“Global Washington today will release its policy paper Global Development through Aid, Partnerships, Trade and Education: Recommendations from Global Washington, which provides recommendations for improving the effectiveness of U.S. foreign assistance. The recommendations draw on Washington’s status as an international leader in the growing global development sector and were prepared at the request of Sen. Maria Cantwell (D-Wash.) and Sen. Patty Murray (D-Wash.).”

Global Washington Releases Recommendations For Improving U.S. Global Development Efforts
Puget Sound Business Journal | July 06, 2010

“The system of U.S. foreign aid is broken, Seattle experts on development issues say. Now local nonprofits, businesses and educational institutions hope to have a direct impact on how it’s fixed…Those recommendations from Global Washington, a Seattle association of 120 groups working in the field of global development, were released Tuesday and discussed by U.S. Sen. Maria Cantwell and others in a forum at Seattle University.”

Local Organizations Weigh In On Global Summit Failures
The Seattle Times |  Kristi Heim | July 06, 2010

Unitus Redirects Efforts From Non-Profit Microfinance Acceleration Toward A
Broader Array Of Social Ventures

• Innovative non-profit helped shape and validate microfinance as a viable commercial activity, increase access to investment capital for working poor; with tens of billions of dollars in commercial capital now available in the microfinance industry, Unitus will refocus efforts to other scalable solutions to global poverty

• Over nearly 10 years, Unitus has directed $40 million in donations and almost $30 million in investment capital to strategic microfinance partners

• Unitus strategic partners have channeled $2 billion in loan capital to more than 12 million clients, most of whom live on a few dollars a day

• New activities will adhere to the vision of positively impacting the greatest number of the world’s poor through innovative, highly leveraged solutions that are currently not widely available in the marketplace

SEATTLE, BANGALORE and NAIROBI (July 2, 2010) – Unitus today announced that it will suspend its micro-finance acceleration activities and shift its resources and activities to areas of maximum socio-economic impact for underserved people throughout the world that have yet to attain either scale or commercial viability. After fulfilling current partner commitments, the organization will release its staff of nearly 40 individuals in its Seattle headquarters and its Bangalore, India and Nairobi, Kenya field offices. Remaining assets will be directed into new early-stage, poverty-focused philanthropic activities.

“For the past decade, Unitus has been working to increase access to capital for the working poor, under the central premise that this vast, underserved segment of the world’s population was a good investment and could be well-served by commercial capital providers,” said Joseph Grenny, chair of the board for Unitus. “We are gratified that this core belief has been validated—capital markets have embraced microfinance to the extent that there are tens of billions of dollars in microfinance capital now available annually, with additional providers entering the marketplace at an aggressive clip. We now feel that there is greater need for our capital and energy in other areas—which we are currently exploring—aligned with our overarching mission of alleviating poverty through opportunity.”

Since its launch in 2001, non-profit Unitus has played a significant role in the development of viable business models for microfinance that have been instrumental in attracting a host of commercial lenders and investors to what was previously a significantly underserved marketplace. The organization employed rigorous due diligence to identify microfinance institutions (MFIs) that could serve as strategic partners in India, Southeast Asia, East Africa and Latin America. Unitus then helped accelerate the development and growth of these MFIs through the deployment of grants, guarantees, “catalytic” equity and debt capital, and strategic/operational consulting.

In turn, these partner MFIs have deployed capital for the benefit of the working poor. The Unitus MFI partners have collectively lent in excess of $2 billion in microfinance capital to more than 12 million clients. Unitus hoped that by demonstrating the commercial viability of microfinance, they could encourage capital markets to take an interest and provide greater capital funds than the nonprofit sector was capable of generating. Today a significant portion of microfinance loan portfolios globally are funded by commercial rather than donor dollars.

To achieve its demonstration goal, Unitus also started and spun off two groundbreaking microfinance-oriented organizations that helped further solidify the viability of microfinance as a commercial business model, both of which continue to grow and evolve: the Unitus Equity Fund (now managed by Elevar Equity), a private equity fund; and Unitus Capital, a boutique investment bank.

