The world’s first Development Impact Bond (DIB) to support the enrolment out-of-school girls and improve quality education in remote, rural and marginalised communities in India exceeded ambitious targets. The DIB achieved 116 per cent of the enrolment target and 160 per cent of the learning target in its final year of the programme.
The UBS Optimus Foundation, launched the Development Impact Bond in education in 2015 to provide Indian NGO Educate Girls operational and financial flexibility.
The DIB model is shaped around an outcome payer who agrees to pay for the social outcomes that are achieved by a programme. The risk investors provide upfront funding to the implementing partner and receive a return only if the outcomes are achieved. As a result, The UBS Optimus Foundation, which provided the upfront working capital of $270,000, recouped its initial funding plus a 15 per cent return from the outcome payer Children’s Investment Fund Foundation. Educate Girls will receive part of the return as a bonus payment, while the rest will be used for other UBS Optimus Foundation programmes.
Safeena Husain, Executive Director of Educate Girls, said: ‘It’s been a journey of self-discovery for Educate Girls. The funding enabled us to innovate and apply tailored solutions to enrol the hardest to reach girls in school and significantly improve the learning levels of a large number of marginalized first-generation learners. The final results are a testimony to our efforts and give us the confidence that Educate Girls can deliver quality at scale and value to every single child in the program.’
The focus on measurable impact and contractually agreed payment-by-results (which have to be verified by an independent evaluator) could potentially make DIBs and appealing way for philanthropists to donate their money.
Phyllis Costanza, CEO of the UBS Optimus Foundation, said: ‘We must challenge, innovate and create if we are to truly reframe the future for thousands of girls across India. The launch of the DIB demonstrates how we are turning those words into action. It is proving an increasingly attractive approach as people recognize the DIB’s ability to secure new and much needed funding and deliver significant and sustainable social returns.’
Following this successful demonstration of the DIB approach, the UBS Optimus Foundation is working on a new education DIB, which will be announced later this year.