Changing the Game: Redefining Innovation

Changing the Game: Redefining Innovation

Seattle, United StatesManagua, Nicaragua
Year Founded:
1994
Organization type: 
nonprofit/ngo/citizen sector
Budget: 
$1 million - $5 million
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

We build a portfolio of microfinance institutions and cooperatives whose leaders are committed to integrating health into their service offerings. Global Partnerships' team works with partners to develop business models for health services that can be delivered on a market sustained and scalable basis. And we make grants to fund the costs required to make progress and demonstrate results.

About Project

Problem: What problem is this project trying to address?

The links between poverty, health, and development are well established. Poverty impacts an individual’s health, including the ability and opportunity to engage in health-seeking and health-promoting behavior. At the same time, poor health can deepen poverty by diminishing an individual’s ability to be economically productive and through catastrophic health costs. Apart from economic barriers, poor households face additional structural barriers that result in a lack of access to, and utilization of, effective and affordable health education and services. Often, it is the poor, particularly the rural poor, who must incur additional costs to travel long distances to reach the nearest health facility.

Solution: What is the proposed solution? Please be specific!

Global Partnerships works closely with identified microfinance institution and cooperative partners to develop and scale sustainable business models for providing essential, high quality health services, which generally includes some combination of education, early detection exams, primary level medical consults,and other products and services such as basic medicines. Not only do we provide the knowledge capital to help develop sustainable business models, but we supply the seed capital necessary to bring the organization from pilot to scale. We anticipate that the business models of our partner organizations will demonstrate that health outcomes are improving for clients and that the business models will be financially sustainable by the end of the project (roughly three years).
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

Based on early success in developing a revenue-sustained model for delivering health education, diagnostics, and low cost services through the village bank model in Nicaragua, Global Partnerships has launched a $2.6 million initiative aimed at expanding health services with six partners in six countries by June 2015. Our initial goal is to create business models that directly and sustainably bring essential health services to more than 100,000 people, most of them low income women, with the potential to scale to reach millions.

Impact: What is the impact of the work to date? Also describe the projected future impact for the coming years.

GP is achieving target goals at the expected rate. Half-way in to our three year goals, GP has active grant investments with four partners in four countries, including: Pro Mujer (Nicaragua), Fonkoze (Haiti), COMIXMUL (Honduras), and ESPOIR (Ecuador). We have developed detailed business models for all four partners with made initial grant investments of over $330,000. Pro Mujer in Nicaragua has scaled part of its model to all of its 5 branches in the last 12 months. Fonkoze launched its pilot program in the last six months, COMIXMUL launched its pilot in January 2013 and ESPOIR launched its pilot in March 2013. As of December 2012 our partners had reached 32,766 people with health services and were tracking towards sustainability. Fonkoze is a good example of what our programs look like, as the health program will leverage Fonkoze's existing 46 branch offices with include 1,800 village banks (close to 60,000 women clients) across the most rural and isolated communities to deliver monthly preventive education and screening, focused on prevalent conditions particularly anemia, malnutrition, hypertension, and diabetes, and access to primary care consults with existing providers for clients and their families. Fonkoze's health program is unprecedented in terms of its ambitions for scale and sustainability
Sustainability

Financial Sustainability Plan: What is this solution’s plan to ensure financial sustainability?

We currently have four partners and aim to have six partners that are reaching more than 100,000 people with sustainable, quality health services by June 2015. In the mid-term are striving to catalyze additional interest by other MFIs, Cooperatives as well as other stakeholders to implement and/or enable the implementation of similar sustainable health services business models in other contexts. In order to achieve this we are participating in conferences to bring awareness around our work and writing up case-studies to highlight best practices and lessons learned.

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

There are other organizations and institutions that deliver education modules via the village bank channel or offer additional non-financial services along with financial services in order to attract and retain clients, therefore, the idea is not necessarily new to microfinance practitioners or donors in the region. However, there are few, if any, organizations that have achieved a holistic sustainable business model approach to their programs that allows them to offer services sustainably at scale.
Organization Name

Global Partnerships

About You
About You
First Name

Sarah

Last Name

Henry

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Innovation
Explain what the "innovation" is about, e.g., is it the idea and/or the model you use to accomplish the idea, or your understanding of the target population, etc.?

