An image evoked at the Skoll World Forum this year was kintsugi. Literally meaning to “join with gold,” kintsugi is the Japanese art of repairing broken objects, usually using ceramic pottery or glass.
At the Skoll gathering in Oxford last week, there was certainly a recognition that something has broken in this last year. With the shuttering of USAID, many of the social entrepreneurs that attend Skoll brought difficult stories of impact lost. Beyond staff cuts and rethinking business models, there was a sense of grief brought by implementers who have dedicated their lives to building scalable interventions to tackle the world’s most pressing problems.
One leader running a low-cost healthcare delivery organization said the USAID cuts would lead to them pulling back from serving 250,000 vulnerable people in Mali. Another said that while the cuts to their core model weren’t critical, it was the loss of innovation funding that had them questioning what the long term pull back of funding would mean for solving intractable challenges in their sector. Still others who were serving the poor questioned, where can I start to think about impact investing in my model to build resilience for the future?
Another consensus was that, while the USAID cuts have been done in the most abrupt of manners, the US is not alone in its shifting aid priorities. This is not a blip, but a long-lasting paradigm shift. Only three countries have increased their foreign aid budgets this year (Ireland, Korea and Spain) with many others pulling back in what will be the largest drop in overseas development assistance since the 1973 oil crisis. The unsettling trend of cutting aid to increase defense was also noted.
The silver lining, if there is one, is that it seems that many countries in the Global South see this as an opportunity to take ownership of their own citizens’ development, with strategic and targeted support from philanthropy. As one minister from Zambia, who was in attendance with Skoll Awardee Healthy Learners, said to a roomful of foreign donors, “we’ve got this from here, thank you for your help.”
Solidarity campaign
Of course, funding will still be an issue in many of these countries where China and the Gulf States are stepping in to offer different kinds of partnerships than the US’s previous soft power strategy. There is a critical lobbying campaign surge led by the US Global Leadership Coalition USGLC and InterAction to try to keep the US foreign aid budget as high as possible, regardless of which government entity the funding comes from. As one funder put it, “the funding level agreed upon today will have impacts for a generation to come.”
There have been many articles in the last two months commenting on the failure of philanthropy to respond to the moment. A repeated line at Skoll was, “the problem is just too big,” or “we’re waiting until the dust settles.” There have however been funders to step up their giving. This includes the host, Skoll Foundation who is launching a $25 million “pivot fund” for its grantees, and Rippleworks Foundation, which cut $100,000 grants within a week of the freeze to their portfolio, no questions asked. My organization, Open Road, created a $14 million fund supporting grantees from the USAID Development Innovation Ventures portfolio.
And MacArthur Foundation is increasing its giving slightly, but almost more importantly, its CEO, John Palfrey, is leading philanthropy’s Solidarity Campaign.
Perhaps most encouraging (and impressive) is an initiative launched in Oxford last week called Project Resource Optimization (or PRO, named by an economist, of course!). PRO, which includes former USAID staffers, has been pulled together to evaluate all of the cancelled USAID grants and contracts. The group has built a list of fundable opportunities and prioritized them by cost-effective delivery of life saving and poverty-alleviating programs and high-ROI research into new models for more cost-effective future programs.
The total projects listed are about $2 billion, including an “urgent and vetted” list, which is a much more approachable number than the $40 billion in USAID cuts.
It is PRO’s hope that this “menu” of prioritized impact will help get funders moving. Stay tuned.
