At the end of April I was sitting in a room in Oxford; A room I'm not normally in. Yet there I was, the CEO of a Somali organization, behind closed doors with the leaders of some of the most important institutions in global development—Ford, Rockefeller, Hilton, Packard, Skoll.
Questions on the agenda: What comes after aid, and what should philanthropy do to help build it?
The background to this question is probably familiar. Official development assistance to decline by 23.1 percent in 2025, The Lancet An estimated 14 million additional deaths by 2030, And the emerging landscape leans towards development finance, country platforms and government-to-government agreements as seen in recent steps $2.5 billion US-Kenya health deal and the European Union €150 billion Africa-Europe investment package.
In other words, the funding system we have worked on for 60 years is fundamentally changing.
What is being designed is the financing architecture: new instruments, new treaties, new ways to route mixed capital. Something that is not being designed as carefully institutional architecture. That is, to look at how and which institutions are being supported on the ground to achieve this new reality.
South Africa's transitional infrastructure
Philanthropy cannot mathematically make up for what bilateral aid has lost. But our emerging models assume that capable counterparties exist at the receiving end of finance and at the required scale. In most parts of the world, this is far from the truth. Here, one of the clearest examples of why these institutional counterparts are so important can be found in the case that the development sector has filed under transitional justice.
In the mid-1980s, international donors rallied to support black South Africans living under apartheid, but many found that they could not ethically channel money through the apartheid government, nor rely solely on outside donations.
As a result, a coalition of American foundations, European governments, and South African civic leaders came together to discuss the problem and together they did something revolutionary: they funded transition infrastructure.
Ford FoundationThe Rockefeller Brothers Fundand this Carnegie Corporation helped establish Legal Resource Center (LRC) and Center for Applied Legal Studies In the Witwatersrand. He created a cadre of public interest lawyers, constitutional thinkers and civic leaders – and helped design legal and administrative operating systems for the post-apartheid world. LRC led arthur chaskelsonFirst President and Resident of the Constitutional Court of South Africa fink hessomWho later drafted important parts of the post-apartheid constitution.
This alliance also helped in funding Kagiso Trust. Founded in 1985 by South African civic and church leaders including Desmond Tutu and Eric MolobeyKagiso was a South African-controlled vehicle to transfer international money to black civil society while bypassing the illegitimate state. Here, the European Community Special program for victims of apartheid Committed approximately 450 million ecu ($524 million) over eight years, with Kagiso as its largest single channel.
How much construction was done with that amount matters more than the money itself. it sowed the seeds Kagiso Trust InvestmentsOne of the first significant Black-controlled investment vehicles. it was paid thousands of black students To attend universities designed to keep them out. It supported the Institute for Democracy in South Africa (IDASA), which ran back-channel negotiations between the African National Congress (ANC) and Afrikaner intellectuals, which helped make a political solution moot.
Kagiso was, in Molobi's own phrase 'Government in Waiting'; The civil society infrastructure is ready to be inherited by a country. It forced South Africans to build the unwieldy, vital machinery of a waiting state – grant making, financial control, procurement, audit, community accountability – and was a rehearsal space for democratic development administration.
Creation of a constitutional core
What those donors understood is that redistributing wealth is not enough. New tools and agreements do not create locally rooted institutions or leaders ready to build and advance the new architecture. That construction needs to be intentional and as a parallel project. This is what is lacking today.
When the apartheid accord was reached in 1994, the institutions were ready. Some people went to the government. Chaskelson on the Constitutional Court. Bursary alumni fill the public service, universities, law firms, the press, and although there are still deep unresolved injustices in post-apartheid South Africa, the Foundation has endured.
So, what if we trained a constitutional group of local leaders for the post-aid era? What if, like Kagiso, we capitalized on the closest intermediaries to where aid is going, and gave them a runway to learn the institutional work that aid has spent 40 years doing around them? Philanthropies and governments should think like this.
experimental architecture
Bringing this story to the present day, I should mention that I run Iftin Global and preside over shako platformSomalia's first locally owned development alliance for youth employment.
