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Development Innovation Ventures: Seed Funding for Scale from USAID

By Wayan Vota on August 4, 2010

usaid div grant funding

USAID has just announced a very compelling program for all those who want to see scale in international development. The Development Innovation Ventures Annual Program Statement (a type of RFP) is soliciting proposals in all development sectors – from economic growth to agriculture to anti-corruption activities – that have potential to reach this outcome:

DIV’s goal is to identify and support innovations with a proven, cost-effective impact that can match the scale of microfinance, which has been adopted by at least 75 million end users worldwide. This is an ambitious goal. As with all innovative processes, we expect failures along the way, in addition to success.

USAID DIV Tiers of Grant Funding

The DIV fund is approaching this goal relatively reasonably, by segmenting projects into three stages, each with their own type and level of grant funding:

STAGE 1: $200,000 for Proof of Concept Initial Testing

Stage 1 is used to test the proof of concept of any innovative service, product, or business model in a developing country context. A Stage 1 innovation is at initial stages of implementation and needs to be tested within a market to understand interest from consumers, impact, and feasibility.

While a strong theory of change is critical, the impact of the innovation may be less obvious on “direct beneficiaries” in the short-term (for example, innovations that reduce pollution, improve governance, etc.). Innovations must be post-prototype or ideation phase, but pre-revenue innovations are considered at this stage.

STAGE 2: $1,500,00 for Testing and Positioning for Scale

Stage 2 is used to test the business or delivery model of a product or service. Building on the parameters of Stage 1, smaller Stage 2 awards (up to $500,000) are generating evidence of user demand beyond the proof of concept. For commercial models, Stage 2 awards support the generation of a sustainable business model and, therefore, innovations should be post-revenue. Innovations should be collecting data on usage as well as proxies for eventual social impact, however, clear and rigorous evidence of impact is not needed in the lower range of funding levels for this stage.

Larger scale Stage 2 innovations (over $500,000) must include or test the evidence of impact of an innovation. This evidence of impact must be causal and rigorous – the grantee must either have rigorous underlying evidence already established, use this funding to run an evaluation with an evaluation partner, or run an evaluation with its own funding during the grant period. There must be demonstrated significant demand for the innovation.

STAGE 3: $5,000,000 for Scaling and Replication

Stage 3 provides funding for catalytic partnerships to scale the innovation to a new context or demonstrate replicability. Funds must leverage additional external funding or partnerships. Innovations with an expected private sector scaling pathway should have already demonstrated commercial viability in their existing location and the ability to attract commercial and/or impact capital on market terms that would allow sustained expansion, as well as a prima facie case for development impact based on causal, rigorous evidence and demonstration of cost-effectiveness.

For commercial innovations, organizations should no longer need donor funding for basic operations; rather, these funds should be used to attract external funding, or for strategic partnerships to scale to new contexts. Stage 3 investments in commercial projects will only be considered on a pari passu (“equal footing”) basis with other donors/investors, and not as the lead donor. For public sector innovations, organizations should have partnerships with the government or other organizations in place to scale the innovation.

$1,500,000 for Evidence Generation​

DIV is committed to generating evidence in the development sector. Researchers may apply for funds to evaluate the impact of cost-effective innovations in partnership with an implementer (for example, a host country government, social enterprise, nonprofit, etc.). Research is separated from the requirements of staged funding, since research projects vary in funding need and may apply to build on existing research or for any amount up to the funding cap for new research projects. We encourage evidence generation efforts alongside innovation development.

DIV is also willing to fund evidence generation for a project implemented by other means. Small grants (up to $150,000) are available for researchers to participate in the application of the research results to improve development outcomes. Pilot research projects for which funds are not used to generate causal, rigorous evidence are strongly discouraged.

Apply for DIV Grant Funding Today

For those that apply now, the DIV APS has a $350,000 budget for Stage 1 projects, which can be funded via grants, cooperative agreements, or collaboration agreements. This should be good enough to get your thoughts going on the next Big Idea, and fund a sabbatical from your day job to work on it.

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Written by
Wayan Vota co-founded ICTworks and is the Digital Health Director at IntraHealth International. He also co-founded Technology Salon, MERL Tech, ICTforAg, ICT4Djobs, ICT4Drinks, JadedAid, Kurante, OLPC News and a few other things. Opinions expressed here are his own and do not reflect the position of IntraHealth International or other ICTWorks sponsors.
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12 Comments to “Development Innovation Ventures: Seed Funding for Scale from USAID”

  1. Wayan Vota says:

    USAID has just issued a modification to this APS, raising the funding limit to $1,000,000 for the first year, FY10, and $16 million for FY11, and they extended the initial deadline to Aug 23.

  2. If some people with good ideas don’t have the right collaborators to help them “in the field” in Africa then we can introduce them and help them to work together.

    It is possible the some people have good ideas to try, but don’t have the right associates on the the ground to work with. It is essential to have the right contacts and effective communication channels if the great ideas people have are to be developed, refined to meet real-world operational challenges, tested, and ultimately scaled up to change the world in fundamental ways.

