Climate Change, Poverty, and Migration, Part 3: The Implications

by Quentin Wodon

In the previous two posts in this series, I argued that households in climate-affected areas are highly vulnerable to extreme weather shocks, and often cannot cope and adapt adequately to changing climatic conditions. Households also are often not able or willing to relocate to areas less affected by poor climatic conditions. The evidence was based on two recent studies – one for the Middle East and North Africa region where droughts and floods are common, and the other for the Sundarbans in South Asia (let me know if you would like a print copy) where cyclones and associated sea surges are frequent. I would like to complete this series of three posts with a discussion of the implications of the findings for policy makers and service clubs.

Implications for Policy Makers

First, communities affected by changing climatic conditions and weather shocks need more government support to help with short-term coping and medium-term adaptation. The cost of weather shocks and climate change is already felt today by many households, but most have limited ways to cope and adapt. While the two studies on which this series of three posts are based did not provide a cost-benefit analysis to assess which types of programs and policies might help households the most in each country context, there is a clear gap in the public provision and financing of coping and adaptation interventions. This leaves individuals and communities vulnerable and alone in making decisions, which may in turn lead to uncoordinated action and “maladaptation”.

The role of safety nets and social protection programs is especially important to enable households to cope. But the design, coverage and placement of these programs should not be just for the purpose of minimizing the immediate or even future impacts of weather shocks and climate change; safety nets should be seen as an integral part of governments’ broader strategy towards poverty reduction and – in this case – urbanization. They should aim to provide portable skills (human capital) such as a better education for those that need support the most, so that migration becomes more beneficial for the migrants and their family back home through remittances.

Second, migration policy needs to understand and address climate-induced migration in the context of other push and pull factors. Migration is a form of adaptation, but it appears to be often seen as a solution of last resort by households. One reason for this is that migration may be perceived as more costly than other strategies such as using savings, selling assets, or getting into debt to cope with shocks. In addition to material costs (travelling and re-lodging), migration implies substantial risks due to unknown outcomes at the place of destination. It also entails non-economic costs stemming from the uprooting of individuals, households, and sometimes communities. Those left behind may be precluded from reaping the benefits from migration when remittances are hampered by the high cost of remitting or by the fact that migrants have a hard time finding jobs. Policy responses and development interventions need to recognize that migration is or should be a viable and legitimate mechanism through which households address risks to their livelihoods, and a means of adapting to weather shocks and changes in climatic conditions and their impacts. Migration should not be considered as something that needs to be avoided.

Third, enabling communities in sending areas to better leverage the benefits of migration is a better alternative than progressive forced displacement. The effective economic insertion of migrants in urban and other destination areas leads to opportunities for the sending communities through remittances. But without a facilitating environment, remittances may be used for pure consumption and the accumulation of non-productive assets. Among others, incentives should be provided for sending areas, when feasible, to use remittances for productive investments.

Implications for Service Clubs

What do the findings imply for service clubs? There cannot be any cookie-cutter recommendation, but when service clubs are implementing projects in climate-affected areas, they should maintain a balance between responding to immediate needs, and confronting long-term challenges. Many households are left vulnerable in climate-affected areas due to lack of government programs. After weather shocks (or other natural disasters such as the recent earthquake in Nepal) hits, Rotarians should mobilize to provide emergency relief. As I mentioned it on this blog, I wonder whether there is a potential role for the Rotary Foundation (TRF) to play here. Currently, TRF does not seem to have a system to provide incentives (matching funds) for individual Rotarians or clubs to donate in times of crisis. Many Rotarians donate when a major crisis hits, but they do so through other organizations. If TRF could set aside some funds to match individual or club donations by Rotarians at time of crises, this could help the foundation raise more funds. It could also help TRF gain even more visibility as a humanitarian organization.

Beyond emergency relief, what may matter even more in the long run are innovative project responses. It would for example be interesting to assess whether investments by Rotary in education projects in climate-affected areas help in improving the likelihood that younger individuals migrate under good conditions to help themselves as well as their family back home. Perhaps one could even think of pilot projects in which Rotarians involved with banking and credit institutions facilitate the flow of remittances from migrants by reducing the cost of remitting, while also promoting investments for productive uses in sending areas through some forms of matching grants for communities. Such projects would have to be evaluated properly to ensure that they are indeed impactful.

These are just a few ideas, but innovative projects implemented by Rotary clubs as pilots, with proper evaluation of impacts, could have larger impacts down the road than traditional grants as other organizations would be able to scale up initiatives that appear especially promising. Not all global grants should be designed that way, but more could. The need for innovation is perhaps largest in those areas of the world where households are especially vulnerable due to repeated weather shocks that will be exacerbated by climate change, as well as other natural disasters.

