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“De-Sectoralizing” Development through the SDGs

The Millennium Development Goals (MDGs) were an effort to recognize and set measurable targets against the most pressing global challenges; the new Sustainable Development Goals (SDGs) are an expanded opportunity to comprehensively address these same challenges until they are eliminated. The SDGs, through their detailed goal and target outlines, clearly reach deeper into the heart of our global challenges than the MDGs. But beyond the specific target re-characterization and enlargement, there is a second less obvious, but arguably equally important element of the SDGs that signifies a far-reaching change in global development, namely, ‘de-sectoralization.’ The increasing interest in interconnected funding streams and integrated development solutions in the global discourse will be critical to the ultimate success of the SDGs. This emphasis on blended funding and cross-sector approaches is closely aligned with S3IDF’s mission since 2001 – to build inclusive market systems to promote equitable economic and social development.

A recent article posted on Devex, Foundations team up to help tackle the SDGs by Bill Hinchberger, highlights one aspect of this ‘de-sectoralization’ – an emergence of interwoven development capital resources through foundations actively participating in the broader development space. Traditionally, foundations have recused themselves from (and been overlooked by) cross-sector partnerships with development finance banks and governments, focusing instead on a narrower and less holistic scope of prioritized initiatives. Now, the foundations that belong to the Network of Foundations Working for Development (netFWD) and the SDG Philanthropy Platform (Hilton, Ford, MasterCard to name a few) are signaling a willingness to prioritize the SDGs through collaborative partnerships, which will help to redress the currently silo-ed capital from the unilateral streams customarily dedicated to a single foundation’s priorities.

Hinchberger quotes Bathylle Missika, Senior Counselor and Head of the Partnerships and Networks Unit at the OECD Development Center, as saying that, “[Philanthropists] need to understand the multilayered [nature of] development challenges…it takes partnerships to go from innovation to scale. If you want to impact a lot of lives, you have to partner – usually with governments.” The coupling of these coalitions with the expanded SDGs shows progression towards the re-calibration of development funding. The SDGs can be more fully addressed through merging the capital silos and coordinating blended capital structures with partners.

The process of reshaping aid in conjunction with the SDGs from the international development agencies perspectives’ is second aspect of the ‘de-sectoralization’ of development funding and goal targeting. Bill Gates indicated frustration with the current global structure of development finance, as seen in his recent article, A New Map of Poverty, a New Approach to International Aid. The article published in the Wall Street Journal highlights that, when the system was established post WWII, “major donor countries like the U.S. and international finance institutions such as the World Bank viewed poor countries and poor people as synonymous.” Thus the average income of a country was used to determine its allotted development support from other nations and institutions. But as Gates highlights, that is an outdated evaluation, and to withdraw aid (as is done once a country achieves a certain average income) based on a shaky presumption of a country’s domestic economic equality further isolates the poorest individuals within those countries. SDG 10 directly engages with this question of inequality “within and among countries,” and Gates suggests in his article that governments should seek innovative ways to increase their revenue, while donors should discuss, “adapting the aid system to account for shifting patterns of poverty.” Reevaluating broad institutional aid, as Gates posits it, is another positive step towards a recalibration of aid which is more inclusive, collaborative, far-reaching and ultimately capable of achieving the SDGs.

While Gates seeks to redefine institutional aid with the help of the SDGs, the goals themselves demonstrate the international recognition of the necessary intersection of the priorities, such as is outlined in Target 2.3:

By 2030 double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists and fishers, including through secure and equal access to and, other productive resources and inputs, knowledge, financial services, markets and opportunities for value addition and non-farm employment.

Where the MDGs fall short, the lack a co-mingling of single targets to address multiple goals, the SDGs flourish. Target 2.3 illustrates the SDGs ambitions’ to distinguish the necessity of including objectives like financial services, markets and gender equality within an agricultural production goal, thereby expanding target and goal focus. This previously overlooked aspect of international development in the MDGs, the ‘de-sectoralization’ of goals, is as important as the ‘de-sectoralization’ of funding streams and restructuring of international aid evaluations.

S3IDF’s trademarked Social Merchant Bank Approach (SMBA), reflects these ‘de-sectoralizations’. Core to S3IDF’s process has been the use of philanthropic and development funding as a tool to mobilize local private and public capital for community-level to national-level programming that works across a range of sectors (e.g. energy, agriculture) and issues (e.g. poverty alleviation, economic growth, climate change mitigation and adaptation). The resulting blended funding structures and multi-target goals allow for cross-cutting partnerships – including governments, on-the-ground practitioners, local financial institutions, development finance banks, technology suppliers and others. S3IDF’s SMBA recognizes the importance of leveraging financing to ensure the greatest rate of social return on every dollar, impacting the most pressing social needs highlighted in the SDGs and superseding outdated country-development designations. Our work doesn’t compartmentalize funders, it includes them; it doesn’t depend upon average national income, it looks for those isolated impoverished populations globally; and it doesn’t exclusively focus on a single priority, it engages with the majority of the SDGs and more.

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There is no single way to create universal financial inclusion or gender equality to end hunger or ensure universal energy access, to build global sustainable infrastructure, or make cities safe. But the SMBA is a unique method which addresses many of the SDGs through leveraged co-financing, effectively mitigating the challenges of silo-ed funding, overlooked national inequalities, and ‘sectoralized’ goal targeting.

If you’d like to learn more about our past Programs and Projects utilizing the SMBA please visit our website here.