First Payment-by-results Program In Social Sector Launched With Educate Girls
Educate Girls is to pilot the first Payment-by-Results program, a financial innovation in the social sector.
Mumbai, July 29th 2013: Educate Girls, a non-governmental organization (NGO) that works to reform government schools for girls’ education in India, is launching a ground-breaking Payment-by-results (PbR) initiative to the Indian social sector for the first time in the country. PbR will be launched as a pilot program in the Sirohi district, Rajasthan in July 2013.
PbR is an innovation that will pave the way for more strategic philanthropy and greater accountability in the social sector. The premise of PbR is that full or partial funding is tied to achieving pre-determined goals. By tying investment to outcomes rather than activities, PbR provides NGOs with the flexibility to experiment and improve their programs, while funders are ensured of a high social return on their investment. These last few years, some major international development agencies have adopted PbR programs, including the UK Department for International Development (DFID) and the U.S. Agency for International Development (USAID).
The Educate Girls pilot PbR program will be run in approximately 200 schools in Sirohi district, Rajasthan from July 2013 to 2015. Schools will be divided between those that do not benefit from the Educate Girls program, those that receive Educate Girls program under traditional up-front financing scheme and those that receive Educate Girls program and PbR funding. Educate Girls will deliver all social services in this program while the donor will pay for social outcomes.
Instiglio, a Harvard-incubated consultancy that designs, structures and implements results-based financing models, is creating the framework for the project. They will provide technical advice to Educate Girls for the duration of the pilot. An independent auditor will monitor and verify the impact of the program.
The PbR initiative has the potential to rapidly scale up the impact of our program and to help Educate Girls reach over 30,000 schools in some of India’s most acute gender gap areas within a short period of time. This scale can be achieved by integrating the PbR program into a social franchising model that focuses on standardized, measured and monitored impact milestones. “The successful implementation of a pilot program in Sirohi, Rajasthan has the potential to change service delivery and implementation standards across the social sector in India.” says Safeena Husain, Executive Director, Educate Girls. “We believe that PbR will bring accountability to the social sector and has the potential to deeply reform education of the girl child in India,” she added.
India has the largest illiterate population in the world. According to the census 2011, a quarter of the population still cannot read or write. Women and girls, especially in rural areas, are particularly affected.
Rajasthan has 9 of the 26 worst gender gap districts in India for girls’ education. Only 1 out of 2 women can read or write, for every 100 girls, only 1 reaches class 12. With a gender gap of close to 30%, women are lagging behind their male counterparts in all spheres of life. Poverty is one cause, but more importantly cultural and social barriers, as well as the poor quality of public education, keep many parents from sending their girls to school.
“Payment by result initiatives hold tremendous promise for improving financing for NGOs in India. While these initiatives have been implemented in a limited number of locations to date, the recent economic downturn, combined with the increased attention on measuring the outcomes of large social programs, make these initiatives increasingly attractive for governments as well as international donors. We are excited to be working on some of the latest payment by results initiatives in India today.” says Michael Belinsky of Instiglio.
Educate Girls will use this current pilot program to test how to structure, implement and monitor similar programs with partners. Raman Uberoi, COO of CRISIL, said: “As an innovation-driven company that aims to “do good with what it is good at”, CRISIL is delighted to be associated with India’s first PbR initiative. “We believe that new social spending models such as PbR or Social Impact Bonds can help design and deploy social interventions in a more efficient manner for all stakeholders — the government, private investors, non-profits and beneficiaries.”
By 2016, Educate Girls plans to create the necessary systems to operate payment-by-results programs with potential partners to scale first within India and then abroad.
CRISIL Foundation and WomenChangeMakers (WCM) are leveraging their expertise and networks to help raise awareness about PbR in India by sponsoring a series of events across Delhi, Mumbai and Bangalore on 23rd July, 29th July and 31st July respectively.
Yann Borgstedt, Founder and President of the Womanity Foundation, a Geneva-based philanthropy organization said, “We are very impressed with what Educate Girls, our first fellowship in India, has achieved in just a few years. WCM will support Safeena and her team by bringing top quality corporate partners to help Educate Girls support more girls in more parts of India.”
The CRISIL Foundation is CRISIL’s corporate social responsibility arm. Established in 2013 in line with the organization’s stated goal of making markets function better, the Foundation enables CRISIL to ‘do good with what it is good at’. Its two primary aims are to increase financial awareness and conserve the environment. Towards the first cause, the Foundation runs a series of financial literacy workshops to build awareness about financial services, and promote inclusive banking in financially underserved communities.
Posted on August 7, 2013