DIV evaluates innovations against three criteria:
- Rigorous Evidence of Impact: The rigorous evidence of impact supporting the innovation or the plan to collect such evidence
- Cost-Effectiveness: The innovation's potential to achieve more development impacts per dollar relative to alternative ways of achieving those impacts
- Potential for Sustainable Scale: The innovation's potential to scale sustainably through the public and/or private sectors, if proven effective
Read below about each criterion and how they are applied in each funding stage.
Rigorous Evidence of Impact
Many pilots never reach scale because they do not sufficiently focus on collecting rigorous evidence of success. The DIV model emphasizes testing potential solutions and rigorously evaluating impact - often through randomized controlled trials or other rigorous approaches, as appropriate - to identify what works and what does not, and to help scale only those solutions proven to produce results.
DIV looks for ideas that can produce more results per dollar spent than their competitors. We owe this to the communities with which USAID works, but we also believe this matters to ensure American taxpayer dollars are used as wisely as possible. As a function of both impact and cost, innovations can be more cost-effective if they either achieve more impact at the same cost as alternatives or achieve comparable impact at lower cost than alternatives.
Potential for Sustainable Scale
For innovations on a public sector pathway to scale, strong applicants show they are likely to compel host country governments, multilateral donors, or other public sector players to scale the innovation. They discuss how targeted outreach and rigorous evidence of impact and cost-effectiveness will result in action. For innovations that expect to achieve widespread adoption through private sector commercialization without long-run subsidy provide evidence that: production costs and sales prices enable producers to make profits; customers demand and are willing to pay for the product or service; and development outcomes occur. Such applicants plan to achieve commercial viability themselves and/or credibly demonstrate that other businesses will scale their innovation.
How do we think about these criteria in the context of each funding stage?
From our Annual Program Statement (available in Resources), which all applicants should review in detail:
Stage 1: Proof-of-Concept / Initial Testing ($25,000 to $150,000, up to 3 years)
Introduce an innovation to target customers/beneficiaries in a developing country context to gain an early, real-world assessment of potential for technical, operational, organizational, and financial viability.
- Clear articulation of the innovation’s potential to generate significant improvements in specific development outcomes per dollar invested, more cost-effectively than alternative existing approaches. Although Stage 1 applicants are not expected to already have rigorous evidence of impact of the innovation, the theory of change articulated should be informed by the broader body of evidence related to the specific development outcomes the applicant proposes to affect.
- Carefully selected tests to assess the potential for the innovation to work in the field or to help improve the innovation, make it more cost-effective, build evidence on outcomes, refine an implementation strategy, and/ or increase adoption. Testing should inform the potential for long-term financial and operational sustainability and should include well-defined metrics to judge success (with relevant targets).
- An implementation plan that demonstrates awareness of important risks, obstacles, and implementing opportunities, including external market factors in commercial scaling scenarios. The plan should clearly demonstrate a viable market for the innovation, with the potential to reach millions of people at scale.
- A plan to track the full costs of implementing the innovation, estimate the costs at scale, and compare these costs with those of existing alternative practices.
- A project team with relevant experience and expertise to execute the proposed plans. Clear roles, demonstrated capabilities, and a corresponding level of effort (percent of full time) to ensure successful implementation. The team may include relevant partners who play critical roles to facilitate testing and growth.
Stage 2: Testing and Positioning for Scale ($150,000 to $1.5 million, up to 3 years)
Rigorously test promising innovations that 1) already have some proof-of-concept to measure development impact and cost-effectiveness and/or establish market viability, and 2) through implementation at sufficient scale, generate lessons to inform paths to further scale and sustainability, for example through operational refinement.
- Clear articulation of the innovation’s potential to generate significant improvements in specific development outcomes per dollar invested, more cost-effectively than alternative existing approaches. In articulating the potential impact of the innovation, the applicant should draw on evidence of prior success and include a description of the positive results and scale of their earlier work, and estimates of unit costs.
- Carefully selected tests that generate information relevant to the applicant organization and key partners to encourage further scale, including credible empirical evidence on the development impact of the innovation, establishing a clear causal link between the innovation and the development impact. This testing must credibly distinguish the impact of the innovation from potential confounding factors.
- An implementation plan that allows for testing and refinement to better position the innovation for scale and/or adapt the innovation for new contexts. This may include identifying strategies to address barriers to scale-up (legal, political, regulatory, etc.); conducting financial analyses of the potential to commercialize; and/or developing relationships with potential scaling partners. The plan should clearly demonstrate a viable market for the innovation, with the potential to reach millions of people at scale.
- Identification of financial inputs that will be required to scale the innovation over time, and a plan for how to obtain such resources. This includes strategies for cost recovery in the case of innovations that are intended to scale commercially, or fundraising and partnership plans for those innovations with a public pathway to scale. Applicants should discuss how they will use their Stage 2 project to catalyze either growth of the innovation directly or further investment that will allow for future growth.
- A plan to track the full costs of implementing the innovation, estimate the costs at scale, and compare these costs with those of current practices.
- A clear articulation of relevant metrics or key performance indicators which the applicant will track to demonstrate progress against project objectives.
- Project team with relevant expertise and capabilities to conduct the proposed activities and vision for how the organization will identify the resources, recruits, and/or partners required to scale the innovation, particularly if the organization is not well-suited to perform the tasks required to scale the innovation post-award, itself. Ideally, applicants will provide evidence of commitments from partners. Applicants are encouraged to include anticipated project partners in appropriate roles in the proposed activities.
Stage 3: Transitioning Proven Solutions to Scale ($1.5 million to $15 million, up to 5 years)
Adapt a tested and proven innovation to new contexts and to engage additional partners who will help scale the project beyond DIV support, but for whom greater evidence of success and a more established track record are needed.
- A clear case that the innovation has the potential to generate significant social impacts per dollar invested, either by sustainably reaching millions of people or by dramatically improving lives for a significant proportion of those affected by a development challenge affecting smaller numbers of people . This case should include a discussion of the existing evidence base for the proposed solution and external validity (generalizability) of such evidence to new contexts.
- A scaling plan for building the necessary operational capacity, systems, partnerships, and financial support to drive the innovation towards sustainability and scale. Scaling may include expanding the innovation to a new context/geography and/or executing the innovation within the systems of potential scaling partners. This plan should include a discussion of how the applicant will involve and work with potential scaling partners (e.g., investors, existing large commercial firms, or developing country governments) to adapt the innovation to suit their context, and an assessment of whether the innovation can continue to operate at low cost and high impact in new and larger contexts, and of strategies to drive down costs while maintaining quality. The plan should discuss how new challenges or cultural, political, environmental considerations may affect the success of the innovation as it scales, and allow for refinement and iteration.
- A clear discussion of how DIV funds are necessary to the scaling process and how DIV funding will be catalytic in pursuing this scale path. This discussion should identify financial inputs that will be required to scale the innovation over time, and a plan for how to obtain such resources.
- A plan to track the full costs of implementing the innovation at scale and compare these costs with those of current practices. This plan should include a comparative assessment of the cost of implementation in new contexts and a description of systems used (or planned for use) to track costs.
- Project team with the capability to implement the proposed activities and skills necessary to guide the solution on a credible path to meaningfully improving development outcomes within the next decade. A successful Stage 3 project team will include anticipated project partners in appropriate roles in the proposed activities, to generate relevant implementation lessons of the model at scale and support sustainability of the model at scale beyond DIV funding support.