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Why do we have a staged funding approach?

At the Fund, our goal is to scale innovations backed by rigorous evidence. So every investment we make is designed to support innovations on their path to scale. However we recognise that some of the promising innovations that will change the development landscape are currently only in their infancy. That’s why we have the flexibility to support innovators from early stage field pilots right through to large scale innovations.

Borrowing from the experience of venture capital, The Fund uses a tiered financing model and offers three stages of funding. The goal of our staged funding approach is not to fund small organisations that stay small, and medium sized interventions that stay medium sized. It is to support organisations to scale up to reach millions of people.

This staged funding approach also allows the Fund to manage risk sensibly. We are able to take smaller bets on riskier, unproven innovations at the pilot stage. We are able to invest larger amounts in innovations that have demonstrated strong evidence of success, through rigorous impact evaluations where possible. By meeting the financing needs of innovators from the seed stage right through to expansion funding, The Fund aims to transform high potential ideas into impact at scale.

How does our staged funding approach work?

A stage is defined by how far an innovation is in its development and by the level of evidence that supports its potential for success. The Fund expects that applicants will be able to demonstrate greater evidence of effectiveness in order to get higher amounts of funding from GIF.

Pilot (up to $230,000 USD)*

PilotAt the Pilot stage, the fund provides seed capital to support the startup and field-testing of innovations. The goal of this stage is to refine the basic concept or business model and establish the viability of an innovation at a small scale through testing in real world contexts. This stage could include initial research and development, introducing an innovation to target customers, assessing user demand and willingness to pay, or documenting social outcomes and costs of spreading the innovation.

At the fund, we value any relevant evidence or research findings that demonstrate why the innovation is needed, such as evidence of customer demand or interest in the innovation, however, we do not expect that strong evidence already exists to prove the value of the innovation. At the Pilot stage, detailed operational plans are not necessary but teams should develop clear metrics to judge success.

Test & Transition (up to $2.3million USD)*

TestAt the Test & Transition stage, the fund supports innovations that have already demonstrated success at a small scale. This stage is for innovators who require support for continued growth and for assessing the likelihood that the innovation can achieve social impact and/or market viability at a larger scale. During this transition period, innovators may require funding to test new business models or to make operational refinements.

During this stage, innovation teams should propose an appropriate strategy to track and rigorously assess social impacts, cost-effectiveness, operational feasibility, and/or commercial viability if relevant. For solutions that will require significant public resources to transition to scale, this stage typically includes rigorous testing of social impact and cost-effectiveness, often through randomised experiments. Funds can also be used to build paths to sustainability and scale.

Scaling Up (up to $15million USD)*

ScaleAt the Scaling Up stage, the fund supports the expansion of innovations that have already demonstrated a strong track record of social impact and effectiveness. This category of funding helps innovators transition successful approaches to a large scale, usually with the goal of eventually achieving widespread adoption throughout one or more developing countries. Activities at this stage could include addressing operational challenges for scaling up; working with partners who will help scale the project beyond our support (e.g. investors, existing large commercial firms, developing country governments, etc.); adapting and expanding innovations to different contexts/geographies; or assessing ways to drive cost-effectiveness as the scale continues to increase.

For innovations with scaling up pathways that require sustained long-term public or philanthropic support, rigorous evidence of social impact and cost-effectiveness relative to alternative approaches is required at this stage. Innovations scaling up through commercialisation should be able to demonstrate that their innovation has passed a market test, meaning that revenues exceed costs and/or the innovation has attracted further growth capital from the market.

Before applying, applicants are asked to review additional information on the page “what type and amount of funding should I apply for?’.

 

* Please note that this is the maximum amount considered at this stage, most of our investments are significantly smaller than this.