Annual Report 2014

Creating impact in a world of change.

Judith RodinPRESIDENT’S LETTER

2014 was a year of enormous consequence around the world. The Ebola virus raged through several West African countries; oil prices – key to countless developing economies – fluctuated, then fell precipitously; the Eurozone continued to feel recessionary pangs.

These individual events and growing trends came together – sometimes for good, sometimes for ill – to illuminate the nature of the world we live in: inextricably interconnected, increasingly fast-paced, the riches of wealth and culture passing hands faster than whole societies can blink.

This acceleration of challenges and opportunities is what fuels our dual strategic goals. We work with our grantees and partners to build greater resilience around the world, from New Orleans and Da Nang to Paris and Accra, to help communities prepare for, withstand, and transform and grow in a world where social, economic, and environmental shocks and stresses are the new normal. We’re also hard at work with our grantees and partners to advance more inclusive economies, where prosperity is more broadly shared, especially among those who face the greatest barriers to opportunity – whether by working to make energy more accessible throughout rural India, or jobs more attainable for young people in Nigeria.

Forging within and between these two goals drives our strategic approach for systemic change – not looking at geographies or problems in isolation, but instead finding the dynamic places where action may not have been possible before, or where multiple problems can be solved by one powerful solution. Many of the events of 2014 informed our ongoing work, while revealing promising new innovations and ideas across our dual goals.

This report tells in different formats the story of a world on the hinge of change, through the lens of four global trends that feel particularly important in 2014 and beyond. We take a look at two crises – around water and global employment – and two of our approaches to solve some of the challenges of our day — the increasing use of market-based solutions in philanthropy and a nascent effort to build resilient health systems.

There are many other stories we could tell, these four offer a revealing peek into the great challenges – and reasons for hope – in the world of 2014 and how The Rockefeller Foundation worked to achieve greater impact.

Thank you,

Judith Rodin

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Youth Employment Crisis

2014 marked seven years since the financial crisis that rocked the global economy. Today there are many signs of recovery from the Great Recession that followed, including improving employment numbers. But one group is still being left behind: young people.


Youth unemployment rates in the United States are already twice those of the general workforce—and they’re on an upward trend. If we don’t find opportunities for these young people soon, they’ll be on a fundamentally worse employment track for the rest of their careers. It’s a problem not just in the U.S., but around the world—and it’s affecting economies and the stability of nations.

The Rockefeller Foundation knows it’s a pressing issue, but we’re not job creators. So what is a foundation’s role? John Irons, Rockefeller Foundation Managing Director for Global Markets, shared with us what the Foundation is doing to meet this generational challenge.


The Rockefeller Foundation has been concerned with employment for decades.

Throughout the 1960s, The Rockefeller Foundation’s Equal Opportunity grants addressed employment as part of a larger effort to confront the most pressing issues impacting the lives of minorities. And in the 1970s, our Working Communities Initiative broadened that work to focus on all kinds of low-income urban communities—both of these efforts foreshadowed our goal today of building and promoting more inclusive economies.

All that history and experience notwithstanding, our commitment to the issue—and ability to help make broad, system-level change—was perhaps never tested as much as during and following the Great Recession that began in late 2008. The Great Recession revealed a new problem: While much of our prior work centered on how to make jobs better, or more secure, we now found ourselves in a world with simply too few jobs to go around.


johnYE

We needed to shift our focus and tackle employment directly—both in the United States and in developing economies, where there are huge employment challenges, partly due to the so-called “youth bulge” and other demographic dynamics and partly because of a simple dearth of opportunities.

But what could a Foundation do to help create new jobs?

It certainly wasn’t a traditional role for an institution like ours to play, but the stakes were too high not to jump into the fray.

We knew from some of our other work focused on employment and opportunity—especially Digital Jobs Africa—that we couldn’t forge a systemic approach without the support, and buy-in, of the private sector. In fact, we knew that the private sector would eventually have to lead the effort. The sooner they see bottom-line benefits to hiring disadvantaged young workers, the sooner we’ll see true, transformative change.

knack_business_app

Our learning has already shown some of what employers can do to turn the tide.

For example, many employers’ practices for screening and selecting job candidates often put youth at a disadvantage. So The Rockefeller Foundation tested a new game-based technology called Knack to compare how disadvantaged youth scored in comparison to current entry-level employees across several sectors. It turned out that more than 80 percent of disadvantaged youth scored at or above the jobholder average on at least one job.

