Why MSI is exploring impact investing for reproductive health financing

Facing an uncertain aid landscape, MSI Reproductive Choices is turning to new funding models to secure its future and expand the services it provides to women and girls. As many health organizations shuttered programs this year amid steep U.S. funding cuts, MSI managed to cushion the blow. The sexual and reproductive health provider had already begun reducing its reliance on U.S. aid, anticipating the cyclical nature of foreign assistance tied to shifting administrations in Washington. “At MSI, we have faced challenges with [official development assistance] for a long, long time, longer than many other organizations may have faced this year, because it comes in cycles with the change of administration in the U.S. So we kind of weaned ourselves off over USAID funding over time,” Sam Tiwari, head of philanthropy at MSI Reproductive Choices, told Devex. Still, the variability of foreign aid and shifting donor priorities have pushed the organization to explore other ways of sustaining and expanding its work, including impact investing, which combines financial returns with social impact. The changing funding landscape MSI has received funding from governments and foundations for years. But the makeup of those grants has changed over time. In addition, government grants have increasingly focused on low-income countries, while funding for middle-income countries has gradually declined. This is the case in several Asian countries, such as India and Vietnam, where Tiwari said MSI is increasingly working through alternative models such as government contracting and social business approaches that include clinics providing women’s health services as well as selling contraceptive products and earning revenue. Despite the economic growth in many Asian economies, there remains a huge need for access to sexual and reproductive health and rights services across the continent, especially among adolescents, and rural and marginalized groups who are also increasingly exposed to the impacts of climate change, she said. The social business model has become an important source of income for the organization over the last 10 years, and now accounts for nearly 50% of its total funding. The organization believes this model could grow further with impact investments, allowing it to serve millions of women and girls in growing urban centers with high-quality sexual and reproductive health care services, while ensuring that foreign aid and philanthropic grants are spent meeting the unmet sexual and reproductive health needs of women and girls in remote, rural, and underserved communities. “Across Asia and its subregions, there is a huge diversity of need and opportunity for women and girls. In many markets, the private health care sector continues to grow rapidly and become a main point of care for many women and girls,” Tiwari said. “Impact investing is one of the several areas that we are exploring to ensure continuity and expansion of health services for women and girls in Asia and globally,” she added. Where the opportunities lie MSI’s social business model includes a network of over 300 clinics and 20 maternity hospitals across Africa and Asia. These clinics were launched through donor subsidies, but now many of them are increasingly self-sustaining. In Vietnam, for example, 88% of the clinics’ operating expenses are now covered by the revenue from the provision of sexual and reproductive health services and products, according to Nguyen Thi Bich Hang, MSI’s country director in Vietnam. “We would like to kind of scale up a model whereby we could have a profitable business, and because we are a social enterprise, we put that all back to those programs that serve poor people, ethnic minorities, women living with disabilities and low-income factory workers,” she said. “If we develop and manage our business on a surplus basis, I don't think that we have any problem with sharing the profit with the investor,” she added. The opportunity to scale is huge. In Vietnam, Nguyen said 13 million women are in the perimenopausal and menopausal age and need health advice and services. Beyond safe abortion and access to contraceptives, MSI Vietnam clinics offer menstrual health services, including hormonal panel testing, counseling on nutrition, physical exercise, sleep and mental health. Some products for hormonal replacement therapy can be prescribed for women based on their hormonal test results. The clinics also offer women advice on how they could share their health concerns with their spouses and partners during perimenopause and menopause. Cervical cancer screening is another service that MSI provides and hopes to expand with impact investing. “Together with increased awareness, more and more women seek for testing service. However, the vulnerable population groups like ethnic minority women, rural women, women living with disability and factory workers are those who have the lowest rate of cervical cancer screening and preventive treatment,” Tiwari said. She said impact investments can help expand pap smear programs — a test that collects cells from the cervix to help detect cancerous or precancerous cells that could lead to cervical cancer — to vulnerable populations, and make cervical cancer screening and preventive therapy more available and accessible to women at affordable prices. Getting on the same page “In order to be ambitious about the scale, we have to be ambitious about the kind of capital that we are attracting into this model,” Tiwari said. But she emphasized that impact investors should also be aligned with the organization’s mission. “This model is very promising to a certain kind of donor. I wouldn't say that it's for everyone,” she said. “At the end of the day, we are a reproductive health organization that's committed to family planning and safe abortion. So there has to be alignment on the ideology. There has to be alignment on gender-lens investing, and there has to be alignment about what is the impact that we're trying to create in communities.” But to attract the kind of investments the organization is seeking, Tiwari acknowledged they need to make funders understand the connections between reproductive health and rights and some of the big issues confronting the world, such as climate change. In Asia, for example, climate change is seen as one of the biggest challenges the region is facing. And while there is a recognition of the impact of climate change on health, she said there is “a lack of recognition of sexual and reproductive health as a small, but extremely significant and a tremendously empowering tool for women and girls to have control in a situation that is out of their control.” “The first thing that they need control over is their own body and their fertility. That matters a great deal in a situation where everything is going out of control,” she said. Making that link known to funders was what Tiwari and her colleagues were doing at the recently concluded AVPN conference in Hong Kong, where different funders came together to discuss how to use their capital for social impact. “I don't think we’ve had any conversation where anyone has said, ‘Well, that’s not interesting.’ I think everyone is saying that’s really important work, but it just doesn’t click how it is related to some of the other development goals. For example, how is it related to gender equality? How is it related to climate change adaptation?” she said. “I think the responsibility lies with us to raise awareness and to be more present and to be more visible and talk about the links,” she added.