Avnish Gungadurdoss, Co-Founder and Instiglio’s Managing Partner, said:
The development challenges we work on are complex. But if 50 years ago, we placed a man on the moon, I believe that collectively, we have all that it takes to educate our children, to eradicate poverty, to end malnutrition.
But then, why do we still struggle to get results?
Of course, there are politics, there is corruption, and other intractable challenges.But, today, we want to focus on one small tweak we can implement tomorrow that has shown to transform results.
In our work with over 50 development partners to improve their impact, we have observed ONE thing in common among those that succeed in cracking complex problems.
They have an experimental approach in the DNA of their day-to-day implementation. They approach their work as a continuous problem-solving exercise. They monitor constantly, learn what’s working or not, and regularly evolve their solutions as the problems evolve.
Yet, we fund programs in a way that discourages that experimental/problem-solving approach.Funding is conditioned on complying with a predefined list of activities and milestones, forcing implementers to follow a rigid roadmap, rather than discover their way to results.That often fails to deliver results on complex problems
Our simple innovation is to shift from paying for activities to tying funding to rigorously measured results.Under pay-for-results schemes, donors do not only enable but actually incentivize problem-solving and extraordinary results.
In 2015,we launched a first experiment in India,where donors disbursed 100% of their funding on the achievement of education outcomes for girls.That contributed to a 60%, 60%improvement in the results in just 3 years. Imagine moving 60% faster in solving development challenges.
In 2017,with Dianne’s organization, Village Enterprise, we launched a larger experiment, where USAID and DFID will pay Village Enterprise for their rigorously measured impact in lifting 15,000 households out of poverty.
Dianne Calvi, CEO of Village Enterprise, said:
To be honest, when I first spoke with Avnish in 2016, I had never heard of this simple tweak. I was intrigued by the prospect of a game-changer. And although it felt daunting, Avnish’s team had evaluated over 80 organizations and chose Village Enterprise. How could I say no.
We had recently completed a randomized control trial with IPA to evaluate our poverty graduation program which helps the very poor start smalls businesses and savings groups. The results showed that we had a comprehensive and cost effective impact on poverty alleviation. But we didn’t want to stop there. We wanted to continue to innovate and increase our impact.
Now, three years later, we are wrapping up this experiment. What we have experienced is truly remarkable.
Our entire organization is focused on results not activities.
We thought we were focused on results. but we weren’t really, not like we are today.We builtpowerful adaptive management tools and dashboards that all of our employees are usingon a daily basis. They are now able to closely keep track of our entrepreneurs’ progress and, importantly, problem-solve in real-time to ensure their businesses are profitable.
And we’re not resting on our laurels, we’re pushing those tools further to make our program more cost-effective, experimenting with larger and digital cash transfers and new digital training tools.
What we are most excited about is how this focus on results has dramatically improvedo ur impact.
The increase in income of our entrepreneurs has doubled from 35% to 70% and the increase in their savings has risen from 200% to over 300%.
Most importantly, our entrepreneurs are no longer living in extreme poverty and are self-reliant.With more than 400 million people still living in extreme poverty in Africa, the development community needs new ways of funding solutions to complex problems. Imagine if this small tweak could get better results, raise more money, and put that money behind the most cost-effective solutions. Imagine what more we could accomplish to eradicate poverty. Let’s remember that man has walked on the moon. I challenge and invite us to pursue our mission of supporting people on their journey to self-reliance,with a greater focus on results.”