This Thursday, June 4th, join USAID for the fourth in a series of five webinars to better understand the USAID Water and Development Strategy and how its principles provide the foundation for Agency water programming.
To have lasting impact over time and after USAID’s assistance ends, WASH programs need to factor in sustainability during planning, design, implementation and monitoring. USAID’s Heather Skilling and Rochelle Rainey will host this webinar on the nature of sustainable WASH services; factors of sustainable service; challenges and approaches that can improve programming outcomes by addressing sustainability.
This webinar will take place on June 4 from 10:00-11:00 am Eastern Time.
Register for the webinar here. Registration for each webinar session is required since space is limited. If you register for the webinar but are not able to attend, kindly cancel your registration before the day of the event so that someone else can register and participate.
If you are unable to join this webinar, a recording of each webinar will be posted shortly after each event here. And look out for the last webinar in the series, on drinking water quality, to be held on June 18.
Editor’s note: This blog post was authored by Ryan Cronk, PhD student researcher at The Water Institute at the University of North Carolina-Chapel Hill, which focuses on producing practical and relevant sector knowledge by linking research with policy and practice. In his post, Ryan describes the development of the WaSH Performance Index, which compares progress on WaSH access and equity across countries, and highlights some insights that the 2015 Index reveals.
What is the WaSH Performance Index?
The WaSH Performance Index is the first index to rank countries based on water and sanitation performance and on implementation of the human right to water and sanitation. It is the first of its kind in that it compares countries of all sizes, water and sanitation coverage, and income levels. By assessing how countries are improving water and sanitation compared to best-in-class countries at similar levels of water and sanitation coverage, the Index provides a fair comparison of progress.
Why a performance index?
Water, sanitation and hygiene (WaSH) are essential to human health and development, and water and sanitation are recognized as human rights. Proposed global targets for the post-2015 Sustainable Development Goals (SDGs) call for universal access to WaSH and reducing inequalities in access. The forthcoming SDGs provide potential for convergence of human development and human rights policy.
Monitoring approaches to assess progress toward proposed goals have focused on the level of coverage of water and sanitation. New instruments are necessary to monitor and evaluate country performance on WaSH and to ensure progressive realization of the human right to water and sanitation.
Looking at coverage between countries, such as improved water access in the United Kingdom (100%) and Mozambique (49%), does not provide a meaningful comparison. An improved approach is to compare rates of change of coverage. Countries like Mali have been doing well (improving at 4.3% per year) while countries like Colombia have not been improving (-2.4% per year).
The challenge in comparing rates of change is that countries are at different levels of WaSH development. When comparing levels of coverage with rates of change, we tend to see rates increasing at low levels of coverage, plateau at intermediate levels of coverage, and slow as they approach 100% coverage. To compare countries fairly, we must compare country rates of change to best-in-class rates of change at different levels of coverage.
The WaSH Performance Index meets these needs by comparing country performance on increasing access and equity to best-in-class performance at different levels of water and sanitation coverage. The Index provides insight based on already-available water and sanitation data from the WHO/UNICEF Joint Monitoring Programme for Water Supply and Sanitation. It is designed to accommodate new types of data relevant to the SDGs, such as hygiene, water safety, and non-household settings, as they become available.
The WaSH Performance Index answers two policy questions:
- How quickly are countries improving access to improved water and sanitation relative to best-in-class performance?; and
- How quickly are countries improving equity in access to improved water and sanitation relative to best-in-class performance?
What are some of the interesting insights from the 2015 WaSH Performance Index?
- High-performing countries in the 2015 rankings are those that achieved significant improvement in recent years compared to their peers. These include El Salvador, Niger, Egypt, Maldives, and Pakistan. Low-performing countries are those that showed stagnation or decline in recent years compared to their peers, such as the Dominican Republic, the Gambia, Ghana, Samoa, and Timor-Leste.
- Despite persistently being the region with the lowest water coverage in the world (Figure 1), water access performance among countries in Sub-Saharan Africa varies widely, with both high and low performers (Figure 2). Identifying characteristics of high performing countries and learning from them may enable more rapid progress among countries.
