03 March 2011

Millions, not Billions

If the DFID Aid Review was about how best to spend £11 billion to reduce global poverty, I have a different question for you this morning: how to spend £11 million to do the same?

I have been approached by someone advising a Charitable Trust on this very question. The Trust has assets of £11 million and currently allocates its investment income of £500k per annum (they must be good investors) to a variety of NGOs with no particular sectoral focus.

So, what areas should an independent, flexible and thoughtful UK-based trust focus on? and how many of its capital assets should it spend over what period?
This is a generous amount of money for any individual to give, but is also a drop in the ocean when it comes to meeting needs, so what to spend it on?
Given that it is a small amount, my chief criterion would be that the money is used to change the way people think about development.
New ideas are the most scalable things going and represent one way of leveraging the £11m. The fund could work on how do we unearth good ideas, generate them, share them and make them work?
Do you run the assets down or just use the income? Again, the question would boil down to whether you can transform ideas with the £500k or not?
So, some candidates for using the £500k (in no particular order):
  • a scholarship fund for 25 new leaders in African development per year
  • a prize fund for the 25 best African innovations in poverty reduction
  • support to 4-5 African online newspapers to create something similar to the Guardian's own Development website
  • a fund to recognise and support 25 outstanding leaders in the fight against poverty in Africa
  • setting up an accountability and transparency initiative that monitors African governments' spending, policy commitments and legislative achievements on Millennium Development Goals
  • working with a human rights organisation to track the performance of governments (in Africa and outside Africa) in respecting and protecting economic, social and cultural rights of Africans
Why not just give the £11 million to an existing African Trust so it can do some of the above things? This may well be a very good idea if the UK Trust can find an African Trust that matches its aims and if the UK Trust does not need the name recognition any longer.

Anyway, these are just some of my ideas to get the ball rolling (and don't think I did not subtly suggest they spend it at IDS!).

The adviser to the UK Trust would really like to hear from you on this.


Gabor Meszaros said...

I like the first 4 points on your list, as they have the biggest chance to have an impact in relatively short term. I particularly like the 3. point, maybe because I consider myself as an "online person". Especially when one does not start from scratch, but makes use the already established newspapers or tv channels, it might work out well. The question is however, what the impact would be, given the low internet coverage/usage in developing countries...

SmithMillCreek said...

How about funding a global input and conversation for people ages 15-30 about Millennium Development Goals II? They will be 34-49 years old in 2030.

Questions to ask:
* What should the goals be?
* Should they include goals related to peace/nuclear weapons/military spending? Include consumption goals for the overconsuming North? Expanded focus on biodiversity and environment?

owinok said...

Let's start with the view that changing the way people think about development is a given. I would suggest an essay contest focussed on proposals for reducing poverty and pick the best two or three ideas for testing in the first year. Thereafter, the fund should try and implement the ideas together with a mechanism for using random evaluations to identify which work and which do not. This is one sure way of using evidence to retire bad ideas because development in this continent is sometimes about changing thinking when people are wedded to popular but ineffective ideas.

Surendra Vettivel DP 1984 said...

If Lawrence's suggestions are accepted, at the end of the day, one would not know where the money went!! We are still on creating more innovations. The 500K shd be spent to scale up on the ground proven poverty reduction innovations so that such scaling up would light more candles.....
Surendra Vettivel DP 1984

lawrence said...

great comments, thank you.

global conversation of youth on the MDGs--great--at the moment is it the 30+ age group that is dominating this conversation

i like the idea of linking the new ideas with testing..perhaps this can be done by linking with organisations such as 3ie

on Surendra's comments (greetings DP84!) we should also be interested in innovative things that are currently working in very small areas, but because no-one else knows about them they cannot scale out and have real impacts on lives

Tina Wallace said...