Global Partnerships affirms that financial services are an important tool for poor microentrepreneurs who struggle daily to operate businesses and households with scarce resources, we believe that microfinance institutions (MFIs) and cooperatives can play an even greater role in addressing global poverty. What is required is innovation – pioneering new business models that MFIs and cooperatives can use to broaden their service offerings and deepen their impact. The innovation is the delivery channel as microfinance institutions and cooperatives around the world reach populations at the base of the pyramid, that are too often inaccessible by the public health system. MFIs can serve as a powerful and fully sustainable channel to address these challenges, by leveraging an existing infrastructure to reach people living in poverty, often in remote areas. The benefits include the following: 1) particularly in cases where credit is delivered via a group-based methodology, the services delivery mechanism already in place enables regular (bi-weekly or monthly in most cases) “touch” with tens of thousands of poor women; 2) the best MFI credit officers already have a relationship with clients based on trust that is only reinforced by taking on intimate health-related concerns; 3) geographically, a client’s branch office is often just as close as the nearest health facility; and 4) the fact that MFIs are financial services providers enables them to design creative savings and payment mechanisms to help client overcome the access barriers related to liquidity.

Describe how your innovation model is distinct from any other organization in your field?

GP's model is distinct in several ways: 1) we build on the strengths of MFIs and cooperatives to disseminate health information, screen for disease at existing distribution points, identify existing services, create alliances with local providers, and create financial services that align health care expenditures with the cash flow realities of poor households; 2) we provide a rigorous focus on business models that can be market-sustained and scaled; 3) we invest different types of capital, including low cost loans and start-up grants, tailored to meet the needs of our partners and the requirements of business plans; and 4) we leverage learning from across our regional portfolio about what's working in other parts of the world.

What type of operating environment and internal organizational factors make your innovation successful?

Global Partnerships (GP) applies a comprehensive screening and due diligence process to all MFI and cooperative candidates. Part of these processes is a proprietary social performance rating that credits those organizations with robust and relevant non-financial services programs, as well as those that deliver those packages sustainably, at scale, with higher ratings. As a result of these pre-existing relationships with MFI and cooperative partners in the region, GP staff have identified a potential pipeline of partners who have a vision for distinguishing themselves in the market with non-financial services, and in some cases, some experience with delivering education or limited health services, either directly or indirectly through alliances.

How do you make sure you constantly innovate in light of (potential) external challenges, or your growth plan?

We are constantly testing, monitoring and evaluating the assumptions of our business models. To ensure that we are continually innovating and adapting we have put key processes in place to ensure we are able adapt as necessary. To this end we have quarterly reporting requirements that measure key indicators of success, monthly calls with our partners, and on-site technical assistance once a quarter,

Organization Country

, WA, Seattle, King County

Business Model
The systemic challenge you are trying to overcome (select one)

Bring accessible healthcare to communities in emerging markets

Health area (target market) where the need is [select only one]

Primary healthcare services

Categories along the health continuum you are covering [select all that apply]

Prevention, Detection, Intervention, Follow-up.

Stage that best applies to your solution [select only one]

Start-up and growth (pilot is successful and starting to expand)

Core strategies of your business model [select all that apply]

New/redefined roles for healthcare service provision, New approaches to distribution of health products and services, Unconventional partnerships (between traditional healthcare players and players outside healthcare), New financing strategies for health.

If other, specify here:
Most relevant tools you are using to implement the strategies outlined above [select only two]

Consultation, Community financing.

If other, specify here:

Business model development and implementation

What is your value proposition?

We provide direct technical assistance to develop sustainable business models for delivering health services and well as the necessary seed capital to bridge the gap between the start-up and scale of services.

Who is your customer(s)?

Our customers are microfinance institutions (MFI) and cooperatives whose leaders are committed to integrating health into their service offerings. MFIs and cooperatives already serve millions of people living in poverty, and we believe can serve as effective, low cost and market sustained channels for expanding access to health education, disease screening, consultations and essential medicines.

What approaches to you use to reach your customers?

Global Partnerships becomes aware of potential Health Services Fund (HSF) partners because they have been screened as candidates for GP's Social Investment Fund based on their programmatic and financial profile. The HSF focuses on identifying partners that have aligned missions, institutional commitment and capable management to develop sustainable and scalable business models. We anticipate that within the upcoming year and as our portfolio of partners grows we will reach future customers through conferences and publications about the success of the models.

What are your primary activities?

