The worlds of the bonds, the investors and the financial markets may seem like a long way from the millions of poor people in the world who never get to see their children go to school.
But a project is trying to take advantage of the money and the power of the financial markets to the delivery of the highest standards of education.
Want money in cash and the compassion that go hand in hand.
The British Asian Trust is planning to raise $ 10 million (Â£7.5 m) for an “education development impact bond”, in which the investments are linked to specific goals in the improvement of education for disadvantaged communities in India.
It is a project that is being supported by the British Asian Trust founder Prince Charles.
The trust wants to implement a business as a model for supporting education for very disadvantaged communities. The funding is based on a bond of a loan that will be repaid with interest.
But the management talk about the meeting “performance goals” is to improve children’s life chances.
The goal is to get more young people to stay in school, particularly girls, and to increase the literacy and numeracy level of 200,000 young people in Gujarat, Rajasthan and new Delhi.
Richard Hawkes, chief executive of the British Asian Trust, highlights the importance of linking the funding to specific, measurable results.
Instead of relying on the good intentions, he thinks that this is a way of giving investors the confidence that something positive will be achieved.
Will be $7.6 m (Â£5.7 m) in delivery of improvements, with four education providers selected to carry out the work, along with local and national educational authorities.
It will mean the support of projects such as remedial support for children who have been left behind and the training of teachers and heads.
There is a four-year time frame for primary pupils to make sufficient progress, with the results to be independently verified.
And if the promised results are not achieved, the sponsors have not lost anything, since “it is paid only when results have been met”.To help girls stay in school
The initial funding, which provides working capital to allow the process to begin, has been provided by the UBS Optimus Foundation, the charitable arm of the Swiss financial services company.
But the trust wants to open an extension of the cycle of investment and improvements.
Already there have been positive signs of this type of experiment.
The charity, Educating Girls, is being funded by a “development impact bond”, with the goal of improving school enrollment and raise standards for girls in the state of Rajasthan.
This is linked to goals three years out of school of girls to education, and then monitoring progress in English, Hindi and math to 18,000 children.
Safeen Husain, the executive director of Educate Girls, says that the “razor-sharp focus on results” has meant much more focused, data-driven approach.A good business
The analysis of the results until now has meant “the redesign of the curriculum from scratch and retraining of personnel”.
If the objectives are met, the funders will pay their contribution. But the real prize is in the long-term change that we want to offer through the improvement of education.
Educate Girls wants to avoid more than 10 years-that girls dropping out of school and improve the education of girls will bring multiple benefits to the local community in better health outcomes and employment opportunities.
Mr Hawkes believes that this type of funding can achieve more than traditional philanthropy.
“The positive intentions are not a guarantee of success,” he says.
“We want to know what are the interventions that make the biggest difference. We want to gather data about what works, so that we can scale.
“We want to be something that is part of a big change.”
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