- Among the most populated countries in the world, Pakistan, China, and Nigeria were top performers (ranked 5, 11, and 18 respectively), while Russia, the Philippines and India were bottom performers (ranked 72, 83, and 92). India’s ranking as a bottom-performer predates the recent launch of the “Clean India Mission” by Prime Minister Modi and suggests his initiative may be even more critical and urgent than originally thought
- Progress toward equity in sanitation is significantly associated with governance indicators including control of corruption, government effectiveness, regulatory quality, and rule of law. These results suggest the enabling environment for WaSH contributes to progress in sanitation equity.
- Despite the assumption that countries with higher Gross Domestic Product (GDP) will perform better in improving access to water and sanitation, GDP was not significantly correlated with performance. This means that even countries with limited resources can make great strides if they have the right programs in place. National governments, NGOs, and aid agencies can direct their resources toward building systems and capacity for action in countries that are lagging, and toward implementation where those capacities are in place and performing.
What’s next for the WaSH Performance Index?
In future versions of the WaSH Performance Index, we plan to explore alternate measures of equity such as wealth quintiles and minority groups. We also plan to address levels of service and other important service characteristics such as water safety and continuity. Finally, we plan to develop Index rankings for hygiene, comparing every country with available data.
Where can I learn more about the Index?
You can read the full report here.
We’ve also posted a recorded webcast presentation about the Index online, including remarks from Ed Cain from the Hilton Foundation and a discussion with Vice Chair of Sanitation and Water for All Catarina de Albuquerque.
We would love to hear your feedback and questions about the Index! Please email Ryan at firstname.lastname@example.org
Editor’s Note: This guest post was authored by Danielle Keiser of WASH United, a Berlin-based organization that acts as the Secretariat for Menstrual Hygiene Day. In her post, Danielle provides a round-up of events being organized all over the world to draw attention to this critical development issue. To read more about how May 28 became Menstrual Hygiene Day, read Danielle’s post published last year on the WASHfunders blog.
I know what you’re thinking – ‘there’s a day for THAT?’
Yes, and there should be. Menstrual health and hygiene continues to be among the most challenging areas to address within the development arena. Not only do deep-rooted taboos and myths create the illusion that menstruation is inherently shameful or dirty, but in places such as South Asia or sub-Saharan Africa, there is often times a lack of adequate sanitary materials and hygienic conditions (i.e. toilets, clean water and soap) to maintain good menstrual hygiene management (MHM).
As a matter of human rights, poor menstrual hygiene negatively impacts the education, health and economic potential of girls and women. A case study by UNICEF from Burkina Faso revealed that girls often have no safe or private place at school to change their menstrual materials, leading to the estimate that 1 in 10 African girls miss school during their periods. In India, access, affordability and disposal of menstrual materials is a colossal problem: a report by AC Nielsen, “Sanitary Protection: Every Woman's Health Right” revealed that 88% of women use old fabric, rags, or sand to manage their flow.
Recognizing the urgency of these challenges, we at WASH United initiated Menstrual Hygiene Day to encourage policy advocacy and grassroots action around the issue.
Here is a list of the top 10 events expected to make some noise and break the silence on Menstrual Hygiene Day:
10. Dar Es Salaam, Tanzania – Hedhi Salama (Safe Menstruation) Campaign
Kasole Secrets will organize an advocacy event including a voluntary walk from the ministry of education to the celebration grounds with the Deputy Minister of Education as the special guest of honor. A press conference will be held on May 21.
9. Caen, France – Journee de L’hygiene et de la Menstruation
On Saturday May 30, Collectif Hygie will organize a day brimming with various activities intended to promote a better relationship with menstruation including yoga lessons that introduce postures to relieve discomfort during periods and a round-table panel on the theme ‘ending the hesitation around menstruation’ (featuring a gynecologist, medics, an artist, an osteopath specialized in gynecology, and community members).
8. Kampala, Uganda – Celebration and Advocacy Walk
MH Day will kick off with an advocacy walk organized by AfriPads in the center of Kampala to raise awareness about MHM. The walk will end at the Parliament of Uganda where all participants will sign the MHM Charter with a press conference soon thereafter. There will also be an exhibition, a seminar about MHM, a 'creative corner' where people can share poems and creative expressions about MHM, and an MHM tent where people can make bracelets. There will also be performances later in the day by various Ugandan artists.
