It has been nearly 50 years since the U.S. foreign assistance system was formally established through the Foreign Assistance Act of 1961 (FAA). In that time, the structure of U.S. foreign assistance has become bloated and unwieldy. Currently, 12 Departments and 25 government agencies are charged with implementing foreign aid policy as defined through over 400 development objectives. To complicate things further, numerous amendments to the FAA and over 20 additional pieces of legislation were passed to direct U.S. foreign aid in the time since the FAA’s passage. With such a muddled structure, it is no wonder U.S. foreign assistance has come under assault in recent years, as calls for serious reforms have continued to mount. Luckily, reform efforts are moving ahead at full steam.

Two weeks ago, Representative Howard Berman, Chairman of the House Foreign Affairs Committee, introduced the first two sections, or preamble, of a draft of the Foreign Assistance Act rewrite. This draft marks an important step in the process of overhauling the U.S. foreign aid system to make it more coherent and effective in achieving the goals of global development. While the preamble is meant more as a formative document, designed to provide the development community with a first glance and guide a discussion, it offers insight into some of the new initiatives and strategies to be included in the final draft.

For the most part, this draft presents a broad picture of the direction in which the reform effort is moving. Through a declaration of general principles, policies, and goals of U.S. foreign assistance, the preamble offers insight to the guiding tenets of the reform process. Within these broad principles and goals, all four of Global Washington’s principles of effective development are accounted for: coherence and coordination, transparency and accountability, local ownership, and targeting aid to those most in need.

To ensure coherence and coordination, the draft calls for a streamlined foreign assistance structure to clearly delineate authority and responsibilities and to ensure consistency across all policy areas.

In order to improve transparency and accountability, the draft’s “principles of assistance” include a call for improved monitoring and evaluation mechanisms, as well as the need for detailed information regarding foreign aid budget and expenditures.

With regards to local ownership of aid projects, the preamble offers several principles to increase local capacity and ensure local ownership of development programs. According to this draft, it should be the policy of the U.S. government to develop assistance programs in partnership with local stakeholders that increase local capacity in the government and civil society. As a result, foreign assistance programs can be more effective and sustainable.

As a means of ensuring aid is targeted at those most in need, the preamble recommends that assistance be based on “poverty measurement tools and gender analysis.” Included in such measurement tools would be, among others, the Human Development Index rankings, per capita incomes, local capacity, and prior performance records.

Apart from the statement of general principles and policies, the preamble does introduce new, specific initiatives and organizational structures. Most important amongst the specific items in this draft is the designation of a national development strategy to guide foreign assistance activities and to ensure coherence across all foreign policy objectives.

The preamble also suggests that a rewritten Foreign Assistance Act would establish Development Support Funds to provide the USAID Administrator with the authority and resources to provide assistance to developing nations that will support local capacity and ensure aid is targeted at those most in need. Such an initiative offers stark contrast to the current policy planning strategy. Instead of using sector-specific goals and objectives to guide development policy, USAID would be afforded the flexibility needed to create effective programs.

To ensure that development activities reflect the needs and priorities in the field, each Development Support Fund will contribute a percentage of its funding to the administration of Country Investment Strategies for Development. Each Country Investment Strategy for Development will be prepared every three to five years by each USAID Mission Director. This is another departure from the previous policy of allowing specific goals and objectives to guide development policy. As a result, conditions in the field would inform the creation of development policy much more significantly than in the past, making programming more flexible and responsive to the needs in the field.

Paramount to the success of any reformed foreign assistance structure is consistency and coherence. In an effort to ensure development policy is consistent throughout the government, a rewritten Foreign Assistance Act would create a newly established Development Policy Committee. Such a committee would be composed of the USAID Administrator and a representative from each department and agency that has a stake in global development such as the Departments of Agriculture, State, and Defense, as well as at least eleven others.

While this draft is a mere outline of what a rewritten Foreign Assistance Act will look like, it provides a great deal of hope that reform is truly within reach. However, with only a few weeks of legislative business to go before Congress recesses for the mid-term elections, whether the new Foreign Assistance Act will even be considered in this Congress remains to be seen.

