“We have to try something different.” That’s how Amel Karboul, CEO of the Education Outcomes Fund, summed up the move to try a new funding mechanism aimed at achieving better learning outcomes for preschool-aged children in Sierra Leone and Rwanda.
With global education development funding dwindling, EOF has designed two programs tying the amount paid out by funders to specific results, such as literacy, numeracy, and social-emotional development.
Results-based funds, also known as development impact bonds or outcomes funds, aren’t new approaches in 2024. But, as Devex contributor Sophie Edwards reports, here project implementers can also raise pre-financing from social investors who only recoup their investment, plus a capped return, if pre-agreed targets are met.
That’s to help cover the cost of their work until they get paid by the “outcomes funders” — in this case, pooled funding from the governments of Rwanda and Sierra Leone, the LEGO Foundation, and other donors. Each project is expected to get $15 million, and the aim is to reach more than 100,000 children across the two countries over the next four years.
For Tarek Alami, vice president of children’s learning and development at the LEGO Foundation, EOF’s outcomes model could be replicated globally, “to achieve a huge impact, deliver quality education, ensure that children are able to play and learn and fill the education financing gap.”
Read: Results-based funds aim to boost preschool access in Rwanda, Sierra Leone
Total eclipse of the sector
When Mark Malloch-Brown talks, people tend to listen.
So it was striking for the outgoing head of Open Society Foundations and former U.N. deputy secretary-general to say recently that he thought “the level of societal stress and breakdown” in the world would soon force governments to mount a response akin to former U.S. President Franklin Delano Roosevelt's New Deal response to the Great Depression in the 1930s.
It is no longer possible to believe “foundations can fix the problem,” he said at an event hosted by the ODI think tank in London. “We are going to enter a period where foundations are going to be somewhat eclipsed because people are going to say, ‘nice lot of people, but simply not big enough, not accountable enough, not systematic enough, to deal with what's going wrong with our country.’”
Read: Philanthropy will be ‘eclipsed’ by big government, says Malloch-Brown (Pro)
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EU do the math
There have been assurances galore in recent years that the European Union’s Global Gateway investment strategy/plan/label would be transparent and accountable about its promise to “mobilize” €300 billion in investments around the world from 2021 to 2027. The reality has been murkier.
The gateway’s founding document from 2021 has a box on “the finances.” But it’s been hard to link up those numbers with the purported progress updates from Brussels.
In October 2023, the president of the European Commission, Ursula von der Leyen, said the EU had already “committed … €66 billion to transformative projects” — but the commission ghosted us when we asked repeatedly how she arrived at that number. Then this month, the EU development commissioner, Jutta Urpilainen, told the Financial Times that €100 billion has so far been committed to 225 projects.
So where did these numbers come from, we again asked the commission. It turns out that when Von der Leyen said “committed,” she meant to say “mobilized.”
“The President of the European Commission announced at the Global Gateway Forum in October 2023 that the Commission had mobilised €66 billion (€27 billion in direct budget contributions and €39 billion through blending and guarantee agreements),” a commission spokesperson tells us. “Taken together with the financing mobilised by the rest of Team Europe, we estimate that around 100 billion in direct budget contributions and investments has been mobilised so far.”
Perhaps it all comes down to the difference (which readers of this newsletter surely know) between committing your own money and helping attract someone else’s through blending or guarantees. But we would also hope the EU is only counting actual amounts that have been generated, rather than projections.
We may have to wait and see. The spokesperson adds: “The Commission is currently in the process of obtaining the precise figures from the Member States, the EIB and the EBRD in order to calculate how much has been mobilised by Team Europe as a whole according to a common tracking methodology. The figures will be released in due time.”
ICYMI: How to read Europe’s future development vision (Pro)
+ Curious about the changes in European aid budgets? Devex Pro members can catch the full discussion on why billions are being slashed from development spending across Europe from countries such as Germany and France.
Huge Grant
In February 2020, Jeff Bezos, founder of Amazon and at that point the world’s richest man, announced a $10 billion commitment to combat the climate crisis.
Some $1.7 billion has been disbursed so far, and with the aim to spend the rest by 2030, our latest Pro Funding article from Alecsondra Kieren Si looks at publicly available data to see which topics and regions have seen the most support from the Bezos Earth Fund.
One thing catching our eye: Projects that will benefit the United States received 32.3% of disbursed funds to date.
And the fund’s largest grant so far? $80 million to the Bill Gates-founded Breakthrough Energy Ventures to “advocate for policies that advance clean technologies and to accelerate the commercialization pathway for promising innovators.”
Read: What's inside the $10B Bezos Earth Fund? (Pro)
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Seoul searching
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And finally, Seoul, South Korea, will be the place where donors announce their final pledges to the 21st replenishment cycle of the World Bank’s International Development Association in December 2024.
The bank called the meeting “a vital opportunity to step up commitments and get the world back on track to eradicate poverty on a livable planet.”
Listen here as my colleague Adva Saldinger discusses the bank’s pitch, what borrowing countries want, and why advocacy looks different this year.
ICYMI: What's at stake in the World Bank's IDA replenishment?
What we’re reading
A gateway to equality? Insights from El Salvador and Lesotho on tackling inequalities in the European Union’s Global Gateway programs. [Concord]
Intelligence advantage: Profiling African leaders’ meetings with U.S. presidents. [Center for Strategic and International Studies]
The Pandemic Fund eyes $2 billion funding target to kick-start a new strategic plan. [Devex]
Update, May 30, 2024: This article has been updated to clarify the name of the Education Outcomes Fund.
About the author
Vince Chadwickvchadw
Vince Chadwick is a contributing reporter at Devex. A law graduate from Melbourne, Australia, he was social affairs reporter for The Age newspaper, before covering breaking news, the arts, and public policy across Europe, including as a reporter and editor at POLITICO Europe. He was long-listed for International Journalist of the Year at the 2023 One World Media Awards.
