Being a new funder in the WASH sector has sometimes felt like being the new kid in high school. It can be hard to know where you fit in — particularly when you’re not that big, or experienced, or well-connected. You have to decipher a whole new language and get up to speed on all the unspoken power dynamics and history. And there’s the danger you’ll fall in with the wrong crowd, try and be something you’re not, or get frustrated, drop out, and go it alone.
Of course the analogy only goes so far, and also has the effect of making people think I had a very unhappy time at high school. But I guess in a way it highlights some of challenges that a new, mid-sized funder faces when trying to work out its strategy, and the importance of initiatives like WASHfunders.org.
For us at the Stone Family Foundation, we still feel very much like the new kids, but we’re getting a clearer idea of the direction we’re heading in and the way we want to spend our annual WASH budget of £4m ($6.25m).
Our current approach is based on three main hypotheses. First, that market-based solutions, have the potential to provide sustainable, scalable, and efficient water and sanitation services to low-income households. Second, that more grant funding is needed to help these initiatives to transition from a successful pilot to operating at scale. And third, that the Stone Family Foundation is well-placed to fill this funding gap. We can provide grants of a meaningful scale, we have an appetite for risk, and we can take advantage of the business skills and experience of our trustee board and their contacts.
Since the end of 2010, we’ve started to put in place specific funding programs to refine, develop, and test these hypotheses. And as we seem to like to do things in threes, this has coalesced around three main initiatives.
The first, the major grants program, is focused on three countries, Cambodia, Zambia and Tanzania, where the foundation is making a small number of grants, with an average size of £1m ($1.6m). In Cambodia, it is funding a cluster of work in sanitation marketing — two programs are scaling up their work with local entrepreneurs, and then a third is exploring how to integrate sanitation marketing into a portfolio of approaches (such as targeted subsidies, CTLS, and government regulation) in order to achieve 100% sanitation coverage in a specific area.
The second, an innovation grants program, is looking to reach further down the food chain, identifying projects that are at an earlier stage of their development. In sanitation we are continuing with a proactive model — as promising ideas have been relatively straightforward to source — but with water, we’ve taken a different approach and have set up the Stone Prize for Innovation and Entrepreneurship in Water. (First round applications close on 22nd March.)
And then the third, more nascent initiative, is a strategic grants program looking at how the foundation can help strengthen the resources and the support available to organisations looking to develop and scale their work. So for example, the foundation is funding Monitor Inclusive Markets to support a group of Indian organisations to test and strengthen the business model of their urban water purification. And it is exploring potential ways to open up sources of finance, by partnering with social impact investors and microfinance providers, as well as potentially supporting organisations to access carbon financing.
This is where we are at the moment. It’s all quite early stage, but also quite exciting, and we feel we’ve already learnt a lot, and are starting to refine and challenge some of our working hypotheses — for example, the specific role and potential of market-based solutions, and also the extra capacity the SFF will need to fund in this space.
As we learn more and our partners start to report back on the progress of their projects, we’ll post and blog the lessons on this site, and we’re happy to talk with others off-line and share our experiences in more detail — like why we chose Cambodia, Zambia and Tanzania as a focus for our major grants program. We’re also currently writing up a short report on what we’ve done to date, which should be out at the beginning of April.