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Investing in children

Save the Children Global Ventures CEO Paul Ronalds on why we need to rethink how we fund projects for young people in sub-Saharan Africa.

Words: Paul Ronalds
Photography: Shutterstock
Date:

In a rural corner of sub-Saharan Africa, staff at a small village school are struggling. Salaries are late and teaching materials are in short supply. The school building meanwhile, is literally crumbling, providing students little respite from harsh conditions caused by increasing temperatures.

The school would like to build new classrooms better adapted to the changing climate. It wants to install rainwater tanks and solar panels to improve access to water, reduce energy costs and improve access to reliable power. But there is no money.

The local bank won’t consider giving the school a loan, and overseas support is hard to come by, with less than one fifth of the US$19.8bn in aid and philanthropy for sub-Saharan Africa targeting child-centred sectors (of which schools are just one component).

Fixing the school buildings is not just cosmetic. A recent World Bank study found more than 210 million children lost teaching days in April and May this year due to school closures related to extreme heat.

And then there are the children who don’t even go to school. Sub-Saharan Africa has the highest rates of education exclusion in the world – more than 20 percent of primary-age children and almost 60 percent of youth between the ages of 15 and 17 are not in school.

The funding shortfall in Africa’s education sector is expected to reach $5bn by 2025. And beyond education, the other unmet needs of children are tragic.

The annual funding gap between what is needed to solve the universal challenges children face — ranging from climate, water, and food crises to conflict, violence and inequality – is US$4.2 trillion.

Government grants and philanthropy are not currently - and cannot in the future - even begin to close this gap. If we are serious about meeting the needs of children, we must crowd-in significant private sector investment.

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Investing in children pays long-term dividends. Photo: Shutterstock.

Although they make up a quarter of the world’s population, children are mostly absent in policy development by governments. They don’t get to vote and in the financial world, they are almost completely ignored. But what if we could create a child-lens to investing - a framework in which a financial portfolio could seek both returns and intentionally improve the lives of children?

What if we could encourage funding to be directed towards our school and its modest, yet life changing building project and countless others like it?

This is exactly what Save the Children Global Ventures’ new Africa-focused fund is trying to do.

We have joined forces with Kaizenvest, a leading impact investor for human capital development, to create the Generation Empowerment Fund to finance community-based schools via financial institutions, and healthcare and nutrition companies across sub-Saharan Africa.

We are seeking to enable wholesale lending to financial institutions and mid-sized banks, on the condition that they expand their loan books to low-fee paying schools, early childhood development centres, and other services that are critical to children’s development.

The fund is looking to raise at least $50m and will pioneer the implementation the first child-centric investment strategy targeting sub-Saharan Africa. The focus countries are Ghana, Kenya, Nigeria, South Africa, Rwanda, and Uganda.

Child-lens investing takes a holistic approach through a combination of investments to improve learning, as well as healthcare, water and sanitation, nutrition, climate resilience, and others.

The framework screens potential investments to understand if a company’s product or service has a clear, positive impact on children, potential for scaling, and the commitment of a company to child rights business principles.

We also look at to see products and services are designed inclusively and intentionally to address children’s needs, based on evidence and direct customer insight research.

Post-investment, the child-lens investing framework also provides a child-centred approach to impact measurement and management, which centre around maximising holistic impact for children.

Beyond the impact of the fund itself, Save the Children hopes the successful use of the child-lens investment tool will be a catalyst for the financial community to consider children more deliberately in their investment strategies.

"If we are serious about meeting the needs of children, we must crowd-in significant private sector investment.”

Save the Children Global Ventures has already made investments in education, health and child protection projects closely aligned with Save the Children’s mission and expertise.

Across its other funds, it has offered early-stage capital to innovative businesses around the world such as Instill Education, a game-changing mobile app that offers teachers self-paced, bite-sized online modules to help address challenges in the schools and classrooms.

To-date, some 50,000 teachers have already enrolled in the app’s professional development modules providing a pan-African community of peers and experts who provide support and feedback.

Then there is Inquisitive, an education company and SaaS (Software as a Service) business dedicated to enhancing teachers' access to quality lesson plans, making high-quality education more accessible, and giving teachers more time to teach and students a more purposeful and in-depth learning experience.

In a similar vein, Zeraki Analytics aids schools in quickly understanding academic data. They offer a mobile-first school management platform for real-time tracking of student attendance and performance, which can be easily shared with administrators and parents.

Because Zeraki is ‘home grown’, it is ideally suited to the mobile first, low-bandwidth context in sub-Saharan Africa. Over half of high-schools in Kenya now use Zeraki’s tools.

The challenges children face today are profound. We must find ways to generate the funding required to give our children a future. Child-focused investment must be a critical component of this funding.

We are seeking investment from development finance institutions, corporate investors, and philanthropic entities. Investors who have already committed include the IDP Foundation, founded by Irene D Pritzker.  Will yours be next? - PA

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