Co-funding or co-investment between a donor-funded project and a private sector partner is a strategy that allows a project to raise additional resources to fund activities. The private sector partner’s investment may take the form of cash (e.g., a grant) or in-kind (e.g., contribution of materials, equipment, curricula, training, or cell phone air time) support.
Co-investment between a private sector partner and a donor-funded project may happen at the design phase or during the course of the program.
Working through channels such as business advisory councils is a useful strategy for identifying private sector partners and assessing the possibilities for their investment in the project. Projects can also identify local businesses through an initial labor market assessment or other research of companies or private sector foundations that are established in a given country and working in relevant sectors.
Using this initial assessment, the project should research a company to determine if it has donated to or funded education or training programs and to identify its priorities and interests. The project then develops a “pitch” that is tailored to the profile of the company and its priorities. Finally, the project holds a meeting with the company or private sector foundation to present the project and describe the scope of support that the project is seeking. The project may be asked to develop a concept note that describes the support requested and the activities to be implemented.
Co-investment can be beneficial to both the project and to the private sector partner. From the project’s perspective, leveraging funding or in-kind support from a private sector partner can help a project fulfill its cost share or leverage requirements for USAID or other donors. In addition, it can expand the resources available to a project for essential project activities that may not be covered by donor-funded resources. Finally, co-investment can help make a project more sustainable when donor funds are no longer available.
From the private sector partner’s perspective, co-investment in a youth project can further a company’s business interests by providing programming that eventually contribute to the bottom line such as training that strengthens the skills of prospective employees or broadens the customer base for a product, e.g., software or equipment. In addition, co-investment may also fulfill a company’s own corporate social responsibility (CSR) goals or mission.
When identifying potential private sector co-investment partners, conduct research on a company’s priorities, CSR mission, and its track record for supporting other projects. This information is essential to identifying the appropriate potential partners, and for crafting an effective pitch for co-investment.
When making the “ask” for private sector co-investment, promote the benefits of the project to the private sector partner’s priorities⎯both in a business sense and in relation to its CSR goals. This focus will ensure a more compelling argument for the private sector partner.
The G-Youth project has developed a co-investment partnership with Cisco to support the creation of a local academy within the Northeast Province Technical Training Institute (NEP TTI) in the Garissa region of Kenya.
The EQuALLS2 project in the Philippines partnered with the Petron Foundation and Brother’s Brother Foundation to carry out project goals.
The International Youth Foundation, together with various multinational companies throughout Latin America, has launched an initiative that $37 million cash and in-kind resources from the Inter-American Development Bank and 5 private sector partners to provide youth with education, training, internships and jobs.
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