 

Organizing Great District Conferences: Lessons Learned

by Quentin Wodon

April-May is a busy time for many Rotary districts as this is often the period during which districts organize their annual conference. How can districts organize great conferences combining learning and fun at an affordable cost for participants? A few months ago, I ran a series of three posts on preparing and evaluating great conferences. The posts were based on a detailed evaluation of the conferences organized by my district over the last three years. The evaluation is available here. Given that we are entering conference season in full swing, let me summarize in this post some of the key points I made in the three-part series on this topic a few months ago (the links to the series are Part 1, Part 2, Part 3).

What Feedback Did Conference Participants Give?

In my district, our evaluations suggested that participants were often fairly happy with most aspects of the conferences. But they also had suggestions. When asked what types of sessions they would like to see more off in future conferences, they suggested having more sessions on successful projects and debates/discussions on Rotary and its future. In terms of the types of speakers, participants would like more motivational and entertaining speakers, as well as more speakers from the business world versus nonprofits. Participants would also like less time spent on award ceremonies.

Participants would like the conferences to be shorter (two days). Shorter conferences would also help reduce the cost of attending the conference, which is often a complaint. This in turn may make it easier to attract more Rotarians to these events, including some of the younger Rotarians for whom cost may be a more serious issue. As to whether it is better to have one or more districts present at a conference, feedback was split between the two options – some participants prefer to have only their own districts, while others like the opportunity to meet members from other districts. Virtually all participants like opportunities for discussions with Interactors and Rotaractors, and would like more such opportunities.

While some of the feedback received in your district may be different, it seems to me that quite a bit of what we learned in my district about what was great and what could be improved in district conferences is likely to apply in many other districts as well.

Is It Difficult to Evaluate Conferences?

It is not. Evaluating district conferences in a serious way is feasible at virtually no cost, as illustrated by the work we did in our district. The surveys for the evaluation were administered through the web and by sending an email to participants a few days after the conferences took place. Using web surveys reduced the time needed to tabulate data, and ensures that there is no waste of information, say from legibility issues often encountered with printed surveys. Participation rates can be strong, so that the surveys are representative statistically. You can even monitor changes in the evaluation of conferences over time – as we did – by fielding similar surveys year after year.

Our latest survey for 2014 survey had a total of 24 questions, some with multiple sub-questions. The questionnaires were designed to take about 15’ to complete, so that substantial information can be captured without taxing too much the time of respondents. Two emails (one initial email and one reminder email) were sent to participants to ask them to fill the survey – this was enough to generate fairly good response rates.

In terms of the structure of the questionnaire, a first set of questions were asked to respondents about their profile (age, gender, Rotary status, length of membership, club affiliation, past attendance at district conferences, attendance rate at club meetings, positions of leadership in the organization, etc.). A second set of questions were asked for participants to evaluate all of the conference sessions to which they participated one by one, as well as their general appreciation of the conference along a number of characteristics and some of their preferences for future sessions. Finally, a last set of questions were open-ended to elicit qualitative feedback on the conferences. The questionnaire of the 2014 evaluation is available in the report on the evaluation.

If your district is one of many that are organizing their conference in the last quarter of the Rotary year, good luck! And if you would like help with evaluating your conference, please let me know by sending me an email through the Contact Me page of the blog.

The Sierra Leone Education Fund: Small but Impactful

by Quentin Wodon

While some of the projects implemented in developing countries by service clubs are large, most are not.  Smaller projects may be small, but they can nevertheless be impactful, making a real difference in the life of their beneficiaries.  A good example is the Sierra Leone Education Fund.

Sierra Leone

A new Rotarian Economist Brief by Jennifer Carr Pilholski and Eric Wolvovsky tells the story of the fund and how it works.  The fund was launched as a project of the Howard County Rotaract Club with additional support from the Columbia Rotary Club.  It is now a 501c(3) organization in the US, and all the funds donated go to a primary school in Sierra Leone for materials and scholarships. As for other posts showcasing projects through briefs from this blog’s series, rather than summarizing the brief, I encourage you to read it in full here.

If you would like to submit a brief about your project, please send me an email through the Contact Me page of this blog.

Impact Evaluations, Part 3: What Are Their Limits?

by Quentin Wodon

In the first post of this series, I argued that impact evaluations could be highly valuable for organizations such as Rotary in order to assess the impact of innovative interventions that have the potential to be replicated and scaled up by others if successful. In the second post I suggested that a range of techniques are available to implement impact evaluations. In this third and last post in the series, I would like to mention some of the limits of impact evaluations. Specifically, I will discuss four limits: (1) limits as to what can be randomized or quasi-randomized; (2) limits in terms of external validity; (3) limits in terms of explanation as opposed to attribution; and finally (4) limits in terms of short-term versus long-term effects.

