This post was written by Dr. Ku McMahan, SWFF Team Lead, and Dr. Donna Vincent Roa, SWFF TA Facility Chief of Party.
Currently, more than 1.5 billion people live with water shortages for at least part of the year. Those water shortages often threaten their farms, livelihoods, and families. Since its inception more than three years ago, Securing Water for Food (SWFF): A Grand Challenge for Development has made significant progress toward its overall goal of producing more food with less water and making more water available for the food value chain and has met and, in most cases, exceeded the expected outcomes envisioned when the program was created.
As reported in the SWFF Annual Report, to date, SWFF innovators have helped farmers and other customers save or reallocate almost 10 billion liters of water to the food value chain, help produce nearly three million tons of food and reach nearly three million farmers and other customers. More than two million hectares of rangeland and cropland are under improved practices due in part to SWFF innovations. Innovators have also leveraged SWFF funding for almost $20 million in additional funding through more than 150 partnerships and achieved more than $3.5 million in sales.
Milestone-based funding, paired with acceleration support services, delivers greater program and individual innovator impact than development dollars alone.
With significant effort from SWFF innovators, the SWFF program’s lessons learned inform more cost-effective, cost-efficient choices and increase the likelihood some innovations will reach sustainable scale by the end of the program.
Grant Funding Augmented by Support From the SWFF TA Facility
To augment the grant funding SWFF innovators receive, the SWFF program funds a hybrid incubator-accelerator that works with innovators to identify barriers to organizational growth and scaling and provides financial and acceleration support through high-impact service providers to help innovators overcome those barriers. Since its inception, the TA Facility has delivered 131 business service engagements (total value over $1.1 million) directly to innovators. For every $1,000 spent by the SWFF program, SWFF innovators have impacted 160 customers/end users, produced 140 tons of produce, saved one million liters of water, improved water management on 44 hectares of land and generated $110 of sales.
10 Key Lessons Learned
- Milestone-based funding, paired with acceleration support services, delivers greater program and individual innovator impact than development dollars alone. The acceleration support services must increase an innovator’s technical capacity and the milestones must be realistic but ambitious.
- Capacity building on grants management helps innovators comply with USAID rules and regulations, enhances their capacity to organize and manage their finances and operations, facilitates upscaling and supports their sustainable growth.
- Innovator success requires multi-stakeholder collaboration, as well as the flexibility to pivot and recalibrate based on lessons learned from measurement and monitoring data.
- In order to scale, every innovator must be able to define their customer segments and relationships and validate their assumptions on the value they deliver to their customer, their distribution channels, their cost structure and revenue streams.
- Early-stage small and medium-sized enterprises need to focus on creating a viable and financial model along with a realistic sales and marketing strategy before focusing on a sales target.
- In SWFF’s experience, NGOs and nonprofits that have focused on financial sustainability and developed viable business models in the earliest stages of their innovation’s development were more likely to have reached their milestones. This has often been because NGOs shift farmers from a charity mindset to an ownership mindset, and farmers are often willing to pay for goods and services of value.
- Sequenced and incremental acceleration support where innovators experience meaningful short-term results can build momentum for success and help innovators meet milestones at an accelerated pace.
- In some countries, women are 70 percent of smallholder farmers. Practical and actionable gender recommendations can create gender champions and facilitate gender-inclusive programming that lays the foundation for strategies that promote the participation of these women.
- In some cases, innovators have become more profitable because they have incorporated design and marketing feedback from women to address the specific challenges women face. In many cases, women using SWFF innovations have benefitted more than men because of the time savings realized in cooking, collecting water and performing other on-farm labor.
- Helping alleviate poverty is extremely challenging for SWFF innovators because they are trying to create financially sustainable enterprises while meeting the needs of people who are often neglected or ignored by water/agricultural technology providers. When farmers lack the ability to initially pay the full cost of the innovation, reasonable loan systems with a down payment have allowed farmers to get up to 10 times their original investment.
Looking Ahead: Facilitating Access to Funding
As many innovators approach the end of their SWFF award periods, working capital has become a bottleneck for growth. While some innovators have exited the program with more than enough capital for their growth over the next two to three years, others are looking for additional investment from investors, foundations, and donor governments.
One of SWFF’s major foci over the last few years of the program will be to build upon its early efforts to identify external sources of capital and, in some instances, connect innovators to those funding sources where there is a mutual alignment. Toward this end, in future years, SWFF may be combining efforts with the Powering Agriculture Grand Challenge for Development to connect social impact investors to later stage innovations at the nexus of water, energy, and agriculture.
Since 2013, USAID, Sweden through the Swedish International Development Cooperation Agency, the Government of South Africa and the Ministry of Foreign Affairs of the Kingdom of the Netherlands have invested $35 million and provided critical acceleration support to promote science and technology solutions that enable the production of more food with less water and/or make more water available for food production, processing and distribution. Additional information and research findings can be found in the 2017 Securing Water for Food Annual Report.