Want Your Big Bet to Pay Off? Don’t Forget About Government Capacity

In the Chinese zodiac, 2017 was the Year of the Rooster. But in US philanthropic circles, it was the Year of the “Big Bet” and “Systems Change” Agenda, most recently with the announcement of the MacArthur Foundation’s first $100 million 100&Change Award, among other philanthropic endeavors. These efforts aim to better coordinate philanthropists and focus on supporting larger social impact opportunities—and the social sector should applaud both.

But for long-term, lasting impact, most of these big systems change opportunities require an ingredient that gets much less attention and funding: overall sustainability through government capacity, particularly in developing countries. Whether it’s a government that puts policy in place to support implementation, that can take over direct implementation of a proven program itself, or that can finance and manage implementation, the “endgame” for many of the most promising social change initiatives relies on a significant government role. Unfortunately, philanthropists often overlook or avoid this ingredient, though it’s critical to helping their grantees scale impact and make a real dent in the world’s biggest challenges.

So with the start of 2018 upon us, the question we need to collectively answer is: How can global development philanthropists seeking big systems change help governments build their leadership, engagement, and ability to deliver on goals?

Government Adoption as the Primary Endgame for Nonprofits

Government adoption isn’t just something a few nonprofits here and there aspire to achieve. In research for our SSIR article “What’s Your Endgame?,” my colleague Alice Gugelev and I found that nonprofits are primarily focused on government adoption for their endgame. Most nonprofits pursue this endgame as their path to scaled impact, because governments are the only institutions with the ability to scale, sustain, and fund programs at a meaningful level over time.

We’ve seen similar trends from the funder side through our collaboration with several philanthropic efforts, including Unorthodox Philanthropy, which helps organizations reach their endgames by providing a finite amount of philanthropic capital. A review of these efforts reveals that approximately 80 percent of shortlisted organizations had government adoption as their primary endgame.

It has become clear from our work with these nonprofits that, at a minimum, the social impact sector needs competent counterparts in the government—and urgently. Nonprofits need to empower these counterparts to not only execute programs effectively, but also make decisions about which interventions to prioritize (rather than just giving in to donor-pushed efforts). Governments must also have the vision to make early investments in budgeting and systems critical to supporting those interventions. In the long-term, effective government adoption hinges on government leadership, commitment, and human capacity to competently run these programs and build on them with other new, innovative approaches.

The Gaps in Government Capacity

Despite the need, however, many governments in developing countries—those the philanthropic community most often targets—are not ready to take on or take over high-performing, high-potential social impact programs. (Unfortunately this sentiment may now also ring true for philanthropists targeting interventions in the United States—both at the state level, where we see variability in funding and capacity, and at the federal level, as the Trump Administration reduces staff budgets and delays filling senior positions.)

I saw the implications of the government capacity gap most acutely several years ago in my role as board chair of mothers2mothers, an international NGO focused on the prevention of mother-to-child transmission of HIV. Together with a donor, we laid out a good-faith plan for governments in sub-Saharan Africa to take over the program so that they could scale our model across the continent without mothers2mothers needing to directly implement it. We made it part of the way in South Africa and to a lesser extent in Kenya, but ran into significant human resource shortages and budget shortcomings elsewhere (and had to confront a frustrated donor who felt we didn’t try hard enough).

Why this gap? Building government capacity is a public good and goes beyond the work of a single NGO. Moreover, donors have real concerns about interfering with governments, private sector conflicts of interest, paternalism, and deeper philosophies of wanting to count how many lives saved, as opposed to measuring whether a system changes or has been sustained.

Consequently, the international donor community has provided limited resources and support for real government capacity building. Philanthropists have focused on scaling specific interventions of a nonprofit, without an eye to influencing the broader systems or building an enabling environment. Government donors such as USAID primarily support contractors independent from the government and spend minimally on government capacity-building efforts in developing countries, aside from large infrastructure projects. Even well-respected leadership programs that recognize the need for public sector leadership—such as the Young African Leadership Initiative and the Tony Blair Africa Governance Initiative—have struggled to empower local civil service leaders effectively.

The donor community needs to understand that to achieve more government ownership, NGOs need comprehensive resources to support service implementation (to demonstrate outcomes), excellent evaluation systems (to prove quality and impact), policy (to advocate, model, and garner adoption), and technical assistance (to monitor and provide quality assurance support post-adoption).