Can Everything Be Randomized?

The gold standard for impact evaluations is randomized controlled trials (RCTs), as discussed in the second post in this series. When it is not feasible to randomize the beneficiaries of an interventions, statistical and econometric techniques can sometimes be used to assess impact through “quasi-randomization”. But not all types of interventions can be randomized or quasi-randomized. If one wants to assess the impact on households of a major policy change in a country, this may be hard to randomize.

One example would be the privatization of a large public company with a monopoly in the delivery of a specific good. The company can be privatized, but typically it is difficult to privatize only part of it, so assessing the impact of privatization on households may be hard to do because of the absence of a good counterfactual. Another example would be a major change in the way public school teachers are evaluated or compensated nationally. At times, even with such reforms, it may be feasible to sequence the new policy, for example by covering first some geographic areas and not others, which can provide data and ways to assess impacts. But in many cases the choice is “all or nothing”. Under such circumstances techniques used for impact evaluations may not work. Some have argued that for many of the most important policies that affect development outcomes, the ability to randomize is the exception rather than the rule.

For the types of projects that most Rotary clubs are implementing, I would have doubts about an argument that randomization would not be feasible, at least at some level. This does not mean that all or even most of our projects should be evaluated. But we should recognize that most of our projects are small and local, which makes it easier to randomize (some of) them, when appropriate for evaluation. For larger programs or policy changes, one must however be aware that randomization or quasi-randomization are not always feasible.

Internal Versus External Validity

When RCTs or quasi-randomization are used to assess the impact of interventions, the evaluators often pay special attention to the internal validity of the evaluation. For example, are the control and treatment groups truly comparable, so that inferences about impact are legitimate? Careful evaluation design and research help in achieving internal validity.

But while good evaluations can be trusted in terms of their internal validity, do the results also have external validity? Do they apply beyond the design of the specific evaluation that has been carried out? Consider the case of a NGO doing great work in an area of health through an innovative pilot program. If the innovative model of that NGO is found to be successful and scaled up by a Ministry of Health, will the same results be observed nationally? Or is there a risk that with the scale-up, some of the benefits observed in the pilot will vanish, perhaps because the staff of the Ministry of Health are not as well trained or dedicated as the staff of the NGO? There have been cases of interventions when, as pilots were scaled up, their original promise did not materialize at scale.

Attribution Versus Explanation

Consider again the example of the dictionary project mentioned in the previous post. An impact evaluation could lead to the conclusion that the project improves some learning outcomes for children, or that it does not. Impact evaluations are great to attribute impacts and establish cause and effect. But they do not necessarily tell us why an impact is observed or not. For that, an understanding of the context of the intervention is needed. Such context is often provided by so-called process as opposed to impact evaluations. There is always a risk that an impact evaluation will be like a black box – impacts can be attributed, but the reasons for success or lack thereof may not be clear. This in turn can be problematic when scaling up programs that were successful as pilots because when doing so, it is often necessary to alter some of the parameters of the interventions that were evaluated, and without rich context, the potential consequences of altering some of the parameters of the original intervention may not be known.

Short Versus Long-term Effects

Another issue with impact evaluations is the time dimension to which they refer. Some interventions may have short-term positive impacts but no long-term gains. An evaluation carried out one or two years after an intervention may suggest positive impacts, but those could very well vanish after a few years. Conversely, other evaluations may have no clear impact in the short term, but positive impacts later on. Ideally, one would like to have information on both short-term and long-term impacts, but this may not be feasible. Most evaluations by design tend to look at short-term impacts rather than long-term impacts.

Implications of this Discussion

The above remarks should make it clear that impact evaluations are no panacea. They can be very useful – and I believe that Rotary should invest more in them for innovative projects that could be scaled up by others if successful – but they are not appropriate for all projects, and they should be designed with care.

I hope that this three-part series has helped some of you to understand better why impact evaluations have become so popular in development and service work, but also why they require hard work to set up well. Again, if you are considering impact evaluations in your service work, please let me know, and feel free to comment and share your own experience on this topic.

Note: This post is part of a series of three on impact evaluations. The three posts are available here: Part 1, Part 2, and Part 3.

 

Impact Evaluations, Part 2: How Are They Done?

by Quentin Wodon

Having argued in the first post in this series of three that we need more impact evaluations in Rotary, the next question is: How are such evaluations to be done? One must first choose the evaluation question, and then use an appropriate technique to answer the question. The purpose of this post is to briefly describe these two steps. A  useful resource for those interested in knowing more is an open access book entitled Impact Evaluation in Practice published by the World Bank a few years ago. The book is thorough, yet not technical (or at least not mathematical), and thereby accessible to a large audience.

