Education Outcomes Fund takes shape, with September launch in sight

LONDON — As schools around the world close their doors in an effort to halt the spread of the new coronavirus, the team behind the Education Outcomes Fund is optimistic it can still launch later in 2020, after two years in the making. Around 90% of the world’s enrolled students are now out of school due to the pandemic. While schools in high-income countries are doing their best to teach kids online, students who do not have regular access to the internet are missing out on classes altogether. That threatens to worsen the learning gap between countries. Even before COVID-19, 53% of children in low- and middle-income countries could not read and understand a simple text by age 10, according to the World Bank. EOF was first mooted in 2017 in a bid to change that by channeling more private finance and innovation into global education. The aim is to create a $1 billion outcomes fund to help governments across Africa and the Middle East get 10 million children and young people back into school or learning. The fund works with governments to design development impact bonds, or DIBs, that address specific educational challenges, such as getting out-of-school children into the classroom or making teaching more effective. Under the model, EOF — which is hosted as a trust fund by UNICEF — brings in social investors who provide not only upfront working capital but also performance support to a group of nonstate actors tasked with delivering certain outcomes. The investors are then repaid from a pool of donor funding, including a contribution from the host government. Repayment depends on the outcomes achieved, which are independently verified. Now, EOF is nearly ready to launch its first programs in Ghana and Sierra Leone. The U.K.’s Department for International Development has agreed to be an outcome buyer for both projects. The investors are yet to be selected but will be announced after the procurement process has finished. Although schools in both countries are currently closed until further notice due to the pandemic, EOF’s chief executive officer, Amel Karboul, is confident it will not derail the launch. She told Devex that both governments have expressed a strong wish to go ahead with the programs — but with a focus on distance learning, remote mentoring, and radio classes, for example — even if schools remain closed. In addition to the challenges of potentially launching amid a pandemic, EOF’s approach also faces opposition from some teachers’ unions and NGOs. They say it encourages the privatization of education and will increase inequality by incentivizing implementers to focus on helping those kids that are easiest to reach and not those furthest behind, though EOF says it will design contracts to mitigate this risk. A partnership, not a fund Despite its name, EOF is “not a fund, but actually a partnership model where all partners are aligned around a set of [education] outcomes,” said EOF co-founder Jared Lee. In Ghana and Sierra Leone, both governments are putting up their own money, alongside funding from DFID, to pay for outcomes. In Ghana, the plan is to use EOF to build on an existing “complementary basic education” program that has been running since 2013 with funding from DFID and the U.S. It involves intensive classes for out-of-school children and young adults to get them back into formal education. Building on the success of the program in northern Ghana, EOF plans to take it into new regions and expand its focus to include improving learning at participating schools. That will involve recruiting nonprofit organizations to work in around 700 schools, and success will be measured against two target outcomes: student retention and average learning gains. The program also has a special focus on girls, Lee said. “We’ll be paying a higher price multiple for all outcomes for girls in the program to create an additional incentive to focus on their needs,” he said. “We’ve seen countless examples of schools with three toilet blocks but no furniture, books, or textbooks because NGOs came with funding just to build toilets.” --— Jared Lee, co-founder, EOF DFID has said it will contribute up to $25.5 million in outcomes funding over five years, while the government of Ghana will contribute $4.5 million from its own budget. The World Bank’s Global Partnership for Results-Based Approaches will manage the financing. However, the program still needs to get Cabinet approval, which may be difficult with teachers’ unions campaigning against EOF’s “promotion of private actors in education,” since it works with nonstate actors to provide education, although for now they are nonprofit and will not charge students fees. Still, opponents want to see the money and provision of education remain in public hands. Ghana’s deputy education minister, Yaw Osei Adutwum, said he believes ministers will support the plan as long as its benefits, including the fact that Ghanian money is not at risk, are well communicated. “This is a project that will truly yield dividends, and in case the work is not done, the money is not lost,” he told Devex, adding that the impact bond model will bring “efficiency” to the program as it will be managed by a third party with skin in the game. He said the program will make life easier for teachers and offer them opportunities for training and development. However, good communication would be key. “You have to communicate to them [teachers] and implement in such a way that they see the benefit of participating in it and that it is not an additional burden,” he said. The government hopes to launch the DIB at the beginning of the school year in September. In Sierra Leone, the plan is to expand the government’s Education Innovation Challenge — a DFID-funded program to improve education outcomes using experimental methods. With EOF, the government will turn it into a pay-for-results pilot and scale it up from 170 schools to approximately 500, with funding from the national government and DFID, though DFID funding is contingent on design approval. Speaking at this year’s virtual Skoll World Forum, Sierra Leone’s education minister, David Moinina Sengeh, said the Cabinet has already endorsed the partnership and plans to push ahead with the September launch even if schools are closed. “Our objectives remain the same whether kids are in school [or] not. ... They still need to be able to read, they still need to be able to do math, and they still need to be able to engage in critical thinking,” he said. While Ghana’s bond took more than a year to design, replicating it in Sierra Leone has been much faster, according to Lee, helping to counteract a long-standing criticism that impact bonds are time-consuming and costly to set up. “The vision is to build a community of practice for development impact bonds … and to build institutional capacity to do them in a repeatable way,” he said. A game changer? For Lee, EOF’s most significant innovation is its focus on results, citing the age-old problems with input-focused aid programs. “We’ve seen countless examples of schools with three toilet blocks but no furniture, books, or textbooks because NGOs came with funding just to build toilets,” he said. “If instead we attach the funding to the things we care about — the outcomes themselves … a child who is learning or a young person who gets a job — then that’s … a game changer.” This can lead implementers to think more holistically and to adapt as they go, using data about what is working and what is not to inform their approach, he suggested. It also makes DIBs a useful mechanism in a crisis such as COVID-19, he said, since implementers have the freedom to change their approach to include distance learning, for example. Others remain to be convinced. Education International, which represents teachers’ unions around the world, questions the use of results-based financing, arguing that it is neither new nor effective but instead creates perverse incentives for providers. EI also continues to argue that the fund, through its emphasis on working through nonstate actors — nonprofit or otherwise — presents “education as a market commodity rather than a fundamental human right and public good.”