“The fact that we have become largely unnecessary in the microfinance arena is fantastic news and is a tribute to our generous, enlightened donors and the phenomenal staff at Unitus, who worked tirelessly to validate and refine the microfinance model, and advance the operations of our partners,” said Ed Bland, President and COO for Unitus. “Brigit Helms, our outgoing CEO, merits our gratitude for her outstanding leadership in surveying the global socio-economic landscape, evaluating future options for Unitus and working with the staff to assure that our partners are on solid footing. Outgoing members of the Unitus team can now leave with the assurance that they have contributed to a tremendous legacy of success here, prepared to make a continuing positive difference in the world.”

As Unitus transitions away from microfinance to other strategic areas, Geoff Woolley, a former Unitus board member, will serve as future CEO for the reinvented organization. Bland will remain in his role as acting President and COO. Helms will serve as a key advisor during the organization’s transition. The Unitus Board and executive team are currently considering various strategic opportunities, with the goal to maximize the socio-economic impact for those currently not being served in today’s marketplace.

Nearly two months after the draft Presidential Study Directive (PSD) on development was leaked, the White House is showing a strong commitment to reforming the U.S. foreign assistance system. At the G8 summit in Muskoka, Cananda, President Obama issued a statement outlining his objectives in reforming the U.S. global development strategy entitled “a New Approach to Advancing Development.” Like the draft PSD, President Obama’s new approach would place a greater emphasis on research and innovation, tailor development strategies to specific conditions in the field, and hold all aid recipients accountable for results.

Unlike the leaked PSD draft, this new development approach explicitly exemplifies all four of Global Washington’s Principles of Aid Effectiveness; consolidation and coordination, transparency and accountability, targeting to those most in need, and local ownership. By strengthening multilateral capabilities, the U.S. can consolidate resources and increase donor coordination. Using data and analysis from strong monitoring and evaluation mechanisms to guide policy will help to make the process more transparent and will increase both donors’ and recipients’ accountability to results. President Obama’s new development strategy will also target aid to select countries, regions, and sectors and emphasize local ownership of development projects.

Missing from this strategy, however, is any mention of institutional reform of the U.S. foreign assistance structure. Without addressing the tangled and unwieldy web of U.S. departments and agencies charged with carrying out U.S. development programs, the goals of President Obama’s new development strategy may not be met. Such reforms will most likely be taken up by the highly anticipated development policy directive to be released in the near future. Until the official policy directive is released, “a New Approach to Advancing Development” acts as a strong framework of objectives to be met by a new U.S. foreign assistance strategy.

“The Seattle Times’ “The Business of Giving” blog examines global health community leaders’ reactions to the outcomes of the recent G8 summit in Canada.”

Seattle Times Examines Reaction To G8 Summit Commitments, Upcoming ‘Global Washington’ Recommendations For U.S. Foreign Assistance Reform
Kaiser Family Foundation Daily Global Health Report | July 01, 2010

Seattle International Foundation Message

SIF is pleased to share news of our recent grants to ActionAid and Catholic Relief Services to support the relief efforts in the aftermath of Tropical Storm Agatha. Please click here to visit our website for news regarding these grants.

SIF would like to thank you for your generous donation and for attending our event in partnership with the University of Washington Center for Human Rights where we raised over $3,000! Last week, our Executive Director, Mauricio Vivero, traveled to Guatemala to see firsthand the damage caused by Tropical Storm Agatha, and to meet with many committed individuals working on the ground. We would like to invite you to visit our blog for a full report and photos from his trip. We have also posted photos from our community event in partnership with the University of Washington Center for Human Rights on June 17th.

Thank you again for your generous support and we look forward to continuing to work with the community here in Washington State dedicated to alleviating poverty in Central America.

