The Future of Results-Based Funding, Part One: Adapting to a New Normal
By: Dianne Calvi, President & CEO of Village Enterprise; Avnish Gungadurdoss, Co-founder and Managing Partner of Instiglio; and Jeff McManus, Senior Economist at IDinsight.
Part one of this series on results-based funding was originally published by the Center for Effective Philanthropy on February 14, 2023.
The world, and the international development sector, are facing more uncertainty and volatility than it has in living memory. This state of ongoing fragility — stemming from the pandemic, climate change, the war in Ukraine, and related humanitarian emergencies — appears to be the new normal. At the same time, the economic fallout from these crises is putting pressure on aid budgets, and progress on reducing poverty has come to a halt, according to recent data from the World Bank. How should the international development sector adapt, and specifically, how should funders ensure program effectiveness in this new context of volatility and budget constraints?
As leaders at organizations that have been involved in results-based funding from different vantage points — design and management (Instiglio), evaluation (IDinsight), and as an implementer and co-designer (Village Enterprise) — we believe funding based on results offers an opportunity to do more with less. Yet, the approach needs to be adapted for this new, less predictable context.
In part one of this two-part post, we put forth recommendations on adapting results-based funding for crisis and uncertainty. These recommendations come down to a couple of basic principles: first, recognizing crisis is inherently risky, be sure to carefully balance risk and reward to service providers. Second, expect the unexpected by having emergency funding available and preparing to verify results remotely. In part two, we discuss what should not be lost along the way as funders and their partners adapt results-based funding models. But first, we address the underlying need for adaptation.
To read the full article, visit the Center for Effective Philanthropy by clicking here.
The Future of Results-Based Funding, Part Two: What to Keep
By: Dianne Calvi, President & CEO of Village Enterprise; Avnish Gungadurdoss, Co-founder and Managing Partner of Instiglio; and Jeff McManus, Senior Economist at IDinsight.
Part two of this series on results-based funding was originally published by the Center for Effective Philanthropy on February 21, 2023.
In part one of this post, we shared two key principles for funders to keep in mind as they adapt results-based funding models to the volatile and rapidly shifting “new normal” of international development funding. These insights are based on the authors’ own experiences with results-based funding from various vantage points. If you haven’t yet read that post, we suggest you start there.
However, even as the need for adaptation is clear, we believe users of these models should be sure to retain three critical elements that not only work, but work well in a crisis: flexibility, accountability, and rigorous measurement.
In making adaptations and getting creative with results-based funding, it’s critical that projects not lose sight of crucial elements that make results-based funding instruments effective vehicles for social impact. For one, results-based funding commits funders and implementers to participant welfare and ensures it is at the heart of the problem-solving process as stakeholders navigate and adapt to the crisis. Second, implementers need the flexibility to chart their course when plans change. Last but not least, rigorous measurement is the only way to know whether a program is making an impact in a context where everyone may be negatively impacted, making it particularly critical in a volatile context. We explain these points in more detail below.