How a Pritzker-Backed Philanthropy Channels Impact Investing Toward Private Schools in Ghana
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a Classroom in Rural Ghana. James Dalrymple/shutterstock
Africa is far and away the world’s youngest continent. The population of its mosaic of countries is expected to account for 42% of the world’s youth by 2030. Within a few decades, demographers predict its workforce will top a billion people, becoming the largest in the world.
Those numbers pose both an unprecedented opportunity, and the unprecedented challenge to match opportunity with preparedness. Booming youth populations can yield great socio-economic dividends, but only if the race to boost health, education and skills training proceed apace.
Among the funders drawn to the education component of that challenge is the IDP Foundation (IDPF), which has been working to prepare Ghanaians to meet the future for more than a decade. IDPF focuses on financing for low-income private schools that generally sit outside government educational systems, but are critical to meeting the pressing needs of Ghana’s students.
Here’s how COVID added urgency to that work, and IDPF’s impact investing approach to the problem:
A family affair
An acronym for “innovation, development, and progress,” the IDP Foundation was established as a 501(c)(3) a dozen years ago with a $50 million endowment, using proceeds that Liesel Pritzker Simmons won from a settlement with her father, Robert Pritzker, one of the heirs to the Hyatt hotel fortune.
Pritzker Simmons and her mother, Irene Pritzker, co-founded IDPF with the mission of applying all of the elements of its name to support “all forms of advancing human knowledge,” with a focus on education in Africa, medical research and entrepreneurs. Irene Pritzker currently serves as CEO; her daughter serves as director. The foundation is part of the Pritzker family’s far-reaching philanthropic footprint, which spans climate change, gender justice, criminal justice and more.
Liesel Pritzker Simmons is also co-founder of Blue Haven Initiative, one of the largest U.S.-based investment funds dedicated solely to impact investing. Since 2012, she and her husband, Ian Simmons, have followed the mandate of the field by managing portfolios designed to generate both financial returns and positive social change.
Catalytic capital
As previously covered in Inside Philanthropy, Irene Pritzker credits her daughter with carrying an impact-investing mindset to IDPF. The foundation views grants as catalytic capital, making strategic investments in opportunities with the capacity for growth, leveraging additional funding, and leading the way for future scalability, replication and sustainability. It also frames its work within the U.N. Sustainable Development Goals, applying “rigorous analytics” to measure impact.
IDPF’s website states that “everyone should have equal access to educational opportunities to break the cycle of poverty,” and that a combining “smart philanthropy and investment can galvanize solutions to make that future a reality.”
Corina Gardner, executive director of the foundation, said that recently, education has been more at the center of its work, specifically its Rising Schools Program in Ghana.
Leadership’s engagement in the region was inspired by James Tooley’s 2009 book “The Beautiful Tree,” which concludes that in low-income countries, private markets provide better educational opportunities than governments. Tooley is an education professor at the University of Buckingham and an adjunct scholar at the libertarian think tank Cato Institute, which also published the book. While he has his supporters, his outlook on education and enthusiasm for privatization has drawn its share of pushback.
The mother-daughter team was moved by the book, and during a subsequent educational trip, they visited a Ghanaian entrepreneur who sold yams and also ran a school—but couldn’t get a single school loan—and saw a solution in impact investing.
Today, the foundation spends $2 million to $3 million annually on education programs, in addition to grants to medical research and entrepreneurs. Its endowment is nearly 100% impact invested.
Education in Ghana
With a population of roughly 30 million, the Republic of Ghana is considered among the most stable of the West African countries since transitioning to a multi-party democracy in 1992. Formerly known as the Gold Coast, the country has a high level of media freedom and an independent judiciary.
Ghana’s modern commitment to education was formalized in 1974, when it created an education framework, Ghana Education Service (GES), with the mission to provide all Ghanaian children with an inclusive and “equitable, quality education.”
But that didn’t do away with fees for education, which have been common on the continent since the 1980s—and a persistent barrier to educational equity. Ghana hoped to address that in 2005, when GES mandated fee-free basic education in all government schools, regardless of location or socio-economic status.
While the directive boosted overall enrollment, it only exacerbated shortcomings in infrastructure, teacher training, and overcrowding. Other forms of indirect fees continued. Drop-out rates soared, and data from 2014 showed that more than 400,000 primary-aged students never enrolled at all.
The need for viable alternatives, especially for students in places without access to free public schools or who lack the means to attend costly elite private schools, is evident in the numbers. The International Finance Corporation estimates that 40% of Ghana’s basic education schools are private; a quarter are considered low-fee.
IDPF Rising Schools
The foundation’s educational work centers on its Rising Schools Program (IDPRSP), which invests in low-fee private schools (LFPS) in Ghana. IDPF feels its model helps meet market demand from disenfranchised parents seeking affordable educational alternatives that deliver “more access and accountability than the government can provide,” said Gardner.
