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Instiglio — Designing a Health Outcomes Fund

Published: May 2019

Note: This page summarizes the rationale behind a GiveWell Incubation Grant to Instiglio. Instiglio, UBS Optimus, and the Global Fund to Fight AIDS, Tuberculosis and Malaria reviewed this page before publication.

Summary

In April 2019, we recommended a grant of $60,000 from the Effective Altruism Global Health and Development Fund to Instiglio, an organization which assists in the technical design of results-based financing mechanisms.

Grant details

Instiglio is currently working with GiveWell, UBS Optimus, and the Global Fund to Fight AIDS, Tuberculosis and Malaria to design a Health Outcomes Fund focused on primary health. This fund is intended to be between $50 million and $100 million, and allow funders in global health and development to fund programs based on results, while reducing the transaction costs of a typical results-based contract. Design decisions include: selection of implementers and payment metrics, metric pricing, and verification and evaluation methodologies.

This grant is intended to cover a portion of the design costs for the initial technical specification of the fund. We expect additional funding will be required to finalize the design of the fund.

The case for the grant

We believe it is worth making a grant to support the design work because:

  • We believe GiveWell can be helpful in designing the scope of the Outcomes Fund, particularly by (i) encouraging a focus on cost-effectiveness (and doing the technical work to estimate cost-effectiveness), and (ii) ensuring the fund is committed to transparency, and explaining the reasoning for the decisions it makes.
  • Participating in this fund may lead to deeper relationships with other major funders (such as international aid agencies), and test whether GiveWell's style of analysis can be useful to their decisions. Aid agencies collectively gave more than $25 billion in health aid in 2018.1 Assisting in the design of this fund seems to us to be the best opportunity GiveWell has to make progress towards this goal in the short term.
  • Working closely with other funders with different perspectives may lead us to challenge our own assumptions, and force us to thoroughly consider how to value benefits that we put less emphasis on in our current recommendations, such as benefits to the wider health system.
  • We believe results-based financing mechanisms hold some promise for encouraging funders to make their decisions on the basis of verifiable results where possible.

Reservations

Our biggest reservations about this grant are:

  • We believe some of the arguments commonly given for results-based financing are unsubstantiated. For example, we do not think results-based financing mechanisms are likely to "crowd in" substantial additional funding for global health and development programs from the private sector in the long run.
  • We are uncertain whether we will contribute funding to the Outcomes Fund once the scope is finalized. We would guess that there is sufficient alignment between partners to co-design a fund which meets our minimum criteria for cost-effectiveness, but we are uncertain whether this is the case.
  • We expect the programs funded by the Outcomes Fund will be less directly cost-effective (by our estimates) than the programs we would have otherwise allocated marginal funding to. We currently believe the benefits of participating in this fund outweigh the expected loss in direct cost-effectiveness, but would be unlikely to be willing to pay more than $5,000 for each death averted.

Why are we recommending a grant through Effective Altruism Funds?

We decided to recommend this grant through Effective Altruism Funds because our understanding is some donors give to this fund because they want to signal support for GiveWell making grants which are more difficult to justify and rely on more subjective judgment calls, but have the potential for greater impact than our top charities. If we had not funded this grant through the Effective Altruism Global Health and Development Fund, we would have sought funding from Good Ventures through the Open Philanthropy Project, who have generally followed our recommendations in the past.

  • 1.

    The Institute for Health Metrics and Evaluation estimates total international global health financing flows in 2018 at $38.9 billion. After subtracting the contributions from private philanthropy ($4.5 billion), the Bill and Melinda Gates Foundation ($3.2 billion), and other sources ($4.2 billion), we estimate that most of the remainder ($27 billion) was funded by aid agencies.