After we select a partner and complete a due diligence visit we move forward to develop a business model for delivering health services. The model includes: a definition of a high impact core health services package, low-marginal cost operational strategies and its associated cost-revenue structure, a detailed implementation plan, financial sustainability projections, and a monitoring and evaluation plan. Once the model is complete our partners pilot while we closely monitor key indicators of success and provide the gap in necessary funding, as the model is designed to be financially sustainable at scale, Once the pilot is complete we have adapted the model and develop detailed expansion plan and move forward to expand/scale the program.

What other challenges - individual, organizational, or environmental – are you currently facing or might hinder future success of your business, and how do you plan to overcome those?

We are currently piloting in three countries (Haiti, Honduras, Ecuador), and scaling in one country (Nicaragua). Each model requires constant monitoring as we find ourselves continually adapting as new information is learned or as assumptions of the model are tested. We are currently a team of two full staff and in order to maintain the level of engagement and quality we'll have to add additional staff.

Briefly describe your growth strategy going forward

We currently have four partners and aspire to have 6 partners in the next year. We are actively adding potential partners into our pipeline and starting to perform due diligence visits to see if we have aligned goals and vision.

What dimensions for growth are you currently targeting for your innovation [select all that apply]

New regions(s), New market(s)/country(ies).

What makes your business "ready" for growth?

We are currently piloting and scaling in four countries and have learned a great deal about business models that work and that can be replicated in other markets.

What are your key growth objectives?

We want to build a diverse, yet strategic portfolio of partners that allows us to share and replicate best practice.Our goal is to create business models that directly and sustainably bring essential health services to more than 100,000 people, most of them low income women, with the potential to scale to reach millions.

Organization's Country of Operation

, MN, Managua

Social Impact
What methods for quantification of social impact are you applying (if at all)?

We require our partners to submit quarterly financial and programmatic reports. After every submission we have a call with each partner to walk through any questions we might have and brainstorm ideas to overcome any challenges. We also do on-site technical assistance with each partner once every quarter. These visits are an opportunity to see the programs in action and to work through any challenges they might be facing. We have found that it allows us to make necessary changes to the models in "real time".

Could your solution work in other geographies or regions? If so, where?

Yes. Honestly, it would work in any county that has functioning MFIs or cooperatives. We are currently only working with MFIs and cooperatives in Latin America and the Caribbean, but are starting to think about how this model could be used in other contexts and settings.

What is your projected impact over the next 1-3 years?

We hope that our partners will be reaching well over 100,000 people with quality, sustainable health services. We also hope that we have six partners that have demonstrated the ability to provide high-quality, low-cost health services sustainably at scale (we define scale as reaching at least 50% of their client base).

Sustainability
Elaborate on your current financing strategy

Global Partnerships current financial strategy is to cover our costs through earned income and philanthropic contributions grants.

Share of revenue generation in total income of organization (in percent)

42%

Direct sales to patients or other beneficiaries (in percent)

0%

Of the possible sources of these sales listed below, check all that apply to your current strategy

Licensing fees, e.g., for technology/franchise model (in percent)

0%

Of the possible sources of these licensing opportunities listed below, check all that apply to your current strategy

Service contract with organizations, e.g., government, NGOs (in percent)

0%

Of the possible sources of the service contracts listed below, check all that apply to your current strategy

Explain your revenue generation strategy in more detail

Global Partnerships manages investment funds and generates earned income in this capacity. Operating costs for our Health Services Fund is covered in part by these earned revenues as well as philanthropic gifts and grants.

Share of philanthropy in total income of organization (in percent)

58%

Philanthrophy strategies you are using

Diversified strategy.

Explain your philanthropic approach in more detail

Global Partnerships' philanthropic approach is to engage like-minded foundations, individuals and corporations through targeted appeals, events, and foundation applications. We have a retention rate for current donors 10% above the industry average.

Expand on your selections; explain how you will sustain funding over the next 1-3 years.

Global Partnerships is half-way through a three-year strategy to raise $8 million dollars for operating support and $2 million to be used as seed capital to unlock innovation and scale programs in multiple countries with selected partners. To date we've raised more than 50% of the $10 million.

Additionally, Global Partnerships continues to manage and develop investment funds through which we collect management fees as earned income. Global Partnerships has recently launched our fifth fund and have a track record of paying back our investors in full and on time.

Years in Operation

Operating for more than 5 years

Has the organization received awards or honors? Please tell us about them
randomness