As mentioned in the first post in this series, impact evaluations seek to answer cause-and-effect questions such as: what is the impact of a specific program or intervention on a specific outcome? Not every project requires an impact evaluation – but it makes sense to evaluate the impact of selected projects that are especially innovative and relatively untested, replicable at larger scale, strategically relevant for the aims of the organization implementing them, and potentially influential if successful. It is also a good practice to combine impact evaluations with a cost-effectiveness analysis, but this will not be discussed here.

Evaluation Question

An impact evaluation starts with a specific project and a question to be asked about that project. Consider the dictionary project whereby hundreds if not thousands of Rotary clubs distribute free dictionaries to primary school students, mostly in the United States. This project has been going on for many years in many clubs. In Washington DC where I work, local Rotary clubs – and especially the Rotary Club of Washington DC – distribute close to 5,000 dictionaries every year to third graders. Some 50,000 dictionaries have been distributed in the last ten years. This is the investment made in just one city. My guess is that millions of dictionaries have been distributed by Rotarians in schools throughout the US.

The dictionary project is a fun and feel good activity for Rotarians, which also helps to federate members in a club because it is easy for many members to participate. I have distributed dictionaries in schools several times, the last time with my daughters and two other Interactors. Everybody was happy, especially the students who received the dictionary with big smiles. Who could argue against providing free dictionaries in public schools for children, many of whom are from underprivileged backgrounds?

I am not going to argue here against the dictionary project. But for this project as for many others, I would like to know whether it works to improve the prospects and life of beneficiaries – in this case the children who receive the dictionaries. It could perhaps be enough to justify the project that the children are happy to receive their own dictionary and that a few use it at home. But the project does have a cost, not only in terms of the direct cost of purchasing the dictionaries, but also in terms of the opportunity cost for Rotarians to go to the schools and distribute the dictionaries. Rotary clubs could decide to continue the project even if it were shown to have limited or no medium term impact on various measures of learning for the children. But having information on impact, as well as potential ways to increase impact, would be useful in making appropriate decisions to continue this type of service project or not. It would not matter much if dictionaries were distributed only by a few clubs in a few schools– but this is a rather large project for clubs in the US.

An impact evaluation question for the project would be of the form: “What is the impact of the distribution of free dictionaries on X?” X could be – among many other possibilities – the success rates at an English exam for the children, the propensity for children to read more at home, a measure of new vocabulary gained by children, or an assessment of the quality of the spelling in the children’s writing. One could come up with other potential outcomes that the project could  affect. In order to assess impact, one would need to compare students in schools where children did receive dictionaries to students in schools where children did not. This could be done some time after the dictionaries have been distributed.

About two years ago I tried to find whether any impact evaluation of the dictionary project had been done. I could not find any. May be I missed something (let me know if I did), but it seems that this project which requires quite a bit of funding from clubs as well as a lot of time spent by thousands of Rotarians every year has not been evaluated properly. It would be nice to know whether the project actually achieves results. This is precisely what impact evaluations are designed to do.

Evaluation Techniques

In order to estimate project impacts data collection is required. Typically for impact evaluations quantitative data are used. For the dictionary project, one could have children take a vocabulary test before receiving the dictionary and again one year after having received the dictionary. One would then compare a “treatment” group (those who received the dictionary) to a “control” group (those who did not). This could be done using data specifically collected for the evaluation, or using other information – such as standardized tests administered by schools, which would reduce the cost of an impact evaluation substantially, but would also limit the outcomes being considered for the impact evaluation to those on which students are being tested by schools.

The gold standard for establishing the treatment and control groups is randomized controlled trial (RCT). Under this design, a number of schools would be randomly selected to receive dictionaries, while other schools would not. Under most circumstances, comparisons of outcomes (say, reading proficiency) between students in schools with and without dictionaries would yield (unbiased) estimates of impacts. In many interventions, the randomization is applied to direct beneficiaries – here the students. But for the dictionary project that would probably not work – it would seem too unfair to give dictionaries to some students in a given school and not others, and the impact on some students could affect the other students, thereby making the impact evaluation not as clean as it should be (even if there may be ways to control for that). This issue of fairness in choosing beneficiaries in a RCT is very important, and typically the design of RCT evaluations has to be vetted ethically by institutional review boards (IRBs).

A number of other statistical and econometric techniques can be used to evaluate impacts when a RCT is not feasible or appropriate. These include (among others) regression discontinuity design, difference-in-difference estimation, and matching estimation. I will not discuss these techniques here because this would be too technical, but the open access Impact Evaluation in Practice book that I mentioned earlier does this very well.