To review the draft preamble in its entirety, please follow the link here. To read more about Global Washington and our recommendations for a reformed foreign assistance structure, please visit the Policy Work section of our website.

Village Reach 
Announces
 National
 Expansion
 Of
 Last
 Mile 
Health
 Program
In
 Mozambique

New
 funding 
appeal 
targets 
$4
million 
to
 support 
six year 
program
Charity 
evaluator
 Give Well 
continues 
to 
rate
 Village Reach 
its
 #1
 charity

SEATTLE, WASHINGTON, July 27, 2010 VillageReach, the Seattle‐based social enterprise that increases access to healthcare for remote, last mile communities in low‐income countries,
today announced a $5.6 million program to strengthen the national health system in
Mozambique. Contributions for the six‐year program total $1.2 million to date. The new
program is supported by the Mozambique Ministry of Health ‐ MISAU – and follows a successful
five‐year demonstration project of the VillageReach vaccine and medical commodities
distribution model. Results of the demonstration project recorded improved population
vaccination rates from 68% to 95%, with corresponding cost decreases of as much as 20%.

VillageReach also announced today that GiveWell, the independent, non‐profit charity evaluator,
will continue to rate VillageReach its #1 charity. To date, more than 400 domestic and
international charities have been reviewed. GiveWell conducted an extensive review of
VillageReach to evaluate the Mozambique program in terms of its impact and cost effectiveness
in saving lives. See www.givewell.org for the VillageReach review.

The Mozambique challenge

Mozambique has a national vaccination coverage rate of 72%, significantly below the World
Health Organization’s (WHO) goal of 90%. Like many low‐income countries, Mozambique
suffers from high child mortality rates. UNICEF estimates that for every 1000 live births in
Mozambique, 154 children will die before they turn five, many from vaccine‐preventable
diseases. In addition to low vaccination rates, Mozambique has a weak and poorly resourced
health system to support its population of 23 million. Rural health facilities are geographically
isolated and chronically understaffed.

The VillageReach Model

VillageReach strengthens health systems in low‐income countries by designing new approaches
to address common rural health infrastructure challenges. VillageReach combines proven
practices in logistics and supply chain management with new approaches for health system
performance measurement, supervision, and information management to build new models
that meet the unique challenges found in last‐mile settings. As a result, frontline health workers
can dedicate more time each day to saving lives, more families can be served, and community
confidence in rural health systems increases. For more information on the VillageReach model
and details of the Mozambique program, see www.villagereach.org.

“In our view, VillageReach has developed a unique approach to saving lives, and is the best
organization we’ve found by the criteria of proven impact, cost‐effectiveness and scalability,”
said Holden Karnofsky, co‐founder of GiveWell. “We reiterate our #1 rating for VillageReach
and its Mozambique program because of this demonstrated effectiveness, and in recognition of
the organization’s efforts to be as transparent as possible to its donors.”

“We are engaged in an ambitious initiative to demonstrate that improving logistics for health
systems in low‐income countries is highly effective and can have lasting impact to benefit
millions across a national population,” said Allen Wilcox, president of VillageReach. “We take
great pride in GiveWell’s evaluation and appreciate the insight their independent assessment
can provide for donors seeking non‐profit organizations that openly document both their
challenges and results.”

About VillageReach

VillageReach is a non‐profit social enterprise that extends the reach of healthcare services to
remote, underserved communities by creating dynamic delivery and information monitoring
systems. Its mission is to save lives and improve well being in developing countries by
increasing last‐mile access to healthcare and investing in social businesses that address gaps in
community infrastructure.

• For further information, please contact:
• John Beale, Director of Strategic Development
• Tel: +1‐206‐925‐5200
• Mobile: +1‐206‐755‐0145
• Email: john@villagereach.org
• Website: www.villagereach.org

“FOR most Seattle residents, global hunger seems like an impossible problem to solve. Reports of famine in Niger or the thousands at risk for starvation and malnutrition in the Democratic Republic of the Congo, seem not only far away but impossible to change. A local organization, however, begs to differ.”

