Could paying for results (finally) help us learn?

MonitoringWaterfall

Source: Scott Chaplowe, International Federation Red Cross and Red Crescent Societies

I came across this really interesting blog post recently (shout-out to Instiglian Michael Eddy for sharing) by a disgruntled M&E consultant.

S/he asks a simple question: why are NGOs so slow to use monitoring data that could improve the effectiveness of their work?

The answers were spot-on and made me wonder whether – and to what extent – paying for results (often referred to as “results-based financing“) helps address some (if any) of these challenges.

I’ll just go down the list:

Reason 1: Most of the data that NGOs collect is useless, usually geared towards measuring a small/narrow number of quantitiative indicators that have little to do with the actual program. 

As someone who believes in and promotes RBF, I tend to be a big fan of outcome metrics, indicators and measurement. Having said that, I completely agree that the types of metrics and indicators used by most NGOs have little to do with their actual programs and theories of change. But I think it’s important to understand the underlying reason for that: most NGOs’ M&E frameworks (and therefore the data they collect) is driven by donors agendas. Indeed, rare is the donor who disburses “unrestricted” funds; instead, most donors fund a specific project that advances their narrow strategic priorities and impose their own methods and indicators for measuring success. So, dozens of donors –> dozens of M&E frameworks –> useless data for the NGO –> few opportunities (or incentives) for actual learning.

In an RBF contract, the donor is not paying for projects per se. Instead, s/he is purchasing an outcome (i.e. a 10% reduction in the incidence of malaria in a given community) regardless of which programs – or combination of programs – it took to get them there. This should, in theory, promote the use of metrics and indicators more closely aligned with NGOs’ theories of change. A major assumption, however, is that donors are both willing and able to wash their hands clean of any programatic decision-making once an outcome has been agreed…this is where third-party intermediary organizations can add value in terms of negotiating contracts and setting the record straight.

Reason 2: Pressure to spend quickly means there is little incentive (or need) for learning.

The pervasive disconnect between funding disbursements and programmatic realities on the ground is a huge problem in development…and usually comes from the top (i.e. the donors). Again, there’s a reason for that: if U.S. government agencies don’t spend all the money they’re allocated in a given year, their agencies will get less money the following year. For foundations, there are serious tax/legal ramifications for not disbursing a certain percentage of their endowment each year. Yes, the system’s messed up. Unfortunately, RBF alone won’t provide a solution. While it’s true that paying for results in one lump sum at the end should in theory remove the perverse incentive to spend, spend, spend, if donors are unable (for legal reasons or otherwise) to set aside a pool of money that just sits there for a couple of years and does nothing, RBF won’t stand a chance. Donors need to figure out a way around this ASAP.

Reason 3: Short-term projects often leave little time for staff to really learn from M&E. 

It’s true that most donors fund projects on a short-term basis…too short to enable any real focus on outcomes or learning. In an RBF contract, because outcomes are precisely what donors are paying for, they should be committing funds over longer time horizons. However, this is assuming that the donor has the legal authority/political will to actually commit – and hold on to – funding over multiple years in the first place (see previous grumblings).

Reason 4: Learning from monitoring data requires some kind of process to allow organizations to feed this learning back into performance. Donors don’t typically make this easy (em, DFID) by imposing rigid logframes that are impossible and/or take forever to amend. 

Don’t get me started on logframes. Suffice it to say that in an RBF contract, the idea is that once an outcome has been agreed and the donor has committed to paying a specified amount for that outcome, donors wash themselves completely of any programmatic decision-making. That includes changes to our beloved logframes.

Reason 5: NGOs genuinely don’t have a clue about how to actually improve programs. That’s because development is complex and programs typically aim to do ridiculously ambitious things.

I agree that development programs are complex, which is why a hands-off, more flexible approach like RBF might be preferable to a rigid, linear funding model. I also agree that many NGO programs aim to do ridiculously ambitious things. In some ways, because RBF requires both donors and NGOs to focus on things they can actually measure (ironically, this is a common criticism of RBF), perhaps RBF can help bring things down a notch…and in a good way. Start small, think big.

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A Development Impact Bond for Nutrition?

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Credit: DFID

I recently had the privilege of participating in a half-day private workshop on the suitability of development impact bonds (DIBs) to the nutrition sector, organized by some serious rockstars at the Center for Global Development (CGD). Participants included an impressive mix of nutrition experts, finance professionals, innovation gurus, and leaders from across the government, nonprofit and international organizational sectors. If you’re asking how in the hell I got invited (good question), I used to support CGD’s work on development impact bonds.