Finally. apart from measuring the impact of programs through evaluations, it is also useful to better understand the factors that lead to impact or lack thereof – what is often referred to as the “theory of change” for how an intervention achieves impact. The question here is not whether a project is having the desired impact, but why it does or does not. This can be done in different ways, using both qualitative and quantitative data. For example, for the dictionary project, a few basic questions could be asked, such as: 1) did the child already have access to another dictionary at home when s/he received the dictionary provided by Rotary?; 2) how many times has the child looked at the dictionary over the last one month?; 3) did the dictionary provided by Rotary have unique features that led the child to learn new things?, etc… Having answers to this type of questions helps in interpreting the results of impact evaluations.

Conclusion

Only so much can be discussed in one post, and the question of how to implement impact evaluations is complex. Still, I hope that this post gave you a few ideas and some basic understanding of how impact evaluations are done, and why they can be useful. If you are considering an impact evaluation, please let me know, and if I can help I will be happy to. In the next and final post in this series, I will discuss some of the limits of impact evaluations.

Note: This post is part of a series of three on impact evaluations. The three posts are available here: Part 1, Part 2, and Part 3.

Impact Evaluations, Part 1: Do We Need Them in Rotary?

by Quentin Wodon

Monitoring and evaluation have become essential in development and service work. When providing funding, most foundations and donors now require some type of monitoring and evaluation either ex ante to allocate funding, or ex post to assess whether projects that have been funded have proved to be successful or not. The same is true for government agencies – when deciding whether to scale up a pilot intervention, most agencies now typically rely on the results of at least some type of evaluation.

Different types of evaluations can be conducted and not all are equal in terms of what we can learn from them. In this series of three posts, I will focus on impact evaluations (as opposed to process evaluations). Specifically, I will discuss 1) whether we need impact evaluations in Rotary; 2) how impact evaluations can be implemented in practice; and 3) what are some of the limits of impact evaluations that practitioners and policy makers should be aware of. But before doing so, it is probably useful to briefly explain what an impact evaluation entails.

What Is An Impact Evaluation?

Impact evaluations aim to measure the impact of specific projects, policies, or interventions on specific outcomes. The question they ask is not whether a given outcome has been achieved or not among a target population. They look instead at the specific contribution or impact of a well-defined intervention on a well-defined outcome. Said differently, they try to measure a counterfactual: what would have been the outcome without the intervention? By comparing the assessment of what the outcome would have been without the intervention and the outcome with the intervention, impact evaluations inform us about the success (or lack thereof) of specific interventions in improving specific outcomes. When data on the cost of alternative interventions and their benefits are available, impact evaluations are especially helpful in deciding whether some interventions should be maintained or scaled up, while others should be abandoned.

Estimating the counterfactual in an impact evaluation is no simple matter, in part because most interventions are not distributed randomly in a target population. Consider children going to private or charter schools. In most countries, those children perform better than children attending public schools. Does that in itself tell us anything about the comparative performance of public versus private or charter schools? It does not.

Children attending private or charter schools may for example come from wealthier families with well educated parents who are better able to help their children at home than parents from less privileged backgrounds. The higher performance of students in private or charter schools on tests aiming to measure learning may not be related to the school in which they are enrolled per se, but instead to their socio-economic and other characteristics. The proper counterfactual question would be: how well would students enrolled today in private or charter schools perform if they had enrolled instead in public schools? Data to answer such questions are often not readily available, so the counterfactual is often not known without some further data or analysis. Special techniques – ranging from randomized control trials (the gold standard) to various statistical and econometric approaches, are often needed in order to assess the impact of specific interventions on specific outcomes. I will discuss these techniques in the second post in this series.

Do We Need Impact Evaluations in Rotary?

If as Rotarians we “do good work” in the world, why would we need impact evaluations? Isn’t it enough to serve the less fortunate? I would argue that Rotary needs impact evaluations for at least three reasons.

