Progress Under Foreign Assistance Cuts

Can private philanthropy rescue innovation?

By Colleen Gregerson, Managing Director, Maverick Collective/PSI

The President’s 2018 budget to Congress proposed a 28.5% reduction in funding to the foreign aid. The impact of such cuts will result in lives lost, security compromised and reduced diplomatic clout.

I am also worried about the impact on innovation.

When sequestration took hold in the U.S. in 2013, the impact on innovation as federal budgets were cut led to historic lows in global health research and development.  Some examples of innovation on the chopping block included 1300 fewer research grants made by the National Institutes of Health and a permanent stop on an Ebola vaccine candidate, which meant we did not have this tool on hand when the disease broke out in 2014 killing more than 11,000 people.

Last September, the global community agreed to the most ambitious development targets we’ve seen: the Sustainable Development Goals. Many of these goals require innovation to solve social issues sustainably and to empower markets, communities and governments, reducing their dependency on aid.

Business as usual simply won’t work.

The challenge is this. How do we innovate to reach these goals under the likelihood of dramatic budget reductions from the largest contributor to overseas development assistance? I fear that limited R&D budgets will be one of the first to get cut as belts tighten.

At PSI, we are experimenting with private funding from individual philanthropists combined with a radically participatory approach to design thinking to fuel our own innovation engine.  In fact, we found that the traditional donor-implementer relationship that funds much of the social work in the developing world has an inherent power imbalance that can stifle innovation.

Some of the reasons for that imbalance make good sense:  government agencies are accountable to tax payers for the money spent and must carefully audit expenditures to assure the public their tax dollars are being used wisely. Nevertheless it does have an impact on implementers’ ability to innovate.  Unintended consequences of the typical donor-implementer relationship include:

  • A fear of funding being pulled if projects go off track, mistakes are made or significant changes in course are needed. However, as Christian Seelos and Johanna Mair pointed out in an article on When Innovation Goes Wrong in the Stanford Social Innovation Review, “Progress is nonlinear and does not follow carefully prepared plans, milestones, or budgets.” This fear of losing funding curbs implementers from talking about the inevitable “downs” in the innovation process. This fear will only increase as budgets come under greater pressure.
  • A focus on compliance with donor regulations, which can be thousands of pages of rules and restrictions, sometimes to the determinant of social outcomes. This is no doubt a frustration for the personnel in donor agencies as well who are responsible for ensuring adherence to regulations. These restrictions usually come from far up the food chain and are often part of complex political process far removed from the reality on the ground and the desired impact. Might the Administration’s policy to remove two regulations for every new one introduced alleviate this?
  • Pressure to execute on agreed workplans as opposed to focusing on the higher level change we are trying to make on a social issue. By way of example, at PSI, we realized we had spent years and many international meetings talking about risk mitigation and compliance with one of our largest donors, and to both our and the donor’s frustration, had never once had a significant meeting dedicated to the health impact we were both working to achieve.

So what does it look like to partner in a way that supports innovation?

A network of women philanthropists is experimenting with this kind of mutual partnership as part of the Maverick Collective, an initiative of PSI. These individual philanthropists are not just funding innovative pilot projects to solve health challenges faced by women and girls in the developing world, but bringing their time and expertise to the implementing teams as well. In Tanzania, this meant design thinker Pam Scott rolling up her sleeves to build the capacity of the PSI Tanzania team to use human centered design to address the issue of teenage pregnancy.  In Haiti, it meant Kim Agnew teaching self-care to the Haitian staff who are witnessing the horrors of child slavery and abuse on a daily basis. Others also recognize the value of this more mutual partnership, such as the Bill & Melinda Gates Foundation.

At the Maverick Collective, partnership is essential to our success.  It is so important to achieving the impact we seek that we spent International Women’s Day last week examining how we can further improve and live consistently in a mutual partnership between donor and implementer.  These are some of the key recommendations we made to ourselves, and that we offer to others who seek evolved partnerships that support innovation:

  • Establish a clear understanding of each party’s role: donor, in country team and headquarter staff. We have jointly decided to co-create job descriptions for each party vis a vis each partnership.
  • Practice respect and empathy for each other’s roles and expertise. We have an agreement to imbue our partnership with kindness even when the relationship is uncomfortable.
  • Have more informal dialogue and less formal reporting. Imagine problem solving between all parties as you hit one of those “downs” on the innovation cycle rather than a report that shows progress against a workplan.
  • Bring a learning mindset to the project and the partnership. We are all shifting our mindset from “we cannot fail” to “we always learn.”
  • Understand that everyone is 100% responsible for creating the partnership we want. No one can wait or assume; we all must lean in and author our experience.

We have boiled down the key elements of a mutual partnership to clarity, connection, and candor. These are attributes we constantly strive to achieve, and always have space to improve.

As we grapple with the impact of scaled back U.S. foreign assistance, the role of private philanthropy in sustaining the innovation needed to achieve global goals has become more important than ever.

Banner photo: © Population Services International / Banner Photo by: Trevor Snapp