Local Organizations Weigh In On Global Summit Failures
The Seattle Times |  Danielle Nierenberg and Molly Theobald | July 26, 2010

“A simple bowl of white rice sits on a conference table inside the Seattle headquarters of global-health nonprofit PATH…For every 100 grains of rice, the bowl contains one grain of Ultra Rice. It’s actually not rice at all, but pasta fortified with vitamins and minerals and squeezed through a rice-shaped mold. The manufactured grains are made from a mixture of rice flour, nutrients and binding agents derived from seaweed.”

Ultra Rice: Whatcom County Invention Holds Hope For Health
The Seattle Times |  Kristi Heim | July 24, 2010

With 5 years left to 2015, the target date for achieving the Millennium Development Goals (MDGs), is the world on track for achieving these goals?  Has the economic crisis in 2008 affected the progress? The good news is that though the global economic crisis has slowed progress, the world is still on track.  However, the 2010 progress report issued by the United Nations illustrated that success is uneven across the various goals.  While a number of goals are expected to be achieved, the UN still urges a major push forward by all international development partners to reach all of the goals.  UN Secretary-General Ban Ki-moon brought this key message to the G20 summit in Canada last month, urging world leaders to keep their promise and not to “balance budgets on the backs of the world’s poorest people.”  As a result of Mr. Ban’s urgent message, the next G20 summit in November 2010 will include development on the agenda for the first time.  Also, the UN MDGs summit will take place in two months in New York. A concrete action plan is expected to emerge to accelerate the realization of the commitments world leaders promised in 2000.

According to the 2010 UN Progress Report on the MDGs, goals in the following areas are expected to be reached with current trends:

• – Poverty reduction
• – Sustainable access to safe drinking water
• – Developing countries gaining greater access to the markets of developed countries

Some progress has been made in the areas below, but much more work needs to be done in order for these goals to be realized by 2015:

• – Universal primary education
• – Reducing child and maternal mortality
• – Stabilizing the spread of HIV and AIDS-related deaths
• – Malaria prevention and treatment
• – Forest conservation
• – Information and communications technology penetrating in the developing world

 If the world does not expedite progress in these areas, we may not reach these goals:

• – Ending hunger
• – Gender equality
• – Funding in family planning
• – Ensuring environmental sustainability
• – Increase in official development assistance

 All in all, in each of the target areas, extraordinary attention is demanded to eliminate the “stubborn gaps,” as described by Mr. Ban, between rich and poor, urban and rural, and men and women.

 To view the full version of the UN MDGs 2010 report, please click here.

We hope you enjoy the new additions and streamlining!

Puget Sound Investors Realize Social And Financial Returns From Microfinance Investment Fund

Global Partnerships’ first fund provided five years of double-bottom-line returns

Seattle – Today, Global Partnerships (GP), a Seattle-based nonprofit that invests in high-performing, socially focused microfinance institutions in Latin America, announced that the cycle of its first $2 million microfinance investment fund has been completed, less than five years after the fund was closed. As of last week, Global Partnerships had repaid all investors to Microfinance Fund 2005, either on time or early, with interest.

“This is a watershed moment,” said Rick Beckett, president and CEO of Global Partnerships. “When GP closed our first fund, we were testing the idea that an investment fund strategy could help us reach more people living in poverty and provide social and financial returns for investors. Five years later, we have launched three funds and have $39 million invested in microfinance institutions serving more than 800,000 people with affordable microcredit and other innovative solutions.”

Global Partnerships, founded in 1994, created its first fund, Microfinance Fund 2005 (MFF05), after realizing that philanthropic capital alone would not be sufficient to meet the demand for affordable microfinance capital. Like GP’s two subsequent funds, MFF05 was a five-year debt fund that leveraged philanthropic dollars to raise resources from qualified individual and institutional investors, and then loaned that capital to select microfinance institutions (MFIs) in Latin America.

