If aid for education plummets, could philanthropies fill in the gap?

The immediate future looks dire for foreign aid. Last year, UNESCO projected that total intergovernmental aid to education would likely decrease by 12% by 2022. The beginning of 2021 suggests that this might have been optimistic, with the UK announcing its intention to cut foreign aid for education by a dramatic 40%.

What would it mean for philanthropies, such as foundations, to play a larger role in such a crisis? To be clear, philanthropies cannot and should not replace bilateral aid. For one, philanthropies have a relatively small role in education development. While UNESCO estimates that an additional USD 178 billion is needed per year in order to meet targets set by the Sustainable Development Goal 4 (Quality Education), philanthropies are estimated to only commit USD 0.6 billion to education per year. Moreover, philanthropies’ lack of democratic accountability also means that they can only ever be a supplement, rather than an alternative, to public spending.

Nonetheless, philanthropies may have a role in mitigating, however partially, cuts to foreign aid. It is promising that preliminary evidence from the OECD suggests that major education philanthropies are either maintaining or increasing their funding for education in response to COVID-19. However, “stepping up” to the funding crisis would require a significant change within many education philanthropies. Judging from the data from the OECD there are at least three reasons for this.

• Education philanthropies are estimated to allocate 41% of their funding to upper middle-income countries, compared to only 19% in lower middle-income countries and 8% in least developed countries. In contrast, least developed countries received 48% of country allocable grants from Development Assistance Committee (DAC) donor countries in 2014-15.
• The largest share of education philanthropy is spent on higher education (26.5%). Basic education (including early childhood development), in contrast, received only 11.5% from philanthropies, compared to 42% of Official Development Assistance (ODA) in 2018. Similarly, secondary education is estimated to receive only 4% of philanthropic education funding, compared to 19% of ODA.
• Only a minority of education philanthropies publish evaluations of their programmes (33%) and evaluations of their overall performance as foundations (26%). In contrast, the effectiveness of ODA spending is frequently subject to critical public scrutiny (see UK for example).

With this in mind, we should not imagine that the philanthropic sector – as a whole – could substantially repurpose itself to meet the same needs as ODA. Nonetheless, philanthropies that are willing to step into the crisis would do well to consider three priorities:

• Invest in partnerships to facilitate better spending in low-income countries. In early childhood development, for example, networks such as the African Early Childhood Network are invaluable partners for regional learning and investment.
• Draw on expertise in ‘good practices’ in basic and secondary education. Alongside resources of cost-effective approaches to improving global learning, initiatives such as the Research in Improvement Systems of Education (RISE) Programme produces vital research on systemic education challenges.
• Institutionalise a culture of evaluation. Independent evaluations are invaluable for reflecting on the strengths and weaknesses of a programme, and adapting accordingly. Our Non-State Actors in Education Hub specialises in supporting philanthropies. We are proud to currently be working with the Gates Foundation, Central Square Foundation, Porticus, GHR Foundation, and the Templeton World Charity Foundation.

We should not ignore that bilateral cuts to aid are fundamentally political decisions, rather than unavoidable economic consequences. Nonetheless, as bilateral aid shrinks, philanthropies will have an increasingly important and sensitive role in education development.

About the author:

David Jeffery is a senior consultant in the education team of the Social Policy Programme, and manager of the Non-State Actors in Education Hub.