Currently the aid agendas are increasingly being set by people (of all kinds and qualities!) in the North, with a focus on results, value for money, scaling up etc. Aid money is being spent in larger tranches, often through the corporate/consultancy sector, meaning that organisations in Africa, especially small and medium sized are increasingly squeezed for cash. Many work largely as volunteers while those in UK that partner them are comfortably off. Work that falls outside the narrow MDG targets is increasingly underfunded, yet there is some amazing and interesting work going on across Africa in national and local NGOs, at all levels from provision of services/support to the poorest through to legal work, policy change, rights work and much more. The people working at the coal face are largely starved of significant funding and live hand to mouth. Setting up long term funds to enable them to grow, develop, learn and share their experiences would be truly innovative in an era when the bulk of aid money does not reach the ground at all. Giving the power to think, plan and implement in locally appropriate ways back to those who lives are most directly affected would be a good anti-dote to the dominant trends and could actually significantly increase local capacity, voice and energy to work on difficult issues such as women's rights, working with the displaced, critiquing the land grabs in Africa and so much more. There is so much more to say but I think the money could be used wisely to support and build local organisations able to make their own decisions about priorities and to direct their work with dignity, not always having to come begging for short term funding thast always carries multiple and changing conditionalities including meeting our externally imposed ideas/criteria....There would be many challenges but also exciting opportunities to build different kinds of relationships around the provision and use of aid.

lawrence said...

Tina, this sounds good

"The people working at the coal face are largely starved of significant funding and live hand to mouth. Setting up long term funds to enable them to grow, develop, learn and share their experiences would be truly innovative in an era when the bulk of aid money does not reach the ground at all."

What would the Trust actually spend its money on--how would it do it?

Alex Jacobs said...

What a really interesting debate. It's surprising how hard hard it seems to spend the money! After years working with NGOs, I don't have a well evidenced answer. Which is chastening.

How about more direct work, e.g. to help tackle maternal health. It's getting a lot of attention, but the needs still outstrip resources and there are tried and tested ways of using funds to save lives / reduce morbidity now.

Or what about the buzz round social impact investment? If the predicted billions it could release are even half true (e.g. see J P Morgan's recent report) then there are vast new resources on the brink of being tapped for development here. Could the trust fund ways of helping make sure they genuinely help the poor, maybe tackling some of the lessons learned from the rapid scale up in microfinance?

I'd also love to hear more about what can be done to support the kind of bottom-up CSO initiatives Tina suggests.

Alex Jacobs said...

What a really interesting debate. It's surprising how hard hard it seems to spend the money! After years working with NGOs, I don't have a well evidenced answer. Which is chastening.

How about more direct work, e.g. to help tackle maternal health. It's getting a lot of attention, but the needs still outstrip resources and there are tried and tested ways of using funds to save lives / reduce morbidity now.

Or what about the buzz round social impact investment? If the predicted billions it could release are even half true (e.g. J P Morgan's recent report "Impact investments: an emerging asset class") then there are vast new resources on the brink of being tapped for development here. Could the trust fund ways of helping make sure they genuinely help the poor, maybe tackling some of the lessons learned from the rapid scale up in microfinance?

I'd also love to hear more about what can be done to support the kind of bottom-up CSO initiatives Tina suggests.

ZakT said...

I agree with Gbaor, I think point three has potential and not only because the developing world is experiencing a move toward broadband and increased connectivity, but also because there are lessons to be learnt from those who, all too often, do not have a means to express and discuss ideas. One of the great things about development discourse is that it thrives on innovation, more so than other fields, and we need to tap that potential.

Tina Wallace said...

