New fund revives USAID’s ‘discovery engine’ outside of government

When USAID’s Development Innovation Ventures shut down a year ago, it didn’t just put more than 100 active awards at risk. It raised a broader question about how to carry forward the unique initiative’s social impact mission — which uses a venture-style approach to find new innovations, pressure-test them, and help them grow. Specifically, that approach uses open calls to surface new ideas, evaluating proposals based on evidence, cost-effectiveness, and pathways to scale. It also uses a tiered funding model — with smaller pilot grants, funding for rigorous testing, and larger investments tied to stronger evidence of impact. Since it first launched in 2010, DIV supported more than 300 innovations across 54 countries, while also influencing how other donors adopt new evidence-driven approaches to scaling what works. Now, that approach is reemerging in a new form. The DIV Fund, an independent nonprofit formally launching today, is picking up where USAID’s DIV left off after the agency’s innovation unit closed in early 2025 following the Trump administration’s stop-work order. DIV served as “a beacon” for innovators looking for patient, flexible capital, said Jeff Brown, cofounder and chief innovation officer of The DIV Fund, which he launched with Sasha Gallant, former head of DIV at USAID and now the fund’s CEO. It was one of the few places that offered “risk-adjusted funding and support,” meaning small, early grants for untested ideas and larger investments only after evidence of impact emerged, no matter the type of organization, sector, or geography. “When DIV was shut down, that front door wasn’t there,” Brown said. “And we’re bringing it back.” Led by some of the same people who started and grew DIV, the innovation fund is launching with a $48 million budget, with anchor funding provided by Coefficient Giving, formerly known as Open Philanthropy. The DIV Fund’s leadership raised an emergency round of $20 million that will go to 24 innovations from the DIV portfolio that lost their funding when USAID was dismantled, and philanthropic donors have since committed an additional $28 million that will be deployed over the next four years. The DIV Fund held a launch event in Washington, D.C., on Thursday. Now, it’s in fundraising mode as it works toward a goal of spending $25 million annually. The question is to what extent The DIV Fund, which is starting out with a much smaller team and budget than its predecessor, will be able to identify potential breakthrough innovations and influence large-scale adoption now that it operates outside of government. The DIV Fund welcomes proposals from any organization seeking to improve the health and well-being of people living in poverty, selecting investments based on the potential to deliver the greatest impact per dollar spent at scale. It’s preparing to launch its next open call for proposals this spring. How the DIV Fund came to be For DIV grantees, this kind of early, flexible backing often determined whether promising ideas could survive long enough to prove their value. An example of this success is Maisha Meds, which builds digital tools to improve access to affordable medicines through private pharmacies in East Africa. It had been subsisting on $100,000 to $200,000 grants before receiving a $1.5 million award from DIV in 2019 to scale mobile software that improves malaria care. Jessica Vernon, CEO of Maisha Meds, said USAID’s backing was pivotal. She received word from DIV about its award while meeting with the Gates Foundation, where a program officer told her that if DIV supported the approach, Gates would be prepared to follow. That program has since reached more than 1 million patients, and Maisha Meds is now focused on millions more through its growing digital network of pharmacies and clinics. Many of those types of innovations, however, came to a halt with the Trump administration’s stop-work order on Jan. 24, 2025. Soon afterward, private donors stepped in to support roughly 70% of the existing DIV portfolio. Gallant and other former DIV colleagues quickly assembled what they described as an “urgent and vetted” list of at-risk projects, matching philanthropists with proven interventions in need of immediate funding through a new initiative called Project Resource Optimization that the DIV Fund now hosts. “One of the things DIV has been really good at, and I expect we’ll continue to be really good at, is being a discovery engine for the field,” said Gallant. “We’ve got a pretty good eye for needles in giant haystacks.” Track record of effectiveness Over 15 years, DIV’s approach drew on the rigorous evaluation methods pioneered by Michael Kremer, currently the scientific director of the DIV Fund, who was awarded the Nobel Prize in 2019 for his work on experimental approaches to alleviating poverty, using field experiments to test and identify the most effective interventions. Many of the innovations DIV, under USAID, identified have since gone on to be highly cost-effective solutions at scale. For example, Teaching at the Right Level, an approach to education pioneered by the Indian nonprofit Pratham, demonstrated that targeted, evidence-based instruction could deliver the equivalent of an additional three years of high-quality schooling for roughly $5 to $50 per student per year, and has since reached 80 million children across