Tools like Knack help employers to improve recruiting, uncover and develop better leaders, and—in the end—save money. Learnings like these are only a beginning. In the changed environment following the Great Recession, entire economies have to create a new normal and the more inclusive they are of young people, the better off they’ll be, for generations to come.


Related Reports & Publications:

The Future of Youth Employment | Institute for the Future The Plummeting Labor Market Fortunes of Teens | Brookings U.S. Youth Employment | The Rockefeller Foundation Youth Hold the Key | The Bridgespan Group

Next: World Water Crises

In 2014, California entered its third year of drought, threatening drinking water supplies and taking its toll on the agricultural sector, the state’s largest. Thousands of miles away, floods crippled the Kashmir region of India and Pakistan. Around the world, nearly 1 out of every 5 deaths worldwide continued to be a result of a water-related disease.

Nutrient regeneration efforts have been initiated to improve water quality with increased oxygen levels. Pictured here: Munna in Lasuriya Mori.
Photo credit: Gitika Saksena

After a year like that, it’s no wonder, then, that in January 2015 the World Economic Forum listed water crises as it’s number one global risk in terms of the impact it could cause, ranking higher than civil conflict, climate change, or financial contagions.

This designation recognized water’s role at the core of all human activity—which is why water cuts through every single initiative and issue that The Rockefeller Foundation pursues. This certainly wasn’t novel to 2014, but the year’s events—and the prospects for growing competition for freshwater—put new emphasis on finding solutions for a range of water-related challenges.

Each year, more than 115 million people worldwide are impacted by flooding.

In some parts of the world, the problem is too much water. Over the last 40 years, the average number of people exposed to yearly flooding in South and Southeast Asia more than doubled, and more than 400 million people in Asia are expected to be vulnerable to flooding by 2025—an issue that is benefiting from innovation through Asian Cities Climate Change Resilience Network (ACCCRN) cities such as Surat. Each year, more than 115 million people worldwide are impacted by flooding, with costs estimated at $19 billion in economic damage.


fredWATER

In other parts of the world, the problem is too little water, or too little clean water, and increasing competition for these resources. By 2030, global water demand is expected to exceed current supply. More than 20 million people in the Sahel and Horn of Africa are affected by food insecurity as a result of water scarcity.

By 2030, global water demand is expected to exceed current supply.

These challenges have influenced the strategies for almost every Rockefeller Foundation initiative, with particular relevance for those with a primary focus on building resilience.

For example, in 2014 the Global Resilience Partnership, a collaboration between The Rockefeller Foundation, the United States Agency for International Development, and the Swedish International Development Cooperation Agency that works to build resilience in some of the world’s most vulnerable places, launched a competition to solicit projects that solve pressing development challenges with resilience-building solutions. Among the proposed solutions  were promising ideas and technologies focused on distinct water-related challenges: harnessing road flooding to harvest and retain water for agriculture in the Horn of Africa, or using local data to develop cyclone and flood satellite-based early warning systems in Uganda.

Giving her sheep water
Hapsatou Ka, a community-based solution provider, provides water to her sheep as a part of her daily morning routine. Photo credit: Morgana Wingard, USAID

Yet despite the awareness of potential for water crises globally, some cities are still not fully preparing for the extent of water threats. Cities applying to be members of 100 Resilient Cities, for example, seem to have dangerously underestimated their flood risks. “When we overlaid the cities that have applied in the first two rounds of the 100 Resilient Cities challenge on to a topographical map, we found that nearly a quarter were underreporting their chance for flooding,” said Michael Berkowitz, Managing Director for The Rockefeller Foundation and President of 100 Resilient Cities. “One thing the 100 Resilient Cities strategy process will help uncover is exactly where those threats live, and we’ll work with cities to embrace water as an asset to their social and economic viability, rather than something they try unsuccessfully to keep out.”

Nguyen Can Chau.
“Sometimes, it would flood twice a day,” recalls a local farmer during ACCCRN’s Erosion Management Project in Vietnam. Photo credit: Lisa Murray

Looking forward, it’s clear that a key water challenge on the horizon is the depletion of freshwater resources and the competition for what remains. In the fall of 2014, the Foundation began a rigorous analysis to see how it might build an initiative to more specifically address this problem, with a key focus on ensuring that rights to water allocation or the management of natural flows of water do not disadvantage poor or vulnerable populations.