I am not alas a financial guru but know there are different ways 'to endow' effectively organisations so that they have some guarenteed income and the room to grow, learn, develop their staff etc. Helping people working on complex issues to have more time and space to do their work better and innovate based on their learning rather than externally driven demands would be a huge benefit. There is good evidence of NGOs in UK, Asia and a few in Africa that have been able to develop and grow and become centres of great work, often in tough areas, because of stable, reliable and relevant funding.
Alex, there is tons of evidence out there about what works. What you want is a 'magic bullet' that can change things fast for huge numbers and that can not be the role for NGOs - they are too small and wrongly structured for huge infrastructure, education or health projects. The evidence of their role and power to change ideas and ways of working can be tracked in many countries and I wonder why all the evidence on the ground is being ignored because of issues of scale.
We certainly know what doesn't work and much of what is currently being done in Africa will probably leave the same trail of unfinished business, disused water points etc that litter the history of development there.
Surely our role is to find ways of identifying and supporting good work, new work and work that is making a difference in real peoples' lives, especially in the less fashionable areas of marginalisation and exclusion, violence, the position of women and girls...the horror of the slums which are now seen as new potential markets rather than the blot they are where people live in truly unbeleievable conditions and we seem unworried by that...
Shiort term fixes are now needed...so yes I support the ideas of research, money for good research institutes in Africa, money to promote good thinkers and avdocates for key issues, maybe using the internet though connectivity is not good in so many places....but also money for those who do the work, who learn and have huge experience and to whom we pay almost no attention at all at the moment.
Why don't we start by looking at the evidence we have instead of saying there is none because it is not neatly packaged in management reports? There is a huge history which we rarely sit down to explore and development is littered with stories of repeating mistakes made in 1920s, 1950s, 1990s and probably about to be made again, around e.g. water....Sorry to be old fashioned but listening to those most affected and those that work with them has real mileage in understanding what people need and what works for them...and it will be different in different contexts, though clearly the need to be allowed to express themselves and be free of tyranny, which still affects many countries in Africa is a huge need. How can we work to enable people of all kinds to speak out and if we find good organisations let's invest in them...maybe trust funds, endowments ...not sure but there are different mechanisms I know. Or look at some African funders and see if they do work you can support As LH suggested).
Let's not set up any more 'results based' initiatives that feel good here and take them as models to there but find ways to invest the money in those close to the issues to support their research skills, the work they do, their learning and documentation, their networking....too much money goes to UK based people in the current paradigms and so little money ever reaches the ground. It needs courage, trust and vision to give away money and power to others but that is where I would start to focus- who to fund in Africa and how to provide supportive funding.
I strongly agree with the need to focus work and provide voice to those under 30 in these debates...

Tina Wallace said...

Sorry I meant short term fixes are NOT needed!! These problems are long term and often structural, about believes, attitudes and knowledge as well as material conditions, so setting uo long term approaches seem essential. Sorry to mis-write!

Tina Wallace said...

A long email I wrote this morning and which I corrected in a second short email seems to have disappeared, so my comment now makes no sense. Sorry...will write it all again later

Tina Wallace said...

I will try again to summarise some ideas/responses:
1. Endowment funds, trust funds, investing in businesses run by NGOs to provide their own incomes...there are many ways to start funding NGOs differently, longer term and with some stability and less conditionality imposed from outside
2. Too much aid funding is syphoned off before it reaches Africa never mind those on the ground- finding ways to get money to those working on complex issues seems essential, to enable them to experiment, learn, develop and grow good workable ideas, challenge thinking (including ours)
3. Identifying interesting NGOs and research outfits is challenging but possible and this is where there is very little money spent currently
4. Promoting voice and expression and generating ideas are all good and important especially with those under 30 so find and fund people working on repressions, rights to voice etc and approaches that engage youth- newspapers, cartoons, internet, films, video, drama ....
5. There is huge creative energy and good work on the ground (and lots of evidence of this Alex!) - they need space, time, money to do the work better, learn and document it.
6. Can we start by looking at history in development and evidence of what does work (not huge numbers and universal changes - those are not for NGOs to do) and build on that. There is a huge wealth of knowledge and learning we can tap into. Trusts and NGOs can't fund huge infrastrutre of massive health reforms but thay can and do change lives
7. Fund for the long term not short term quick fix approaches..which have a habit of collapsing once funding ends
8. Research, information networking, challenging the status quo, working in ways that really enable positive change for women and girls, the most marginalised in slums, the displaced etc are all important. Fund in ways which give those doing the work the power to shape it, decide on what is needed, and learn and change.