Africa and South Asia. Kremer said these kinds of interventions have a high social rate of return, with DIV’s latest estimates suggesting roughly $40 in social value generated for every dollar invested. The historic declines in official development assistance clarify what has always been true, Kremer said — that the key players driving global development will be low- and middle-income countries themselves. “If we think about DIV’s strategy and its history, if you look at programs that DIV supported and indeed other programs that have gone on to reach the most people, they’re almost always scaled by either governments in low- and middle-income countries or by firms or by consumers paying for products,” he said. DIV’s goal, Gallant said, was never to fund programs indefinitely, but rather to identify promising approaches that others would be better positioned to carry forward. “From the start, we're thinking: Can the cost go down in a meaningful way so that this could be implemented by country governments or paid for by people on the ground?” Gallant said She added that the DIV team, which had grown to 35 people, had unique insight into how to navigate procurement, build local buy-in, and identify the payer at scale. “We have to keep finding things that work better, bring costs down and impact up, and recognize that that is, in fact, the work of innovation,” Gallant said. Supporting the spread of development innovation Even in the early days of DIV, Brown and Kremer were thinking about how to spread the DIV approach beyond USAID by offering technical assistance to other funders, including bilateral donors, multilateral organizations, and private foundations looking to invest in development innovation. One of the organizations that took its inspiration from DIV was the French Development Agency, which closely coordinated with USAID’s innovation unit as it built its Fund for Innovation in Development, or FID. Since then, DIV and FID have worked together, from comparing notes on potential investments to co-funding projects. Juliette Seban, executive director of FID, said it has been valuable to collaborate with another funder that shares the same investment thesis, including common selection criteria, and uses the same definitions of evidence and scale, noting that other donors can be “less rigorous on what they mean by impact.” FID saw an 80% increase in applications in 2025 compared to 2024, with a surge of interest from new geographies, including Latin America, a sign of the gap left by DIV’s closure and the continued demand for the kind of support it offered innovators. DIV was also working to move its strongest innovations into USAID’s mainstream programs, using a $45 million grant from Coefficient Giving to introduce a funding stage to help proven solutions scale through partnerships with USAID missions and bureaus. Otis Reid, managing director of global health and well-being at Coefficient Giving, said the effort was beginning to show early signs of success. “We were really seeing all the green shoots of things we hoped they would get to do,” he said. But USAID’s closure in 2025 brought that work “to a bit of a screeching halt,” cutting short what Coefficient Giving had hoped would be a pathway for scaling evidence-backed solutions through government systems. The DIV Fund will now operate with far fewer resources than DIV once had inside USAID, and without the agency’s vast reach, technical depth, and on-the-ground networks. “We’ll have way less money in the space than we did before,” Gallant said. Beyond USAID: Scale by other means But while working within a large aid agency had offered DIV unparalleled reach, Reid said operating independently could make it easier for the DIV Fund to identify new innovations and provide technical assistance to other donors interested in building their own DIV-like innovation units. “We believe in scaling up the things that work, but it's really valuable to have that next set,” Reid said. “And DIV has a track record of doing that, and I think outside of government, they'll actually find that somewhat easier.” Gallant agreed, arguing that much of DIV’s strength has always come from outside government, and the DIV Fund can tap into these networks, as well as former USAID staff, while also engaging with new partners. Brown, meanwhile, pointed to the practical advantages of independence: fewer administrative constraints, greater flexibility in paying for expertise, and the ability to move faster and experiment with new partnerships and technologies. Vernon, the CEO of Maisha Meds, said she was initially skeptical that an independent fund could replace DIV’s influence inside USAID. “When I heard that DIV was going to be sitting outside of the U.S. government, I said, ‘Oh, that’s a missed opportunity,’” she explained. “You had the opportunity to shape billions of dollars, and now it’s probably not going to do that.” But she has come to see how the DIV Fund can play a unique role in helping other donors. In fact, Vernon said she has advised some donors who might have otherwise supported Maisha Meds directly to consider giving to the DIV Fund instead. “There’s such a trend of collaborative funds right now, and I think it’s one of the first I’ve seen that has a clear path to help organizations reach scale,” she said. “I love the staging of the DIV model, and I’m excited to see it be implemented outside of government.”