Open Source Aid

The Business of Changing the World: How Billionaires, Tech Disrupters, and Social Entrepreneurs Are Transforming the Global Aid

Raj Kumar

256 pages, Beacon Press, 2019

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The “aid industry” is an antiquated term and most people use it pejoratively. But changes to this sprawling, $200 billion-a-year industry have come so quickly that we don’t yet have language to describe it. Perhaps one day something like “impact industry” will catch-on, but for now we’re left with an alphabet soup of social entrepreneurs, NGOs, impact investors, multilateral development banks, philanthropies, socially responsible businesses, and on and on.

The changes to the aid industry are happening all around us but haven’t been described systematically with detail and context. That’s what prompted me to write The Business of Changing the World: How Billionaires, Tech Disrupters, and Social Entrepreneurs are Transforming the Global Aid Industry.

In the book, I argue that we are moving from an aid industry organized around good intentions to a global competition for good results. This results focus is leading to profound changes in the way we do and even think about aid. So much so, that the ancient concept of “charity” is becoming obsolete.

We have an imperative to shape the new aid industry to be fit for today’s challenges. There has been enormous progress on poverty reduction over the past few decades, much of it due to the economic advancement of middle-income countries like China. But in this time of abundance and technological advancement, ten percent of humanity continues to live in extreme poverty on less than $2 per day. That poverty line is arbitrary but is perhaps the most visible goal of the aid industry and it’s the first of the Sustainable Development Goals.

The extreme poverty that remains is tied up with conflict, discrimination, and injustice. It won’t be easy to solve. At the current pace, we are likely to be chauffeured around in autonomous electric vehicles long before children stop dying of the diseases of poverty like diarrhea and pneumonia. (Currently there are more children living in extreme poverty in the world than there are people living in the United States.)

If we are to accelerate progress toward the end of extreme poverty and other critical goals, we’ll need to change the way we do business. We’ll need a more open, collaborative approach. It’s something I call Open Source Aid.— Raj Kumar

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When I consider the new aid industry—erupting with billionaire donors and big company do-gooders, social entrepreneurs with a retail mind- set, new approaches like human-centered design, behavioral science, and systems thinking, all with a results focus—I see the outlines of a new ethos I call open source aid. It’s not a single methodology, like randomized controlled trials or a robust philosophy like effective altruism but rather an operating culture. It’s a combination of having the humility to assume no charitable idea is going to work out exactly as intended and the honesty to share experiences and results, good and bad.

The old aid industry has been held back by a fear of openness. The risk of highlighting wasted taxpayer dollars or of drawing attention to failures that individual donors might not appreciate makes charities and aid agencies clam up. One of the key reasons we started Devex was because we saw no open forum for the most effective ideas, people, and organizations—especially those from the countries where aid work takes place—to rise to the top.

Open source aid, like open source computer code, seeks to change all that by enabling everyone involved in the industry to learn from and build on the experiences of others. It’s not proprietary or centrally controlled. It values everyone’s contribution—from the foundation president to the expert consultant to the poor person sharing feedback about an initiative in his or her own community. It’s effectively altruistic in that it assumes all lives have equal value and that saving as many lives as possible should be our shared goal. It allows for a range of approaches, with the best ideas bubbling up to the top of a transparent and open community.

GitHub is the largest online platform for web developers, where they post and comment on each other’s code. The site also hosts the largest open source community in the world. Over twenty million developers are part of the platform, and they work together to improve the quality of open source code that no one owns. Engineers on the platform take pride in the amount of code they publish and on how many people have given their code a kind of digital thumbs up. Whether you’ve heard of GitHub or not, chances are many of the digital products you love have benefited from that platform, as have ours at Devex.

Wikipedia, a similar platform, is another example of what is known as the principle of open collaboration, where people work together informally and without hierarchy but toward a singular goal. On Wikipedia, volunteer editors prune and add content to make the platform as robust and accurate as possible.

Similarly, global development is beginning to head in the direction of open collaboration. When aid projects are designed by the same people in the same conference rooms in London and Washington, DC, it’s only natural that they’ll turn out to be near facsimiles of what’s been done in the past. Often, in pursuit of low-risk, high-impact results, they’ll pursue straightforward, noncontroversial interventions like training healthcare workers or purchasing medicine. Because overseeing smaller projects can entail as much cost and time as larger ones, these projects will commonly be quite large—often millions of dollars committed over several years.

This approach leaves out risky but innovative opportunities like APOPO, one of my favorite examples of an intervention that only an experimental, collaborative approach could surface. APOPO is an organization that trains African giant pouched rats—who have an unbelievably precise sense of smell—to detect tuberculosis (TB) in laboratory samples. In Ethiopia, Tanzania, and Mozambique, people with symptoms of TB cough up sputum and the rats sniff it to see if it contains the disease. The samples flagged as positive by the rats then get full laboratory testing. It turns out a rat can check a hundred samples in just twenty minutes, something that would take a lab technician five days using a microscope. In low-resource settings with high rates of TB, the number one infectious-disease killer in the world today, use of these rats might just be a game changer for detection of the disease and saving lives.

APOPO was funded by USAID but not through a standard government contract or grant. Instead, it received money through a program called Development Innovation Ventures (DIV, though known more commonly as “Div”) specifically designed to test out risky but potentially hugely cost-effective ideas. The organization is funding APOPO to help build evidence of the rats’ capabilities, and, ultimately, to scale the program up for more widespread use. So far, DIV has granted $90 million to innovations like APOPO in over forty countries.

