Case #2155.0

Paying to Improve Girls’ Education: India’s First Development Impact Bond

Publication Date: April 8, 2019
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In 2013, Educate Girls (an Indian nonprofit working to increase the number of girls enrolled and learning in school), partnered with Instiglio, a startup specializing in financial instruments for social programs in developing countries to create the first Development Impact Bond—a financial instrument similar to a Social Impact Bond. UBS Optimus, a Swiss foundation, agreed to act as the investor and the London-based Children’s Investment Fund Foundation would reimburse UBS Optimus’ initial investment and pay returns if Educate Girls met or exceeded a set of predetermined goals. Instiglio would broker the deal and IDinsight, a new evaluation organization would conduct the evaluation.

Agreeing on the evaluation design, however, proved challenging. An evaluation was vital to the DIB because success payments hinged on its findings, but Educate Girls was concerned that the investors and evaluators were not considering the realities of program implementation when proposing complex evaluation methods. Whereas, the investors and evaluators were not interested in backing a DIB where the impact findings could be open to question.

This case places students in the decision room with the DIB parties and asks them to grapple with the tradeoffs social organizations and evaluators often have to face. The case includes a 6:30-minute video supplement where Avnish Gungadurdoss, Co-Founder and Managing Partner of Instiglio, explains the challenges the parties had to face and reveals to students how they eventually resolved their differences, signed on to the DIB and selected an evaluation design.

Learning Objective:
Examine how incentives and risks vary between the various parties of a Social Impact Bond; students explore the common tradeoff evaluators face between internal and external validity; and gain a deeper understanding of other evaluation design issues such as spillovers and selection bias.

Other Details

Case Author:
Anjani Datla
Video Producer:
Patricia Garcia-Rios
Faculty Lead:
Dan Levy
Pages (incl. exhibits):
Joseph B. Tompkins, Jr. Fund for Case Study and Research