7. Bristol, UK – Talk.Period Celebrates in Bristol
This day-long event organized by no more taboo and Grace & Green comprises of a menstrual hygiene exhibition, sustainability workshops, and a teen debate. In the evening, there will be a screening of Menstrual Man and a lively discussion about menstrual waste, homelessness and periods, and the taxation of feminine hygiene products.
6. New York City, USA – Why Menstruation Matters in Sustainable Development
Organized by over 10 partners in the New York area, this interactive workshop will explore a variety of cross-cutting issues inextricably linked to menstrual hygiene in New York and around the world, including the advancement of education, the assurance of health, the strengthening of the economy, environmental protection, and the realization of human rights. International speakers include Stand4Education in South Sudan, NFCC International in Nepal, Huru International in Kenya, and the Museum of Sex in NYC. Participants working in development, journalists covering development issues, and individuals with a passion about these topics are all welcome.
5. Various districts, Pakistan – High-level advocacy meetings and MHM awareness creation
Members of IRSP, KRDO and SDS will meet with government bodies and NGOs working with children and human rights in Mardan, Peshawar, and Khairpur to ensure that menstrual hygiene becomes a priority in all future WASH and development projects. The goals of the meetings are to highlight the impact of poor MHM and how it affects Pakistani society as a whole as well as to develop an action plan among donors, state policy makers, women’s and children’s rights activists, and the health and education sectors.
4. Dhaka, Bangladesh – Dhaka Celebrates Menstrual Hygiene Day 2015
Youth’s Voice Foundation will be organizing an event where over 300 students, NGOs, and local celebrities will come together for an interactive workshop intended to bring the taboo topic of menstrual hygiene out of the dark and into the spotlight. The workshop will include short film screenings and a game-based MHM training as well as breakout sessions on how to make reusable pads. Click here for more information.
3. Various counties, Kenya – Ending the Hesitation Around Menstruation
The Ministry of Health and other key stakeholders will join together for a national event in Kwale County organized by WASH United. The event is focused on opening up the discussion about taboos and challenges related to MHM that girls and women in different settings face. Additionally, in collaboration with the Cabinet Secretary of Health, there will be an event in Muranga where sanitary pads will be distributed to 500 girls. In partnership with Soroptomist International, WASH United will also be implementing MHM interventions with schools and women’s prisons in Kakamega, Nairobi, and Kisumu counties.
2. Washington DC, USA – The Voices of Why Menstruation Matters
More than 20 organizations including WASH Plus & WASH Advocates will host an exciting learning and advocacy event on menstrual hygiene. Through dynamic speakers, voices of girls from around the world, and exhibitions of solutions, the event will shine light on the important link between access to menstrual hygiene management and water, sanitation, and hygiene, gender equality, sexual and reproductive health, women’s and girls’ empowerment, and the realization of fundamental human rights. Participants will have the opportunity to engage in direct advocacy for the inclusion of menstrual hygiene in global policies on sustainable development and girls’ education and will leave the event empowered to continue advocacy for menstrual hygiene in their own communities and spheres of influence.
1. New Delhi, India – National Workshop to Ignite Action for MHM under the Swacch Bharat Mission
In coordination with the Ministry of Drinking Water and Sanitation (MDWS), WASH United, UNICEF, Water Aid, and other Indian partners, will be presenting and unpacking the soon-to-be released official MHM guidelines to State-level officials from MDWS and other relevant ministries. The event is designed to share learnings and best practices from different states and put the gears into motion for a government-mandated MHM action plan for each state.
Raise awareness in your own city or town!
Editor’s Note: This guest blog post is authored by Hanna Woodburn, Deputy Secretariat Director for the Global Public-Private Partnership for Handwashing. In her post, Hanna discusses the importance of incorporating targets and indicators on hygiene, a critical but often overlooked area, into the post-2015 development agenda under the Sustainable Development Goals (SDGs). She points out that, while the proposed goal for water under the SDGs is a step in the right direction, there is a need to develop global level indicators that more accurately assess progress on hygiene.
Some of the world’s greatest development challenges have the simplest solutions. If you are reading this blog, you likely know the facts about water, sanitation, and hygiene (WASH). You probably know that diarrhea and pneumonia are the top killers of children under the age of five, and that WASH can make a big difference in saving these lives. You might be able to cite statistics about how many days of school children miss due to diarrhea (272 million per year, in case you were wondering), or be able to describe the impact that a lack of facilities have on menstruating girls’ education.