  1. Doing good work is not enough – we need to do the best we can. We live in a world with scarce resources. What Rotarians can contribute – whether in terms of money or time and expertise – is finite. Our resources should be devoted to projects and initiatives that have the largest positive impact on those we aim to serve. And we will be able to assess what these projects or interventions are or should be only by evaluating our work (and relying as well on the evidence generated by other organizations that are implementing robust impact evaluations.)
  2. Who says we are doing good work? We may believe we are doing good work, but do we know whether some of our projects and interventions may have unintended consequences that could be detrimental to those we are trying to serve? To consider the example of education again, if we support one dynamic school in a poor community that selects its students on the basis of their academic potential, could this have a negative effect on another school in the area which might be left only with children who tend to perform less well for whatever reason. Given that peer effects are important drivers of learning, supporting one school may have negative consequences on another school. This is of course not necessarily the case, and this does not imply  that we should never support specific schools. But we need to be aware of the potential ripple effects that our projects may have, and impact evaluation can be useful for that.
  3. Rotary has an important role to play in piloting innovative interventions. Much of what Rotary clubs do on an on-going basis is not innovative, and there is nothing wrong with that. There are a lot of needs out there that we can contribute to meet without being innovative. Being innovative is not a requirement. But at the same time, we should promote some level of innovation in Rotary. Rotarians have technical expertise in many areas and they know (or should know) their community. They are in a way uniquely positioned to propose new ways of tackling old problems, and assessing whether such new ideas actually work. Furthermore, Rotary has a relatively large foundation, but in comparison to other actors, especially in the field of development, we are small. If we could pilot more innovative interventions, evaluate them properly, and let others with more resources scale up the most promising interventions, we could achieve more for those we aim to serve.

For these reasons I believe that we need impact evaluations in Rotary. Not all projects require an evaluation, especially since evaluations take some time and cost money. But we can probably do more in this area than we are doing today. In the next post in this series, I will discuss the “how to” of impact evaluations.

Note: This post is part of a series of three on impact evaluations. The three posts are available here: Part 1, Part 2, and Part 3.

“We Love You Gringos!” Serving Remote Communities in Honduras

by Quentin Wodon

Every year, many Rotarians, Rotaractors, and Interactors travel internationally to participate in hands-on community service projects in developing countries. What does it take to implement such projects? Are the projects sustainable? Do travelling teams do useful work? Do the projects make sense or are they costly? What are their main benefits?

Honduras

A new Rotarian Economist Brief by Bill Phillips suggests answers to these questions. The brief is based on a decade-long commitment by Tennessee Rotarians to support families in remote communities near Choluteca in Honduras, among others through access to electricity and water. As for other posts showcasing briefs from this blog’s series, rather than summarizing the brief, I encourage you to read it in full here.

If you would like to submit a brief about your project, please send me an email through the Contact Me page of this blog.

Rotary Foundation Basics, Part 3: What’s Great, What Could Be Improved?

by Quentin Wodon

This last post in a series of three on The Rotary Foundation (TRF) looks at what is great about the foundation, and what could probably be improved. TRF support for Rotary projects is first discussed, based on my own perceptions and those of a few fellow Rotarians to whom I talked before writing this post. Ratings received by the foundation as a charity are then briefly reviewed.

TRF Support for Rotary Projects

On the plus side, TRF support for polio has been instrumental in the near eradication of the disease, as mentioned in the previous post in this series. The focus on polio has also helped Rotary in getting a seat at the table with major partners such as the World Health Organization and the Bill and Melinda Gates Foundation. Even more importantly for Rotarians involved in service projects, the matching system whereby TRF co-funds grants is well appreciated. Both district and global grants benefit from TRF support, but I will focus in this post on global grants.

TRF provides up to $200,000 in matching funds for global grants, with the minimum match being $15,000. This is for projects that reach a minimum size of $30,000 in overall cost/funding. The system for global grants has been fundamentally revised in recent years in order to have fewer but larger grants, which should help in ensuring that projects have a bigger impact on the ground and are well managed. Six areas of focus have been selected for the grants, which is also positive to narrow down a bit the scope of what is funded (even if this scope remains fairly broad). The rules of the game for putting together global grants are clear, which also helps.

In terms of potential areas for improvement, the Grants Online System may not be as friendly as it could be, given today’s technology. Several Rotarians mentioned to me that there may also be at times issues with the grant review process. Hopefully reviewers are as objective and qualified as they should be, but this is something that could be assessed. In addition, despite efforts to help Rotarians put together great global grants, more could be done in terms of e-learning resources and other tools to help the membership develop impactful projects beyond the management and processing aspects of grants.

Many global grants are complex and require substantial expertise. It is not always clear that project teams have enough expertise. The system relies largely on volunteer hours to prepare and implement grants. This helps not only for cost savings but also for getting Rotarians’ hands dirty. Personal experiences gained through hands-on work are invaluable, especially when working directly with project beneficiaries. But it may be useful in some cases to rely more on external paid expertise, especially for large grants. In principle Rotarians can get help from Rotarian Action Groups (RAGs) for the design and implementation of projects. These are great resources, but it is not fully clear how active and effective some of the RAGs are.

