Interview – Jamie Cooper-Hohn

According to the Children’s Investment Fund Foundation (CIFF), its approach is ‘a substantial divergence from the norm of development funding’. One aspect of this is that they look at their funding as an investment, with real clarity about impact from the outset. But, CIFF president and CEO Jamie Cooper-Hohn emphasizes to Caroline Hartnell, this does not make CIFF less likely to undertake risky funding, just more careful about making decisions. Clarity about success is something we can’t do without in any field, she insists.

On your website it says that ‘CIFF recognizes that its approach is a substantial divergence from the norm of development funding’ – in what way?

There are two main aspects to that. One is that we look at our funding not as a gift but as an investment, so we insist that there’s real clarity on impact from the outset. We build these goals with our partners – for example, we’re going to have x reduction in mortality, or x increase in standard deviation of learning outcomes – and this must include some clear logic as to why we think we can get there and why this approach is cost-effective. It is rare that organizations are held to account that much on delivering impact, and I think it’s been somewhat unfamiliar for them.

Evidence shows success in improving early learning outcomes has enduring and high value returns on investment.The second part is a business approach, which means accepting that nothing ever quite works out in reality as it did in the business plan. For example, if a business sets up advertising to attract x thousand new customers in a certain timescale, you’re constantly assessing whether that’s happening. If nobody’s signing up for the promotions, you ask ‘do we have the promotion wrong, could we be doing better?’ You have to constantly course-correct to get to your end goal. It’s not that we write the cheque and wait for self-reported data or an end-of-the-line evaluation. We monitor agreed key ‘buckets’ (such as x per cent of kids attending school regularly, teacher proficiency in delivering the new curriculum) that are central to delivering the desired outcome.

Inevitably after the first six months we have a problem with a couple of the goals, and there are two possibilities: either you say, for example, we’re doing well on the first goal, maybe we could up that more and not worry about the other one; or you can try to fix the underlying problem. What’s satisfying is that in the last couple of years, we have seen that even in the first six months most organizations can make dramatic changes. The ultimate change – ie whether or not we hit the target – we don’t know about until after three to five years, but knowing that we are least doubling impact along the pathway is exciting for everyone.

You describe that course correction and your continuing involvement as a business approach. Would you also describe that as a venture philanthropy approach?

It depends on the venture philanthropy but I think where there’s a double bottom line, which there often is, there tends to be a lot of management around hitting the financial target. It’s assumed that if the business is growing then you’re having a social impact. You’re working in a sphere of social benefit – building hospitals, running ambulances – but are you actually saving lives? An improvement in response time for ambulances, for example, would be the primary driver for us.

You talk about successfully marrying the acumen and discipline of the private sector with the best thinking and evidence of what works in development. Are there aspects of private business practice that aren’t applicable to development?

I think the biggest difference is that as a corporate you have a lot more control over your destiny – you hire who you want and you have an exit strategy. We generally have two sets of partners, governments and NGOs. For the most part either a government approaches us or we approach them where we think there are large gains to be had for children in an area where that country has a substantial need. We agree with the government that we will get a programme going using their infrastructure over a period of time, and that we will take on a lot of the major costs at the beginning, such as training, and sometimes initial procurement or capital costs. So we’re in the game to institutionalize a programme – usually into the government system or perhaps a market system. Our programme may depend on the quality of 100,000 community health workers, for example, and although we may be able to marginally affect that, we’re not going to get to hire government workers. Hiring and firing is a key thing that matters a lot in quality of delivery and holding people accountable, and we often can’t do that. You also don’t make a lot of the budget decisions that allow you to exit: you can agree and negotiate and hope that you share a vision of value in this, but it isn’t yours.

We generally work with an NGO as well that has a good relationship with the government and has done work in this area to accelerate the implementation. They’re the ones who are held most accountable for making sure that the system works and that the exit back to the government is smooth – really trying to return the ownership to the government.

You have talked of seeking to invest in ‘big wins’ where successes extend well beyond the direct impact of the funded programmes. Can you say a bit more about this?

Overall we’ve moved to what we call strategic priority areas, focusing on areas where evidence exists that we could really change the norm of outcomes for kids. For example, on child survival for the under-fives, there is very good evidence on what you can do to prevent or treat things like infections, hypothermia and breathing problems —key causes of neo-natal mortality. So we will try to focus on where those big gains can be made. This means we have to make a series of interventions. Some are grants, but a lot of it is policy guidance, policy change in some cases, and bringing together donors willing to fund those interventions – the whole package.