Investors in MFF05 included two institutional investors as well as 22 individual investors, most of who are from the Puget Sound area. Those investors received an annual fixed-income return over the life of the fund. The capital was loaned to eight microfinance institutions in Central America, which together reached more than 150,000 borrowers when the fund was fully invested.

“GP’s microfinance funds are demonstrating that doing well and doing good are not mutually exclusive,” said Jeff Keenan, a Puget Sound investor who has invested in all three of GP’s funds to date. “Investing in GP funds has allowed me to earn a reasonable rate of financial return and positive social returns.”

Stuart Rolfe, another Seattle investor in MFF05, said: “My wife and I were thrilled that there was an opportunity to invest in a fund that provided resources for Latin American families in need while receiving a fixed-income return. We’ve traveled to some of the areas where Global Partnerships works and have seen firsthand the professionalism and thoroughness of GP’s due diligence and the impact on families who have benefited from their programs.”

GP’s Rick Beckett noted that socially motivated capital from Global Partnerships funds serves a key need in the microfinance industry, which has seen an influx of commercial capital in recent years. “Commercial capital has expanded access to microfinance, but tends to flow to the most profitable microfinance institutions that don’t reach the most vulnerable people with the highest-impact solution,” he said. “In contrast, Global Partnerships invests in microfinance institutions that reach underserved markets and combine microcredit with other services that help people improve not just their livelihoods, but their lives.”

The 2005 fund invested in microfinance partners such as El Salvador’s Enlace, which serves the poorest segments of the population with small loans at low interest rates; and Honduras’ ODEF, which combines microcredit with training, technical assistance and access to basic health services.

Founded in 1994, Global Partnerships (GP) is a Seattle-based nonprofit organization that expands opportunity for people living in poverty by investing capital and management expertise in socially motivated microfinance institutions. GP currently invests in a portfolio of 27 MFIs in seven countries that are selected against a set of stringent financial and social criteria. Since launching its first fund, GP has increased the amount of capital invested in microfinance institutions to just under $39 million, as of March 31, 2010. GP expects to close a fourth social investment fund in the next two months. Find out more at www.globalpartnerships.org.

by Danielle Ellingston and Linda Martin, Global Washington Volunteer

On June 11, Global Washington hosted one of 2 U.S. based consultations, as part of The Open Forum, an initiative driven by a global coalition of CSO’s, whose goal is “to define and promote the roles and effectiveness of the CSO sector in development, based on a shared framework of principles”.  The Seattle based consultation was one of hundreds of consultations occurring in over 50 countries by the end of 2010.   

Sixteen people attended the consultation, and provided insight and recommendations in three areas:  

1) Global Principles of CSO Development Effectiveness.
2) Best Practices and Methods for Implementing Principles.
3) The Enabling Environment for CSO Success.

What Defines a CSO?

The consultation kicked off with a discussion on the term, “CSO” which can be somewhat nebulous. The general consensus is that CSO is a broad umbrella term for organizations outside the government seeking to affect change in their society. Open Forum builds on this definition,”CSOs represent the engagement of people who have organized to promote human dignity and accompany people around the world in efforts to realize human rights and fundamental freedoms.”

Two recommendations which surfaced during this discussion include ensuring inclusion of the voices of local CSOs throughout the Open Forum process, whether they are formally recognized or informally constituted; and to more clearly delineate the roles of the Global North and Global South CSOs.

Principles of CSO Development Effectiveness.

Participants first reviewed a set of draft principles offered by InterAction, the organization coordinating the U.S. CSO response, before opening up the meeting to additional ideas for common principles. A lively dialogue followed, reflecting the group’s passion for inclusion, relationship building, and locally based leadership as keystones for successful CSO development efforts.

We offer the following 4 principles for consideration:

1.       Include local grassroots voices.
Allow local CSOs in developing countries a greater voice in the Open Forum, and in the design and application of development policies. These measures can help ensure long term, sustainable development solutions.