Here are my three main takeaways from these discussions.

1. While we shouldn’t expect DIBs (or any instrument for that matter) to be a “magic bullet” in solving all the nutrition sector’s problems, there is strong appetite among the nutrition community to try something new, and DIBs offer a promising new business model to test out.

Yes, progress has been made: the global prevalence of stunting in children under the age of 5 has decreased from an estimated 40% in 1990 to 26% in 2011 – that’s a whopping 35% reduction (UNICEF 2013 Report). But progress is fragile and unevenly distributed across the globe, with some countries making huge strides (i.e. China, which accounts for the bulk of that progress) while others fall behind. In 2011, stunting affected a staggering 165 million children, mostly in Asia and sub-Saharan Africa.

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Source: UNICEF 2013 (CLICK TO ENLARGE)

How much will it cost to make this problem go away? In 2013, The Lancet estimated that scaling up 10 “proven” nutrition interventions in 34 high-burden countries would reduce global stunting prevalence by 20% and cost $9.6 billion…per year. Just to put this in perspective, last summer world leaders convening in London for an historic “golden moment” focused on tackling undernutrition raised $4.15 billion up to 2020. Not exactly a “sexy” international development issue.

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Lives Saved Tool Model, as appeared in Lancet Maternal and Child Nutrition Series 2013 (Bhutta) (CLICK TO ENLARGE)

Even then, raising the money is only part of the solution – you’ve still got to deliver results. And that means understanding not just the direct causes of undernutrition but also its underlying causes – things like poverty, agricultural productivity, climate change, behavioral norms, gender inequality – and getting everyone to agree and work towards the same goals in a coordinated, collaborative and flexible manner. I’m going to go out on a limb here and say that’s probably not going to happen… unless we radically change the way we do aid.

By providing upfront funding, aligning incentives and establishing a coordinating body singularly focused on achieving results and managing performance, DIBs offer a promising new business model for aid…one that has yet to be tested.

2. “Value-for-money” does not mean “cheap.”

In the wake of the global financial crisis and tightening aid budgets, donors are eager to get “value for money,” hence their active interest in DIBs and other instruments that aim to improve the effectiveness of aid and/or get private actors to pick up some of the slack. However, although DIBs could offer donors incredible value for money (they pay for results ex poste, thereby outsourcing risk to private investors), that doesn’t mean they come cheap.

Conducting feasibility studies, running cost-benefit analyses, negotiating contracts, agreeing suitable outcome metrics, setting up data collection and measurement systems are all key to setting up a rigorous DIB pilot, but unfortunately come at a price, especially if they are to be done right. Just ask Dalberg, the development consultancy firm that’s now in its second year of putting together a bond for malaria in Mozambique.

But is this really such a bad thing? If we – the aid community – aren’t already doing all these things, shouldn’t we be? And aren’t DIBs exactly the kind of instrument we’ve been looking for to help us do all the things we know we should do – but can’t seem to operationalize?

I think an important distinction needs to be made here between “transactions costs” vs. the cost of doing aid well. While there will certainly be very real transactions costs associated with doing early DIBs, as with any new initiative, these costs are likely to decrease with time and practice. What we shouldn’t try to avoid are costs associated with making sure our aid money does what it’s intended to do. We just can’t afford to.

3. Partner governments’ involvement in the design, co-financing and/or implementation of DIB pilots will be key to their long-term sustainability and scale-up.

The sheer magnitude and complexity of today’s global development challenges means that donor resources alone just aren’t going to cut it, even if it’s channeled through an innovative financing mechanism like DIBs.

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Source: Investment for Poverty, Development Initiatives CLICK TO ENLARGE

According to Development Initiatives, government spending in developing countries is now $5.9 trillion per year and growing at a rate of over 5% per year, presenting a huge opportunity for developing country governments to participate and advance their own development agendas.

Granted, not all developing countries are growing at equal rates. The poorest countries still face severe spending constraints that are likely to continue. The role of DIBs in these countries will be to target donor resources and build up the capacity of local governments to commission and oversee effective service delivery. However, donors would be wise to rollout DIBs as part of a broader package aimed at strengthening partner countries’ capacity, like helping to put a plug on illicit financial flows that drain billions from developing countries’ budgets, often ending up in secret bank accounts in those same donor countries (click here to see CGD’s work on this).