While the initiative is in the early stages of development, Fred Boltz, Managing Director of the Rockefeller Foundation’s revalue ecosystems work, says the big question for 2015 and beyond is “how do we as a global community address issues of water scarcity, flooding, or clean drinking water in socially and economically inclusive ways?”


Related Reports & Publications:

Revaluing Ecosystems | The Economist Revaluing Ecosystems: Visions For a Better Future | The Economist Intelligence Unit The Urban Resilience Summit: Innovation, Investment, Collaboration | The Economist Road to Resilience: A Guide to Leading a Resilient Life | TARU

Next: Market Based Solutions

As global challenges continued to mount in 2014—and the ambitions of philanthropies, development agencies, and other social actors continued to rise—one thing became exceedingly clear: the resources available to those very actors just isn’t enough to do the job.
Stitching under smart power lamp. Given that gap between our goals and our resources, The Rockefeller Foundation worked across a number of initiatives during 2014 to leverage the participation of the private sector in pursuit of our mission.

We talked to Saadia Madsbjerg, The Rockefeller Foundation’s Managing Director for Innovation, and Ashvin Dayal, The Rockefeller Foundation’s Associate Vice President and Managing Director, about how the work’s getting done.


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Given the size of the “need gap” that we hear so much about, what is there, really, for foundations like Rockefeller to do?

SM: Well, in one, purely monetary sense, not much. The dollar amounts add up very quickly, if you’re looking at the wide range of challenges that our sector exists to address—health, environmental, economic, and on and on. There’s just no amount of philanthropic capital that can now—or ever—make those issues disappear. But, in another way, there’s a lot that we can do—but only if we effectively partner with and channel the energies, expertise, and resources of the private sector. That’s the idea behind our Zero Gap initiative, to uncover new financing vehicles, like our early support to develop the social impact bond—to power social change. Our charge is to make this an obvious proposition for our friends in the private sector, not something cordoned off under the umbrella of corporate social responsibility. When we make corporate attention to our goals a net positive for their bottom lines, that’s when we’ve done our job. The same concept applies for the investor class: there’s an incredible hunger in that community for investments that are both financially savvy and socially impactful. Our work is to make those goals one in the same.

ashvinMB

And how does that idea show up not only through our Zero Gap portfolio but across our entire portfolio of work?

AD: These ideas are at the heart of so much of what we do, including, for example, our newly launched Smart Power for Rural Development initiative, which aims to electrify 1,000 rural villages in India to spur economic growth. It’s not at all an exaggeration to say that this work couldn’t exist without the collaboration—and, yes, the resources—of multiple private sector partners. Here’s the thing about Smart Power: what we did was create the model, whereby working with telecom companies with significant energy needs as anchor tenants, we can make it profitable for smaller-scale energy-services companies using alternative energy sources such as solar, wind and biomass to bring reliable, twenty-four hour electricity to households and small businesses in rural areas.

Installing the final module on a solar panel.

We created a new organization—Smart Power India—to bring this all together but it’s the private sector that populates both “ends” of the service we want to provide. On the one hand, we’ve sought out representatives from telecom and other growing sectors with significant energy needs—they’ll serve as the anchor tenants and contractually guaranteed customers for the energy we want to provide to energy-starved rural areas. On the other hand, we’re working to make it profitable for smaller-scale energy services companies (ESCOs) to provide the electricity that those tenants need. Meanwhile, there’s the environmental benefit of having invested in cleaner sources of energy. This is a win-win-win solution for the poor and vulnerable, with all sides of the deal facilitated by private enterprise.

What do we hope to see as the future of this kind of collaboration?

SM: There’s no question that the political winds, in the U.S. and around the world, point toward a growing awareness of issues like income inequality—concerns that we at The Rockefeller Foundation share. Whether it’s through focused initiatives like our work to connect smallholder farmers to more efficient markets to ensure less post-harvest waste, or the more than fifty companies joining the 100 Resilient Cities’ platform to offer cities a set of curated resilience-building tools, we’re continuing to find ways to enlist private enterprise and capital in service of our work to build inclusive economies.