However, did you know that you can and should be involved in ensuring that WASH is an integral component of the Post-2015 development agenda?
The Millennium Development Goals (MDGs), established in 2000, represented a major shift in the way in which the global community rallied against some of the world’s greatest economic and development challenges. Many successes born out of the MDGs are hard to ignore. Sources of improved drinking water became available for 2.3 billion people. Major progress was made in the fight against child mortality, with the mortality rate for children under the age of five dropping from 90 deaths per 1,000 live births in 1990 to 48 in 2012. Between 2000 and 2012, primary school enrollment increased from 83 percent to 90 percent in developing regions.
And yet, critical goals remain off-target, particularly that of sanitation. The Sustainable Development Goals (SDGs), which the global community is currently debating, represent an opportunity to continue the work that began under the MDGs, but the SDGs must also be used to address gaps in the goals, and a major oversight in terms of WASH was the absence of hygiene.
This must not occur again. Hygiene undergirds success in a myriad of areas, including reducing under five mortality, education, nutrition, gender equity, and more. And of course it is an essential counterpart to water and sanitation.
Despite its importance, hygiene is far too often overlooked, as we saw in the MDG era. And, as the 2014 Global Analysis and Assessment of Sanitation and Drinking Water (GLAAS) Report found, hygiene is also largely ignored at the country level, with only 19 of the 93 countries surveyed having an approved, funded, implemented, and reviewed national hygiene policy. Likewise, only 18 countries had national hygiene policies in schools and healthcare centers that fulfilled the same requirements.
The GLAAS report confirms that lack of investment in hygiene is a serious barrier to progress in international development, and that there are inequities in access to proper handwashing facilities. Knowing these shortcomings exist, however, is very different than taking action to address them, but with the United Nations’ work on developing global SDGs, the international community faces a valuable juncture wherein water, sanitation, and hygiene can be prioritized.
The proposed Water Goal (Goal 6) is a step in the right direction, and an indicator addressing water, sanitation, and hygiene is included under the goal, presently. However, this is not enough to guarantee that WASH under the SDGs will be adequately measured and prioritized. Rather, water, sanitation, and hygiene must be included as mandatory, global level indicators. These indicators should address not just the availability of the critical hardware and behavioural promotion to encourage their use at the household level, but also at important public locations, such as schools and healthcare centers.
Given the importance of hygiene, the Global Public-Private Partnership for Handwashing has taken a leading role in advocating for hygiene at the global level. We encourage you to download our hygiene advocacy toolkit and join us in our advocacy efforts.
Without proper investment, measurement, and prioritization of WASH, the global community is missing an important opportunity to improve the health and lives of billions of babies, children, and adults around the world. The global community has an opportunity to change this. Everyone, young or old, rich or poor, should have access to these life-saving resources by the year 2030.
As efforts shift from rescue to relief in the aftermath of the recent earthquake in Nepal, pledges of aid from individuals, foundations, and others are growing steadily while logistical challenges threaten to delay the response.
An immediate priority for the WASH sector is to provide access to water, while longer term recovery will involve building infrastructure for safe water and sanitation. For those interested in supporting WASH-related relief and recovery efforts, we’ve pulled together some resources:
- The Global Public-Private Partnership for Handwashing has compiled a list of documents for WASH practitioners in Nepal responding to the earthquake, such as the World Health Organization’s Rapid Needs Assessment tool.
- The United Nations Office for the Coordination of Humanitarian Affairs (UN OCHA) is producing regular situation reports that provide an update on the humanitarian response in Nepal. According to UN OCHA, the earthquake has left 4.2 million people in need of WASH services.
- WASHfunders’ funding map pulls together foundation grants data, reporting on bilateral and multilateral funding, as well as social and economic indicators. A quick look at grants data in Nepal shows that a number of WASH organizations are already working on the ground in the country, including WaterAid, Splash, ANSAB, and the Environment & Public Health Organization, among others.
And if you’re interested in learning more about foundation engagement in disasters more generally, read the 2014 report produced by Foundation Center and the Center for Disaster Philanthropy, Measuring the State of Disaster Philanthropy.
