Who is required to use the USAID Poverty Assessment Tools?

All projects and partner organizations receiving at least US$100,000 from USAID in a fiscal year for microenterprise activities in countries with a USAID-approved tool are required to report. To identify partners who received this significant amount of funding, USAID will presume that any implementing partner, in a country with a USAID-approved tool, that spent at least $100,000 in obligations to support microenterprise development in the previous fiscal year will need to report using the tool, as will any partner with at least $100,000 in projected obligations for the current fiscal year. All funding accounts with microenterprise activities undertaken as part of broader programs count toward this total, including PEPFAR, ACI, and Title II. Implementing partners that demonstrate that their current fiscal year expenditures on microenterprise development fall short of the $100,000 threshold may seek exemption from the reporting requirement.

Currently approved tools can be found on the povertytools.org website at USAID Tools. Updates listing newly approved tools will be available on the povertytools.org homepage, and the new tools and accompanying data entry templates will be added to the USAID Tools page of the povertytools.org website once they are finalized. Organizations in those countries meeting the criteria above are currently required to use the tools to report on their outreach to very poor clients for the 2007 fiscal year. (Partners in countries that lack a tool will continue to report using the poverty loan proxy, as in the past.) Additional country tools are in the final stages of development and will be added to the povertytools.org website once they are finalized. Partner organizations should monitor the povertytools.org website to determine whether a tool is available for the current fiscal year for the country in which they operate; also, organizations are encouraged to subscribe to the PAT listserv to receive notification of newly certified country tools and new or updated training materials.

What exactly does the congressional legislation require?

The Microenterprise for Self-Reliance and International Anti-Corruption Act requires that 50% of all USAID microenterprise resources benefit the very poor; this legislation was further augmented by the Microenterprise Results and Accountability Act of 2004. The legislation defines the term very poor as those households living in the bottom [poorest] 50% below the nationally defined poverty line or those living on the equivalent of less than $1/day (in Purchasing Power Parity, or PPP) The 2004 law requires USAID to develop, field test, and certify no fewer then two low-cost, accurate methods for partner institutions to assess the poverty level of their current and prospective clients. In actuality, USAID is developing country-specific tools, having concluded that two tools alone could not identify the very poor with reasonable accuracy across the wide range of countries in which USAID supports microenterprise development. Partner organizations applying for microenterprise assistance in countries for which USAID tools have been developed will be required to begin using the tools to determine and report the poverty level of current and prospective clients.

How will the poverty level results affect a partner organization's funding? What if less than 50% of its clients are very poor?

The legislation requires that Agency-wide, at least 50% of USAID funding for microenterprise activities reaches the very poor as defined in the legislation. While the results from individual partner organizations will contribute to this statistic, the objective is to get a global figure for USAID's overall funding and not to influence the funding of individual partner organizations. It is expected that this portfolio will include organizations with a range of client poverty levels.

Will implementing organizations be given additional funding under their existing contracts to fulfill the U.S. Congress-mandated poverty assessment requirements?

No. The implementation of a poverty assessment tool should be considered part of the project's existing reporting requirement.

How do the new requirements affect projects or partner organizations that provide non-financial business development services? How are beneficiaries defined for these interventions?

The legislation does not distinguish between financial and non-financial microenterprise development interventions. In a country with a poverty assessment tool, all partner organizations receiving funds for microenterprise assistance from USAID will be required to begin using that tool to report on the poverty level of clients. Determining the client pool from which a partner organization will sample can be determined in conjunction with the USAID mission, as well as with added guidance from the PAT Help Desk at pathelp@iris.econ.umd.edu.

Will USAID country missions be responsible for ensuring that 50 percent of the program clients in their countries are very poor?

No. The legislation requires that 50 percent of microenterprise funding from USAID as an agency, not from each individual mission, reaches the very poor. This does not mean that 50 percent of the program clients of each mission, nor each individual organization, must be very poor.

Will USAID country missions need to verify poverty assessment results from the implementing partners before the partners report to MRR?

No, partner organizations are responsible for properly implementing the poverty assessment tool and reporting results directly to MRR. Prior reporting procedures to MRR will not change; the PAT results will simply be an additional statistic on the report. Reporting will be conducted through the MRR website, and compliance will be monitored in partnership with missions.

What is the role of the USAID country mission in translating tools and training materials?

Each partner organization is responsible for ensuring that its survey is being carried out according to the standards laid out in the Poverty Assessment Tools Implementation manual. This responsibility includes ensuring that tools are translated in the appropriate languages, back-translated into English to ensure accuracy of meaning, and then distributed to the staff carrying out the survey. The USAID mission can aid the partner organizations working in its country by coordinating these translation efforts so that all affected organizations share equitably in the effort and expense rather than each bearing the full costs of translation.