Development Innovation Ventures

$45m to identify and scale exceptional development programs to reach millions of people
A woman draws water from a communal water point, supplied with a chlorine dispenser from Dispensers for Safe Water (a grantee of Development Innovation Ventures [DIV]). Image courtesy of DIV.

What’s the problem?

Although the world has made huge progress in reducing extreme poverty, the World Bank estimates that 648 million people worldwide still live on less than $2.15 per day.1 More than 1 in 4 people globally do not have access to safely managed drinking water.2  Globally, 8% of children in low-income countries die before reaching their 15th birthdays, which is more than thirteen times the death rate of children in high-income countries.3

Traditional development organizations have funded a broad range of programs, but some of the most effective interventions are relatively new and lack a clear pathway to reach the people who need them. Rigorous evaluation can determine whether a new approach has the potential to be highly impactful before development organizations and private sector companies invest millions of dollars to bring it to scale.

What are we funding?

Development Innovation Ventures (DIV) is a program inside the United States Agency for International Development (USAID) that invests in early-stage organizations and projects in global health and development. DIV invests heavily in evidence4 and incentivizes collaboration across innovators and researchers.5 Over its 12-year history, DIV has sourced, funded, and tested a broad range of innovations using a system that ties the amount of funding to the cost-effectiveness, level of supporting evidence, and potential scalability of an intervention. A paper by DIV leadership Michael Kremer and Sasha Gallant, along with co-authors Olga Rostapshova and Milan Thomas, found that DIV’s early portfolio has returned over $17 in social benefit for each dollar awarded.6

DIV makes four types of grants:

  • Stage 1 (Pilot) grants support initial small-scale implementation of new ideas in low- and middle-income countries to test user demand, feasibility, impact, and financial viability (up to $200,000).
  • Stage 2 (Test and Position for Scale) grants support rigorous testing to determine impact or market viability (up to $1,500,000).
  • Stage 3 (Transition to Scale) grants transition proven approaches to widespread scale in new contexts or new geographies (up to $15,000,000).
  • Finally, DIV makes Evidence Generation grants to support research and evaluation of widely-used development approaches that are not necessarily innovative, but lack sufficient evidence of impact and cost-effectiveness (up to $1,500,000).

With $45,000,000 in Regranting Challenge funding, DIV will expand their grantmaking through Stages 1, 2, and 3 grants and launch a new “Stage 4” initiative. Stage 4 grants will help some of the most promising programs in DIV’s portfolio scale up through partnerships with Missions and Bureaus across USAID. They will provide partial match funding for other USAID spending, with the aim of expanding the use of innovations that have been rigorously demonstrated to cost-effectively improve development outcomes.

Why are we funding it?

Among other successes, DIV’s funding was key to launching Evidence Action’s Dispensers for Safe Water (DSW) program, a highly cost-effective program that we have since funded via our partner GiveWell. In 2012, DIV awarded Evidence Action a $7.4 million Stage 3 grant to scale its chlorine dispensers model. Following initial RCT results demonstrating that DSW had much higher usage rates than other existing water treatment interventions and that those usage rates remained high over the long run, DIV provided support for DSW to reach more beneficiaries while continuing to generate high-quality evidence for the program’s impact on child mortality.

“We estimate that the Dispensers for Safe Water program across Kenya, Malawi, and Uganda is six to seven times as cost-effective as providing unconditional cash transfers, the benchmark against which we typically compare programs.” — GiveWell

DIV has also supported programs in early childhood education, social welfare reform, and routine immunization, among others. We hope that our funding enables DIV to identify and test new interventions, and helps DIV to scale the most cost-effective solutions from its portfolio – like Dispensers for Safe Water – across USAID, while attracting complementary funding from other parts of the Agency. We view this as a hits-based opportunity: Stage 4 grants have never been tried before, and it is possible they will not work, but there is enormous potential for impact if they do.

DIV has an exceptional track record, and we have high confidence in their leadership team, including co-founder and Nobel Prize-winning economist Michael Kremer. We hope this funding will support DIV — and the rest of USAID — as they work to bring exceptional programs to millions of people. 

What would success look like?

We hope to see DIV’s “Stage 4” initiative scale several high-impact programs within other parts of USAID. A breakout success would include further organic uptake of these approaches across USAID as different parts of the Agency become more familiar with them. We’re also excited about the possibility of another major success story whereby DIV’s evidence generation and Stage 1-3 grants help to identify and scale an additional cost-effective intervention like DSW.

1 These are 2017 international dollars, which adjust for inflation and differences in purchasing power between countries. The $2.15 (in 2017 international dollars) international poverty line was updated in 2022.
3 Data from United Nations Inter-agency Group for Child Mortality Estimation via Our World in Data.
4 40% of grants have included funding for randomized controlled trials.
5 72% of DIV grantees had at least one partner, and 40% had two or more partners.
6 “Is Development Economics a Good Investment? Evidence on scaling rate and social returns from USAID’s innovation fund” (University of Chicago, 2021).