Related Reports & Publications:

Leveraging Telecom Towers to Address Energy Poverty and Secure Livelihoods | The Rockefeller Foundation The Power of Impact Investing | Judith Rodin & Margot Brandenburg De-Centralized Electricity in Africa and Southeast Asia | Accenture Peterborough Social Impact Bond Reduces Reoffending by 8.4%; Investors on Course for Payment in 2016 | Social Finance Limited

Next: Ebola and the Need for Resilient Health Systems

Ebola and the Need for Resilient Health Systems

After the Ebola virus wrought havoc across West Africa in 2014, smart leaders across the world have rushed to reassess their own health systems. How susceptible, many wonder, are their countries to this kind of outbreak? And how well are they built to keep true disaster at bay?

Ebola Health Worker
Photo credit: Morgana Wingard/ USAID

To help answer those questions it’s helpful to look back at Liberia just before the Ebola outbreak.

Before the outbreak, Liberia had been steadily recovering from 14 years of stop-and-start civil war, ending in 2003. It was the first African country to achieve a crucial global development goal—reducing child mortality by two-thirds from 1990 levels—in part by doubling rates of childhood immunization. The country also made progress toward other important milestones, including reducing deaths from H.I.V., malaria, tuberculosis and pregnancy or childbirth.

But when Ebola struck, Liberia’s fragmented health system collapsed almost immediately. What was the system missing? And how could it have performed better under pressure?

In a word: resilience.

The five characteristics of a resilient system—already well understood in fields like biology and engineering—are increasingly relevant, and necessary, within the realm of health.  Resilient systems share several characteristics. One is awareness, which in the case of health systems means strong disease surveillance. The Rockefeller Foundation’s seminal work to establish disease surveillance networks has supported the building of transnational detection, monitoring, and communications systems in Asia and Africa to strengthen disease prevention and mitigate the impact of disease outbreaks.

Health care practitioner Thuong Thi My Dung holds a leaflet which shows measures households can take to prevent dengue fever outbreaks. The leaflets, along with posters and other educational materials, are distributed in local communities to raise awareness of dengue fever prevention measures.
Health care practitioner Thuong Thi My Dung holds a leaflet which shows measures households can take to prevent dengue fever outbreaks. Photo credit: Lisa Murray

A second characteristic is the ability to adapt. We saw this in Nigeria: When Ebola first surfaced, leaders redeployed polio eradication teams to focus on Ebola. With polio “season” over, G.P.S. tracking and contact-tracing developed for polio were deployed to monitor Ebola, while community leaders raised awareness.

A third characteristic is diversity: the ability to address a wide range of challenges. This is most often seen in countries that have prioritized universal health coverage, because they are more likely to have health workers, facilities and other readily accessible resources that can be the difference between life and death at the onset of a system-wide crisis.


michaelHEALTH

Fourth, resilient systems are self-regulated, meaning that when one aspect of the system is tested, another part can compensate. This kind of balance can keep health systems like Liberia’s on their feet.

Finally, resilient systems are integrated: information is shared across different levels of government. For example, New York City, which in this century alone has experienced a terrorist attack, a blackout, and Superstorm Sandy, prepared for Ebola far in advance of an actual case. With each crisis, the city enhanced its resilience. So when a volunteer doctor returning from West Africa checked himself in, city leaders quickly mobilized, freely sharing information with the public to explain their Ebola management plan, providing guidance as well as assurances of public safety. This integration allowed for the single case to be successfully treated.

Health Researcher
Photo credit: David Rochkind/ USAID

When a resilient system is in place, communities, cities, countries and companies alike are prepared to yield a “resilience dividend“—benefits that redound regardless of crises.

One lesson from Ebola is clear: in a resilient health system, the whole is greater than the sum of its parts. Liberia continues to face challenges in the wake of the Ebola crisis, ranging from an uptick in contagious diseases like the measles to a rise in malnutrition. But the country is fighting back: through its wide-ranging Post-Ebola Health Investment Plan, the Liberian government is focusing on recruiting and training local health workers; reinforcing its infrastructure; and investing in labs needed to quickly detect and identify dangerous diseases. With the help of the global community, and using the lessons of resilience, there’s a hopeful path forward for Liberia.


Related Reports & Publications:

Planetary Health | The Economist What Is a Resilient Health System? Lessons From Ebola | The Lancet A Human Lens on Informal Workers | IDEO.org Safeguarding Human Health in the Anthropocene Epoch | The Rockefeller Foundation-Lancet Commission

About The Rockefeller Foundation in 2014

FoodThe Rockefeller Foundation has offices in New York, U.S.; Nairobi, Kenya; Bangkok, Thailand; and Bellagio, Italy.