A bill to amend section 123 of the Foreign Assistance Act of 1961, relating to private and voluntary organizations and cooperatives, in order to enhance the private-public partnership for foreign assistance.

Amends the Foreign Assistance Act of 1961 to make findings that private and voluntary organizations and cooperatives have proven to be an efficient and effective means of providing people-to-people assistance which benefits the lives of the poor and builds long-term friendships for the United States. Requires the Administrator of the Agency for International Development (AID) to increase the involvement in assistance programs of such private nonprofit channels for the delivery of assistance, without compromising their private and independent nature.

Specifies that the Administrator shall undertake to: (1) develop specific mechanisms for regular consultation, in the formulation of development strategies for countries and sectors, with private and voluntary organizations which have development experience; and (2) provide assistance to those organizations to support improvements in their planning, management, evaluation, and coordination activities.

Encourages the Administrator to fully support and encourage development education programs. Makes findings that such organizations can play an important role in development education to inform and involve U.S. citizens in programs about developing countries or in the development process.

Provides U.S. and indigenous private and voluntary organizations with increased amounts of local currencies owned by the United States or generated through agreements with host countries, the Agricultural Trade Development and Assistance Act of 1954, or the Agricultural Act of 1949. Encourages the Administrator to provide financial assistance in dollars to initiate and supplement private resources of U.S. private and voluntary organizations for technical assistance and administrative costs associated with such local currency programs with partner institutions in foreign countries.

Directs that not less than $20,000,000 in each of FY 1988 and 1989 be made available to private and voluntary organizations for food programs that reach the poor in conjunction with food made available under the Agricultural Trade Development and Assistance Act of 1954 and the Agricultural Act of 1949.

Makes findings that one of the most effective and least costly ways to maintain and restore the natural resource base in developing countries can be through small-scale, affordable, participatory projects using methods suited to the local environment. Specifies that assistance provided under this Act may be used to support private and voluntary organizations in carrying out resource conserving development projects, training, and educational programs to promote sustainable agricultural development practices.

Requires the Administrator to use not less than $20,000,000 of funds made available in each of FY 1988 and 1989, or an equivalent amount in local currencies, for a program pursuant to which grants are made to U.S. private and voluntary organizations for use in financing small loan activities of private indigenous organizations.

Extends the private voluntary organization funding floor for FY 1988 through 1992 and raises the level of such fundings from 13.5 percent to 15 percent of specified appropriated funds. Increase from 16 percent to 25 percent the target level of the private and voluntary organization funding goal.

Specifies that funds may not be made available to any U.S. private and voluntary organization which obtains less than 20 percent of its total annual funding for international activities from sources other than the U.S. Government.