The British Asian Trust, the Michael & Susan Dell Foundation, the UBS Optimus Foundation, and Tata Trusts, together with Comic Relief, the UK Department for International Development (DFID), the Mittal Foundation, and British Telecom, have launched a development impact bond in support of quality education in India.
The largest education development impact bond to date has raised $11 million in its first phase and, if successful, will support efforts to improve literacy and numeracy skills for more than three hundred thousand children. Beneficiaries of the bond were selected for their diverse and proven interventions and include Gyan Shala, which works with poor rural and urban slum children; the Kaivalya Education Foundation, a Piramal initiative that works to strengthen education and youth leadership; and the Society for All Round Development, which will work within the DIB mechanism to improve learning outcomes for thousands of children.
As the risk investor, the UBS Optimus Foundation will provide the working capital for the interventions and be repaid by the outcome funders — the Michael and Susan Dell Foundation, the Tata Trusts, the Mittal Foundation, British Telecom, and Comic Relief (providing funding through the British Asian Trust) — once the desired literacy and numeracy outcomes have been achieved and verified by Gray Matters India, an independent evaluator. Dalberg Global Advisors is serving as program manager and will work with local NGOs to maximize outcomes, while DFID will provide technical assistance, including funding for legal advice, learning, and evaluation.
"Outcome-based funding models — which incentivize a more targeted focus on improving outcomes — are ideally suited to driving quality in education," said Geeta Goel, the Dell Foundation's country director for India. "The DIB's ambition is to drive meaningful improvement in learning outcomes at scale, while also leveraging our learnings to help government and other funders make informed policy and spending decisions."
(Photo credit: Gyan Shala)