Case study 6: Girls’ Education Challenge Fund

The £344 million Girls’ Education Challenge (GEC) Fund was set up by the Department for International Development (DFID) to run between 2012 and 2018, with funding focused on a four-year cycle, 2013–2017. It is the UK’s main contribution to the Millennium Development Goal of eliminating gender disparity in primary and secondary education – one of the Millennium Development Goal (MDG) targets agreed by UN Member States in 2000.

Context

The Fund provides grants or subsidies to projects designed to achieve a social objective. Projects are selected through a competitive process and recipients share risk in some way with the funding body. The UK government mostly uses the Fund in its international development work but it has also been used to support domestic development goals.

DFID’s business case sets out the rationale behind its design decisions. It opted for a challenge fund design because it can provide strong incentives for innovation in service design and delivery methods. It opted for an external fund manager to ensure a tight strategic and technical focus, while it retains the final say on major funding decisions so that the Secretary of State can manage political risk.

Intended benefits

The GEC Fund has two primary objectives:

  • to help between 650,000 and 1,000,000 girls into primary and secondary education
  • to find new interventions that can be proven to increase participation and quality of schooling for girls in low-income countries.

Process and management

The GEC Fund is administered by a consortium led by the management consultancy PwC UK, which is the ‘prime provider’ responsible for delivering administrative functions for the Fund. PwC UK sub-contracts three other organisations to provide the administration function:

  • Social Development Direct provides education and social impact expertise
  • FHI 360 provides infrastructure in many countries within which the GEC operates
  • Nathan Associates provides measurement and evaluation expertise.

The Fund managers are supported by a steering committee, which informs decisions to support individual projects and is tasked with setting the strategic direction. As Fund managers, the consortium is required to focus purely on outcomes, rather than prescribing what types of intervention are acceptable. But at the same time, it is expected to seek out and provide support for the development of proposals.

In addition, an internal GEC team in DFID provides strategic oversight. An independent provider is contracted to monitor and evaluate the functions of the Fund and assess its effectiveness.

The DFID contract for the GEC sets out clear design principles for the Fund, with justifications. It is supposed to be administered in a way that is:

  • competitive – to drive high performance
  • responsive – so the GEC can adapt to emerging evidence and fund a variety of projects
  • structured – with clear criteria and incentives to derive the full benefits of scale
  • straightforward – with a clear rationale for its model and approach, keeping the level of complexity to the minimum compatible with achieving the Fund’s aims.

The GEC Fund operates three funding windows, in which recipients and projects of distinct types are funded:

  1. Step change – grants and support for projects to quickly expand proven approaches to increasing girls’ participation.
  2. Innovation – grants and support for projects testing new approaches to increasing girls’ participation, including technological solutions, new partnerships, adapting approaches for new contexts, and novel societal interventions.
  3. Strategic partnerships – subsidies for partnerships with private companies.

The GEC Fund managers have an explicit expectation that limits the step change projects to nine countries that DFID prioritises – some of the most challenging states in the world, including Somalia, Afghanistan and Sierra Leone.

Officially, recipients apply for funding during the window that applies to their project. Applications are judged against a set of criteria published before the window opens. In practice, the Fund administrators and their subcontractors seek to stimulate interest in the fund among likely applicants. Many of those who would apply for the step change window have received DFID funding before developing their intervention.

Less-established organisations with untested ideas or project proposals appropriate for the innovation window may not have been involved in development grant applications before. The Fund managers are expected to support potential applicants appropriately and to continue to support their organisation’s development after any grant has been awarded.

Learning and evaluation

Each project has to have a clear theory of change by which their intervention will deliver and specify a number of realistic outcomes over a given timeframe. These outcomes form the basis of a payment by results (PbR) framework. Projects are kept under regular review to ensure that inputs in their project application’s theory of change are in place. These take the form of quantitative measures like the number of school textbooks purchased and qualitative measures like gender-specific teaching. Innovation window projects and partnership projects are not subjected to the same PbR requirements, because they focus on discovering new approaches that could be scaled up and rolled out in the future.

The Fund managers set criteria for the baseline and subsequent mid-line and end-line evaluation of all the projects awarded funding. Baseline and progress evaluations are commissioned independently by recipients. These substantial evaluations seek to understand how much of an improvement the project is making in the outcomes concerned. The criteria set out by the managers include required sample sizes, target setting, and acceptable methodologies for measuring the key outcomes. They also provide support and capacity-building for projects to build their designs for measurement and evaluation.

Funding arrangements

The DFID contract specifies how the overall funds are allocated between the different types of activities. Two-thirds of the Fund are spent on the ‘step change’ scaling window, reflecting DFID’s assessment that effective solutions already exist and just require support to be adopted and implemented elsewhere. The remaining third is spent on the innovation window and strategic partnerships (which run concurrently).

The entire £344 million for the GEC Fund was provided by DFID. However, to ensure that risk is shared with recipients of funding and to maximise the capital it can unlock, match funding is encouraged. Each window had a different approach to match funding, reflecting the objective of that window and its risks. As such:

  • match funding for the innovation window may be ‘in kind’ capital.
  • a spectrum of match funding is related to external risk for the step change window.
  • in the partnerships window, recipients compete on the level of match funding they pledge over and above a 50 per cent minimum.

A proportion of funding (10 per cent) is withheld from step change recipients until their projects can be shown to have delivered their objectives as part of the PbR framework, defined in terms of expanding girls’ education opportunities or eliciting lessons about what works.

The contract for the GEC places an upper limit for individual projects’ funding needs of 10 per cent so that the portfolio can be more diverse and risk is balanced across the Fund.

Outcomes

Although outcomes are directly related to the projects funded, in practice a high degree of emphasis is placed on learning and development of the GEC Fund as a model in its own right. The Fund completes an annual review of the projects it has supported and of how the Fund is managed, which includes a focus on progress and results, costs and timescale, evidence and evaluation, risk, and value for money. As a result, Fund managers have adjusted the proportion of investment in different types of activity, as well as the criteria for funding and the required outcomes. The baseline data, support and evaluation of projects provides a key mechanism for optimising and informing future management of the Fund.

Challenges

Understanding context and access to expertise

One of the main challenges encountered is that many projects setting up at the same time can mean that demand for support – in particular in establishing the appropriate baseline evaluation for projects – cannot be met. The Fund’s managers have had to ensure the development of sufficient capacity in the evaluation market to carry out these baseline evaluations.

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