As aid shrinks, top philanthropies test new ways to spur economic growth – Devex

Report on a Philanthropic Initiative to Accelerate Economic Growth in Alignment with Sustainable Development Goals

1.0 Introduction

A new philanthropic strategy has been detailed by Open Philanthropy, one year after its initial announcement to fund initiatives aimed at accelerating economic growth in low- and middle-income countries (LMICs). This initiative directly addresses several key Sustainable Development Goals (SDGs), most notably SDG 8 (Decent Work and Economic Growth) and SDG 1 (No Poverty). The organization, founded by Dustin Moskovitz and Cari Tuna, is leveraging its data-driven, cost-effective approach to test how private philanthropy can effectively contribute to the 2030 Agenda for Sustainable Development.

2.0 Context: Global Headwinds Impacting SDG Achievement

The initiative operates within a global context where progress towards the SDGs is hampered by significant economic challenges. These factors prevent many nations from achieving the sustained economic growth necessary to eradicate poverty and improve living standards. Key obstacles include:

• Trade Disruptions: Volatility in global trade undermines stable economic planning and growth, directly impacting the targets of SDG 8 and SDG 9 (Industry, Innovation and Infrastructure).
• Automation: The rapid advancement of automation presents challenges to labor markets in LMICs, threatening progress towards SDG 8’s goal of full and productive employment for all.
• Shrinking Aid Budgets: Reductions in official development assistance weaken the global partnership for sustainable development, a core principle of SDG 17 (Partnerships for the Goals), and limit the resources available for poverty-reduction programs under SDG 1.

3.0 Strategic Framework and Alignment with SDGs

Open Philanthropy’s strategy is designed to counteract these negative trends by identifying and funding cost-effective interventions that can place countries back on a path of sustainable growth. The organization’s approach is a practical application of SDG 17, demonstrating the vital role of the private philanthropic sector in achieving global goals.

3.1 Core Objectives

The primary objective is to foster the kind of transformative economic growth that has successfully lifted hundreds of millions of people out of poverty in other nations, thereby making a substantial contribution to the global targets for SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities).

3.2 Methodology

The strategy is centered on a test-and-learn model to determine how private capital can be most effectively deployed to achieve development outcomes. This involves:

1. Identifying high-impact opportunities for growth in LMICs.
2. Applying a rigorous, data-driven framework to assess the cost-effectiveness of potential interventions.
3. Funding programs designed to stimulate economic activity and create decent work, in line with the principles of SDG 8.

4.0 Conclusion and Implications

The Open Philanthropy initiative represents a significant effort to mobilize private resources to support the 2030 Agenda. By focusing on evidence-based strategies to spur economic growth, the organization aims to create a scalable model for development that directly supports the interconnected goals of poverty eradication, decent work, reduced inequality, and robust global partnerships.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 1: No Poverty

  The article directly connects economic growth to poverty alleviation, stating that growth has “lifted hundreds of millions of people out of poverty.” This aligns with the primary goal of SDG 1, which is to end poverty in all its forms everywhere.

• SDG 8: Decent Work and Economic Growth

  This is the central theme of the article. The entire focus is on Open Philanthropy’s efforts to “accelerate economic growth in low- and middle-income countries.” The article discusses challenges to growth, such as trade disruptions and automation, and the need for new strategies to help countries get “back on a growth path,” which is the core of SDG 8.

• SDG 17: Partnerships for the Goals

  The article highlights a shift in development finance. It mentions “shrinking aid budgets” (referring to official development assistance) and the increasing role of “private philanthropy” to fill the gap. This focus on mobilizing financial resources from different sources and the partnership between a philanthropic organization and developing countries is a key aspect of SDG 17.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 1.1: By 2030, eradicate extreme poverty for all people everywhere.

   The article’s reference to economic growth having “lifted hundreds of millions of people out of poverty” directly supports this target of poverty eradication.

2. Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries.

   The initiative’s goal to “accelerate economic growth” and help countries “get back on a growth path” is a direct reflection of this target, which aims to achieve high levels of economic productivity and growth.

3. Target 17.3: Mobilize additional financial resources for developing countries from multiple sources.

   The article describes how Open Philanthropy, a private foundation, is funding efforts to spur economic growth. This is a clear example of mobilizing financial resources from non-governmental sources, as outlined in this target, especially in the context of “shrinking aid budgets.”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Implied Indicator for Target 1.1: The phrase “lifted hundreds of millions of people out of poverty” implies the use of a poverty metric, such as Indicator 1.1.1: Proportion of the population living below the international poverty line. Progress would be measured by a reduction in this proportion.
• Implied Indicator for Target 8.1: The central goal to “accelerate economic growth” implies the measurement of economic output. This directly relates to Indicator 8.1.1: Annual growth rate of real GDP per capita. The success of the philanthropic efforts would be measured by an increase in this growth rate.
• Implied Indicator for Target 17.3: The article’s discussion of “shrinking aid budgets” and the role of “private philanthropy” implies the tracking of financial flows. This relates to indicators that measure development finance, such as Indicator 17.2.1: Net official development assistance… as a proportion of the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee donors’ gross national income (GNI) and the measurement of private philanthropic contributions as part of mobilizing additional resources.

4. Summary Table of SDGs, Targets, and Indicators

Source: devex.com