WORLD BANKMARCH 31 , 2010

FELIPE BARRERA-OSORIOJULIANA 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 impactsThis 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

PublicExpenditures

Private DonationsOfficial

Development Assistance

Local

Cross-border

Two modalities of private resource transfer

InternationalResources

•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-border Local

Schools, administrators, teachers, students

LocalResources

•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

050

0010

000

1500

020

000

2500

0

1970 1980 1990 2000 2010year

Net private US

Total Net Private Grants versus US contribution

Cross-border donations: some data

0.2

.4.6

.8%

of t

otal

1970 1980 1990 2000 2010year

US UKSwitzerland GermanyCanada Australia

Major Contributors of Private Grants

Cross-border donations: some data

050

000

1000

00U

S M

illio

ns

1970 1980 1990 2000 2010year

ODA Education

Panel A

.06

.08

.1.1

2.1

4%

1970 1980 1990 2000 2010year

Share Regression

Panel B

Total ODA versus Education

Cross-border donations: some data

050

000

1000

00U

S M

illio

ns

1970 1980 1990 2000 2010year

ODA NPG

Panel A

.05

.1.1

5.2

Pro

porti

on

1970 1980 1990 2000 2010year

Panel B

Net Private Grants (NPG) versus ODA

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 exceptionsIt 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

LocalizedWork with traditional

structures

Example mechanisms:-Scholarships

- Grants- Buildings

Relationships of Accountability

The State

Citizens Private Donors Providers

- Resources

- Advocacy

- Debate/ideas

-Grants

-Expertise

-Microcredit

-Scholarships

-Information

Services

Voice Compact

Potential Impact

Supply: 1. Establishing relationships of accountability with

existing service providers2. Acting as an independent service provider3. Influencing policy-making

Demand1. Transferring resources to the demand side of

education2. Increasing competition in the system by enabling

choice