Tom Schumacher

Tom Schumacher is a Portfolio Manager for the Global Development Lab - USAID. He works with the Development Innovation Ventures (DIV) program and the Innovation Investment Alliance (IIA). He works on selecting, managing, and advising the organizations within the DIV portfolio. Prior to working at DIV, he was a Presidential Management Fellow at the Consumer Financial Protection Bureau\'s (CFPB) Office of Card and Payment Markets where he focused on emerging payment products (mobile payments, prepaid cards, money transfer) and issues of financial access and inclusion. Tom has experience in international development, startups, and financial markets through a variety of positions. Previously, he co-founded, Tala, a social enterprise working to provide financial identities and financial access to undeserved populations in Africa and Asia. Tom has a MPP from the UCLA Luskin School of Public Affairs and a BA in Economics from the University of Maryland.

20 Questions on Technical Assistance: How Do I Divide up my Resources?

Innovation
26. May 2017

If I manage a portfolio of organizations, how do I divide resources among them? This is a fundamental question for any funder or organization who provides technical assistance and wants to maximize their impact.

There are many answers to this question. You can allocate resources equally to all grantees. You can focus your resources on the highest performers. You can target your resources to the organizations with the greatest need. You can focus on the most promising organizations, projects, or even individual innovators. You can also focus on the enterprise stage of your organizations--providing support at critical moments to help them overcome key barriers to scale.

There are as many answers to this question as there are organizations providing technical assistance.

None of these answers are necessarily right or wrong, but they do need to fit into the strategic framework of what you are trying to accomplish. And, you need to consider the different implications for time, intensity, and cost that accompany each.

For example, using an equal allocation approach has real benefits in the form of transparency and ease of planning. However, it assumes that all the organizations in a portfolio have roughly equal needs, which may not be the case. In a tiered support model like the U.S. Agency for International Development’s (USAID) Development Innovation Ventures, an awardee receiving “Stage 1” support to pilot a new technology will have very different needs from an awardee receiving “Stage 3” support to expand into new geographies and reach commercial scale.

Any deviation from the model of equal allocation and standardization requires some criteria for making a good resource determination. This is inherently a difficult decision and can often devolve into relitigating initial funding decisions. Still, it should be based in principle on where technical assistance will add the most value. Does it make sense to allocate more resources to high-potential organizations that are likely to have the lowest level of need? Or to lower-performing organizations who likely have the highest need for support but are also likely to fail?

USAID’s Landscape Survey on Acceleration and Technical Assistance for Inclusive Business, which will be released in June, suggests that “[non-financial support] probably should not be deployed to the best enterprises, who would thrive anyway, and nor to the least successful, who would probably fail with or without more support.” This calculated approach is often coupled with an element of opportunism, influenced by what organizational needs a funder can most easily and effectively meet.

At the U.S. Global Development Lab, we believe that frameworks for allocating technical assistance help us make better decisions. We are continually refining our framework, but we place significant weight on an organization’s stage, its level of need, its potential for scale and impact, and whether or not we are well-positioned to help them. We also consider the potential impact of the technical assistance we provide. Our goal is to make sure our support is cost-effective and has maximum impact, so we are weighing many questions:

● Who understands innovators’ needs best--a entrepreneur or its funders? Can we rely on what entrepreneurs say they need in terms of technical assistance, or should we offer suggestions?
● Do funders have the right skill sets to assess and meet organizational needs?
● Is the way we provide technical assistance flexible enough to meet the changing needs of early-stage businesses? Are donors’ planning processes too long to be nimble?
● Are we considering an enterprise’s capacity to absorb technical support?

As we continue to work to target our technical assistance as effectively as possible, we look forward to sharing what we find and hearing what others in the field have learned.

This blog is a part of the June 2017 series on advisory support for inclusive businesses in partnership with USAID and the African Agricultural Fund’s Technical Assistance Facility, both of which deliver advisory support and have new analysis of it just launched (AAF’s TAF) and forthcoming (USAID).

Read the full series for more lessons from seven different providers of advisory support and stories of success from entrepreneurs.