Can BIF report jobs and BOP income created per £ from DFID? If not, why not?
I was recently asked if the Business Innovation Facility can report metrics such as:
- DFID cost of jobs created
- Incremental net income of poor people, per £ of DFID investment
- Leverage: investment by other companies per £ of DFID investment?
I thought it might be worth sharing our honest answer with others in this Impact Network who may be similarly interested in such questions.
Do we track these and if not why not? Our answer:
These are interesting questions. Like others, we are interested to see universal metrics that can apply across projects and be used by us to help benchmark. But at the same time, we find that at project level universal metrics often just don't fit.
In response to the specific metrics of the enquiry:
Jobs is not a good metric for BIF.
BIF-supported projects reach many people at the Base of the Pyramid (BOP) but usually not with a job or even part of an FTE (full-time equivalent). Half the projects reach them as consumers, and even those that buy goods or labour from them as producers, tend to be in agriculture, where it is not new jobs created so much as diversification of markets, greater security, better prices etc.
So the jobs metric would not be very useful for us.
Income would be more relevant - but would still miss much of the BOP benefit. Gains to farmers in terms of income are clear in a few cases when a new product is sold (e.g Malawi Mangoes) but very hard to calculate when the gain is a more robust or deep market (e.g. more reliable and robust demand for groundnuts). Our M&E relies on business reporting, and they do not tend to have data to report this level of impact, unless the beneficiary is actually an employee. But beneficiaries are generally not employees. To calculate income gained for consumers would be very hard - we may attempt this in some 'deep dives that we are doing next year. But if (for example) 5 million NIgerians buy an Oando stove, this will save time and reduce respiratory disease, but needs some strong assumptions to convert it to income.
DFID investment per BOP person reached would be useful potentially as an alternative. I think that is where we will get to. Though it needs supplements - accompanied by what other investment, and who is reached with what? We are heading in this direction. Our Portfolio Review outlined that current reach to people at the BOP is 1.9 million estimated to increase to 3.5 million at the end of Year 1, and even more after 3 years. (See Slide 36 onwards in the Portfolio Review). If we exclude one project, Jita, the numbers are 90,000 increasing to 1 million. However, there are a host of other steps involved in calculating DFID input per BOP person reached. Our estimates of reach are currently static snapshots (in one year not ongoing, but gross not net). The totals are for all projects but we explicitly assume that a few projects will outperform, some will under perform, and some will fail. Our measurement of DFID input includes all the knowledge exchange work, which is additional to the project work and serving different objectives. So we would like to generate variations on the input per person theme next year (which may be in the region of £1 to £10 per person depending on which input and which time frame is used) but I'm sorry we cannot yet.
Leverage: yes we do measure that from the application forms and it is in the Portfolio Review, but of course much is in kind, and much depends on how you measure. Compared to the overall business, BIF input is a tiny fraction of total investment. Compared to other funding for the very specific TA input we are not small. With average TA cost being under £50,000, the Facility is putting in 62% so far in terms of cash, just under half if in-kind inputs are included for the TA component.. But with average company investment per business in the region of $1.3 million, you can see that our £40K is tiny relative to the business that it supports and that it seeks to transform onto a more sustainable footing. (See Slide 57 in the full portfolio review.)
I'm sorry I could not provide 3 numbers in relation to 3 seemingly short questions! But they help us to think about what universal metrics we will achieve.
We are always interested to hear which metrics others use and why and how. I get very frustrated that so much evaluation and reporting to donors goes on , and yet things are passed up and down the lines of reporting, with little shared horizontally. So do share what you can.