USAID Private Sector Engagement
The private sector plays a critical role in reducing the need for foreign assistance, providing financial, in-kind, and human resources to organizations who deliver development activities across the globe. Despite its importance, many development organizations lack an understanding of how to effectively engage with the private sector to create better outcomes for communities.
In an effort to better understand and utilize Private Sector Engagement (PSE), USAID partnered with the Pulte Institute at the Unviersity of Notre Dame, Purdue University, and Catholic Relief Services to implement an evidence and learning strategy to help its staff better align themselves with their private sector counterparts.
Phase 1 of the multi-year project, which is supported via a buy-in from USAID LASER PULSE, will focus on filling critical knowledge gaps and answering USAID-identified priority questions, such as: what is the effectiveness of different forms of PSE; what external factors drive effective PSE; and what PSE relationship qualities influence results?
A team of Notre Dame undergraduate and graduate students, directed by Pulte Institute Evidence and Learning Director Paul Perrin, conducted an extensive desktop review, identifying tangible evidence (e.g. case studies, technical reports, etc.) of USAID PSE in achieving sustainable development goals. This led to the creation of an Evidence Gap Map, which consolidates what is known and unknown about PSE and can be used as a tool for decision-making.
A Harmonizing Indicator tool, led by Melissa Paulsen, Director of the Entrepreneurship and Education Division at the Pulte Institute, was created to deepen the understanding between USAID staff and private sector partners regarding motivation, monitoring and evaluation, as well as engagement opportunities. The tool aligns U.S. Standard Foreign Assistance Indicators with popular ESG frameworks, such as GRI and SASB.
Consortium partner Purdue University led a perspective study to lay the groundwork for understanding effective partnership development and efficacy, as well as a failure risk analysis, which examines the end-to-end process used to match private sector partners with engagement needs.
The project is currently in Phase 2, which focuses on consolidating what was learned and expanding the initiatives in Phase 1, as well as further building the evidence base for PSE, including around the application and impact of PSE in humanitarian assistance.