    (I don’t know if its appropriate to reach out to collaborators here – but I would genuinely hate to see good ideas fail to get tried for lack of appropriate collaborators – so if it’s not okay to post this I apologise in advance – and imagine it will be quickly deleted so no harm done.)

    Dadamac was set up to introduce people to each other and help them to do useful stuff – so if anyone has a Big Idea and needs a collaborator to help them to realise it please contact me http://www.dadamac.net/about/pam email pamela.mclean(at sign)dadamac.net or John Dada http://www.dadamac.net/about/john at john.dada(at sign)dadamac.net to see how we can help you to find the right people and then work with them effectively.

  3. Achan vicky says:

    Hallo all,

    thanks for that, can we get the proposals fortmat?

    thanks kitwobee- kitgum women bee keepers association

  4. Robert says:

    We can get ready with a proposal in 30 days

  5. Wayan Vota says:

    You can submit an application for Development Innovation Ventures funding anytime before July 21, 2011

  6. Dear Friend,

    ABA Foundation is a Non-Profit Organization registered under the laws of Uganda. The Foundation’s objective is to promote the Socio-Economic Welfare of our vulnerable communities especially the disaster affected people, destitute children, Orphans, widows, widowers, elderly, refugees, disabled, people in war torn Northern Uganda staying in Internally Displaced Camps and poor families affected by HIV / AIDS.

    We provide them with disaster relief, material support in form of clothing, mattress, blankets,food aid,clean water, medication, toilets, shelter among others. We offer scholastic materials to school going children such as books, pens, pencils, tuition fees, sanitary pads, shoes,school bags etc. We are also a voice to the voiceless poor and vulnerable groups in a bid to seeking justice.

    We run Technical and Vocational Training Centers to equip refugees and other vulnerable groups with life development skills to enable them earn a living. Recent research indicated that 89% of refugees and people in internally displaced camps engage in prostitution which has led to an increase in HIV / AIDS scourge. These Technical and Vocational Training Centers are meant to empower them, fight poverty and combat the spread of HIV / AIDS.

    We operate Mobile Clinics, Home Care Bay and Rehabilitation Homes. We also do training and counseling. We raise awareness in the communities against HIV / AIDS, we also promote awareness among communities by running development programs to fight house hold poverty and promotion of income generation projects.

    We are also looking forward to continue working with you to fulfill our objectives of promoting the Socio-Economic Welfare of the Vulnerable and Poor Communities.

    Yours faithfully,

    Rev. Kiyimba Joseph
    Executive Director
    ABA Foundation
    http://www.AbaAfrica.Org
    Tel: +256772949076
    Fax:+256414234474

  7. albert walugembe-musoke says:

    Dear Mr. Vota
    In the advertisement I do not see the contact adress for submitting the RFP. Secondly, can we get the USAID required format for submission.
    Albert Walugembe-Musoke

  8. Wayan Vota says:

    See page 18 of the document:

    Submission Instructions: All applications must be in English and submitted electronically via http://www.grants.gov and an electronic copy to the Agreement Officer.

    See the Grants.gov page:

    Ray Carmichael, Grantor, Phone 202-712-4433, Grantor’s e-mail address

    See page 11 of the document:

    Application Instructions, Review Process, and Evaluation Criteria
    A. Overview of the Application Process
    B. Application Instructions
    C. Evaluation Criteria for Application Review

  9. Wayan Vota says:

    USAID has issued further guidance on this grant opportunity: answers to questions sent in around the rules to win funding. Download Modification 3 here

  10. chirs says:

    For those that apply before August 15, the DIV APS has a $350,000 budget for Stage 1 projects, which can be funded via grants, cooperative agreements, or collaboration agreements.

    So is the deadline 7/21 or 8/15?

    Thanks

    Chris

  11. Wayan Vota says:

    The most recent modification says:

    Please continue to monitor http://www.grants.com for the upcoming release of DIV APS 2.0, which will include updated application instructions and selection criteria in a call for innovative and cost-effective solutions to key development challenges across a variety of sectors.

  12. Wayan Vota says:

    While the APS solicits applications on a rolling basis during its open period,upcoming closing dates are: July 15, 2011 & October 15, 2011 on http://www.usaid.gov/div/apply.html

    And then WASH was just announced under the DIV APS:

    Over the next four years, WASH for Life identify and rigorously test new WASH technologies and delivery models, and then scale and replicate those that are proven successful. Although projects addressing problems in any WASH area or any country may apply, WASH for Life is particularly interested in interventions that:

    – Operate in the following priority countries: Bangladesh, Ethiopia, Ghana, Haiti, India, Kenya and/or Nigeria;
    – Address issues in the sanitation and hygiene sectors in particular; and
    – Target beneficiaries earning under $2 a day (PPP adjusted).

    See: http://www.usaid.gov/div/washforlife/