Working on PPP-type of primary care initiatives in Africa we experienced that the investment case for primary health care is challenging due to limitations in the revenue model, high development costs and political risk factors. Primary health care is hard to fund sustainably and at scale as:
- commercial funders consider this sector as too risky,
- impact funders typically have a “vertical” focus (certain disease area, care path, patient segment) and do not fund holistic primary care, and
- projects need a lot of structuring and support to be “investable”.
Universal Health Care in sub-Saharan Africa requires leveraging public, private, and philanthropic sector capacity to create new service delivery and financing models that can strengthen primary health care (PHC) at a system-wide scale.
We would propose to break the impasse and unlock much needed investments into better primary healthcare by applying a “double blended finance’ approach, which we developed together with Total Impact Capital. Double blended financing refers to (1) Investment blending to cushion the investment and early-stage development risk using first loss and development grants and (2) Revenue blending at the project/venture level by strengthening the revenue sources and de-risking instruments to ensure that innovations thrive in the long term and reach everyone, including the poor.
Source: double-blended financing in Health Finance Coalition, 5 Sept 2021
A partnership agreement has been signed with FMO (Dutch Development Bank) to unlock invesmtents into the primary healthcare space.
Together with and lead by Health Finance Coalition and AfricInvest, we are in the process of fundraising for a fund, structuring investable deals and building the deal pipeline. The aim is the establishment of a 100m US$ Primary Healthcare Fund that is able to unlock investments in high impact projects at scale for underserved communities with a focus on the primary healthcare sector.
Next to this we are on different engagement levels with various funders, donors and other relevant stakeholders to develop and align funding approaches on the “revenue side”.
Ultimately, at Philips, our purpose is to improve people’s health and well-being through meaningful innovation. We thus aim to improve 2.5 billion lives per year by 2030, including 400 million in underserved communities.
We believe that each actor has a role to play to mobilize the required financial resources. For example, donors and philanthropists can 1) contribute grants for technical and transaction assistance, and first loss to support testing of innovative projects in real life settings and/or scaling interventions with proven impact, and 2) provide guarantees to de-risk equity and debt instruments. Impact investors can invest according to their risk appetite either in the testing of projects or in the de-risked (sub-national) roll out of proven projects. Governments must work to gradually increase the uptake of national health insurance schemes and increase domestic resource mobilization to sustain the business models. A key challenge is to design an impact investment vehicle that is tailored to the individual risk appetite and return requirements of the broad range of investors we seek to engage in. Furthermore, if the much needed risk capital is not provided by DFIs we need other providers of risk capital such as Corporates or Foundations.
Our advice to our peers is to take time to understand all the elements required to establish a sustainable solution and incentivise all the stakeholders required – there needs to be something in for all of them! Another recommendation is to be open to adapt as you go and to be patient. Finally, let’s join forces to make existing funds more “usable” and to build a strong funnel of (investable) projects that can scale!
See blog double-blended financing in Health Finance Coalition, 5 Sept 2021.
Philips Capital / Philips Foundation – Impact Finance
Mobile + 31 651336950
When this work began, the UK had had nearly a decade of austerity, which had stripped out much of the social infrastructure and further entrenched social issues for many communities, leading to people our charity partners were supporting, presenting with greater complexity of need. Public services were under pressure, just as small charities were. Trends in outsourcing of services had led to a greater reliance on larger scale commissioning processes, moving away from earlier practices (e.g. by local authorities) of grant funding the VCSE sector. This reduced trust, and damaged relationships in a way that created a challenging space for collaboration, just when collaboration was really needed in order to identify how to do more with less. Public sector and philanthropic spend was typically siloed, a lack of space for strategic thinking created services that were not necessarily effective in helping people move on in their lives, and there was in many cases duplication and a confusing web of services people might be engaged with. There were significant power dynamics at play between communities, different parts of the VCSE sector, statutory services, strategic boards and politicians.
We sought to bring people together from across sectors and organisations and to create a space to think about doing differently. For Lloyds Bank Foundation, the focus of this work is long term and crucially is not focused on grant funding but rather on resourcing the process of bringing about change in this way. We wanted to work with a small number of local areas, and to learn with them about what it takes to bring about system change. We had a number of key principles and assumptions at the outset:
- Relationships are absolutely key – both our approach being relational and seeking to get to know people but also that relationships between people, organisations and sectors are crucial and that our practice would have to support building positive relationships. We undertook training in restorative practice with a view to incorporating thinking on how to build and maintain positive constructive relationships and, when things have gone wrong, to restore them.
