ILFF 4 Education - Impact Linked Financing for Education to accelerate inclusive quality education through private sector engagement
Many countries face challenges and a considerable funding gap to meet the SDG 4. Covid-19 has aggravated this situation. Impact linked finance is an innovative way to leverage private-sector engagement in the education sector for the inclusion and quality learning of vulnerable groups. In collaboration with foundations, the project will pilot impact linked financing in education in SDC priority regions in order to accelerate learning, inclusiveness and quality of basic education.
Employment & economic development
Education facilities and training
Business support & economic inclusion
- Vulnerable children, youth, adults have improved basic education skills as a result of enhanced education access and learning quality.
- New and additional private finance is leveraged and invested in the education sector.
- The ILF model proves attractive to impact investors in the education sector with increased ILF-based deal flows.
- 156.000 children, youth, adults benefit from quality education services to improve their basic education outcomes.
- A max. of 36 HIOs in the education sector receive appropriate support and investment.
- ILF-based transactions ensure financial viability, the social mission and growth of the selected HIO.
- Clearly defined exit strategy for continued operations after ILF intervention with each HIO.
- Robust and convincing social and educational impact data made available.
- Impact-first investors view ILF as an attractive means to engage in cooperation with philanthropic bodies and other donors to support education.
- Foreign private sector North
- Impact Linked Finance Fund (Dutch foundation co-created by Roots of Impact (ROI)
|Background||Basic education is a fundamental human right and an essential service; basic education skills are the foundation for inclusion, participation, gender equality, equal chances in life and work and for further education and training. Nevertheless, millions of people lack relevant basic education skills: 265 million children and youth are out of school; an additional 617 million lack minimum proficiency in reading and math despite going to school due to low quality of education; 773 million adults are illiterate, most of them are women. School closures in the wake of the Covid-19 pandemic further aggravated educational challenges. To achieve SDG 4 in low- and lower-middle-income countries by 2030, the funding gap is estimated at USD 148 billion annually. Addressing the current education needs requires commitment and resources from both public and private actors but also innovative educational approaches that support and strengthen public education. The Impact-Linked Finance Fund for Education provides financial solutions to stimulate private sector engagement for SDG 4 and links financial rewards to the achievement of positive social and educational outcomes.|
|Objectives||The overall goal of this pilot project is to enable vulnerable children, youth and adults to develop basic education skills and competencies by increasing access to quality basic education through formal, non-formal or alternative education and lifelong learning services provided by High Impact Organisations (HIO) and enabled by catalytic, impact-based funding.|
|Target groups||Direct beneficiaries: HIOs, namely private sector organisations that create strong positive impact in basic education for vulnerable children, youth, and adults. HIO are a means to an end to reach the end beneficiaries: Potentially hundreds of thousands of vulnerable learners in SDC priority regions|
Results from previous phases:
Roots of Impact and SDC co-developed the Social Impact Incentives (SIINC) and enlarged this to the Impact-Linked Finance concept in 2016. First experiences on SIINC in vocational skills development exist from Latin America and are gathered at the moment in Jordan. The ILFF for Education builds on these experiences.
SIINC leverages private investment at 1-5 times the SIINC amount, depending on sector/business. Cost Benefit Relations are in all single deals respected during preparation, results are good to excellent.
|Directorate/federal office responsible||
|Coordination with other projects and actors||
Synergies with ongoing SDC education bilateral programmes as well as SDC’s global education dialog and partners. Synergies with different pillars of the Jacobs Foundation (research, investment, technical assistance) and potential additional private foundations.
Coordination with other SDC ILF initiatives and on-going SIINC programs.
|Budget||Current phase Swiss budget CHF 6’200’000 Swiss disbursement to date CHF 1’000’000|