Forty-three years ago, PSI responded to a dire need to increase access to contraceptives in the developing world and began an experiment to “do development differently” by selling subsidized family planning products.
PSI deemed the experiment successful, and the company evolved. As we did, we found that the best, most ingenious solutions weren’t coming just from the United States or other developed countries, but often directly from the people in the countries where we worked. By listening to our customers, we served them better.
Development is best when it is nationally led — this has been a hallmark of PSI from our earliest days and has helped us shape our business model into one that reaches people in varied environments, communities and countries and still allows us to provide high-quality programming and value for money to our donors. Here are a few things we’ve learned along the way.
Locally rooted, globally connected works best
Today, PSI is a network of more than 65 member organizations. Key program decisions are made in the field and 98 percent of staff is local to communities and countries where we work. Of those working outside of their countries, many are from the same geographic region in the “global south.” For PSI, this commitment to locally led health programs came about organically not from imposed quotas.
We learned that development best practices flourish when there is the opportunity to share both success and failure. Our unique model connects locally rooted organizations to a global network of services. Members have access to central systems for procurement — allowing them to benefit from global relationships with vendors and competitive pricing that comes with scale. They also receive support for compliance and financial standards, helping them navigate the complex nature of government donor regulations. Internal audits help minimize corruption and allow for greater impact from donor funds. Network members also benefit from global communications and advocacy efforts that tell the story of how aid is saving lives to important decision-making audiences like members of Congress, Parliament and the general public.
Flexibility enables innovation
PSI’s network model also offers flexibility to test new solutions. Clear evidence showed that male circumcision could be an effective prevention tool for HIV and AIDS, if enough men received the procedure. As a new intervention — one that many feared would never generate significant client demand — government and institutional donors were hesitant to invest. PSI knew it could create demand, shorten the time of the procedure and reduce the cost, so we invested private funds to support pilot projects — something an organization not tied to a larger network would be unlikely to do.
The pilot project was successful and donors like the Bill and Melinda Gates Foundation, U.S. Agency for International Development and U.K. Department for International Development stepped in to fund voluntary male circumcision as part of a comprehensive combination prevention effort. PSI was able to expand this work as a direct result of its network of locally led organizations working in sub-Saharan Africa. Today, millions are receiving the procedure, helping to reduce HIV transmission.
There’s no one-size-fits-all
Country contexts vary widely, so we developed a model that responds to the realities on the ground. Our network is intentionally flexible, and the role in-country evolves over time to fit the changing environment. In countries that have a skilled workforce and willing donors, our network members may evolve into independent entities that receive direct donor funding and govern themselves completely. In other countries where conditions are not as favorable, PSI remains more directly involved to ensure quality and compliance. In either case, the member organization benefits from PSI’s central services and linkages to other member organizations.
In Uganda, PSI network member PACE is registered locally, has a governing board led by Ugandans, and benefits from PSI’s fundraising and technical expertise. PACE’s staff is 98 percent Ugandan with a Nigerian executive director.
PACE is made stronger, more efficient and more effective by the services provided by our global network — offering the best of both worlds to PACE, donors and the people we serve.
Quotas don’t always work, conversations about timing do
In Namibia, PSI saw potential for our network member to become more localized. With mounting pressure from our donor and a desire to bid on important funding that would only be available to a “local” organization, we moved forward despite questions about the organization’s readiness and knowing the donor was offering limited funding for network services.
The new, local organization, Society for Family Health, faced problems almost immediately. When SFH Namibia wanted to procure condoms from major manufacturers, they were at a disadvantage as a smaller customer. In the past, they had no problems because their suppliers responded to PSI’s scale and global purchasing power.
In addition, budget constraints left SFH Namibia with limited access to the technical support they had previously relied on from the network. To ensure continued high-quality programming for a valued member of the PSI network, PSI temporarily covers network support costs with internal funds that would have otherwise been spent on developing new health interventions.
This scenario strains the entire network and limits innovation.
In an ideal world, we’d work in partnership with the donor to decide on timing, on investment needed for support services and a flexible approach to ensure the organization is ready for transition.
The network model offers a safety net and resiliency
Funding models matter. Funding on a project basis makes it nearly impossible for a local organization to evolve and grow. Without access to something broader than a singular project, it is difficult to survive common delays in funding, difficult to find new sources of sustainable and relevant funding, and difficult to innovate.
With the PSI network, members have a safety net in the event of slow disbursements or stalled funding. Members can tap into bridge funds and rely on global experts to help identify and secure sources of funding to address the most relevant challenges in each country, and they have the flexibility to try new things to find the solutions today for the development challenges of tomorrow.
The network also helps us respond in times of crisis. After the Haitian earthquake of 2010, many smaller organizations were crippled by the disaster. The backing of our global network allowed PSI Haiti to immediately respond to the new health challenges. Despite the crisis — including its serious impact on every member of our staff — PSI Haiti continued to provide critical health services and respond immediately to the realities on the ground.
The PSI network allows members the flexibility needed to make sure programs continue reaching the people that most need them despite delays. Currently, PSI provides bridge funding in the amount of $4.5 million to keep programs operational between funding cycles.
Tomorrow looks more like ‘we’ than ‘us and them’
To maintain quality, reduce fraud and ensure financial and programmatic compliance, centralized network services require a financial investment. While we maintain extremely competitive rates, organizations within the PSI network will not always come in with the lowest bid. In many occasions, PSI network members have been asked to take over projects that were not achieving expected outcomes but had lower initial bids.
We are steadily moving into a new era in development where we have a better understanding of the tools necessary to eliminate extreme poverty in our lifetime and reduce the dependency on developed country donors.
Yesterday’s model of “donor” and “recipient” and “developed” and “developing” is no longer the most effective model for change. Tomorrow’s development model looks a lot more like partnership and a lot less like aid.
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