In late 2022, the Dutch Ministry of Foreign Affairs sought to award $4.5 million to a consortium of four Somali-led organizations working on youth employment and economic integration, and it chose us, a small neighborhood organization, not an INGO or Beltway contractor, as the lead recipient. Its purpose was to test whether the Somali-led coalition could absorb development funds directly without the layer of brokerage that has existed for 60 years between donors and the land. We were experimenting and the embassy was honest about it.
The difference became visible within a few weeks. Our partners had never managed a direct donor relationship on this scale, never run the financial reporting, procurement, or compliance arrangements that INGOs like Mercy Corps routinely handle. We were working, but we didn't have the architecture for it yet.
For 18 months we filled gaps in real time. We hired finance staff to manage donor compliance, taught partners to write reports they had never read, built procurement and monitoring and evaluation (M&E) while running programs through them, negotiated with the embassy in terminology we were still learning. Much was clumsy and we spent as much time on institutional capacity as on the programs themselves.
That grant closed last October. The program was successful: more than 2,500 Somali youth were placed in employment, 335 businesses were started or expanded, and the program cost approximately $1,000 per young person hired. For comparison, programs provided by international NGOs in fragile states often run orders of magnitude higher after expatriate wages, regional centers, and intermediary overhead are factored in.
As stated, the Dutch funding will not be renewed; Priorities have shifted elsewhere. But the infrastructure we built is in place and the platform is set for the next phase. We are raising capital from Somali private sector partners and local financial institutions to build on the systems and credibility built over the donor-funded period. Funding ended. The architecture remained intact.
The untold problem of 'locally led' development
We managed to escape the untold danger that lies at the heart of the infection with aid, but many are not so lucky.
When colonial administrations left Africa between the 1950s and 1970s, they had spent a century deliberately limiting local administrative capacity. Migrants carried institutional knowledge with them in their heads, and those who inherited independence inherited the form of the state, but not its substance.
The international aid system of the last forty years has structurally done something similar. INGOs and contractors had institutional capacity; Local organizations with community ties were the subcontractors. When the support system now shrinks, it is no more prepared to receive what is being handed over than the post-colonial civil services of 1962.
South Africa escaped this void in 1994 because the architects of Kagiso and the LRC saw it coming. They understood that if you do not deliberately build the people's administrative machinery before the transformation, they will inherit a hollow country.
Runway for Institutional Courage
This is not an argument against locally led development. This is an honest argument for what locally led development requires.
This requires a transition period in which locally controlled institutions are raising funds, building capacity, and delivering programs at the same time, and being trusted by donors to fight through that transition without losing funding at that moment.
Kagiso had that runway. The European Special Program stuck with it for almost a decade, through emergencies, civil war and constitutional negotiations, while the institution learned what it was. The architecture being designed today does not yet provide this.
We don't need more pilots. There is already a generation of locally controlled intermediaries doing this work in Africa –Kenya Community Development Foundation, TrustAfrica, African Women's Development Fund– though all are chronically undercapitalized. They should be ten times more numerous, have ten times better resources, and be made to last longer than the donor cycle that started them.
Philanthropy should be funding this unwieldy machinery: finance teams, M&E, audits, unrestricted reserves, leadership pipelines but instead a An estimated $251 billion sits idle in donor-advised funds. only in 2023 4.5 percent of trackable humanitarian funding went straight to local actors and this crisis is a test of whether philanthropy's own architecture can survive a moment of relevance.
Are we creating institutions that nations will inherit and run, or delivery systems that will collapse the day we stop paying for them? I believe this should be the first. The window to exercise the choice made by apartheid-era funders in 1986 is now open. It won't remain open for long.
Mohammad Ali Dini Is a director of Iftin Global.