In the ever-growing number of middle-income countries, which exhibit exceptionally high growth rates but face unsustainably high levels of inequality, donors could play an important role in testing out a new and innovative model that, if proven to work, could move developing country governments to adopt it for themselves.

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Donors opening their doors to business – what to make of it

The UK has recently joined the ranks of a growing number of rich countries – including Sweden, Finland and the Netherlands – that are shifting the focus of their development efforts away from traditional grants to “blended finance” models that include loans, equity investments and guarantees to private sector actors.

Speaking at the London Stock Exchange this week, the UK Secretary of State for International Development Justine Greening announced a “radical shift” in policy that will see a doubling of aid focused on economic development activities to £1.8 billion in 2015-16 (from 2012-13 levels), greater partnership/co-investment with the private sector, and the appointment of DfID’s first director-general for economic development.

She had this to say about her agency’s new focus:

“I believe you can’t build a sustainable public sector without helping to build a private sector. Sustainable public services need a funding stream of tax receipts and that means a thriving private sector. A strategy to do one without the other risks a short term improvement for people in poverty without a long term plan to make sure those gains are locked in.”

In recent months the European Union has also embarked on a process of redefining how it plans to engage and integrate the private sector into its development strategy, with a new communication planned for June.

A number of important trends are pushing donors in this direction, with important implications for traditional aid:

  • Most of the world’s poor now live in middle-income countries where aid is a decreasing share of resources available for development (compared to domestic resources, for instance). Since aid is no longer the “game-changer” it used to be, donors must find ways to stay relevant and add value in a changed development landscape, by catalyzing markets;
  • The global financial crisis means that donors/governments have less money to work with and must therefore find creative ways to leverage limited resources and unlock additional sources of funding; and
  • The world is becoming increasingly globalized, which is a double-edged sword: on the one hand, the nature of today’s problems are increasingly complex (too complex for any single actor to tackle on their own); on the other, a more interconnected world translates into increased opportunities for mutually beneficial partnerships among a growing diversity of players. Donors must find ways to break down traditional barriers and effectively partner with them.

“Blended finance” and innovative finance more broadly offer an opportunity to do all that and more. However, important questions need to be addressed, not least of which is: How can we ensure that such projects do not become a loophole for cash-strapped donors to limit increases to their development budgets by investing in activities with a cash-back guarantee but little development impact, or worse, by diverting aid resources to promote domestic commercial interests?

We know better than to assume that any and all activities that contribute to economic growth will automatically translate into poverty reduction (as evidence by a recent UN report). We also know that the evidence base for the development impact of public-private partnerships is scarce (here’s one review of the available evidence). So, how do we make aid fit for purpose in the 21st century while ensuring that scarce public dollars are being used effectively to combat poverty?

That is the question. 

While I don’t have any enlightening answers for you (and would love to hear from folks who do), it seems that the extent to which this new trend goes “mainstream” will depend at least in part on whether such activities will count towards countries’ overseas development assistance (ODA), and thus, the 0.7% GNI target that donors are scrambling to meet by 2015. Under the current definition, most innovative finance mechanisms do not qualify as ODA due to strict rules on concessionality, flow characteristics and intermediaries. However, efforts are currently under way to try to modernize it. It’s an important space to watch in the coming months.

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How can aid achieve so much yet add up to so little?

A lot has already been said, written, tweeted, etc. about Bill and Melinda Gates’ highly anticipated annual letter, which paints a rather hopeful and optimism picture of the world, by dispelling three myths they believe keep the world from accelerating on the fight against global poverty and disease.

If you haven’t read it, the myths are:

(1) that poor countries will always be poor;

(2) that aid is a big waste, and

(3) that saving more lives means there’s less space and food for the rest of us, so it’s better to let some people die (I have yet to meet anyone who’s actually made this argument, but maybe I just don’t get out enough).

The couple argues that, contrary to popular belief, the world is getting better (in fact, they go so far as to predict that there will be no more poor countries (not people) left in the world by 2035), that aid is working, and that saving lives will actually help decrease the world’s population, because as people’s incomes grow and more of their children survive, they will choose to have less kids.

I have thoughts on all three, but wanted to comment on one specific thing that caught my eye (apart from the awesomeness that is Bill Nye the Science Guy).

I agree with Mr. Gates that the world is getting better. That’s definitely cause to celebrate.