Tobias Denskus said...

Interesting comments and ideas, but given the multi-sited and global nature of the 'aid industry', I wonder whether there would be a space for a more collaborative approach that includes people and institutions from the 'North' as well. There is always a good argument that there can never be enough scholarships or leadership programmes for African citizens, but I also believe that changes 'on the ground' and changes in policy institutions and the mindsets of there staff need to be linked together. Rosalind Eyben's recent idea about the 'Big Push Back' may be an entry point to think collaborative learning, action research and reflective practice further. Studying development - even in a great place like IDS ;) - is one thing, but engaging with the institutions and bureaucracies that think about development policy, budgets and programmes is another thing. I don't know what such 'learning hubs' would look like in detail, but I would like to see a more global approach-even if we recognise the situation and challenges in Africa.

Jennifer Lentfer said...

We all know there is a large discrepancy between the resources that are mobilized or acquired by donors, governments and international organizations for global development, and what percentage of the money actually reaches communities and families.

Yet despite the large numbers of grassroots organizations and local movements operating around the globe (WiserEarth.org estimates there well may be over a million), local groups directly serving families and communities compete for scarce and often ineffective donor resources.

The web of local organizations and grassroots initiatives in the developing world are still largely undocumented, unrecognized and under-resourced around the world. But given recent events in the Middle East, it’s time to recognize local indigenous organizations and movements as vital to supporting genuine, demand-driven development that can genuinely challenge power asymmetries and unleash social change.

I would encourage this charitable to trust to examine how it can best support local organizations that are grown from the inside and fueled by the dedication and vision of the very people they serve. Picture just how far that £500k could go if 100 local groups had access to those funds.

Think of the group of grandmothers gathered under the tree to plan for how they will get orphaned children back into school. Think of a cohort of small villages organized to lobby for protection of a local forest they depend on for hunting. Think of a self-help group that forms a cooperative and lobbies their government to get better prices for their crafts.

I’ve had the unique privilege to experience the impact and potential of alternative funding mechanisms that directly support community leaders and that, for me, highlight the way forward for our sector.

My advice for them? It's time to think small.

rick davies said...

I have been told that the proposed spend will involve using all the remaining capital of the trust.

In my view this capital should be spent in a way that builds on all the previous work of the trust, not on totally new initiatives.

Other trusts have faced the same task of spending out their capital. This trust should seek to learn from those experiences.

Chris Roche said...

Building on Tina's comments I think the trust should look to establish an African Civil Society Innovation Centre or Network with a focus on identifying, sharing and evaluating innovations related to increasing the voice of African citizens in the development process. There is growing evidence to suggest there is lots of innovation out there but it is ignored by 'outsiders' , is not adequately shared, and specific ideas are not adequately evaluated. This lessns the impact of these innovations to make a bigger difference.

It could then also relate - but on its own terms - to other networks or centres emerging elsewhere.

lawrence said...

thanks everyone. a few reflections so far

1. it would be helpful to know more about the Trust's objectives, then we would be able to narrow down ways of achievng them

2. how does the Trust hear the views of potential beneficiaries of the Trust's funds? raises questions about the particularity of the blogoshere..

3. spending money to support change is not easy unless you are in it for the long haul

4. more people have engaged in this blog post than in many others on development horizons...why is that do you think?

traceymartin said...

I think the popularity is because it is a practical problem - and because a donor is genuinely asking practitioners what would work - rather than coming with their own notions.
Also it is a question development practitioners are grappling with in their own organisations - so much to do, what can we do that is most effectively?
For me, identifying organisations that are working well locally and asking them what they could do with the money to be most effective would be great. Include a capacity building component. Include a learning component and enable them to link up with others doing the same thing. And pay for them to 'sell' their ideas and successes to Northern and local policymakers.

Nicholas Colloff said...

