Leveraging Evidence to Drive Robust Education Programs
Launch Year: 2018
Instrument(s): Development Impact Bond
Target Geography(s): India
Target Sector(s): Education
Target Financial Size:USD 11 Million
Key Stakeholder(s) + Role(s):
- Investor: UBS Optimus Foundation
-
Outcomes Funders:
- Michael & Susan Dell Foundation
- Comic Relief, The Larry Ellison Foundation, The Mittal Foundation and BT, through the British Asian Trust
- Convener & Intermediary: British Asian Trust
- Service Providers: Gyan Shala (GS), Kaivalya Education Foundation (KEF) and Society for All Round Development (SARD), Educational Initiatives-Pratham Infotech Foundation (EI-PIF)
- Outcome Evaluator: ConveGenius Insights
- Performance Manager: Dalberg Advisors
- Knowledge & Technical Partners: Foreign, Commonwealth & Development Office, Tata Trusts, Brookings Centre for Universal Education and Ecorys
Executive Summary
India is faced with a unique challenge: while primary school enrolment is ~99%, the quality of learning remains poor. Only 50% of children in grade 5 can read a grade 2 level Hindi text (Annual Status of Education Report, 2018).
The Quality Education India Development Impact Bond (QEI DIB) is an innovative results-based funding mechanism that aims to improve learning outcomes for ~200,000 primary school children. At $11m, it is the world's largest education DIB and was launched in 2018 and running till 2022. Over four years, the QEI DIB aims to identify education interventions that can be successfully scaled and generate evidence, to shape philanthropic and budgetary allocation in future years. The service providers are implementing a diverse range of models such as principal and teacher training, tech-based instruction and supplementary programmes, to achieve learning gains.
QEI DIB 's Year 1 and 2 results have been strong, with almost all service providers exceeding their targets. The programme was affected due to the Covid-19 pandemic in Year 3 and 4. Despite the challenges, the QEI DIB partners continued to work in collaboration to ensure safety of staff and beneficiaries, and trialed innovative approaches to ensure learning continues. The final year results are expected to be released in September 2022.
Financial Structure
Please briefly highlight the financing model (e.g., how is the fund structured?) utilized briefly. If you have an infographic (funding amounts etc.) for the financial structure please share it.
The 'investor' UBS Optimus Foundation provides upfront working capital to the service providers to run the programme. If targets are met (as measured by the outcome evaluator), the 'outcome funders' Michael & Susan Dell Foundation and Comic Relief, Mittal Foundation, Larry Ellison Foundation, and BT through the British Asian Trust repay the investor the capital amount along with a return at the end of each year. However, there is a cap on this return to investors over 4 years which is 8 per cent per annum. Service providers are also incentivised, as the contract includes a bonus payment in the final year if they overachieve their targets.
If the service providers underperform against their targets, the investor is at risk of losing the entire investment.
Key Insights/Learnings
Please express key learnings from this experience.
- A stronger results-driven culture drove better performance in non-profit partners. Non-profit partners are aware of greater scrutiny and year-end external evaluation, this sharpened focus on program delivery across provider teams.
- The DIB ensures that everyone uses data more effectively. This enabled non-profit partners to make small quick incremental changes to drive better results. In addition, the year-end evaluation data helped them address the learning needs of students who might be lagging or identify areas that needed improvement.
- Strong and consistent Performance Management support helped build capacity and systems for more consistent outcomes. For example, Dalberg worked closely with the new non-profit partner (EI-PIF) to develop a dashboard to monitor data and conducted weekly check-ins to resolve setup issues until the program stabilized. Performance management is a unique element of impact bonds that is not a main focus in most grant programmes.
- The flexible funding (that is not forcing them to deliver specific activities) enabled non-profit partners to make quick decisions, invest in systems and drive results to non-profit partners. This helped especially during Covid-19 when the non-profit partners were able to pivot their models and trial blended learning innovations to deliver on learning goals under the DIB structure.
- Collaborative approaches have been key differentiators of impact bonds during crisis like Covid-19. All partners worked collaboratively from the beginning of the crises to problem solve on programmatic challenges and aligned on key principles early on (i.e., to not close the programme and focus on learning outcomes) and ensuring we use our collective strengths and wider experiences from the sector to build on programme success. Please note detailed learnings on the QEI DIB will be shared during the announcement of the final year results which are expected to release in September 2022.
Impact to Date
Please highlight any impact made to date. Include metrics to quantify when possible.
- The aggregate gains across all 4 non-profit partners determine the overall success of the DIB. In the first 2 years (2018-2020), the DIB reached 104,833 children and the results have been outstanding. The overall programme achieved 3X its targets and most service providers outperformed up to 5X. Evaluations showed that children's 'learning gains' are significant as well since these children were learning 2X faster than their peers in non-participating schools.
- Results showed that DIB children are catching up faster and are showing higher levels of proficiency in both literacy and numeracy. Typically, most government schools or well-performing classrooms measure success when they see students move from beginner to basic and intermediate group. However, in the DIB schools, we see significant movement of students into the intermediate and advance group which demonstrates a mastery of all concepts/skills expected at that grade. For example, at the end of Year 2, 63% of the children had moved to the advanced level in Language and 45% of the children had moved to the advanced level in Math.
- Please note the final year results are expected to release in September 2022.