Chapter 13: Donor Strategies and Initiatives

Donors in the YEO field have a diverse set of priorities. All agree that deepening the knowledge base and scaling programs are top priorities. As the range of donors involved in the field continues to increase, individual donors have articulated their value-add to the field and the type of programs and partnerships that fit best with their mission and organizational structure. In general, donors embrace funding strategies that complement their organization’s mission, resources, and experience while seeking to close knowledge gaps and advance the YEO field. At the 2011 Global Youth Economic Opportunities Conference, donor representatives from Citi Foundation, the United States Agency for International Development (USAID), The MasterCard Foundation, the Multilateral Investment Fund (MIF), and the International Development Exchange (IDEX) discussed grantmaking. They shared the importance of the following:

  • Getting to know one another through due diligence and relationship-building;
  • Finding the right match between the donor and the recipient organization, as well as between the recipient organization and the project—the funded project should be core to the organization;
  • Grant-making should form part of a larger strategy and theory of change; it should draw from lessons learned by both the recipient organization and donor.

Citi Foundation Supports the Economic Empowerment and Financial Inclusion of Low-to-Moderate-Income People in Communities where Citi Operates

The Citi Foundation works collaboratively with a range of NGO partners to design and test innovations with potential to achieve scale, and support leadership and knowledge-building activities in the financial inclusion field. Its “More than Philanthropy” approach enables them to leverage the strength and expertise of Citi’s people and business resources to maximize philanthropic investments and demonstrate a commitment to responsible finance. One focus area is the Youth Education and Livelihoods portfolio, which seeks to invest in programs that increase the number of young people, between ages 13-25, that complete secondary school, start a business, become employed or enroll in further education. Another focus area, Financial Capability and Asset-Building, aims to increase the number of adults and youth who adopt positive financial behaviors and accumulate and preserve assets, which also further complements the Foundation’s global mission of economic empowerment and financial inclusion.

To fulfill this mission and strategic objectives, the Citi Foundation partners with local Citi offices across 86 countries to co-create innovative investment plans and drive a place-based grant-making approach that reflects local context and needs. For example, Citi Foundation funding in Brazil focuses on sustainable enterprise development; In Poland philanthropic investments are concentrated on financial capability; while in the Middle East, youth entrepreneurship initiatives dominate the portfolio.

For more information, see www.citibank.com/citi/foundation.

USAID Develops a Youth in Development Strategy, Promotes Inter-Agency Coordination, Supports Systematic Approaches to Reach Scale, and Encourages Partnerships with Youth

The United States Agency for International Development (USAID), the foreign assistance arm of the United States government, will soon release its first-ever policy on Youth In Development. The Policy seeks to realize the demographic opportunity in development, and advance USAID’s core development objectives. It establishes a new framework for USAID to support, protect, prepare, and engage young people as they transition from childhood to adulthood, and embraces a model of change with youth as actors and leaders. For additional information, please visit: http://on.ft.com/wKVQYq.

Box 13.1 outlines several funding mechanisms that may be appropriate for YEO programs.

13.1 Practical Tips: Matching YEO Programs with USAID Funding Mechanisms

USAID has a host of funding mechanisms to support YEO programming. The following options exist depending on the type of programming or partnership.

  • Development Credit Authority: To make vocational education and university more affordable and accessible, USAID/Kyrgyzstan designed a $1.5 million loan portfolio guarantee with two Kyrgyz banks, to cover 50 percent of losses on a portfolio of loans for vocational and university education. In Kosovo, partners worked with local banks to leverage Mission funds for over $2 million in loans to young entrepreneurs.
  • USAID Forward Procurement Reforms: These reforms grow means to fund homegrown youthled and youth-serving organizations and increase use of host country procurement systems to build capacity of youth and youth-serving institutions.
  • Opportunities through the Development Innovation Ventures (DIV): DIV is a mechanism for partners to propose cost-efficient, scalable solutions with the potential to significantly improve development outcomes. DIV provides competitive, staged financing to rigorously test these solutions and help scale those proven to produce impact. DIV welcomes applications from many types of registered U.S. and non U.S. organizations.
  • New Central and Regional Procurements for Youth Programming.

For more information, see www.usaid.gov/about_usaid.

 

 

 

The MasterCard Founcation Promotes Research and Programming that Explore the Nexus of Youth Learning, Earning, and Saving

Established by MasterCard Worldwide in 2006, The MasterCard Foundation promotes youth learning and microfinance with a specific focus on Sub-Saharan Africa. It is an independent, private foundation with over $4 billion in assets; the average grant size is $5 million. In Microfinance, the foundation’s strategies include: scaling access in Africa, pioneering youth-inclusive access, and increasing transparency. In Youth Learning, strategies include: enabling post-primary learning, facilitating entry into the workforce, and supporting entrepreneurship. The Foundation does not accept unsolicited proposals and undergoes extensive due diligence to ensure that codesigning programs with potential partners will be successful.

13.2 Research Spotlight: The MasterCard Foundation Supports Innovation in Youth Learning, Earning and Saving

The MasterCard Foundation supports the following innovative research and programming initiatives around the world:

  • TechnoServe – Kenya, Uganda, Rwanda: Provide training and create employment opportunities for disadvantaged young people in rural communities throughout agricultural value chains.
  • Fundación Paraguaya – Tanzania: Establish and demonstrate a financially self-supporting secondary school model.
  • Swisscontact – Uganda, Tanzania: Expand a nonformal skills training model for out-of-school youth.
  • CAP Foundation – Kenya: Transform technical and vocational training systems.
  • University of Minnesota – Global: Develop a common evaluation framework across programs to track learning, earning and savings behaviors.

For more information, see www.mastercardfdn.org.
 