2.       Embody respect for local traditions and cultures.
Local people are the primary agents of change in their communities, not outside organizations. To develop culturally appropriate solutions, we must first learn about the existing conditions and forces – political, environmental, and familial – that created a need for assistance. Respect the local process for identifying needs, gathering information, implementing projects, and ensuring accountability.

3.       Consider impact on community and long-term relationships.
Increase the focus on long term project impact and outcomes. Aim to build relationships, trust, and leadership in a community, and not harm existing relationships or relationship structures.

4.       Build local capacity by letting locals lead.
Employ local people as the leaders of local projects whenever possible.  Include local voices at all stages of the development project life-cycle. 

 Implementing CSO Development Principles

1.       Be accountable by local standards.
Accountability measures must be informed by local norms. Define success well, using the local definitions of success. Increase grassroots participation and downward accountability in CSOs. Understand local assessment methods, and base monitoring and evaluation on those methods.

2.       Incorporate cultural capacity building training and ongoing coaching as a prerequisite for project planning and development, and monitoring and evaluation activities.

3.       Include relationship building goals and milestones, such as building trust, collaboration, and cross-sector and cross-issue solutions, as indicators of success.

 Standards Which Support an Enabling Environment for CSO Success.

1.       Increase donor responsiveness to local norms for accountability and data indicators, collection and use.
We believe donors need to do a better job of balancing the need to ensure funds are wisely spent, with increased sensitivity to the capacity of recipient organizations to provide such data. Data collection is often considered a resource drain on recipient organizations, and increases the administrative/overhead cost of running a project. Reporting requirements should not place an undue burden on recipient organizations.

Moreover, we encourage donors to consider local standards for accountability. Input from some consultation members suggests that funders collect too much data, with little explanation of what the data will be used for, and that decisions are sometimes made without using the data that was collected. We recommend that funding entities consider collecting less data, and using what is collected more thoughtfully.

We also encourage donors to be more transparent by sharing with recipients why certain indicators are chosen and how data will be used.

2.       Fund for long-term community development, with built in flexibility.
The funding process, from application to evaluation, should create incentives for programs that have a long-term positive impact on community and relationships.  We encourage programs which are nimble and responsive to the changing needs of communities, that offer greater flexibility in how funds are spent, and that are developed in partnership with local CSOs who have a hands on understanding of local conditions.  

Participants indicated that organizations are often hindered by donor funding schedules, preventing locals from addressing pressing needs. We recommend developing more responsive funding timelines which address time-sensitive needs, along with longer term programmatic support to help support sustainable outcomes.

3.       Support transparent and accountable hiring practices.
Ensure that CSO staff work in the interests of the organization’s mission; hire DSO staff on the basis of their qualifications.

4.       Be fair and inclusive.
Promote respect for local professionals and equality between north-south partners.

5.       Develop the cultural capacity of non-local DSCOs to help ensure effective use of resources. Increased cultural competency will help experts to work within local structures more effectively and with each other.

One of the most interesting ideas that came out of the discussion was the suggestion to move towards a resource or asset based development approach. CSOs would identify assets and resources available  to support development activity, along with capacity building programs to build local assets, essential for sustainability. Such an approach would take into account the resources and skills local and non-local CSOs bring to the table, making projects more geared to local capacity while facilitating an exchange of skills and ideas that would benefit both. Based on the assessment, capacity building programs can be put into place to build local assets, which are considered essential for sustainability. As one participant noted” Sharing power with the local leaders is integral to formulating an effective strategy in the field”.

Next Steps

InterAction is combining the recommendations from our Seattle consultation with the ideas that came out of the two-day consultation in Washington, DC, and will write a report based on the outcome.  They will present this report at the Open Forum Global Assembly in Istanbul, Turkey in September 2010.  Stay tuned for updates.  For further information, please refer to the links below.

The Open Forum
Interaction
2005 Paris Declaration on Aid Effectiveness
Accra Agenda for Action (AAA)

Written by Brett Walton, who writes for Circle of Blue, a network of journalists, scientists and communication design experts reporting on global water issues.

