The Bill and Melinda Gates Foundation is adding talent to create innovative financing structures for what it calls a “critical juncture” for international development. Nick O'Donohoe, most recently the head of Big Society Capital in the UK, will join the world's largest private foundation in January as senior adviser for blended finance.
The new UN-backed sustainable development goals, aimed at ending poverty and improving the lives of the poor, come with an estimated annual price tag of $4 trillion. Blended finance, or the use of philanthropic and public funds to mobilize private capital for development, is increasingly viewed as critical to expanding the pool of capital from today's $130 billion in official development assistance.
“Innovative finance models offer huge opportunities to improve the lives of the world’s poorest people and Nick’s experience and achievements leading the world’s first social investment institution of its kind will help deepen our engagement in this area,” said Joe Cerrell, managing director for global policy and advocacy at the Bill & Melinda Gates Foundation.
In the past decade, the $70 billion charitable foundation has carved out a $1.5 billion portfolio for below-market loans, equity investments, guarantees and other program-related investments. The investments finance solutions to challenges in global health, financial services for the poor, and education. With PRIs, the foundation has helped “crowd in” private capital for blended finance vehicles such as the $25 million African Agriculture Capital Fund.
“New ways of crowding in private capital will be a crucial part of the future of development finance,” the Gates Foundation said in a statement.
With decades of experience in private banking and social finance, O'Donohoe was tapped to launch and run Big Society Capital in 2011. The UK government-backed social bank made over $300 million in new finance available to UK-based social enterprises; more than $200 million has been drawn down. He will join the Gates Foundation team in London where he will originate, execute, and manage blended finance transactions.
“The Gates Foundation has been at the center of innovative financing for development for more than a decade, helping to establish two of the most successful examples – the Global Fund to fight AIDS, TB and Malaria and Gavi, the Vaccine Alliance,”O'Donohoe said in a statement. “It is uniquely positioned to continue to develop innovative ways of investing philanthropic capital and I look forward to doing what I can to help catalyze investment to improve health and economic opportunities for the world’s poorest.”
The Gates Foundation is a financial sponsor of ImpactAlpha.