Research to inform the design of a catalytic fund for the ECD sector in South Africa

Background and context

Despite the well-documented importance of early childhood development (ECD), South Africa is far from achieving universal access to ECD services. Aiming for this objective not only guarantees placing more children on the appropriate developmental path before school but also generates meaningful employment in a country grappling with unsustainably high unemployment and poverty rates. Given the vast socio-economic benefits of investment in ECD, it has been rightly argued that universal access for all children presents “the single greatest opportunity to reduce structural inequality in South Africa”.[1]

The expansion and sustainability of ECD programmes, especially for South Africa’s poorest households, is constrained by a funding environment that is wholly inadequate and complicated to navigate. However, even if sufficient levels of funding were to be provided, other constraining factors are present that require urgent attention. This includes poor governmental coordination and monitoring between the government departments responsible for ECD delivery, as well as a fragmented approach from civil society where efforts are frequently duplicated or have conflicting agendas. While progress is being made in this regard, there remains significant potential to cultivate better alignment in vision and execution among these stakeholders and the governmental counterparts.

Purpose of the engagement

Ilifa Labantwana, in collaboration with Harambee, contracted Nova Economics to conduct exploratory research into potential models and approaches for establishing a catalytic fund/platform for the ECD sector that could:

• Catalyse additional investment into the sector;
• Better coordinate existing philanthropic, public, and private sector funding for strategic programmes and initiatives seeking to expand access to ECD; and
• Contribute towards the development of a shared agenda and accountability for achieving universal access.

Our approach

We carried out the project in three steps.

Step 1: Case studies

Based on desktop research and interviews, we developed a series of case studies on local and international catalytic funds and platforms focusing on key elements such as their guiding principles, core functions, structuring, governance and institutional arrangements, fundraising and disbursement approaches and mechanisms, and progress monitoring and reporting. We subsequently extracted and summarised lessons across a range of themes to help inform discussions and decisions regarding a potential fund in South Africa.

Step 2: Workshop

We conducted a workshop with our client and a small reference group of experts to reflect on the findings and lessons from the case studies. We also used this gathering to source input which was used to scope the final step of the project.

Step 3: Deeper research and high-level design of a potential fund

Along with the insights from the workshop, we conducted an additional round of desktop research and interviews. The information gathered was consolidated and used to develop a preliminary, high-level design of a catalytic fund. It was also used to identify and document considerations regarding other critical elements of fund design. These included exploring match funding mechanisms for both fundraising and disbursement, as well as leveraging the fund setup process to facilitate collaborative vision setting and strategic planning for the sector.

Outcomes

At the time of writing, the way forward for the initiative was still being determined.

 

[1] Brooks, L., Mohamed, Z., Almeleh, C., & Maharaj, S. (2022). Early Childhood Development Accelerator Series – Accelerator 1: Towards universal access: A three-year acceleration plan for ECD funding. Cape Town: Ilifa Labantwana.