- Context – every community is different and it is essential to get to know the context locally
- Strengths based – engaging with a building on the existing strengths in a local area
- Thinking about power – being mindful of and considering power and power relationships, especially when bringing different organisations and sectors together.
- Involving the community and people using services in helping to determine what is needed and what change is necessary – we have used a service design methodology
- Long term – we recognized that this work would take time and we would stay with it through challenging times as long as we could see it was progressing.
- We will learn and develop as we go – we have a developmental evaluator and learning partner who is helping us and the communities to learn from the work as we go, so that we can change our practice or shift our approach if necessary. We want to share what we learn together with the six communities, with a wider audience so that others can use it.
We created an infographic to demonstrate these approaches and the evidence base.
We have involved all actors in a place who could be involved in the resource, design or delivery of services:
- Public sector: local government, commissioners, Clinical Commissioning Groups, emerging Integrated Care systems, Police and Crime Commissioners, schools, probation service, police, primary healthcare services, mental health services
- VCSE sector: infrastructure organisations, small charities delivering services, small volunteer led groups, larger charities and local branches of national charities
- The local community, including people with lived experience and people using services
- Private sector: Local Enterprise Partnerships, small business, local chambers of commerce
- Funders: other local trusts and foundations
- Groups and networks: Health and Wellbeing Boards, Local Strategic Partnerships, VCSE networks and assemblies, Local Enterprise Partnerships; in Wales – Public Service Boards, Regional Partnerships Boards, Health boards
We sought to bring people together from across sectors and organisations and to create a space to think about doing differently. We have particularly emphasised the importance of relationships as a foundation of this work and have employed particular approaches to help build, maintain and restore relationships such as restorative practice. We have also sought to influence the use of resources, recognising that even though there is less funding available across the board, there are still significant funds, and collaboration and connection to communities is needed to ensure that these funds are spent in effective ways, ensuring that the services they fund meet people’s needs. We are working to influence the way services respond to people’s needs, by using a service design methodology which is a creative and adaptive model for bringing in the experience of people using services to help to reshape them. Significantly, we are not offering grants or traditional funding, but are resourcing the process, which helps to address the power dynamics we might have as a funder
Insights / Advice to Peers
We are still very much in the middle of this piece of work and are learning as we go. So far our three pieces of advice are as follows
- Recognise your power – Foundations hold a significant and unique opportunity to create a space for doing differently in the long term
- Respond to context and be flexible
- Be ready to learn and be humble – don’t come with all the answers but be prepared to ‘do with’ partners in the work – share power
Videos made during COVID crisis:
Harriet Ballance, People and Communities Lead, Lloyds Bank Foundation for England and Wales; firstname.lastname@example.org
The Service Reform Fund is a conscious effort to engage in large, complex social service improvements in Ireland. This programme has resulted in the national scaling of service innovations, which were previously at the pilot stage. These are now the flagship programmes of Irish government’s response to long-term homelessness, unemployment of people with mental health challenges and supporting people with disabilities to live engaged lives in communities. The programmes are being sustained and expanded by the government at a scale that would be impossible with only philanthropic support.
There were three approaches adopted to advance the Service Reform Fund
- Funding was contingent – The funding was awarded and paid out by the Genio Trust based on progress with agreed plans. Each region was given opportunities to develop plans based on the needs of service users. Funding was awarded to the regions against transparent criteria which focused on the extent to which the regions developed realistic, ambitious plans for service reform. The funding was then paid out based on the monitoring of the implementation of these plans.
- Curiosity about implementation challenges – The implementation of the Service Reform Fund was informed by international expertise about complex social service systems reform. An action research methodology was adapted to the areas of social service reform and was used to make challenges discussable and to support implementation.
- Priority of service user voice – Service users were involved in planning, inputting into decisions on the awarding of funding and evaluation of progress. This symbolised the shift in power dynamics and ensured that a platform was provided for this voice to be heard.