In the fall of 2009, IDPF launched the program through a partnership with Sinapi Aba Trust, a Ghanaian microfinance institution. Rising Schools was created for parents living at the lowest ends of the economic ladder, who come up with school fees of roughly $15 a term to provide their children with a quality education.
The Rising Schools model supports local school proprietors by providing financial literacy and school management programs that make them viable candidates for business loans. Topics include accounting, handling credit and human resources. Training costs are factored into the terms of loans, and are tailored to individual school needs.
At least before COVID-19 hit, IDPF realized a high loan repayment rate: 91% on 590 disbursements.
Though for-profit schools sit outside the system, IDP strongly advocates for public-private partnerships between school operators and the government’s educational framework. School operators are also tutored in registering with Ghana Education Services.
So far, IDPF’s program has reached 717 schools in total, and more than 160,000 students. Thirty percent, or 218, of the schools are registered with the government. Data sourcing is underway to help IDPF understand the factors that lead to cooperation—and reluctance.
The great majority of the schools it funds offer a continuum of pre-primary, primary, and junior high school, the equivalent of U.S. K-10. Roughly half of its students are in kindergarten through sixth grade. Gardner explained that “the typical journey of most of these schools in Sub-Saharan Africa is to start with a cohort of very young kids and then grow the school along with them.”
Drop-out rates across Sub-Saharan Africa are an acute problem. Of the 98% percent of students who enroll in primary school, only 68% complete their studies. And demand for senior high school remains low. Only 9% of students move on to higher education; roughly 6% graduate. Ghana is working to address that with a fee-free senior high school program that increased enrollment from 308,000 in 2016 to 430,000 in 2018.
Rapid response
As COVID spread, the foundation stayed the course on education and quickly deployed 144 relief grants totaling $385,000 to help schools reopen through a rapid needs assessment.
Gardner said that the decision to double down on education was partially driven by “the global diversion of funding toward health systems and COVID response,” which caused global educational financing to “stagnate or decline at the precise moment we need it most.”
Gardner said it was tricky gauging the situation as COVID spread, since nobody knew when things were going to change. In the end, schools closed in March and didn’t reopen until the end of January. Teachers weren’t being paid and physical infrastructure was challenged by widespread ransacking, and newly adopted safety protocols posed logistical problems.
With only two weeks notice to reopen, IDPF created an assessment team that included its five in-country team members and banking partner. The exercise didn’t start with a set amount. Instead, it was purely needs-based, covering the basics of reopening like physical structures and teaching salaries.
The value of building public-private partnerships on the ground paid off. Schools that were inside the system were included in state-led PPE, COVID fumigations and cleaning protocols. And the state made loans available to registered businesses—moves that may encourage more IDPF-funded schools to seek alignment with larger frameworks.
A popular corner of philanthropy—with its share of controversy
Education in Africa is a priority for a number of funders, skating across focus areas from early- and growth-stage development to scaling and partnerships. Early childhood development and education is a priority focus area of the ELMA Foundation, for example. Wellspring’s School Development Fund focuses on two parts of Rwanda. Co-Impact’s systems change work focuses on teachers and teaching. The Michael & Susan Dell Foundation works in South Africa to increase graduation rates. And the Gates Foundation’s Global Education Program has focused on literacy and numeracy skills for primary school-age students in Sub-Saharan Africa and India.
From the impact investing sector, the London-based Global Innovation Fund has made numerous investments in early childhood initiatives, learning through play and skills-based learning, and adaptive learning software. An Acumen fund invests in education companies in East Africa.
But in Africa, as in the rest of the word, the privatization of education is not without controversy.
Bridge International Academies, for example, which operates the largest cohort of low-fee private schools across Africa, initially garnered support from donors like Gates and the Chan Zuckerberg Initiative, and raised more than $140 million by 2019.
Since then, however, there have been challenges. Though still currently a funder, the World Bank’s International Finance Corporation paused funding in 2017 in Kenya and Uganda after research by educational organizations pointed to severe consequences for non-payment of fees and spotty quality. And in 2018, licensing issues led to government calls for closure in Uganda. Schools there continue to operate, and perform well.
Looking ahead
Though IDPF has helped 41,000 students return to their classrooms, enrollment sits at 55% after reopening. And with only 2% of the population vaccinated, and variants circling the globe, the problem won’t ebb anytime soon.
Meanwhile, Africa’s youth keep marching toward the workforce.
Anticipating continued pandemic-related stagnation and stressors on educational funding in national, domestic and foreign aid budgets, Corina Gardner said, “Now more than ever, we need to find ways to deliver quality education that can leverage financing from private actors and individuals,” support that is not “solely dependent on the resources of government or aid.”