Editor’s Note: This guest blog post was authored by John Sauer, Senior Technical Advisor for Water, Sanitation and Hygiene at Population Services International (PSI). In his piece, John lauds the growing appreciation among WASH practitioners for market-based, holistic approaches to challenges in the sector, but also notes that this enthusiasm has been slow to translate into action. He lists several reasons for this sluggish adoption and describes what PSI is doing to apply the principles of market development to its projects on the ground.
With the excitement and buzz of World Water Day behind us I’m left both inspired and concerned. I’m inspired because there is a growing understanding by WASH professionals that it will take market development and systemic change to truly solve the problem. These methods look overall at what is working and not working in terms of WASH services for populations at risk across value chains and within the market system, and then, based on that analysis, develop targeted interventions with pro-poor innovations to make markets work. What is also exciting is the impact that adopting and implementing these approaches might have on the development sector in general.
What is concerning is that I still only see a handful of WASH projects and organizations fully focused on market development and systemic change. In other words there is a lot of talk but no action. Why?
I think there are a few reasons that I hope will change quickly for the sake of WASH and for development overall.
1) WASH players are still learning how to do market development
While there have been some great thought pieces written recently about why market development approaches to WASH are critical to success, very few projects are modeling and testing these approaches. We need more players involved with market development approaches. We need more UN agencies, donors, foundations and governments asking for and demanding market development approaches to WASH programs. NGOs and other players should do market development systematically, learn from implementation (through state-of-the-art monitoring and evaluation), and share their findings with the WASH sector, as well as the wider community of practice. These findings should include real examples of what works and what doesn’t.
Fortunately for the WASH sector this energy for exploring market development comes at a time when the wider market development community (traditionally in the agriculture sector) is actively compiling and publishing practitioner resources. The market development community is also trying to get wider adoption from the health sector, in particular WASH.
2) Funders are still learning how to fund market development
Funders need evidence to drive their funding decisions (rightfully so), and market development work in WASH is in its early days. But we also know that traditional programming focused only on the number of boreholes installed or toilets constructed does not yield transformative change and is often unsustainable. And market development is also a field with some serious discipline and evidence-based thinking behind it (driven by DCED, BEAM Exchange and others). Donors looking to increase their impact should seriously consider funding new market development approaches, so long as those approaches have a rigorous evaluation process tied to them.
3) Market Development ≠ Marketing
Make no mistake; marketing is an important part of market development. Market development, though, is much wider and looks at understanding the total market as it is now and its potential for sustainable growth. It includes but goes beyond enterprise level support, as market failures will be at other levels too, especially in sanitation.
As for action, I’ve just joined PSI as Senior Technical Advisor for its WASH program and a primary driver for my move here was my new employers’ commitment to market development approaches in health. Recently, PSI has been adopting market development work into WASH, and sanitation particularly, and plans to continue to expand this work globally.
One of the programs I’m most excited about is a market development program we’ve just launched with USAID funding in West Africa (Benin, Côte d'Ivoire, and Ghana) to improve sanitation and fecal sludge management services for a projected one million people. The program, called Sanitation Service Delivery, involves partners PATH and WSUP, and will support interventions based on a market landscape and analysis in product and service design, business model development, government partnerships, and demand- and supply-side financing. There is also a strong component focused on shared learning that starts with this blog and that will continue in a variety of channels.
So learn with us and follow our progress as we build the evidence that market-based solutions in WASH work. In doing so, we hope to prompt those who are still skeptical to action as well.
The Coca-Cola Company has announced a commitment of $35 million over five years through its Replenish Africa Initiative (RAIN) to provide an additional four million Africans with access to clean water and sanitation.
The new commitment builds on a $30 million commitment by the company in 2009 to bring access to safe water to two million Africans by the end of 2015.
The funds will enable RAIN, the flagship initiative of the Coca-Cola Africa Foundation, to increase efforts to bring safe water to six million Africans by 2020; economically empower up to two hundred and fifty thousand women and youth; promote health and hygiene in thousands of communities, schools, and health centers; and return up to 18.5 billion liters of water to nature and communities. Partners in that effort include Water & Sanitation for the Urban Poor (WSUP), which will leverage RAIN funding to contribute to efforts to improve water services in selected cities in Kenya, Madagascar, and Mozambique; the Millennium Challenge Corporation, USAID, and WSUP, which together will work to provide access to safe water in the city of Lusaka in Zambia; and Global Grassroots, which will work to empower women in Rwanda to lead water enterprises, improving water access for thirty thousand people across the country.