Having been a past beneficiary of the JJ Charitable Trust, I would argue that there core value has been its ability to identify and back social entrepreneurs with flexible resources enabling them to build on their ideas for new organizational responses to need in ways that allow for scale.

Too often we 'pilot' innovation rather than invest in organizations that act as if they are to be successful (on a venture capital model)and from the outset equip themselves with the team and structures necessary for success.

Pilots are often structured as if the results are meant to be small and we wonder why so many do not take off and acquire the necessary scale.

In spite of the interest in 'venture philanthropy' there remain few trusts that fundamentally retain the flexibility and outlook to take risk and pay for the unattarctive back office capacity that any new venture needs. JJ Charitable Trust has and is one: carry on the good work.

The themes will emerge from the qualities and outlook of the African social entrepreneurs identified. It is the model of investment that remains valuble.

Anonymous said...

Picking up on what Tina and Jennifer said, I think we could better do with something old rather than something new. How many good projects end up going down the plug hole because the donor pulls out and no replacement can be found? Long term support and funding is crucial to achieve development objectives. Imho way too much money gets spent on dreaming up the latest new idea, and far too little money working at the coal face on things we know can succeed. See my posts http://bottomupthinking.wordpress.com/2011/01/04/new-year-new-start/ and http://bottomupthinking.wordpress.com/2011/01/28/my-ideal-donor/ for more on this and other thinking that might interest your friendly trust.

rick davies said...

Further to my own "conservative" comments above, please see Jonathan Lewis's article on the need for "Social Change Humble Pie" in HuffingtonPost which includes the following quotes:
"We need to end 'drive-by philanthropic acts' and stop 'idea inflation' where too many people on both sides of the checkbook promote unproven ideas. "..

"Too often we confuse intent with impact. There are too many great ideas and not enough effective execution." ..

."The pressure from funders and social investors to be innovative results mostly in rebranding old ideas. Most social business strategies are incremental improvements, not blinding game changers."

Instead, we need "a humbler approach to economic development and social entrepreneurism".

Alex Jacobs said...

I just noticed this on the Hauser Center blog, in an interview with Richard Stearns, President of World Vision:

Rahim Kanani: If a foundation or philanthropist donated $10M to World Vision U.S. to increase long-term organizational effectiveness and efficiency, what would be your first order of action?

Richard Stearns: I would launch an innovation fund. Few, if any, aid agencies have the discretionary income to conduct a lot of research and development. Why? Most donors want their contributions to fund programs and see the results of those contributions within a short period of time.
Like other professions, the work of international development is changing rapidly, and it would be beneficial to all of us in this profession to have the opportunity to test new and innovative programs in healthcare, education, economic development and agriculture – even marketing and fundraising. Some would succeed; some would fail. But the learnings would be invaluable.

PBWB said...

What an interesting question, and some interesting answers.

Investment rather than grant making is the kernal of my suggestion i.e.

A slightly different tack would be to look at the investment portfolio that you have - are these investments "doing good in the world" or "adding to the problem" ... a sustainable/ impact investment portfolio can have a much bigger long-term impact than one-off grants e.g. Oikocredit, Calvert Foundation have achieved much through investment rather than grant making etc.

Once you have satisfied yourself that you have an investment portfolio in keeping with your Mission (the most ridiculous example I've heard is of the person that invests in cigatette companies to make money to give away to cancer charities), then I would set up an Innovation Fund".

The Innovation Fund would be seed funded with ~5% of your investment capital and all future income of the main investment portfolio.

The fund would be run with a similar approach to Venture Capital (although with a longer term view) i.e. the Innovation Fund is looking to invest in ideas/ people that have high risk/ high (social)return approach to solving intractable problems. THe expectation is that most of them will fail but (hopefully) one or two will be stellar successes and really "change the world" ... the large NGO/ government world is not well set up to fund in this way - their change is likely ot be incremental rather than radical. This is is something special that a small fund can do much much better than a big NGO/ government and really make a difference in the world.

Hope this is helpful