The Graduation Program works with governments on comprehensive approaches to reducing extreme poverty. The graduation strategy centers on increasing and improving the productive, financial, human and social assets of people living in extreme poverty, offering them the tools and resources they need to weather crises, and continue on the path to the development on their own terms.
The origins of Fundación Capital’s Graduation Program date to 2006, when the Ford Foundation and the Consultative Group to Assist the Poor (CGAP) launched a research and activity regimen based on the idea of “graduation” from social programs, developed by the non-profit BRAC in Bangladesh several years prior. The objective of Ford and CGAP’s efforts was to better understand how social protection networks, means of sustainable subsistence, and access to financial tools can be deployed sequentially to create sustainable paths out of extreme poverty.
During the last ten years, close to 400,000 participants in Bangladesh, the majority of them female heads of houses, and 5,000 more in eight countries hosting pilot projects were reached, all through projects run by nonprofit organizations and with limited capacity for scale.
Starting in 2011, in the hopes of turning the graduation approach into a large-scale effort to reduce extreme poverty through its inclusion in government social programs, Fundación Capital and the Ford Foundation began working with governments in Latin America to adapt that model to create graduation strategies specific to each country. Developing and incorporating a graduation strategy into the parameters of sound public policy requires consideration not only of each country’s specific contexts, but also considerations of logistics, social programs already in place, culture, cost and implementation processes.
With support from the Ford Foundation and the International Research Development Center (IDRC), Fundación Capital is designing and accompanying the implementation of this initiative in five countries in the region. This regional work includes a research and evaluation component that provides essential evidence and key learnings needed to expand the program. With support from the Ford Foundations and the International Fund for Agricultural Development (IFAD), Fundación Capital is also beginning work in Tanzania and Mozambique.
As of the end of December 2015, Fundación Capital’s Graduation Program has accompanied 15,000 families, reaching approximately 57,000 people all told. The national governments with which Fundación Capital has worked have committed close to 70 million USD to the goal of reaching more than 65,500 families by the end of 2018, or approximately 270,000 people. This demonstrates the commitment and the capacity of Fundación Capital to transform the graduation concept into an approach capable of reducing poverty on a massive scale.
The term graduation has many meanings in the context of social policy, all linked to a given approach to combatting poverty. The graduation strategy adopted by Fundación Capital for the Graduation Program is one centered on increasing and improving the productive, financial, human and social assets of people living in extreme poverty by offering them the tools and resources they need to weather crises and continue on the path to the development on their own terms. In some cases, this can coincide, though not systematically, with the benchmarks of extreme poverty as defined by each government – whether that be poverty as measured by income or through a multi-dimensional scale. The debate surrounding the definition of “graduation” in an ever evolving and ongoing conversation.
The graduation model developed by BRAC, CGAP and the Ford Foundation is carefully structured around five main components, each one critical in helping people exit extreme poverty sustainably. The principle components include:
1. Consumption support: small stipends that reduce the daily burdens and provide participants with room to breathe financially while reducing some of the daily stress.
2. Savings: participants are encouraged to save, preferably via formal banking entities, to guarantee their savings and, in this way, support the growth of their assets.
3. Asset transfer: physical assets, such as livestock, are provided to help strengthen income-generating activities.
4. Life skills coaching: Participants receive regular personal home visits from program mentors who advise them in the management of their business and provide general support and motivation.
5. Technical skills training: This training focuses on building basic skills in business, financial knowledge and personal development (such as self-esteem, empowerment, communication and teamwork), as well as for skills specific to the business being developed by each participant.
Susan Davis explains the BRAC model as part of her TED talk, Reaching Beyond the Frontiers of Poverty.
Through a robust evaluation agenda, CGAP-Ford has been able to demonstrate the effectiveness of their model. In the words of Esther Duflo, MIT professor and director of J-Pal, “all over, it has been shown that these anti-poverty programs are the most successful in terms of increasing consumption, food security, and the sense of dignity and belonging of the participants”. In order to integrate the graduation model into public policy and learn from critical developments, the Graduation Program has built an important research and evaluation regional agenda, which will also be implemented with support from IDRC and Ford Foundation.
Some articles highlighting that the Graduation Approach is not only impressive, but has a lasting impact on the lives of the people living in poverty and extreme poverty:
– Upward Mobility for the World’s Destitute, written by New York Times Columnist and Pulitzer Prize winner, Tina Rosenberg.
– MIT researchers are fighting extreme poverty with science, published in the Boston Globe, with a discussion of the results and of Fundación Capital’s graduation work.
– A Multifaceted Program Causes Lasting Progress for the Very Poor: Evidence from Six Countries, the results of the investigation, published in Science.
– Focusing on the Poorest: What Does the Research Tell Us & Infographic: Increasing Income For the World’s Poorest, a discussion on CGAP of the graduation program and study results
At Fundación Capital we are committed to ongoing evaluation our programs and projects to ensure that we are offering proven, high quality solutions. Specifically for our graduation programs in Latin America, we are working with the Center for the Study of Economic Development (CEDE) to develop a platform for evaluation and the sharing of lessons learned. CEDE, which is part of the University of the Andes (Universidad de los Andes) in Colombia, will lead the design and implementation of the platform, which will incorporate local institutions in the evaluation of processes and results in each of the participating countries.
In Paraguay we are conducting a randomized control trial (RCT) that will help to determine the impact of the program. These types of trials are recognized as one of the best ways to evaluate the effectiveness of an intervention, as the results compare outcomes between a control group (i.e. a group that has not received the intervention) and a group who that has received the intervention.
Additionally, several other evaluations of the processes and results in other countries will be completed. To date, the platform is hosting the following evaluations:
The results obtained through the platform will serve to improve existing programs and support the expansion of efforts in other countries. They will also make it possible to compare results with other countries recently evaluated by CGAP.