However,  he makes the implicit statement that aid is the driving force behind these improvements:

“Aid also drives improvements in health, agriculture and infrastructure that correlate strongly with long-run growth. A baby born in 1960 had an 18% chance of dying before her fifth birthday. For a child born today, it is less than 5%. In 2035, it will be 1.6%. We can’t think of any other 75-year improvement in human welfare that would even come close. A waste? Hardly.”

Indeed, aid has proven to save lives. In the middle of his book White Man’s Burden, William Easterly (one of the best-known aid critics) lists several global health successes that were funded by aid, including:

  • “A vaccination campaign in southern Africa virtually eliminated measles as a killer of children.”
  • “An international effort eradicated smallpox worldwide.”
  • “A program to control tuberculosis in China cut the number of cases by 40 percent between 1990 and 2000.”
  • “A regional program to eliminate polio in Latin America after 1985 has eliminated it as a public health threat in the Americas.”

But, as Chris Blattman writes in his blog, there is very little evidence to suggest that aid has any impact at all on overall economic development.

So, how can individual aid projects achieve so much yet add up to so little? Could it be that not all aid is created equal?

In his letter, Mr. Gates differentiates between aid that is sent directly to governments (which he implies fosters aid dependence) from funding that is used for research into new tools like vaccines and seeds (which he says saves lives):

“The money America spent in the 1960s to develop more productive crops made Asian and Latin American countries less dependent on us, not more. The money we spend today on a Green Revolution for Africa is helping countries grow more food, making them less dependent as well. Aid is a crucial funding source for these “global public goods” (GPGs) that are key for health and economic growth. That’s why our foundation spends over a third of our grants on developing new tools.”

While it’s commendable that the Gates Foundation spends a third of its money on research and global public goods, it’s certainly not how most donors spend their money: of $125 billion in annual official development assistance (ODA) only about $3 billion goes to GPGs, or a whopping .02 percent!

That certainly the case for the World Bank. Here’s what CGD’s Lawrence MacDonald has to say about that:

“Many casual observers imagine that that the World Bank, as the world’s foremost development institution and with near global membership, is well placed to take the lead on GPGs. But since the bank was founded more than 60 years ago, most of its resources and decision-making have been locked up in single-country programs designed in discussions with government officials and coordinated by ministries of finance.”

Could it be that aid works but we’re just focusing on the wrong things?

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Let’s talk about MeE!

 

Pile of BooksIn an attempt to downsize a shameless backlog of books, papers and articles I’ve been meaning to read over the last year, I thought I’d start with Lant Pritchett, Salimah Samji & Jeffrey Hammer’s groundbreaking paper on making impact evaluation a useful learning tool for tackling complex problems, “It’s All About MeE: Using Structured Experiential Learning (“e”) to Crawl the Design Space.”

It just so happens that this paper crept into my conversations twice last week (inner nerd emerging from post-holiday stupor), once over coffee with the brilliant and indefatigable Jeff Hammer himself (while I was trying to explain to him the pitfalls of “friending” his former students on Facebook, which he recently joined), and the second time over nachos and beer with some former grad school classmates at the 14th street corridor’s latest hotbed of culinary innovation, Tortilla Coast.

Needless to say, this paper’s been on my mind!

The paper’s main thrust is that while we’ve come a long way in how rigorously we evaluate development programs (hats off to the “randomistas” for heralding in a new age of ex poste evaluation with a counterfactual), much of its current practice is still too often embedded in top-down strategies for implementation and learning. In other words, we still think we know what the solution is before we’ve attempted to solve the problem, usually in the form of elaborate “theories of change” and rigidly defined “logical frameworks.”

It's not that simple (credit Flickr user futureatlas.com)

The problem is that development doesn’t work that way. It’s messy and non-linear because development involves people, who are complex, embedded in organizations, which are complex, embedded in institutions, cultures, norms, etc. which are…you guessed it, complex, making development = complexity∞. (If you haven’t already seen Owen Barder’s presentation and podcast on complexity, you should.)

Thus, small changes in project design can yield huge impacts on outcomes, and given that there are seemingly limitless ways to “tweak” programs, what works in one context in one particular instance can’t reasonably be expected to produce the same (or even similar) results in a different context, the primary reason why randomized control trials (RCTs) – the latest fad in international development – are limited in their ability to teach us anything useful about “what works” (more RCT-bashing from Lant Pritchett here).

So, faced with this reality, the best way to achieve results is through an approach the authors call structured experiential learning, or little “e” (as opposed to the “big” E of traditional M&E).

The approach adapts principles of evolution – namely, nature’s tendency to randomly mutate and replicate the stuff it likes (also known as natural selection) – to development.

