(AP photo by Evan Vucci)
The Global Development Council recently published its 'Progress to Date and the Way Forward' report. In this blog post our CEO, Alix Zwane, touches on some of the report's themes from the perspective of the Global Innovation Fund.
I recently spent some time reading the Global Development Council’s ‘Progress to Date and the Way Forward’ report, published in October. In pointing to the fact that we know more than we ever have about what works in development, and by reminding us that the drive to improve the lives of the world’s poorest people is now being led by a broader range of actors than ever before, the report was a brain tonic that left me feeling grateful for the progress we have made in global development.
But it also got me thinking about GIF’s place in the world. There’s no doubting that meaningful and wide-ranging progress has been made against each of the recommendations that the Global Development Council set out when the current administration took office, but how have we as an organisation contributed to this progress in practice?
Picking up on a few themes from the report, I wanted to share some thoughts.
Embracing social impact investing and emerging finance tools
Too often, less established innovations with the potential to make a transformative social impact struggle to secure the finance needed to begin their journey. If we are serious about tackling the world’s biggest development challenges head-on, funding decisions need to be based as much on an evidence-based assessment of an innovation’s potential for social impact as on financial rates of return.
At GIF, we are committed to partnering with promising innovations early to help them on their path to scale. To echo Owen Barder and Theo Talbot, we use the right financial instruments to support an innovation’s particular funding needs – whether through grants, debt and equity financing, social impact bonds or crowding in private sector funding – and to ensure that we are paying for success by linking our payments to specific and measurable outputs. I think part of the reason that our funders set up GIF was precisely to use this range of instruments, and are glad to see that we are.
Spur innovation and focus on results
We know that promising innovations can come from anywhere and be at any stage of maturity, and so having the flexibility to partner with innovators across the spectrum is important. Our tiered funding model means that we can spur innovation by taking smart risks – as well as supporting proven innovations, we also back the most promising entrepreneurs early on as they go through pilot testing and set out to prove the viability of their business model.
But we also want to make sure that funds are spent well. When it comes to agreeing whether and where to direct our funding, outside peer review is at the heart of our decision-making process. Each investment we make is appraised by the highest quality external reviewers who are thought leaders in their field. From Darby Jack (Assistant Professor of Environmental Health Sciences at Columbia) through to Rachael Watson Chieza (CEO of Every Child Fed) and many more besides, we have built up a wide network of rockstar reviewers whose input has been immensely valuable in helping us to develop our portfolio.
Supporting accountable resource mobilization and lower transaction costs for remittances
Supporting initiatives that help developing countries and their citizens to improve the transparency, accountability and governance of resources is an important part of the GIF portfolio. In July this year we partnered with Afrimarket, a low-cost, cash-to-goods service for sending remittances such as food products, sanitation products and construction materials to West Africa, increasing remittance flows through reduced sender costs.
We also recently awarded a £3m grant to the Behavioural Insights Team to fund a pilot which will take behavioural approaches and apply them to development challenges in four lower-middle income countries: Bangladesh, Guatemala, Indonesia and the Philippines. To begin with, this work will be on increasing tax compliance, helping to grow revenue for essential public services and building capability in the use of behavioural and experimental approaches amongst government officials. Over time, the ambition is that these approaches will then be applied to more complex poverty and sustainability problems.
Creating and fostering entrepreneurship for women and youth
As we continue to build our portfolio we are also focused on investing in initiatives with the potential to help people to empower themselves and harness their entrepreneurial potential – particularly women and young people.
Educate! – one of our investees – is a great example. Using a £210,000 grant from GIF, the team at Educate! is testing an innovation that aims to transform education in Africa to teach youth to solve poverty for themselves and their communities. The signs are hugely positive – evidence from the team’s RCTs have shown that female Educate! graduates earned an average of $200 more per year than their peers in the control group, whilst business-owning amongst women who graduate from the scheme is 152% above average. The goal is to make this practical, skills-based model part of national education systems and promote government adoption of the initiative.
Looking to the future
While the report rightly commends the work of the current administration in advancing global development over the past eight years, I am reminded of my visit to the White House Global Development Summit in July where a number of senior administration figures praised the progress that was made under the Bush administration, particularly in the area of global health.
It poignantly illustrated that, for many years now, a meaningful commitment to development has transcended partisanship as governments have in turn confronted global poverty with innovative, market-driven approaches. Here at GIF, we are confident that investing for the social good will remain a priority and that, together, we can maintain our considerable momentum in seeking to overcome the world’s most important development challenges.
- Alix Zwane