Fundación Capital: Scaling Strategies to Sustain Impact through Partnerships & Policy
As part of this Scaling Snapshot, see also Fundación Capital’s Organizational Overview, Getting Ready for Scale, and Scaling Pearls of Wisdom. You can find the full scaling snapshot PDF here.
Fundación Capital began to attract a more diverse group of funders interested in supporting its work and taking risks as it refined its model, expanded programming from financial inclusion to include livelihoods, and dug deeper into aligned technology solutions (e.g., digitized training). In 2014 FC was named a Skoll Foundation Awardee, which supported its expansion of the model into Africa and eventually Asia. FC continues to expand the breadth and depth of offerings in existing countries of operation and engages with new countries — all with the vision of building the capacity (and commitment) of its private and public sector partners to sustain the work long-term. Additionally, FC leverages its data and knowledge to pursue policy and regulatory change, thereby creating a more enabling environment to advance what it calls economic citizenship (i.e., achieving a level of economic standing to be able to participate fully within one’s society).
As Fundación Capital began to scale around 2014, after spending several years positioning itself for such, it pursued three key scaling strategies to meet its goals. Below you will find more detail about those strategies, along with the organizational implications for pursuing each.
STRATEGY: EXPAND WORK WITHIN AND ACROSS COUNTRIES.
Fundación Capital continues to reach more people by expanding in existing countries of operation and by bringing its approach to new countries.
Fundación Capital scales its impact by growing its footprint and continuing to innovate — always hand-in-hand with partners. FC adds to its portfolio of process, program, policy, and technology solutions within each country and expands to new countries — often by invitation.
EXPANSION WITHIN EXISTING COUNTRIES OF OPERATIONS
In each country of operation, FC begins work focused on identifying and co-creating one or two financial inclusion or livelihood interventions. As FC builds trust through the initial project, new and existing partners often see the opportunity to bolster their programs with FC’s support — and thus create new or deeper partnerships with FC. For example, in Colombia, FC’s initial project supported the government’s digitization of cash transfers in order to increase financial inclusion outcomes. FC quickly demonstrated its value by bringing in new perspectives and ideas and expanded to other interventions, such as embedding a livelihoods’ initiative for families in extreme poverty (i.e., the “graduation” approach) into the government’s social protection system. After a successful pilot with cash transfer recipients, FC and the government designed a graduation initiative for recipients of government reparation payments (including victims of the internal conflict) and scaled the intervention to more households. To date, FC has embarked upon dozens of different projects in Colombia with a diversity of partners — all stemming from the initial financial inclusion efforts and the relationships built through that work. This “deep dive” approach caught the attention of Co-Impact, a new philanthropic collaborative supporting systems change, which, in early 2019, selected FC as part of its first round of five-year funding investments to help FC expand and deepen its graduation work in Latin America.
EXPANSION TO NEW COUNTRIES
Often by invitation of the government, FC expands its approach into new countries of operation, and, as of 2018, it has initiated work in 18 countries. FC brings its reputation, systems approach, and a portfolio of successful programs to each new country — but always begins with an assessment of assets and gaps and the engagement of multiple stakeholders to be sure that any potential solutions align with unique country needs. “Taking the time to understand the problem is crucial. You can’t just come in with a solution; rather, you should co-create it with your partners,” says Chief Strategy Officer Ana Pantelic. Recognizing that many of the lessons learned in Latin America could be applied elsewhere, FC began expansion into Africa in 2014 and into Asia in 2018.
CROSS-CUTTING: EXPANSION THROUGH USE OF TECHNOLOGY
Throughout FC’s expansion within and across countries, it has strategically used digital solutions to create more impact, efficiency, and, therefore, scalability. Early in its work, FC realized that it would need to use digital tools to reach scale and began designing apps and dissemination strategies to not only make field workers more productive, but also to provide services and training directly to end users in their own homes. FC challenged the assumption that people in poverty would not engage with such advanced technology and demonstrated that they could overcome digital and literacy barriers to use technology to learn (e.g., financial training), connect to resources, and manage their assets. With significant funding from the Innovation Investment Alliance (a funding collaboration between the Skoll Foundation and the U.S. Agency for International Development), in 2017, FC pursued additional pathways to scale with its technology-based LISTA initiative; the effort sought to support expanded reach in several countries and to build additional local partnerships around this technology solution. FC is currently exploring how to use its spin-off for-profit social enterprise to expand use and access to some of these technology solutions, subsequently generating revenues for the nonprofit arm to continue to innovate and take risks.
YOU SHOULD KNOW: Implications of Expansion
In-Country Expansion Implications:
Established Relationships. FC can leverage the up-front investment in relationship building with key country stakeholders to pursue additional, aligned outcomes within the country. The challenge, however, is that, when elections bring significant shifts in political parties, it can take many months to build relationships with the new leadership.
Innovation. Given the trusting relationship between FC and the country partners based on initial successful projects, country stakeholders are often more open to taking new risks, and FC can leverage philanthropic resources to test innovative approaches, particularly with governments.
Financing. In some countries, FC has been able to secure direct funding from the government or private sector partners to continue to deepen its work. In others, these partners provide equally crucial in- kind support.New Country Expansion Implications:
Aligning with Funders. While FC’s criteria for entering a new country includes seeing demonstrated interest, commitment, and need from key local stakeholders (including the government), the criteria for funders’ support is often different. Most funders have country or regional priorities, which makes it challenging for FC to garner funding support for many of the countries where it works, namely in Latin America. Additionally, some funders prefer to support “new” innovations, so their interest to accompany long-term development, or the scale-up of a proven innovation from one country to another can be limited.