“Next Tuesday Global Washington will release its recommendations for revamping U.S. foreign assistance from a panel of 45 local experts…It’s a good time to talk about strategies for improving aid after last weekend’s meeting of G8 leaders, which many non-profit groups say failed to adequately fund basic programs to prevent the deaths of mothers and their newborns.”

Local Organizations Weigh In On Global Summit Failures
The Seattle Times |  Kristi Heim | July 1, 2010

by Eugenia Ho, Global Washington Volunteer

It has been an exciting month for the global health community.  On June 2, the Gates Foundation announced a new investment of $1.5 billion over the next five years in maternal and child health, family planning and nutrition in developing countries.   Also, the G8 nations are gearing up for their summit later this week,  where they will discuss a new initiative on maternal, newborn and child health in an effort to work toward achieving the health-related Millennium Development Goals.  In the lead-up to the G8 Summit, Canada has announced its willingness to inject about $1 billion in maternal and child health in poor countries if other countries ante up.

Of course, we cannot overlook the latest development on the Global Health Initiative (GHI) – a U.S. program with the largest amount of money that has ever been committed to any global health initiative.   On June 18, 2010, the U.S. Department of State, USAID and the U.S. Department of Health and Human Services announced the GHI program’s governance structure and the first eight countries selected to receive additional technical and management resources under this initiative.   The eight countries are: Bangladesh, Ethiopia, Guatemala, Kenya, Malawi, Mali, Nepal, and Rwanda. 

The Global Health Initiative is a $63 billion investment over six years to help over 80 partner countries, where U.S. government global health dollars are already at work. The initiative aims to improve measurable health outcomes by strengthening health systems and building upon proven results.  With a comprehensive approach, it places a particular focus on improving the health of women, newborns and children.

According to the GHI’s Fact Sheet on the USAID website, the GHI established goals for improving health outcomes in HIV/AIDS, malaria, tuberculosis, child health, nutrition, family planning and reproductive health, and neglected tropical diseases, with these principles:

– implementing a woman- and girl-centered approach

– increasing impact through strategic coordination and integration

– strengthen and leveraging key multilateral organizations, global health partnerships and private sector engagement

– encouraging country ownership and investing in country-led plans

– building sustainability through health systems strengthening

– improving metrics, monitoring and evaluation; and

– promoting research and innovation

The GHI announcement was welcomed by organizations such as UNAIDS and Oxfam America; while some organizations have different views.  Dr. Peter Mugyenyi, who runs the Joint Clinical Research Center in Kampala, Uganda, which is almost entirely PEPFAR funded, spoke about his concerns on NPR’s Morning Edition radio show.  He worries that the funding for HIV/AIDS will be diluted as more diseases become the focus under GHI.

 As you know, Washington State is a world leader in the field of global health, so this initiative could have a direct impact on local organizations.  According to the Washington State Department of Commerce, about $143 million of Washington’s annual tax revenue is generated by global health activities.  Washington State is home to some of the most renowned organizations and institutions with expertise in global health.  They include PATH, Seattle Biomedical Research Institute, the Gates Foundation, the University of Washington, Washington State University, and Washington Global Health Alliance (WGHA).  A Washington-based organization, Health Alliance International, is part of a coalition of global health advocacy organizations who use the same name – the Global Health Initiative, and they came up with recommendations on how US development assistance for health should be structured in the future. 

Below are some additional news and resources on the Global Health Initiative:

 The Global Health Initiative Fact Sheet on USAID

Huffington Post

Wall Street Journal

“The creators of a four-part documentary series that will highlight Seattle’s global health and development sector have signed an agreement with KBTC Public Television, in Tacoma, and will start filming their project next month.”

Global Health Series Gets Go-Ahead
Puget Sound Business Journal | Clay Holtzman | June 18, 2010

from the Bill & Melinda Gates Foundation website

by Evan Forward, guest blogger

On June 8, Dr. Ignacio Mas—deputy director of the Bill & Melinda Gates Foundation Financial Services for the Poor Program—delivered a special evening presentation at the Frye Art Museum on the topic of mobile banking for the poor.  The focus of Dr. Mas’ talk was M-PESA, a new SMS powered savings deposit and withdrawal platform that the Gates Foundation has been funding through its pilot stages in Africa over the past several years.

