‘The Donald’ foundation seeks to improve maths literacy while India ponders impact investing (the problem in the wondrous sub continent is that markets themselves are prone to so much fraud &/or political/regulatory manipulation that imho they need to sort that first before we can coherently discuss other matters…qv our daily “Exchange Invest” newsletter section devoted to the festering fiasco known as the “NSEL Crisis”).
Happy Orthodox Easter everybody: my assistant Florin is off to munch his bodyweight in chocolate Monday while I am in London to chair an event for the regional FDI agency “Invest Northern Ireland.”
SIB News returns on Tuesday.
Social Impact Bonds For Promoting Excellence In Mathematics Education
The Trump Foundation
A social impact bond (SIB) is a tool used to finance social projects that relies on a pay-for-success mechanism. Funding for the project is raised from investors and returned by the government only if the pre-determined goals are reached, while the return to the investor is based on the value created for the government by dealing with the social problem. The Trump Foundation is supporting the development of a SIB in the field of high school mathematics, focusing on promoting 5-unit studies.
The development of the SIB is led by Social Finance Israel (SFI) and includes an in-depth study and analysis of the social problem: a relatively small volume of 5-unit graduates in mathematics in recent years. SFI has reviewed data of an unprecedented magnitude provided by the Ministry of Education on 578,821 students graduating in 2007-2013, who took any level of matriculation exam in mathematics.
The review examined changes in the general tested population in mathematics versus graduates of 5-units, in order to see what demographic changes might explain the decline in the numbers of those matriculating at advanced levels. Furthermore, the study reviewed trends regarding gender, sector, socio-economic and geographic periphery indices. SFI also compared the dropout rates between the different exam modules, the trends in the students’ scores, trends in the number of exams the students take, and the populations that are more or less affected by these trends.
The most significant and innovative part of the research conducted by SFI is the resolution of analysis achieved, down to the level of local authorities, cities and even individual schools. Thus, based on the data, SFI managed to note four potential groups for intervention. These groups were selected according to their potential for intervention, but also based on their suitability to a specific SIB. For example, SFI noted the institutions where there was the most significant decline in recent years and was also able to identify schools with a multitude of students excelling in 4-unit mathematics alongside a low number of 5-unit mathematics graduates –i.e. schools with a high unfulfilled potential for excellence.
In cooperation with the foundation, over the next few months SFI will continue to review the economic impact of the lack of 5-unit mathematics graduates on the market, and the potential to create significant value for the government by funding an intervention program that will lead to increased numbers of graduates.
‘Impact Investing’ And The State
Aparajita Agrawal & Vikram S Gandhi – Business Standard
India is a hub of social entrepreneurship activity and a testing ground for scalable, innovative and inclusive business models – first, due to the variety and extent of its problems, and secondly, because of its thriving entrepreneurial ecosystem. The combination of these two factors has opened up a massive market at the “bottom of the pyramid”. A large number of entrepreneurs and social enterprises are riding this wave and an increasing number of impact investors are funding them.
Impact investing has been receiving policy attention at the highest levels of the G8 countries. It is time the same happens in India. For impact investing to continue scaling up here – which would bring to India significant private capital and professional expertise – it would need a more intentional and proactive relationship between the government and the range of actors involved in the impact investing sector, both for-profit investors and philanthropic funders. For its part, the private sector also needs to take the initiative and showcase the scalable impact potential of social enterprises to the government, as well as advocate for a more conducive policy environment for impact investors.
Together, the government, companies, non-profits and impact investors make up a four-lane highway for social impact. Combined, they account for over $250 billion in annual social investments, out of which the vast majority is the government’s budgetary allocation on social programmes. Compared with this massive outlay, the contribution from corporate and impact investors can almost be considered marginal. Yet the most vocal voices on impact investing and social outcomes are mostly in the private sector. This is where the discourse and the action in the space need correction. The government needs to be a critical stakeholder and speaker in the impact investing space and work in close tandem with the private sector to ensure delivery of inclusive growth for the marginal and the under-served segments of society.