Learning from Previous MIF Portfolio Contributes to Priorities for Future Funding in Latin America and the Caribbean

The Multilateral Investment Fund (MIF), an independent fund of 39 donors administered by the Inter-American Development Bank, supports private sector-led development benefitting low-income people in Latin America and the Caribbean. The aim is to give these populations the tools to boost their incomes: access to markets and the skills to compete in those markets, access to finance, and access to basic services, including green technology. A core MIF mission is to act as a development laboratory– experimenting, pioneering, and taking risks in order to build and support successful micro and SME business models. To make effective use of MIF projects, the MIF is committed to rigorous results measurement and impact evaluation, and active knowledge sharing so that the most promising solutions are widely known and can be taken to scale. Youth employment and entrepreneurship projects form one of MIF’s largest portfolios. Since 1993 the MIF has funded 123 pilot projects to reach over 150,000 disadvantaged youth in 22 countries. The MIF supports organizations though grants, equity and lending; their average grant size is $800,000. The MIF recently completed an intense external and self-examination of the previous efforts they have supported in the YEO field. Out of that experience, they decided to focus on vulnerable youth, helping them to achieve greater socio-economic mobility through jobs and entrepreneurship. To achieve this impact, MIF will work towards: (1) improving market conditions by eliminating certain barriers that inhibit access to quality employment and entrepreneurship opportunities for vulnerable youth; and (2) scaling up successful training programs to ensure vulnerable youth possess the developmental assets (knowledge and competencies) required to be successful in a competitive labor market. Box 13.3 highlights key lessons learned from the MIF portfolio.

13.3 Checklist: Does Your Program Incorporate Key Lessons From the MIF?

After analyzing its youth portfolio, the MIF came up with the following key lessons. To compare and see if your program measures up, consider the following. Has your program:

✔Developed a comprehensive model in youth employment programs that combines technical and life skills training with internship experience and job placement/counseling support?

✔Established a dual-customer approach that considers both employers and employees? Marketdriven training and responding to youth specific needs, capacities, and interests.

✔Involved youth in the design and implementation of projects?

✔Developed strong training content? Soft skills are important.

✔Prioritized job placement? Convince employers that your training program solves recruitment problems. Job placement is not the only indicator of success, for example, returning to school would also indicate success.

✔Have staff been carefully selected and trained? Your team should have a mix of skill content and capacity to engage with youth. They should also have experience working with the private sector.

✔Devised strategies to achieve sustainability and scale? Working with the private sector would be an effective way to achieve this.

✔Do you take gender differences and key gender considerations into account?

For more information, see www5.iadb.org/mif.
 

IDEX Provides Comprehensive Support to Crassroots Organizations in Africa, Asia, and Latin America and Advocates for Grassroots Development within U.S. Philanthropy

Established in 1985, the International Development Exchange (IDEX) employed a traditional development model by supporting international projects with one-time small grants. In 1999, IDEX created a “partnership model” and committed to building the organizational capacity of selected partner organizations. Today, IDEX supports grassroots movements in building self-sufficiency and works with partners for a minimum of three years after a thorough vetting process. This new model provides financial resources and also includes networking with other organizations, capacity building and technical support.

IDEX has a history of sustainable, credible work at the community level. For many organizations, IDEX is the first source of international funding; they also help connect grassroots organizations with other sources of funding. IDEX collaborates with grassroots organizations to increase their capacity to scale up and also link with social movements. Grant sizes range between $5,000 and $50,000.

IDEX’s current grantees are located in six countries in the Global South: Guatemala, Mexico, South Africa, Zimbabwe, India and Nepal. Organizations work on the following thematic areas in their local communities:

  • Women and Youth Empowerment: Programs strengthen and increase the practice of women’s and youth’s rights, opportunities, self-worth, choices, resources, autonomy and power.
  • Building Local Livelihoods: Programs build local economies through fair and equitable practices that include skill building, education and vocational training, income generation, financial planning, savings, credit accompanied with training and support, jobs that pay fair wages and treat workers justly, and/or market access.
  • Environmental Justice: Programs promote people’s access, participation and rights in the care of their water, soil, air, seeds, forests, fisheries, livestock and land.

13.4 Bright Ideas: IDEX Takes a Collaborative Approach to Funding Grassroots Organizations

IDEX has learned the following lessons in partnering with grassroots organizations:

  • Long-term relationship building: IDEX engages in a long-term process that begins with a trial year of relationship building. They strive for lasting, trusting, reciprocal and humble relationships. Listening, understanding, and respect, as well as insight from the ground, form critical elements of the partnership.
  • Mutual and transparent evaluation of effectiveness: Grantee organizations evaluate IDEX’s effectiveness and vice versa. IDEX employs a diverse evaluation process that includes site visits, surveys and reports. The intention is to promote an atmosphere of mutual learning whereby IDEX understands their partners’ successes and challenges and partners are able to provide honest feedback to IDEX staff as well as request support.
  • Eliminate barriers in grant seeking: IDEX wants to ensure that partners understand what they are getting with IDEX and other international funding organizations. IDEX brings the voices of grassroots organizations to the United States utilizing social media, learning events and partner visits. When grassroots leaders visit the U.S., they meet with other funders, non-profits, government and community leaders to gain exposure and build alliances. These visits support the capacity building of partners.
  • Respect what already exists: Observe, witness, and understand civil society before making funding decisions. IDEX is committed to acting in true partnership and acknowledging the power imbalance inherent in funding relationships. To do this, IDEX supports individuals and communities to step into their power as leaders and game changers, advocates for philanthropy to adopt more egalitarian practices, to balance learning between Global South and North that engenders hopefulness, to raise resources and facilitate connections.

For more information about IDEX, see www.idex.org.