The event was hosted by SeaMo, a Seattle based non-profit organization that serves to connect the microfinance community through events, online services and opportunities for collaboration.

The Gates Case for Mobile Savings Accounts

The Bill & Melinda Gates Foundation financed M-PESA in Africa to address a side of the financial services equation in the developing world that has been thus far severely neglected: savings accounts for the poor.   M-PESA was designed to target the segment of the world’s population that is earning less than $2/day and is eligible to work.  For a typology of this 1.8 billion people adapted from Dr. Mas’ presentation, please refer to the table below.

Table 1 Gates Foundation typology for the 1.8 billion eligible workers in the world living on <$2/day[1]

M-PESA

M-PESA operates through a text message based application that allows an intermediary to accept cash deposits and input the amount for the depositor via mobile phone into a secure electronic savings account.

For the majority of the world’s poorest, few options exist for secure, accessible, and low transaction cost savings deposit accounts.  Currently formal avenues for savings account services are, by and large, prohibitively expensive due to the sheer cost of transporting hard currency that they entail.  The bulk of the world’s poorest are concentrated in rural areas where transportation infrastructure is often limited, circuitous or unreliable.   When a client is only able to deposit in small or sporadic increments, the transaction costs can easily negate the value of the transaction to any provider.  

Apart from the few formal savings services that may be available to the world’s poorest, deposit arrangements arising through informal channels come with a host of other problems.  Informal savings agreements can be unreliable; they are often not private; and they render clients susceptible to exploitive agreements.

Leverage Points

Dr. Ignacio explained that the Gates Foundation sees three primary groups of existing resources that lend can be maximally leveraged in the roll out of M-PESA’s services.  

1)      The “Bricks and Mortar” of existing retail shops and central community buildings.  Rather than constructing new buildings to serve as deposit locations, Gates Foundation looks to market M-PESA as a secondary activity within already active enterprises or community spaces.

2)      An already widely deployed communications network.  Mobile phone networks are quickly approaching omnipresence, delivering 3g capability and cellular phone service today to even some of the most remote areas of the world. With M-PESA, these networks will allow poor and geographically marginalized communities to receive the same real-time, low-cost transaction capability that is enjoyed in the richest countries in the world.  

3)      The rapid spread of mobile phones.   Inexpensive and often the only telecommunication option available for those living in rural areas, mobile phones have spread to the hands and communities of even the poorest in the world.  By charging phones with the rudimentary capabilities of an ATM machine, using M-PESA’s services involves very little new investment, change in normal behavior, or training.

Regulation

The primary public burden of M-PESA, by Dr Ignacio’s characterization, is found in the costs of regulation.  Ensuring that retailers providing M-PESA’s mobile phone based cash deposit services are not exerting monopolistic pricing and exclusive practices on poor communities is a real, and potentially very costly, regulatory challenge to effectively address.  A challenge which requires a regulating entity more credible and responsive than typically exists at the status quo in the national governments of most developing countries. 

Conspicuously absent from the existing resource bases that the Gates Foundation seeks to leverage for the roll-out of M-PESA’s services are the government institutions of recipient countries.  Instead, the Gates Foundation funds the Alliance for Financial Inclusion(AFI), managed by German Technical Cooperation (GTZ).  AFI is a platform for:

• Facilitating online and face-to-face dialog amongst policymakers in the developing world on critical regulatory challenges and emerging best practices;
• Giving visibility to the network of public and private sector actors working to improve access to basic financial services for the world’s poorest and;
• Connecting grant funding to develop and implement the most promising solutions for problems of financial inclusion

Dr. Mas stated that the largest grants currently available from the Gates Foundation are offered through AFI to fund projects and programs that promote financial inclusion.     

[1] Adapted from Dr. Ignacio Mas presentation Thursday, June 3, 2010. Frye Art Museum, Seattle.