When it comes to direct grants for programmatic work, our board looks for two things. One is whether we are reaching a large number of kids in a cost-effective manner, going to countries where there really is a need and the cost is justified. So with our paediatric AIDS work, for example, we focus on the seven countries where that’s the biggest killer of kids under five rather than the countries where it’s rare. Yes, of course we care that a single kid is dying of AIDS, but that’s not the best use of the dollar. Our board calls that their ‘sleep at night’ test: I want to know that a lot of kids’ lives are better because of the money we’re putting in, so if a programme seems to be going a bit wrong, they ask ‘are we still getting our sleep at night?’

The other piece they’re looking for is what they call the ‘10x’ – leveraging the value of the investment, so we can exit and have confidence that the programme is institutionalized and will go on at least another five years, if not indefinitely. We want replication and expansion – so, for example, in a country like India we often negotiate to get a third of a state covered by a programme to the point where we have a clear demonstration of how to implement efficiently and achieve meaningful impact at a reasonable cost. We get all the systems in place, find out how it works, make the mistakes, then hand it over and say ‘you do the other two thirds’. We often end up playing a lesser role in the other two thirds, but still being there.

It is often suggested that foundations’ focus on achieving a measurable impact is a barrier to taking risks. You talk about defining very clearly the impact you want to achieve, but do you think that focus makes CIFF more reluctant to support high-risk areas of activity where the potential gains are very great?

I think what it does is make our process of getting to a decision on a grant slower. We are careful because we’ve done it the other way and had it all go wrong, and we know it’s because we didn’t spend enough time on understanding whether our goals were realistic or not.

Having said that, I don’t think you can look at our portfolio for a second and argue that we don’t take risks. One of our first investments was providing antiretroviral care in agreement with the government in India before the national government had a policy of care. People talked about it as taking out a mortgage that we could be stuck with forever. We did the same with paediatric AIDS: 10, 000 kids came on board for new treatment with no guarantee the Global Fund would pick them up. We assumed that would happen, but we took the chance and we absolutely saw ourselves as morally responsible to keep going once we started someone on treatment.

We would argue that part of development is that you should have a good logic about why a programme should succeed and how you will know if it’s successful or not. We feel strongly that that’s how you get good outcomes: you’ve thought it through, you have that clarity and you share it with the implementer. If it isn’t going to work out as you imagined, you need a mechanism to tell you where it isn’t going according to plan and a quick-response approach to that. I think some risks are inappropriate and unnecessary, for example just to say: ‘I like this person, we’re just going to put $100,000 there and see what happens.’ We have some obligations to spend our money in a way that is likely to get results, and that requires some work.

When you’re thinking about risks, people tend to look on the down side: what happens if we fail or something goes wrong? Should we look at missed opportunities as another sort of risk – the consequences of failing to take action where the potential impact is great?

There are areas such as climate change where there is an urgency, and CIFF probably has made the mistake of going too far in thinking ‘will we ever be able to control this risk? Are we adding a lot of value to thinking about that?’ When we launched CIFF, the Copenhagen process was coming up quickly and we did feel a bit overwhelmed. US support for climate change mitigation seemed to be waning and there were very few funders. So we did have an attitude of ‘let’s just get out there’ and I don’t think we felt great about that. But we have stepped back now and gone through almost identical processes with the team for the climate side and for the children and we’re convinced that slowing down a little bit has got us a lot further a lot faster.

But we’re still trying to get the balance right, to work out where we do need to go faster. Why would we let a child die now? What’s the trade-off? I don’t think it’s a science, so there probably are missed opportunities. Most of our investments are working out quite well and we think the advocacy ones are really moving the field. So now I would say that clarity about success is something we can’t do without in any field.

Do you think foundations generally have a well-developed concept of risk and a systematic way of thinking about it, including looking at the downside risks and the missed opportunities?

What I find interesting is how many people talk about innovation and risk out of context. For me, these things shouldn’t ever be drivers. You have to ask: what am I trying to change, and where is the need to move the needle on this? Sometimes the smartest thing I can do is something low-risk but proven, even if it’s boring, over and over.

It’s also smart to do what you’re good at. If a particular drug or other product is missing, the Gates Foundation will gravitate towards developing that because that’s what they’re good at. We often come in for the fourth round, where we are really talking about getting the new drug out for large-scale trials, because we are good at implementation.

You went to the UBS Forum in December, which is a forum for philanthropists to learn from. How did you find that experience?

The agenda was very varied, and there were some good sessions to support early-stage philanthropists and high net worth individuals. I very much remember being at that stage. It’s incredibly exciting: that first time you see that you’ve changed lives is exhilarating and gives you the desire to do more, and do it well and consistently.

For more information

CIFF: Children’s Investment Fund Foundation

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