At this stage, the Service Reform Fund is nearly complete, and the results have far exceeded expectations. The Housing First model to address long-term homelessness is operating across the whole country and the government has recently announced another expansion of the number of people being inducted into the programme. In the mental health field, a programme to support people with significant mental health challenges to access the competitive labour market, called Individual Placement and Support has been mainstreamed and expanded nationally by the Irish Health Service. Also, Community-Living, a programme where people with disabilities are supported to engage in community life, has now been expanded significantly in Ireland with more person-centred practices being built in. These programmes of work have been rigorously monitored and evaluated.
Often when facing complex scaling challenges, it is best to start with very specific areas of practice and to facilitate well-structured discussions, involving service users, about how services should change. Once momentum builds around these reforms it is easier to build outwards and expand. The design of this process is crucial and it is important to access specific expertise on how to bring about reforms in complex systems.
Overall, there is a need to balance idealism with a sense of realism about how scaling actually happens within social service systems. In Europe, if you are working on social service challenges and not considering the role of the public sector (in conjunction with the private and non-profit sectors) significant scaling will rarely take place.
Dr John Healy – Genio, Deputy Executive Director – email@example.com
Clare Bergin – Genio, Executive Assistant to Executive Director – firstname.lastname@example.org
In 2019, after 2 years in operation, The Human Safety Net recognised that emergent social innovations supported across the countries in which it operated had the potential for transformative, large scale impact with the appropriate tools and resources. This recognition was borne out of the deep links that The Human Safety Net and local Generali representatives had with social innovators in their community, which allowed for targeted support and in-depth knowledge of supported organisations. The challenge was to sustain the richness and strength of the social innovations already supported around the world, and at the same time the need for targeted, structured efforts to support them beyond traditional grant making. Up until then, organisations received funding by local Generali group entities as well as THSN global. By creating the Scale-up Impact programme, these organisations could access greater amounts of funding made available by THSN global as well as a dedicated scaling support track designed together with Ashoka.
Local social innovators lacked the funding and expertise to scale what were very effective actions, and the level of support and coordination with other partners THSN could provide was seen as critical building block to enable the initiatives to grow.
Thus, as a final step THSN decided to create a central mechanism that could further support the scaling of those social innovations that across all THSN locations had the desire and capabilities to do so, as Social Scaling was identified as a key model to further enhance the desired impact of THSN network, as well as the most effective deployment of a corporate entities resources and expertise.
This required both financial resources and accurate planning, identifying the appropriate mechanisms that could guide organisations over a 3 year scaling programme. This meant designing engagement throughout the three years and continuous personalised capacity building activities, impact assessments, and co-funding efforts.
The key elements of the process are 1) RfP launch, open to all THSN partners, 2) concept note submission, by local NGO with support from loca THSN team, 3) full proposal, including co-funding pledges, 4) expert panel review, assessing and scoring NGOs, 5) Due Diligence checks on shortlisted applicants, 6) final selection by THSN global board and 7) Programme launch.
Overall, the process lasts 7 months.
THSN has invested 7 million euros over a 3 year period starting in 2019. Up to now, the scale-up impact programme has reached 8 organisations in 8 countries over two years, supporting each one with three year grants of up to 800.000 Euros. Collectively, these organisations are now reaching more than 16,000 people.
Scale-up impact recipients have also been able to leverage an additional 4.8Mln Euros in co-funding to support ongoing scaling efforts.
The process was designed from the start to engage all relevant stakeholder, ensuring adequate and widespread buy in from them, which is a critical element to ensure the effectiveness of the scale-up mechanism selected by NGO partners. THSN teams worked in close coordination to ensure NGO partners were well prepared for the application and prepared all necessary support. A strong ecosystem approach was key for the successful execution and following impact of the programme, allowing partners to find their own approach to scaling thanks to a wide pool of support, funding and expert advice. Our three key pieces of advice for others looking to launch their own scaling programme would be:
- Carefully map out the user journey one expects the ngo applicants to go through, in order to understand when/where to provide additional support and how to plan for the future of the relationship with them.
- Focus on selecting partners with significant expertise in scaling social innovations, in order to provide the best possible support to partner who are selected. This also means scrutinising proposals very closely, focusing on the proposed end-game and the overall plan of the organisation.
- The long term sustainability of NGO partner should be considered once the relationship has ended, working with the ngo and other partners in its ecosystem to ensure they have access to additional long term co-funding.
Manager, Programs & Social Innovation
The Human Safety Net, Generali