The application of evolutionary biology to non-scientific endeavors is not new. The authors point to the example of Steve Jones, an evolutionary biologist who helped Unilever create a better nozzle for soap production by making 10 copies of the nozzle with slight distortions at random and testing them all, then taking the most improved nozzle and making another 10 slightly different copies and repeating the process. After 45 such iterations, he came out with a complex and unexpected shape, way better than the original and probably better than anything he could have pre-designed himself.

Structured experiential learning is the equivalent of this approach in development. It requires mapping the universe of possibilities, or the “design space,” of a particular project; admitting we don’t know what will work but making educated guesses about key parameters; testing different variations of key parameters sequentially; measuring outcomes meticulously and making necessary adjustments along the way until we get the desired result. It’s a 7-step process, as illustrated in the graph below.

Screen Shot 2014-01-10 at 4.35.36 PMThe thing I find most promising about this approach is that it offers an opportunity to learn about the thing we fail most at in development but spend the least amount of time trying to understand: implementation.

Impact evaluation involves two distinct causal models – one moving from inputs to outputs (which is internal to the implementing agency) and one moving from outputs to outcomes (which is external to it).

Most projects fail in the first stage – that is, the project design fails to produce the intended outputs due to implementation challenges. However, most “rigorous” impact evaluation (e.g. RCTs) focus exclusively on “impact,” thus missing out on a whole lot of learning. The little “e” offers an interesting solution.

The approach is not without problems, however. While it’s nice to talk about big donors loosening their ties and “going with the flow,” it’s hard to imagine how this could work in practice while donors remain in the business of providing money upfront.

Namely, when governments/donors provide money upfront, that money is gone regardless of whether or not “outcomes” are achieved; thus, prescribing solutions and focusing on inputs and processes becomes the only tangible way for donors to mitigate against the risk that programs don’t achieve their objectives (as far as taxpayers are concerned, at least).

It’s also just easier.

At the end of the day, it’s easier for donors to tell their grantees how they should spend their money, and then focus on making sure it was spent accordingly, than worry about the “impact” of programs (which is notoriously difficult, time-consuming, expensive, etc.), particularly if the former allows donors to check off the accountability box and get away with it. Donors are, after all, in the business of doling out money. The incentives just aren’t aligned in my view.

One way around this is to take governments completely out of paying for programs upfront – and have them pay ex post for results. This gives implementing agencies the flexibility to tailor programs and focus exclusively on achieving the desired outcome, while shifting risk away from donors. The problem is, who pays for the programs upfront?!

Under current approaches, the burden usually falls on developing country governments and/or nonprofits, often ill-equipped to assume full implementation risk. In my (perhaps biased) view, Development Impact Bonds (DIBs), a new financing instrument I’ve been working on for the past year with colleagues at the Center for Global Development, offers the best solution for little “e.”

In a DIB, private investors provide money upfront to roll out interventions and donors pay them back (principal plus a return, commensurate with success) if – and only if – outcomes are achieved. If outcomes are not achieved, investors lose all or part of their investment.

What are other ways to make little “e” work? How do donors see this playing out in their respective agencies? (I’m less interested in fringe movements and more interested in how we mainstream this kind of approach.) I’d love to hear from you.

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In other links…

Borrowing from other blogs I follow (see Cool Links), each week (let’s say Fridays?) I’ll try to post a round-up of links I like – things that catch my eye, blow my mind or just make me laugh.

Here’s my roundup for this week:

  •  The entire Intergovernmental Panel on Climate Change (IPCC) 5th Assessment Report….in 19 illustrated haiku! Will the scientist storytellers please stand up? We desperately need more of you.
  • Speaking of the devil, here’s a great article about how scientists (and all policymakers dealing with complex issues) need to overcome the problem of “storyphobia” and incorporate narrative structure into their communication endeavors – from a storytelling scientist himself!
  • If you haven’t heard already (it’s been all over the news), a new report shows that poor countries are losing $1 trillion a year to illicit capital flows – 7 times the volume of aid. Who’s financing whom here?
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“Is your data revolution like my data revolution?”

The release earlier this year of the UN High-Level Panel’s report calling for a “data revolution” has produced quite a stir among the international development community about what this actually means, why we need it and how we get on with it.

Attribution: Space & Light

Attribution: Space & Light

This was the topic of discussion today at an event organized by the Center for Global Development (CGD), with speakers from the Partnership in Statistics for Development in the 21st Century (PARIS21) (presentation slides are available here).