One area of concern is the ability of TRF to respond to crises, with the most recent case being Ebola in West Africa. There are two issues here. One issue is fundraising. TRF does not seem to have a good system to provide incentives (read matching funds) for individual Rotarians to donate in times of crisis. Many Rotarians donate when a major crisis hits, but they often do so through other organizations because TRF does not have a good system to attract these donations. If TRF could set aside funds to match individual donations by Rotarians for major crises, this could help the foundation raise more funds. It would also help TRF gain in visibility as a humanitarian organization. The other issue is about the allocation of the funds that could be raised. Part of the funds could be allocated to Rotary clubs in affected countries for their projects to respond to crises with some type of fast track approval. Part of the funds could also be transferred to well established national and international NGOs active on the ground in responding to crises. Overall, setting up a stronger crisis response mechanism within TRF could strengthen the Rotary brand while providing much needed rapid support to vulnerable groups in countries affected by major crises.

Finally, more expertise and commitment from TRF is needed for proper monitoring and evaluation of global grants, and for disseminating the results of such evaluations. My perception is that few projects are evaluated in-depth with baseline and endline data collection to assess impact. Impact evaluation can be expensive, so not all projects should be evaluated in that way. But more should be done in this area, including in partnership with some of the NGOs implementing TRF projects. If TRF could fund more innovative projects that would be evaluated seriously, it could have a larger impact because other organizations with more resources could then bring successful TRF pilots to scale.

Ratings for TRF as a Charity

The comments above point to some great features of TRF, but also some potential areas for improvement. One should not forget however that overall TRF is very well rated as a charity. Given that many of the followers of this blog are new, let me repeat here what I mentioned on TRF ratings a few months ago on this blog as well as in another post for Rotary Voices.

In the US, Charity Navigator provides ratings for charities. Three ratings are available for financial performance, accountability and transparency, and a combination of both. Charities can get one to four stars overall. TRF has the highest possible rating (four stars). The yellow dot in the Figure below shows exactly how the foundation is rated – it has a rating of 89.8 out of a maximum of 100 for financial performance, and 97.0 on accountability and transparency, which yields a four stars rating overall.

RI Foundation Graph

For financial performance, Charity Navigator considers seven main indicators: the share of the charity’s budget spent on programs and services, the share spent on administrative expenses, the share spent on fundraising expenses, the fundraising efficiency ratio, the primary revenue growth, the program expenses growth, and the working capital ratio. Details are available on the Charity Navigator website. For accountability and transparency, a total of 17 indicators are used. TRF could have scored even higher except for the fact that its donor privacy policy requires donors to opt out for their basic information not to be (potentially) shared with other charities.

Conclusion

Overall, TRF helps fund great projects on the ground, and it is also well rated as a charity. The reform of the global grants model of the last few years to define areas of focus and implement fewer but larger grants was smart. But as for any other organization, there are also areas where TRF could probably do better, especially in terms of the friendliness of the Grants Online System, the need to ensure that project teams have the expertise they need, the ability to respond to humanitarian crises, and the need to better evaluate the impact of projects that appear especially innovative. What do you think?

Note: This post is part of a series of three on TRF: Part 1, Part 2, Part 3.

Rotary Foundation Basics, Part 1: How Large is the Foundation?

by Quentin Wodon

The Rotary Foundation of Rotary International is a major player in the work of Rotarians worldwide. True, most activities organized by clubs and indeed most service projects are implemented independently of the Rotary Foundation, which I will refer to as “TRF” in this post. Many clubs have their own foundations and many projects do not require a foundation to be implemented. But for most investments at scale, TRF does play a key role, so Rotarians should have at least a basic knowledge of the foundation. My guess is that this is not the case today, so I thought it might be useful to run a three post series on some of the basics of the foundation. This first post discusses assets and expenses. The next will look at categories of expenses by thematic areas. The third will discuss management and suggest a few ideas to make TRF more impactful.

RTF Report

How large is TRF In Terms of Assets?

A widely used measure of the size of a foundation is its assets. According to their latest annual report (consolidated statements of activities), TRF and Rotary International had $1.2 billion in total assets as of the end the 2013-14 fiscal year, and $1.09 billion in assets net of liabilities. This represented an increase in net assets of about $130 million versus the previous year (2012-13) when net assets were at $961 million and total assets were at $1.08 billion.

One billion dollars is no small change, but some other foundations are even larger. Within the US, TRF would rank about 71st in terms of assets according to data from the Foundation Center (for some reason, TRF is not listed in the top 100 foundations put together by the Foundation Center, so the exact ranking is not available). The largest US foundation is the Bill and Melinda Gates Foundation, which had more than $40 billion in assets at the end of 2013. A dozen other US foundations have assets between $5 billion and $15 billion, and many more had assets between $1 billion and $5 billion.

