovernmental organizations (NGOs), universities, or other donors. (Source: USAID Office of Acquisition and Assistance and ADS Chapter 303) 

Market-Based Approaches: Market-based approaches use business models and catalyze markets to solve development and humanitarian challenges more sustainably and at scale. A market-based approach can engage low-income people as customers, and supply them with products and services they can afford; or, as business associates (suppliers, agents, or distributors), to provide them with improved incomes. When a market-based solution becomes commercially viable, the private sector has a financial incentive to continue and operate it at scale, which increases the sustainability of the intervention, and decreases the need for donor support over time. (Source: Adapted from Monitor. “Promise and Progress Market-based Solutions to Poverty in Africa”) 

Mission: USAID calls its in-country offices Missions. 

Partnership: A collaboration between two or more actors with aligned objectives, shared risk and shared reward. There are many different types of partnerships, in both business and development. 

Implementing Partner: Implementing partners manage the implementation of project activities associated with a partnership. They ensure all activities are delivered on time, to budget, and in pursuit of identified objectives. As a neutral party, they measure and report on impact achieved to support internal and external communications about the partnership.

Private Sector Engagement (PSE): PSE is a strategic approach to planning and programming through which USAID consults, strategizes, collaborates, and implements with the private sector for greater scale, sustainability, and/or effectiveness of outcomes.

Risk Mitigation: Strategies and approaches aimed at managing and controlling risk. In the context of PSE, risk mitigation is any strategy, approach, or tool that reduces the risk of investment for private sector partners, USAID, local communities, or host countries.

Shared Value: A management strategy in which companies find business opportunities and create economic value in addressing social issues. This contrasts with corporate philanthropy and social responsibility efforts that focus more on the license to operate, “giving back,” or minimizing the harmful impacts of a business. (Source: “Creating Shared Value: How to reinvent capitalism — and unleash a wave of innovation and growth,” Michael Porter and Mark Kramer. Harvard Business Review. February 2011)

Sustainability: The ability of a local system to produce desired outcomes over time by obtaining the resources necessary to produce those outcomes. Programs contribute to sustainability when they strengthen a system’s ability to produce valued results, to generate or attract needed resources, and to be both resilient and adaptive in the face of changing circumstances. 

Additional terminology can be found:

USAID Private Sector Engagement Policy