We’re From the Government and We’re Here to Help

The social impact community needs to recognize the importance of government capacity for supporting credible nonprofit endgames and real systems change. With an understanding that government capacity starts with local actors and involves bigger issues around governance, legitimacy, and credibility, the international donor community can play a useful role on both the demand and supply sides of government capacity.

The demand side may well be easier for philanthropists, as they can still avoid engaging governments directly. Numerous nonprofits focus on holding governments accountable, increasing transparency around budgets and spending, providing feedback on policy and decisions, fighting corruption, and more broadly supporting the democratic process. These roles are important and create the right environment and incentives for government reform.

The harder—but potentially higher-impact—path for donors is direct support on the supply side. Directly increasing government capacity may take the form of several initiatives:

• Human capital-focused interventions such as senior leadership training, graduate school education, or international expert fellowships (such as Scott Fellows in Liberia)
• Civil service reforms, such as technical assistance for pay scale reform
• Program delivery units (PDUs) to set up additional capacity that is fully integrated into a government and draws on international staffing only temporarily (such as the Agricultural Transformation Agency in Ethiopia)
• Government inclusion efforts, such as encouraging more youth to run for political office or serve in the government

One government capacity-building program we at the Global Development Incubator (GDI) are particularly excited about is Emerging Public Leaders (EPL), which we helped start and incubate with its founder Betsy Williams over the last 18 months. EPL aims to improve government performance and leadership by building a pan-African network of 500 young leaders in public service by 2021 to create a tipping point for meritocratic, ethical, and effective civil service throughout Africa. EPL is based on an initial program in Liberia, started in partnership with President Ellen Johnson Sirleaf, and is now poised to expand into Ghana and other West African countries. Over the last six years, the Liberia program has recruited, trained, and placed 120 fellows into the Government of Liberia, with more than 90 percent still in service and many of them moving up to senior executive leadership positions.

At a graduation ceremony for Liberia's President's Young Professionals Program, President Ellen Johnson Sirleaf congratulates Patience Y. Karley, who was a fellow for two years and now serves as Budget Officer in the Ministry of Finance and Development Planning. (Photo by the PYPP of Liberia)

Beyond the numbers, an evaluation conducted by Princeton University found that the program has built government capacity; fellows in the Ministry of Finance were recognized for helping deliver the first-ever, on-time government budget to Congress. It has also helped the government become an effective counterpart to international NGOs and donors; fellows were seconded into the government’s Ebola response team to ensure coordination with civil society and across ministries. The program is also reframing government capacity to include leadership and professionalism, which—combined with EPL’s explicit drive towards inclusive representation of young people, women, and people from diverse backgrounds—help strengthen and sustain coordinated interventions across ministries. The model has extended the gains of post-conflict technical assistance programs, such as the Governance and Economic Management Assistance Program, which can run the risk of providing short-term capacity support without sustainability.

We see the model as one of the best “bang for your buck” global development programs, as most of the EPL country budgets support fellows’ salaries—in Liberia this annual cost is $15,000 per fellow—for two years (as opposed to funding international contractors, for example). The model also “practices what it preaches” with a government adoption endgame: The Liberia program is now in a public-private partnership with the Government of Liberia, which funds a significant percentage of the budget.

What’s a Donor to Do?

Programs like EPL are promising. But if the international donor community is serious about systems change and mobilizing local resources toward the Sustainable Development Goals (SDGs), building government capacity needs to become a fundamental piece of every donor’s strategy.

We see three potential ways donors can take action. First, they can invest in civil service leadership programs like EPL while investing in other programs to ensure the enabling environment is growing. This approach requires patience, persistence, and most notably, a new way of thinking about timelines for results and impact. Second, donors can look at the nonprofits in their portfolio pursuing a government adoption endgame and direct a percentage of that overall support toward strengthening government counterparts to support those original efforts. For example, donors might co-fund an NGO-led community health worker model with a civil service program that supports the ministry of health’s team overseeing it and the ministry of finance’s team developing the budget for such an investment. Finally, donors can start by checking their own approach to working with nonprofits and governments. For example, setting up a memorandum of understanding with a government shouldn't just be part of a checklist for a license to operate; it should reflect a true partnership with government and both parties should discuss the goal of a long-term handover.

Philanthropic big bets have enormous potential, and the fact that more and more donors are thinking at the systems level is promising. But without a focus on building government capacity—particularly in developing countries—we can’t realistically expect these laudable pushes from the philanthropic community to succeed.

Read more stories by Andrew Stern.