The IDP Foundation Story: Finding Purpose in Sustainable Solutions

IDP Foundation, Inc.
Jun 18 · 6 min read
Irene and Paulina

By Irene Pritzker, President & Chief Executive Officer, IDP Foundation, Inc.

I found my philanthropic calling in 2008 while visiting the Agbogbloshie market in Accra, Ghana. It was there that I met Paulina Nlando, a yam wholesaler and school owner.

Her school was a refuge for children whose parents had to work and were concerned about safety. The market was a hazardous place with open fires, snaking electricity cables, standing water, wobbly trucks loaded down with produce and wares, and little in the way of pedestrian amenities like sidewalks.

Paulina’s bare-bones school served around 400 students and was a lesson in “making do.” Tuition revenue was barely keeping the doors open; there were practically no teaching materials; and her teachers lacked training. Her most pressing need was securing a loan to reinforce the second floor.

Paulina was a go-getter and creditworthy, having borrowed on multiple occasions to finance her successful yam business. But when she sought a loan to fix up her school, banks turned her down, including the one with which she had more than established her creditworthiness.

I was in Ghana seeking to learn about microfinance as a tool for supporting private schools that catered to the most economically marginalized populations in developing markets. What Paulina told me struck a nerve. Why could she obtain financing for her yam business but not for her school, which clearly wasn’t lacking for pupils and had the support of parents who worked in the market?

Once I began to pursue answers in earnest, it became clear that Paulina’s story was not unique. Her school was one of an estimated 6,000 low-fee private schools in Ghana, according to a 2011 report by the International Finance Corporation (IFC).[1] Most were bootstrap affairs born of necessity, providing a viable means of education for pupils from low-income communities who might otherwise remain unschooled.

The proprietors of these schools typically lacked financial and management acumen. And as I also discovered, their struggles to make improvements were compounded by the high cost of borrowing money in Ghana (if they could even qualify for a loan to begin with) and the fact that government and multilateral funding agencies offered little to no support because the schools were privately owned.

I’d started the IDP Foundation, Inc. (IDPF) in 2008 to fund medical research and provide investment capital and program-development services aimed at fostering economic opportunity and supporting educational advancement in underserved communities. A year later, in partnership with a Ghanaian microfinance institution, Sinapi Aba, we launched the IDP Rising Schools Program (IDPRSP) targeting low-fee private schools shunned by banks as credit risks.

IDPF took the risk of seeding the venture using a combination of philanthropic capital and low-interest loans. With access to funds at a reduced cost, Sinapi Aba could administer financial literacy and school-management training while providing below-market-rate loans to school owners. The result is a sustainable program in which participating schools have demonstrated admirable creditworthiness, enabling Sinapi Aba to consistently turn a profit on its lending to them.

This is the essence of what makes IDPRSP a trailblazer in education financing in the developing world. The program offers largely affordable tuition fees, scholarships, negotiated discounts and flexible payment arrangements (such as daily fees or payment plans) to parents who do not always have a predictable income.

IDPRSP, by leveraging the private sector to enable people to have more control over their lives — and be less dependent on philanthropy — became the IDP Foundation’s keystone project and model for pursuing solutions to tough problems.

Our approach is the same whether we’re allocating funds in our endowment’s portfolio to impact investments or we’re deploying philanthropic funds in the form of grants or Program-Related Investments (PRIs). As impact investors, we favor business models that generate both financial and social returns.

Consider Edovo, a social enterprise we helped seed that offers tablet-based learning programs and communication services to incarcerated people. Edovo’s platform makes staying in touch with loved ones and support networks easier and more affordable, makes correctional environments safer, and motivates prisoners to spend more time on education — such as working toward General Educational Development (GED) — and thinking about the future.

While education is IDPF’s central theme, our mission is purposefully broad: “To encourage and support innovation, development, and progress in every program we either support or in which we invest.”[2] This provides maximum flexibility in using PRIs to engage with sectors that are of interest to us. We seek out operators who are responsive to community needs and whose models are replicable and scalable, thus enabling the recipients of our grants and/or investments to validate their work and attract funding from other sources. We think of our philanthropic dollars as patient, catalytic capital seeking a return with societal impact — just like with investments made from the foundation’s corpus. The underlying idea is that some problems are best approached as investment opportunities that put capital at risk rather than as causes seeking precious grant money or institutionally administered aid that might not be sustainable.

Have there been stumbles? You bet. An early plan to gather up donated supplies in the U.S. and ship them for distribution to school proprietors in Ghana, based on a rewards system modeled after airline frequent flyer programs, turned into a logistical fiasco. Closer to home, there have been initiatives we funded for a while but discontinued when nonprofit organizers didn’t do their part to establish sustainable programs. For instance, we stopped funding an after-school tutoring program in Chicago when we learned that the grantee wasn’t tracking outcomes for the kids who went on to attend college or other professions.

Developing IDPRSP from scratch taught us the value of due diligence and partnerships; of narrowly focusing on a set of principles when deciding whether to provide funding or make an investment; and of not being afraid to chart a new course and take risks, experiment, iterate and pivot to come up with the right methodology. Refining and bringing transformative models to fruition requires an enduring commitment to working on the ground, to listening and learning and interacting closely with the communities we partner with.

For our IDPRSP, Sinapi Aba’s expertise and extensive geographical footprint in Ghana proved invaluable when reaching out to schools with a survey questionnaire to validate the market for a loan program, determine what the program should look like and devise a plan to execute it step by step. We spent time in the field alongside loan officers to gain firsthand insight into the source of the problems people were facing. All of which fed into developing training modules covering everything from creating financial statements, managing savings and handling credit to human resources management, forming parent-teacher associations, working with Ghana Education Services and the Ministry of Education, and building community trust.

When it came time to make the leap from providing loans and training proprietors to supporting teachers, we were fortunate to enlist Sesame Workshop as a partner to develop a series of training videos and implement activity-based learning techniques to enhance the quality of pedagogy in the classroom. The nonprofit media and educational organization, which hadn’t previously produced videos to educate teachers about broadly applicable teaching techniques, cast Muppets Zobi and Kami, with Matilda Asante in the role of their favorite teacher. They debuted in 2012 to support schools participating in IDPRSP.

The videos — there are now 14 in all — demonstrate creative, engaging ways for teachers to work with young pupils and develop child-friendly learning spaces. They’re part of a multimedia kit developed with the assistance of Ghana’s Ministry of Education and the Ghana Education Service that includes in-person trainings, teacher guides and learning materials, all specifically designed with West African classrooms and cultural sensibilities in mind.

These efforts have begun to influence conversations around low-fee private schools run by local social entrepreneurs, leading to acknowledgment of the positive contributions they and affiliated private-sector players make in expanding access to education among disadvantaged children and helping achieve national and global education targets.

With an eye on this broader educational ecosystem, IDPF is dedicated to ensuring the affordable private school sector is recognized and supported. To do that we’ll continue to invest in program development and market-building, research, strategic partnerships, and advocacy and policy influencing in the areas of education finance, quality and experimentation around public-private partnerships.

Paulina, her students, and their parents in the Agbogbloshie market deserve as much.

Irene visiting Paulina’s school in 2008

[1] Cited on IDP Foundation website: http://www.idpfoundation.org/idp-rising-schools/approach

[2] IDP Foundation website: Who We Are

IDP Foundation, Inc.

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The IDP Foundation, inc. is committed to encouraging and supporting the development of innovative and sustainable solutions to complex global issues.