WORLD BANK MARCH 31, 2010 FELIPE BARRERA-OSORIO JULIANA GUAQUETA Trends in private sector donations in support of the education sector

Private donations: why is the World Bank interested? Private sector is an important player in education Our “business” model is the interaction with the Government …however, we need to start thinking how to best engage with the private sector In the context of the Education Sector Strategy 2020, the private sector is a critical actor to be included

Private sector donations in education: what do we know? Very little:  The data is scarce, fragmented and of low quality  There is not a common framework to understand the dynamics, motivations, modalities, and impacts This is a first attempt to address some of these issues:  Attempt to define a common language and conceptual framework that organizes the different forms of private donations  Understand their function in education systems and potential to educational opportunity and improve service delivery  Present very raw estimates of a portion of private donations

Who are the private donors in the education sector? Who? Philanthropic Foundations Corporations Faith-based organizations High Net Worth Individuals Banks Business Networks What? Financing of a public service (complementary role) Transfer expertise How? Work outside government structures to avoid complex processes Cooperate with civil society organizations with expertise on the ground Seek to achieve specific objectives or work with a targeted group

Sources of Education Financing Resources Household Expenditure Public Expenditures Private Donations Official Development Assistance Local Cross-border

Two modalities of private resource transfer International Resources Foundations Corporations High-net worth individuals Other private entities Channels Public Sector (central, regional, local) Multilateral Organizations NGOs and Civil Society (international or domestic) Implementer Public Sector (central, regional, local) NGOs and Civil Society Individuals Cross-borderLocal Schools, administrators, teachers, students Local Resources Foundations Corporations / Business Networks High-net worth individuals Other private entities Implementer Private Donor NGOs and Civil Society Public Sector (central, regional, local) Individuals

Cross-border donations: some data Source is the Development Assistance Committee Data from OECD  The data has serious limitations: inconsistent reporting across countries; inconsistent reporting across time; it does not provide sectoral breakdown, geographical distribution, or project level data  Governments face difficulties in tracking private donations from donors and recipient side

Cross-border donations: some data

Private donations data Cross-border donation to education: unknown ..and the available data has problems Local donations: unknown  Self-reporting has problems, and usually is attached to tax exceptions It is imperative to build better data!

Some elements for a framework Despite the lack of data, it is important to understand the rationale of the flows We present three main pieces for a framework  A characterization of different type of donors  The potential impact of private donors

Characterization of Donors Localized Work with traditional structures Example mechanisms: -Scholarships - Grants - Buildings Supportive Build new models through pilot programs Example mechanisms: - Teacher incentives - Management programs Systemic Influence systemic policy-making Example mechanisms: - Advocacy - Building Institutional capacity

Relationships of Accountability The State Citizens Private DonorsProviders - Resources - Advocacy - Debate/ideas -Grants -Expertise -Microcredit -Scholarships -Information Services Voice Compact

Potential Impact Supply: 1. Establishing relationships of accountability with existing service providers 2. Acting as an independent service provider 3. Influencing policy-making Demand 1. Transferring resources to the demand side of education 2. Increasing competition in the system by enabling choice