While we’re still a ways from a common definition, the idea behind a “data revolution” is that if the development community just had more data on how people are faring, where public – and private – money is flowing and the impact that programs are having, they could increase the pace of development, presumably through better, more informed policymaking.

I’m all about data and evidence-driven policymaking. But we all know that evidence is just one (some would argue quite small) driver of policymaking, particularly among poor, corrupt countries with limited capacity to deliver.

As Lant Pritchett aptly pointed out at a recent event on the current “fad” of randomized control trials (RCTs) as part of this broader movement towards evidence-based policy, one of the ironies of this movement is that its advocacy has been evidence-free – namely, there is little evidence (much less “rigorous” evidence) to show that evidence alone (in this case RCTs) affects policy in any significant way. Oxfam’s Duncan Greene has also blogged about this.

That’s not to say that evidence is not important – or that policymaking shouldn’t be more evidence-based. I happen to think quite the opposite is true. Without data, we cannot adapt programs, learn from our mistakes and improve results. The issue is that data – and technology – is just one component of the “data revolution.”

It’s also about politics. It’s about building capacity and strengthening institutions at the local level. It’s about changing cultures and mindsets. And it’s about getting data to be more demand-driven. At the end of the day, data is only as good as its ability to influence policymaking.

How can we incorporate these factors into a true “data revolution”? I think this is a question that too often gets pushed under the rug, including at this event.

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Scaling partnerships for public good

It used to be that public-private partnerships (PPPs) were a way for governments to outsource operational and/or financial risks (e.g. large infrastructure projects)…or just do things more cheaply, usually through rigid government contracts. Now we’re seeing PPPs evolve into a motley crew of players ranging from NFL stars to large multinational corporations to astronauts to tree-hugging campaigners coming together to solve a growing diversity of complex social problems traditionally in the exclusive domain of government agencies.

How these PPPs are taking shape in practice – and what it will take to sustain and scale them – was the topic of last week’s lightning round of talks on innovative partnerships and social innovation, organized by Deloitte and co-sponsored by Wharton’s Social Impact Initiative, New Profit Inc., and 1776.

Here are my main take-aways from these sessions:

(1) Finding the “right” partner is easier said than done.

Given the diversity of players involved in social issues today, identifying the “right” partner is difficult and not as straightforward as it used to be. It requires looking beyond the usual suspects, to understanding the entire “ecosystem” of players that might care about any given issue. The problem is that the innovators who have the solution to your problem are often 8 degrees removed from where you think they are, said NASA’s Jenn Gustetic. So how do agencies overcome with this?

  • NASA, for one, does it through prizes and challenges. They pay for access to existing communities and source their problems to thousands of contractors from various fields and reward the best idea. The 2009 second-place winner of an astronaut glove challenge was a stage designer that stitched the wings used by Victoria’s Secret models and now designs for NASA full-time.
  • Seventy percent of applications submitted to USAID’s Development Innovation Ventures, an open competition supporting innovative solutions to development problems, have come from organizations that have never done business with USAID, according to USAID’s Chris Jurgens. He also talked about Global Development Alliances, USAID’s flagship model for engaging the private sector.
  • More interesting is a new DC-based startup hub called 1776, which aims to connect social entrepreneurs to the resources they need to scale their ideas, whether it’s seed capital or the policy gatekeepers sitting down the street from them. They’re all about creating “density” and playing a convener role among seemingly unlikely partners in the social space. Very cool.

(2) Creating a “win-win” is key to sustaining (and scaling) these partnerships.

From the perspective of many in the government and nonprofit sectors, the challenge in engaging the private sector is getting them to “care” about social issues. The White House’s Jonathan Greenblatt responded to this best: regardless of how “socially minded” a company is, it’s always going to care about the bottom line, period. It’s not companies that have changed – but rather the economy in which they operate.

Companies are finally realizing that poor people are customers too – not just aid beneficiaries – and are thus responding to previously untapped business opportunities. The challenge is to find the sweet spot for collaboration. And because not every social problem will have a market-based solution, some problems will remain best handled by governments.

(3)   Measuring impact is hard without a common language.

The lack of common metrics to measure impact is emerging as a common problem to scaling impact investing more broadly. More on this later.

I hope these talks are the start of an ongoing conversation that includes: identifying the right problem for PPPs (not just the right players); overcoming their practical challenges (i.e. government procurement); figuring out the appropriate role of government; and moving PPPs from fringe to mainstream within agencies.

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