DIV uses a tiered system for awarding grants: $25,000 to $150,000 for an initial proof of concept period, which, if successful, can be followed by a $150,000 to $1.5 million grant for testing and preparing the innovation for the market. Finally, if the innovation really works and has market potential, it’ll award a grant of $1.5 million to $15 million in order to take it to scale. This allows it to take measured risks and to focus most of its funding on innovations that work.

Grants and Competition

Another manifestation of open source aid is the growth of competition grants like XPRIZE. These kinds of grants seek to inspire a large community of people—including those outside of a field of practice who may have a fresh perspective—to bring their ingenuity to bear against a significant problem. The financial prize offered isn’t meant to necessarily enrich the winners but rather to help take their idea to fruition.

As the aid industry has been shifting to a greater focus on evidence and results, these kinds of competition grants have been growing dramatically. Grand Challenges Canada, an initiative primarily funded by the Canadian government, seeks out what it calls “bold ideas with big impact” and has funded 854 since its inception in 2010. Scientists, healthcare practitioners, students, and anyone with an idea can make a case for funding as part of a competitive process. An example is a project to test pregnant women for urinary tract infections (UTIs) in low-income countries.

Around a third to half of pregnant women will get a UTI during pregnancy. They’re often not serious, but if the infection is not treated it can have significant complications for the mother and fetus, from premature labor to low birth weight or even spontaneous miscarriage. In low-income countries like Sierra Leone, poor women don’t have the money for expensive lab tests to determine if they have a UTI. The alternative is use of test strips you pee on, like a pregnancy test, but those cost one dollar each, which is still too much for many soon-to-be moms. A Christian relief organization, World Hope International, won a Grand Challenges Canada grant to test out a new innovation it developed—a test strip specifically for UTIs that costs just twenty cents.

Ideas like that one are most likely to be hatched by smaller organizations and those closer to where the problems are. Competition grants are cropping up to help foster the development of these ideas and take them from small-scale concepts to commercial application.

What’s incredible about competition grants is their efficiency. Given the causes involved, many people are willing to contribute their ideas and efforts without receiving a paycheck. Participating in a competition to solve an important problem is its own reward. Plus, using a tiered model allows funders to experiment with innovative ideas while reserving significant money for ideas that are proved and ready to scale.

The Global Innovations Fund (GIF), which made its first grants and investments in 2016, is one of the latest examples of the growth in this space. Among its projects is a modest effort to place twenty Syrian refugees currently in Jordan into employment with major corporations in Morocco and the United Arab Emirates.9 At first glance, it seems like a drop in the ocean of twenty-one million refugees in need. But remember, these are not typical grants designed just to do immediate good but rather opportunities to collect evidence.

 Like an early stage venture capitalist, organizations like GIF use small grants to study what works—in this case the process for identifying employers, matching and training the workers, securing visas—in order to build a robust business model that can scale. If it works—and it could well fail—GIF will ultimately provide loans or even invest directly and become a shareholder of a new company that connects global corporations with refugees who have the skills they need. We are in a period of experimentation, as organizations work to define their impact in order to meet the new expectations of the industry. While I have certainly witnessed quite a few young organizations and projects given credibility they don’t deserve by virtue of throwing around buzzwords that fit the moment, some of these experimental ideas are working.

Obstacles to Open Source Aid 

The dream of a new aid industry that operates like an open market and drives a virtuous cycle of more funding chasing better solutions is far from assured. There are major roadblocks in the way. The largest is that despite all of the transformational work being done, most aid funding today still comes in the form of government contracting.

In the case of the US, reforming the way the federal government purchases goods and services is a challenge far beyond USAID and the other US government foreign aid agencies. There’s reason to be skeptical that significant foreign aid funding will shift away from large-scale contracts and grants and toward more innovative pay-for-performance instruments.

There are also many examples of progress, from USAID’s Development Innovation Ventures mechanism to the Millennium Challenge Corporation to development impact bonds. Nonetheless, these are just a few percent of the approximately $30 billion annual US foreign aid budget.

Achieving global development progress may get harder in coming years. For one thing, automation and digital disruption, including technologies like 3-D printing, could close off the traditional route to economic growth for the poorest countries. Instead of low-skilled, light- manufacturing, such as that done in garment factories, moving from places like China and Bangladesh to sub-Saharan Africa or Haiti or Myanmar, those jobs may be replaced by robotics. For another, accelerating climate change could lead to more migration and more water shortages and food crises.

Foreign aid agencies and foundations urgently need to open up, collaborate, and innovate if they are to be effective under these difficult new circumstances. In particular, they need to find a way to tap into the millions of people around the world working in all industries and professions who want to help. If we can crowdsource innovative ideas and solutions and crowdfund the necessary investment for implementation, we can redraw the org chart of the aid industry to include virtually everyone in the world who wants to be a part of it.

An important element of moving toward an era of open source aid will be innovators inside government agencies like USAID and DFID. We need more focus on the sometimes-unsexy topics of procurement reform—for example, moving away from buying big technology projects that become obsolete overnight and toward the kind of software-as-a-service rental models so favored in the private sector. In a moment of urgency, innovators will need to figure out how to take more risks and co-create solutions with private companies and online communities, and they will need to move more quickly. Who would have thought the future of the world, including critical challenges like ending global poverty, would be in the hands of procurement officers?