Financial capital, to be precise, is the most pressing and simultaneously, the least appreciated, of the challenges we face today in development.
By Fumani Mthembi, Knowledge Pele
Recent reductions in the socio-economic development obligations of Independent Power Producers (IPPs) from 15% to 10%, was triggered by government’s argument that IPPs failed to deliver impactful change to communities. The Independent Power Producers Office (IPPO) plans to use the 5% of community development budgets, to invest in monitoring and evaluation.
If one parks the evidence gaps in the case advanced by the state, the conclusion it arrives at is one that has become all too common in development. Failures of impact are almost always understood to be failures of practice. And failures of practice are increasingly understood to be failures of impact, expressed as monitoring and evaluation, which cuts across programme design or the initial social investment philosophy, to the quality of outcomes.
Indeed, the 2019 award of the Nobel Prize in Economics to Esther Duflo, Abhijit Banerjee, and Michael Kremer for randomised control experiments as a way of testing for development impacts is evidence of the growing dominance of monitoring and evaluation in development. The cross-cutting importance of designing and measuring for impact is now a mainstream idea in development. This is a good thing.
But how do we define development impact?
However, there is a requirement to ask a different question about the very meaning of the term “impact”. Understood in the context of a monitoring and evaluation framework, impact is the positive outcome of a project or programmatic intervention. A well-considered development intervention derives from a legitimate social need.
In other words, good development interventions are rooted in a sound articulation of social needs and assets, to which the programmatic intervention is a theory of change, the efficacy of which is measured through monitoring and evaluation. What we grapple with less, is what society understands as impact. Put differently and in context, while we are accustomed to asking communities, by way of example, whether or not they need and would benefit from tertiary education, we seldom ask what percentage of the community would need to be university educated to make a fundamental impact on the destiny of that community?
DO AS MUCH AS IS NEEDED
As a consequence of how we frame our questions, we have become comfortable with doing as much as we can rather than doing as much as is needed. Therefore, if a bursary programme delivers three graduates out of four university entrants, it is considered successful, given that only 60% of first year students end up completing their degrees in South Africa. This success, however, is seldom placed in the context of societal impact.
The social objective, as it pertains to higher education, is contained in the National Development Plan (NDP). The NDP envisages doubling the number of people who are enrolled in the university system from 950 000 to 1.62-million people by 2030. While statistics vary, several sources agree that roughly 29% of matriculants enter university, per annum. Thus, if the intention is to double university enrolments, the social impact objective ought to be a concomitant increase in university entrants from 29% to roughly 58%.
The question then is whether, in determining to invest in bursary programmes, the private social investment sector appreciates and works towards this impact objective? Put differently, in a community that produces 100 matriculants, do we set out to offer 58 of them bursaries? The answer, often, is no. Indeed, the motivation to do as much as we can often see us investing within the boundaries of our budgets, failing to appreciate that there exists risk in failing to do what is needed. Supporting four university entrants where the requirement is arguably 58, is the distance between self-referential impact and social impact.
DICTATED DEVELOPMENT INVESTMENT
Supporting four university entrants where the requirement is arguably 58, is the scale of social exclusion and ultimately, the cause of the unrest and discontent that we experience in communities. Development remains a core imperative for our country. In tandem with this is the requirement to appreciate the true nature of the development challenges we face.
When communities protest and politicians express their discontent with private actors such as IPPs or indeed corporate foundations and philanthropists, it does not follow that the answer is monitoring and evaluation. Monitoring and evaluation are important. But the issue that more centrally defines our challenge is the absence of sufficient funding to achieve the goals set out by the National Development Plan. Simply, the more pressing challenge is capital.
COLLABORATION AND CONSTRAINED CAPITAL
Because we exist in a capital constrained society the only way out is through collaboration. Rather than running similar yet uncoordinated programmes, we need to pool capital and focus it on geographies to achieve our aims. Whilst this implies the exclusion of others, the compounded impact of a single community achieving at least one NDP outcome will far exceed the “praying that accompanies the spraying of resources”, that dominates the current approach.
Linked to this is the requirement to be smarter about capital. At a recent conference hosted by my organisation, Knowledge Pele, Dr Frank Aswani of the African Venture Philanthropy Alliance emphasised the importance of taking a segmented view to funding. If people are willing to pay, don’t offer a product or service for free. If financiers are willing to partner, leverage the capital at your disposal to amplify your impact.
Development remains imperative and more importantly, urgent. And in line with a commitment to evidence-based development, we need to take a more sober approach to what we have been calling impact. Impact is not what happens when our monitoring and evaluation frameworks check out. Impact is what happens when we respond to society at a pace and scale that is consistent with its needs. In a constrained world we can only achieve that through pooling our capital, focusing on specific issues, within defined communities, thus collaborating more genuinely for good change, in our lifetimes.