"Our commitment to the well-being of African communities is unwavering. Through the efforts of RAIN, we are reinforcing the incredible progress made to date with our many partners and are pledging to do even more," said Coca-Cola Africa Foundation president and CEO Susan Mboya. "As we begin work in this era of new commitments, we must continue the progress made from the Millennium Development Goals to set these economies up for success. Through programs and partnerships focused on safe water access, women's economic empowerment, job creation, and community well-being, we are investing in the future progress and prosperity of the African people and economy."
"The Coca-Cola Africa Foundation Broadens Reach of Replenish Africa Initiative." Coca-Cola Company Press Release 04/13/2015.
Editor’s Note: This guest blog post is authored by Charles Nimako, Director of Africa Initiatives at Safe Water Network. In his post, Charles provides an overview of Safe Water Network’s Beyond the Pipe Forum, which took place last month in Ghana, and focused on the potential for public-private partnerships (PPPs) to improve the country’s rural water supply and infrastructure gap. The piece outlines a number of highlights from a set of policy recommendations on PPPs to come out of the Forum, such as the need for Ghana’s national water policy to clarify rules surrounding asset ownership and the benefits of exploring a variety of different partnership structures.
I, like most managers, enjoy reporting progress, whether it’s the completion of a new Safe Water Station, the community-owned water purification systems we build throughout Ghana, or meeting a commitment to advancing knowledge in the water sector. This past month, Safe Water Network hosted its third annual Ghana Beyond the Pipe Forum in Accra under the theme “Public-Private Partnerships (PPPs) for Community Water Solutions.” Each session not only engaged panelists and the audience in discussing how we can put PPPs to work for decentralized rural water supply, but also delivered on the key action points from last year’s forum.
The session, Addressing Barriers to PPPs, was chaired by Mrs. Magdalene Apenteng, Director of the Public Investment Division at Ghana’s Ministry of Finance, the key institution facilitating PPPs in addressing Ghana’s significant infrastructure gap. Her role at the forum was particularly fitting since she also wears the hat of Chair of the PPP Working Group, established by Safe Water Network after the 2014 forum to develop a clear policy framework that enables successful private engagement in the supply of rural water. The group, comprised of representatives from government, donors, private sector and NGOs, delivered on its first milestone to put forth recommendations (see below) within this framework, and began the process of broader sector engagement in a demonstration project to prove PPPs could work in Ghana’s rural water sector.
Safe Water Network, coordinator of the PPP Working Group, presented a preliminary analysis around a group of proximate Safe Water Stations, what we call a “cluster,” in the area of the lower Volta Lake. The financial proposition in this prospective case study grounds the idea of a demonstration PPP project in practical implementation experience.
We know others have tried PPPs with limited success, and that we don’t have all the answers ourselves yet. However, we believe we have brought new ideas to light on how to incentivize public and private funding for such a project, and want to show that partnerships can work.
The PPP Working Group and Safe Water Network are working to be part of the solution, and we welcome others who would like to participate. In parallel to the Working Group, we have been in dialogue with the Ghana Infrastructure Investment Fund to begin structuring specific PPP frameworks for community water provision. Next year, I expect to be reporting progress again with a clear project plan and financial commitments from the public and private sectors to drive this demonstration project.
Here are the highlights from the PPP Working Group Policy Recommendations:
- A cluster approach to implementing rural water systems improves financial viability (vs. independent water stations) and thus can broaden the extent of private sector participation.
- Ghana’s national water policy needs to clarify asset ownership regarding who owns what, and which types of PPPs are most practical.
- The sector should explore varied forms of partnership structures including Design-Build-Operate (a common World Bank partnership structure that is output based and involves significant upfront design) and risk sharing.
- Immediate opportunities include applying management and service contracts to existing rural piped systems and using public funds for infrastructure investment.
- There should be a balance in pricing so it can be both affordable and incentivizing to the private sector, but we must remove impediments to efficient pricing.
- National water policies need to accommodate the PPP policy, which was launched by the Ghana Government in 2011. This should be accompanied by a regulatory framework and an improved information flow about investment opportunities in rural areas and small towns.
We look forward to working with others throughout the sector to learn more about their experiences with PPPs.