In other words, in comparison to some of the largest US foundations, TRF could be considered as mid-size, even if it remains large in comparison to most foundations that tend to be much smaller. In comparison to foundations from other service club organizations, TRF is also the largest by far. Lions Clubs International now has more members than Rotary worldwide, but the Lions Clubs International Foundation had total assets in 2014 of $318 million. This is still large, but quite a bit smaller than TRF. The Kiwanis International Foundation is much smaller in terms of assets ($28 million in 2013).

How large is TRF In Terms of Grants?

Grants matter more than assets, since this is where the foundations make a difference. In 2013-14, TRF and RI had consolidated total expenses of $350 million. About two thirds of that amount ($232 million) were allocated to program expenses. The rest went to TRF development expenses ($16 million), TRF general administration ($5 million), RI operating expenses ($73 million) and RI service and other activities ($25 million).

With $232 million in program giving last year, TRF would have ranked about 25th among US foundation according to the list from the Foundation Center. This is a pretty good ranking. By comparison, the Lions Clubs International Foundation provided $44 million in grants in 2014, and the Kiwanis International Foundation made $18 million in grants in 2013. Only one US foundation – the Bill and Melinda Gates Foundations – gives more than one billion dollar in grants per year (it gives over $3 billion per year).

Why is there such a jump in terms of ranking for TRF among US foundations when considering grants or contributions instead of assets? In large part because many US foundations rely mostly or quasi exclusively on their endowments to make grants, without necessarily a lot of extra funding coming in annually (apart from returns on equity). By contrast TRF is able to rely also on donations from Rotarians, among others through its annual fund. In 2013-14, revenues from the annual fund reached $117 million. A separate endowment fund grew by $24 million. Annual giving by Rotarians, which is invested by the Foundation, is what makes it feasible for TRF to be able to make more grants in a sustainable and long-term basis.

Annual Fund

Still, we should all realize that while substantial, $232 million in grants/contributions per year remains small in comparison to some of the investments made by other players in the field of development. Official Development Assistance flows estimated by the Organization for Economic Cooperation and Development stood at $134.5 billion in 2013 (the largest recipient was Afghanistan, with more than $5 billion in aid). And some groups such as World Vision or Catholic Charities tend to have larger footprints than TRF. For example, World Vision provides funding to the tune of $2.3 billion per year for international programming as well as relief and rehabilitation, or about 10 times the level of contributions of TRF.

Who Gives the Most to TRF?

Since annual contributions are essential for the future of TRF, it is useful to look at who gives. The country that gives the most to TRF is (not surprisingly) the US. This is not surprising because the US has also the largest membership in Rotary. For the Rotary year 2013-14, TRF received $174 million from donors in the US. This includes $90 million in matches from the Bill and Melinda Gates Foundation for polio, so that individual and other forms of giving reached $84 million. Japan came in second, with $15 million in giving, followed by India with $13 million, Korea with $12 million, Taiwan with $9 million, Italy with $8 million, Canada and Germany with about $7 million each, Australia with $6 million, and Brazil with $5 million.

Giving TRF

How about giving per member? On a per Rotarian basis Taiwan comes on top with $216 in giving per Rotarian, followed by Korea ($182), Canada ($168), Japan ($134), the US ($124, not including the Gates foundation matching funds), and Australia ($123). In other countries, average giving per Rotarian to TRF is below $100 per year. Considering that membership in Rotary costs much more than that including for meals in many clubs, these levels of individual giving are frankly too low, especially in the United States where donors benefit from a tax exemption when giving since TRF is a registered 501c(3) charity. But this is another matter that will not be discussed here.

Giving per person

So that’s is for the basic financial information on the size of TRF that I wanted to summarize in this post. The conclusion is that TRF is a relatively large foundation, especially in terms of contributions/grants disbursed annually. At the same time, in comparison to overall flows for projects in developing countries, TRF is not at the same level as a number of other players, which makes the issue of strategic positioning essential for the foundation. That will be the topic of the next post in this series, by looking at the categories of expenses of TRF by thematic area.

Note: This post is part of a series of three on TRF: Part 1, Part 2, Part 3.

 

 

Innovative Books for Children in Rural Burkina Faso

by Quentin Wodon

One of the aims of this blog is to showcase innovative service projects. These projects will be featured on the blog through 4-6 page briefs that will be publicized through a short post (short, because the idea is for you to read the brief, not a long post about it!)

FAVL

Today’s featured project was implemented in Burkina Faso with support from a global grant from The Rotary Foundation. More than 60 photo books have been created, printed and distributed to community libraries in rural areas. Michael Kevane, a Professor at Santa Clara University and the Co-Director for West Africa of FAVL (Friends of African Village Libraries) has written a brief on the project. I encourage you to read the brief, which is available here.

If you would like to submit a brief about your project, please send me an email through the Contact Me page of this blog.