If you’re a funder of development programs, you’ve got to make some tough choices about which organizations and programs you’ll support. Most foundations and bilateral donors pick some key sectors in which to work, and then focus within those. But what if your goal is to maximize impact across various sectors? How can you compare the benefits of investing in, for example, healthcare vs. education vs. the rule of law?
Sarah Lucas recently pointed me to some interesting work that the Global Innovation Fund is doing in this area. GIF describes themselves as a “hybrid investment fund that supports the piloting, rigorous testing, and scaling of innovations targeted at improving the lives of the poorest people in developing countries. Through our investments, we support a portfolio of innovations that collectively open up opportunities and improve the lives of millions of people across the developing world.”
I really liked their approach to thinking about the magnitude of the benefits which different programs provide. It doesn’t appear to require quantification of disparate outcomes, which can be difficult, but it still provides a structured way for making comparisons across sectors.
As they note about the middle scale, which is the “depth” of the benefit:
Choosing among competing proposals inescapably means comparing health, education, and income outcomes. The depth scale makes these relative values explicit. For easier estimation, the scale is relative to a typical beneficiary’s annual income or consumption. Lives saved and illness avoided are scaled using Value of a Statistical life. This summarizes people’s willingness to pay for risk reductions, [although] it doesn’t represent the intrinsic value of life. Education is scaled using typical economic returns to increased education.
Their whole impact assessment section is worth checking out.