Editor’s Note: This guest blog post was authored by Alix Lebec, Director of Strategic Alliances at Water.org. Alix writes about the potential for impact investing to help address the global water crisis, which currently attracts far less funding than the WHO estimates is needed. She describes how Water.org has adopted this approach to leverage philanthropic capital and scale up their WaterCredit model in India.
Impact investing is gaining momentum worldwide. Seen as the future of double bottom-line investing – which seeks to measure investment performance in term of positive social impact, as well as fiscal performance, many believe this approach has the potential to leverage trillions in private capital to address social causes. Wealth holders are increasingly looking for ways to direct their resources and business acumen toward initiatives that generate financial returns and a positive impact at the same time, what we call “doing well by doing good.”
And while impact investing is still an evolving field, social entrepreneurial organizations such as Root Capital and Acumen Fund are paving the way with innovative finance models to accelerate progress toward alleviating poverty. We know there will never be enough philanthropy to tackle pervasive challenges such as the global water crisis that continue to cripple poor communities economically. The World Health Organization estimates that it will cost $200 billion in capital annually to solve the global water crisis over five years, and maintain the infrastructure. Currently, annual investments combined amount to roughly $9 billion, far short of what is needed to solve this crisis. Combining innovative financing, such as impact investing, with smart philanthropy presents one of the greatest opportunities to optimize social returns per philanthropic dollar invested, and scale solutions.
Today, there is a $12 billion demand globally among families at the base of the economic pyramid (BOP) for access to microfinance to meet their water supply and sanitation (WSS) needs. This is a huge market waiting to be discovered. Water.org’s WaterCredit model strives to tap into this demand, and enable local microfinance institutions (MFIs) to provide small and affordable loans to families at the BOP for WSS needs. To date, Water.org has directed $10.9 million in philanthropic capital toward its 51 MFI partners to help them jumpstart WaterCredit loan portfolios. As a result, these MFIs have attracted more than $100 million in commercial and social investment capital to provide WaterCredit loans. That’s $100 million Water.org did not need to fundraise from philanthropic supporters.
The impact? At a macro-level, this means this model leverages philanthropic resources to attract much larger pools of investment capital to address WSS needs at the BOP. At the household level, this means a family living in an urban slum in India, for instance, can participate as a customer, and pay for the construction of a toilet or water connection at home. Globally, Water.org has reached 2 million people through WaterCredit.
While this progress is encouraging, ongoing investment capital constraints for WSS lending at the BOP in key markets such as India still represent a significant barrier for scale. Our local MFI partners repeatedly emphasize how much more they could accomplish if they had access to greater and more reliable sources of social investment capital to meet the growing demand for WaterCredit. In its quest to continue attracting more capital to the water sector, Water.org saw this challenge as a unique opportunity to develop and launch the WaterCredit Investment Fund.
Building on the achievements of WaterCredit, this new $12 million Fund will connect, for the first time, social impact investors in the US and Europe directly with WSS needs at the BOP in India. Supporting Water.org’s highest performing MFI partners in this country, this Fund will provide a targeted, annual pre-tax return to investors of 2 percent. And while this is a modest financial return, the potential for social impact returns is tremendous, particularly as the Fund will help scale a proven model – WaterCredit.
Moreover, Water.org has identified $36 million in demand among just a handful of MFI partners in India alone for access to lower cost capital to scale their WaterCredit loan portfolios. Just imagine how much larger that demand becomes when looking at capital needs for WSS lending across India, and around the globe. Water.org plans to build on the lessons learned and achievements of its pilot WaterCredit Investment Fund to address these larger capital needs.
How is Water.org bringing this effort to life? By continuing to garner the support of leading strategic funding partners that have a strong appetite for innovation and embrace risk, and see the role catalytic philanthropy and impact investing can – together – play in achieving systemic change that works for the poor. Over the past few years, Water.org has secured $40 million in commitments from a growing community of change-makers and visionaries such as the IKEA Foundation, PepsiCo Foundation, The MasterCard Foundation and Caterpillar Foundation for its WaterCredit programs.
And while impact investing is still a new “tool in the toolbox” that needs time to develop, it is one that presents a great potential for creating a win-win-win situation – for the investors, the implementers and the recipients of impact. What better reason for Water.org to venture into this field in pursuit of scaling what already works?