Staffing. Staffing a new country requires significant investment from FC. It must identify a best-fit country lead and commit significant time from its global technical experts and senior leadership to help establish relationships and programming in that country.
STRATEGY: ENABLING PARTNERS
At the core of its work, Fundación Capital seeks to develop solutions that public and private sector partners in-country can adopt and sustain long-term. It spends significant time building trusting relationships and supporting the partners in implementation.
In all of its work, Fundación Capital co-creates solutions with relevant public and/or private sector partners and leverages existing country systems, networks, and assets to develop and deploy solutions. The partners’ role can range from co-managing the project in-house with the close advisement of FC, to closely advising FC as FC manages the entire development, testing, and deployment process. Roles vary based on local capacity, maturity of the innovation, and funding mix. Ultimately, FC works to ensure that all partners are successfully solving a problem and are moving toward full adoption and management of the solutions. To date, FC has engaged over 60 public and private sector partners in its work; below are examples of two different types of engagement:
ADVISING A PRIVATE SECTOR PARTNER ON DIGITAL PLATFORM EXPANSION
In Brazil, FC received funding from the MetLife Foundation to work with the GuiaBolso financial technology company to expand its personal finance-tracking platform for use by low-income people. FC worked closely with the company’s developers to help them understand the target population’s user behavior and relationship with smartphone technologies. Through research and design sprints, GuiaBolso simplified its interface and the partners collaborated on field-testing. GuiaBolso ultimately deployed the solution to all four million of its users (i.e., all original users, as well as first-time low-income users), as the improved interface was determined to be the new standard.
MANAGING DEVELOPMENT OF A TECHNOLOGY SOLUTION WITH A GOVERNMENT PARTNER
For the development of the LISTA Initiative, a digital solution to build the financial capabilities of low-income people, FC led a co-creation process in Colombia. With support from the Citi Foundation, it brought together the government, banks, and end-users and tested prototypes to understand how to reach end-users most effectively. LISTA was a completely new product and approach to financial training, so FC orchestrated all aspects of development, testing, and building the product — all while collaborating closely with the stakeholders. As LISTA has expanded to other geographies and contexts (as of the end of 2018, it has reached half a million people across seven countries), FC has helped governments leverage their networks and data to deploy the product to the target audience and collaborates with banks to ensure that language and interfaces align with their products. FC continues to manage the technology platform and engages in a robust research agenda, but partners are adopting and scaling the innovation.
YOU SHOULD KNOW: Implications of Enabling Partners
Timing. FC (and its funders) must be patient in the progress of the work, as outcomes reliant upon partners are subject to the priorities, operational constraints, and bureaucracies of those stakeholders.
Impact. Even with external partners implementing FC’s digital solutions, FC still hosts backend data and engages in analytics to track performance. It seeks other data sources from government and bank databases to measure outcomes, but those can be hard to come by in some countries due to strict consumer protection laws.
Sustainability. Partnering increases the sustainability of FC’s efforts by embedding them with long-term actors in-country, including financial institutions and governments (who provide crucial in-kind and financial support and, in many cases, adopt and scale the interventions).
STRATEGY: INFLUENCING GOVERNMENT POLICY
Fundación Capital brings program results and data to governments to help influence policy around financial, productive, and digital inclusion.
For ten years, Fundación Capital has worked across 14 Latin American countries to embed financial inclusion into social protection systems through policy and regulatory changes and unlocking of capital. While FC strives to influence policy so that financial inclusion work is sustained, it approaches the process more organically to ensure that the government itself is leading the way. FC does not bring a firm policy agenda into its work with the government but, rather, brings its technical expertise to help the government understand and develop solutions around financial inclusion gaps. As policy, regulatory, and national strategy opportunities arise during that process, FC uses its data and experience to advocate for aligned changes. FC has also assisted four country governments in the design and implementation of a policy-based graduation approach, securing commitments from those governments to co-finance this initiative with an additional $70 million.
FC’s “South-South collaboration” has been key to its ability to influence government entities across 18 countries. Through this effort, FC connects policymakers across countries to see and learn what is possible, leveraging “best practices” beyond national borders.
YOU SHOULD KNOW: Implications of influencing policy
Impact. As FC focuses on catalyzing systems change rather than providing direct services, it is increasingly challenging to measure and attribute impact.
Financing. While many funders view policy change as an important step to scale impact, the challenge of measuring that impact can make it difficult for funders to directly support this work.
Susceptibility to Politics. Efforts to influence policy can be sidetracked by quickly changing political priorities or changing political parties. FC seeks to achieve buy-in across political parties and levels of bureaucracy to have multiple “champions,” so, when there is a transition in government, there will likely still be internal advocates for the work.
Staffing. FC doesn’t hire advocates to lead this work; rather, its technical experts provide direct support to policymakers in a way that is more impact-oriented (with policy resulting only from impact work) rather than policy-focused.
Published March 2019. Find the full Scaling Snapshot PDF at https://rebrand.ly/fundacioncapitalscaling.
Authored by Erin Worsham, Kimberly Langsam, and Ellen Martin.