What is a clean watershed worth? Nature lovers might say ‘priceless’, but the emerging consensus among global conservation experts is that the best way to preserve an ecosystem is to put a price on it.

The buzzphrase in international conservation is ecosystem services; that is, the things nature does that are beneficial to humans. Proponents divide the concept into four service categories: provisioning (e.g. timber, food), regulating (maintaining water quality, controlling floods), supporting (pollination, photosynthesis), and cultural (recreation, beauty).

Because these services are not traded on markets, their value is often neglected in corporate and governmental balance sheets. For example, a city might clear-cut a forest or drain a wetland to build a factory. The factory has clear economic metrics: jobs created, output, construction costs; but the ecosystem is usually described obliquely and does not factor well into cost-benefit equations. If we had a way to quantitatively assess the environment, maybe that factory doesn’t get built because the wetland is more valuable as a climate-regulating, water-purifying, flood-controlling, tourism-inducing bird habitat.

To redress this, researchers are now looking at putting a dollar figure on the benefits from natural processes. Programs such as the United Nations Environment Program’s The Economics of Ecosystems and Biodiversity hope that better valuation of the environment will lead businesses and governments to make better development decisions. A corollary to the idea is that an ecosystem is an asset that land owners are paid to preserve.

This shift in thinking is particularly important for watersheds. In my last post I wrote about problems with clean drinking water. Globally, 75 percent of freshwater supplies come from forested catchments. Payment for ecosystem services (PES) can play a huge role in improving source quality. New York City does not have to filter its water supply because of a watershed restoration program that involved purchasing forests and paying land owners for best management practices. The cost of the restoration program: US$1 billion. The cost of a water treatment plant: US$8 billion, plus US$300-500 million annual maintenance. More than one-third of the world’s largest cities get their water supply from such protected forests.

Not only is it good government policy, it is also good business. Evian and Vittel, two bottled water companies, use payment for ecosystem services to reduce treatment costs at their bottling plants in France. The companies have contracts that pay upstream farmers per hectare to use organic fertilizers and pesticides. Preventing pollutants from entering the rivers and aquifers by paying the land owners for the fertilizer cost difference is cheaper than removing them.

These types of payments are most common in Latin America, the United States and China, according to a recent report by Ecosystem Marketplace quantifying PES transactions for water quality. The report found that US$9.3 billion was paid to land owners in 2008. The Chinese government’s Conversion of Cropland to Forest and Grassland program, accounting for 40 percent of its seven-fold increase in water quality PES in the last eight years. The benefits, as measured in economic terms, are substantial. The UNEP’s report on ecosystem restoration argues that well-managed projects provide returns of 7 to 79 percent.

Tracy Stanton, who wrote the Ecosystem Marketplace report, told me in an interview that the market-based approach helped to bring together people who would not normally cooperate.

“With a market system we start from a point of shared stewardship instead of being told by the government to meet a permit volume,” Stanton said.

The PES model is far from perfect. There is much debate on what to include in the valuation calculus: the proper temporal and spatial scales, discount rates, and proper valuation method. Despite the uncertainty, the PES model should continue to grow. It gives land owners incentive to preserve vital spaces, and couches the costs and benefits in language decision-makers are accustomed to using.

“The United States needs a national strategy to clarify the goals of foreign aid, trade policy consistent with those goals, an easier process for small businesses to participate and support for international education programs,” according to a set of recommendations for improving the effectiveness of U.S. foreign aid assistance released Tuesday by the Seattle-based non-profit Global Washington, the Seattle Times reports. More than 40 development experts worked together to create the policy paper (.pdf), titled “Global Development through Aid, Partnerships, Trade and Education: Recommendations from Global Washington,” in response to a request by Sens. Maria Cantwell, D-Wash. and Patty Murray, D-Wash., the newspaper notes. Cantwell and USAID Chief Innovation Officer Maura O’Neill joined representatives of Global Washington on Tuesday to discuss the report.”

Seattle Non-Profit Recommends Strategy For Improving U.S. Foreign Aid Efficacy
Kaiser Family Foundation Daily Global Health Report | July 07, 2010