The relaunch of DIV Fund on Thursday came after a U.S. foreign-aid funding freeze eliminated a division of the U.S. Agency for International Development, according to organizers. The new structure is designed to preserve the division’s international development work while removing it from the direct control of U.S. government programs.
Organizers said DIV Fund is the nonprofit version of USAID’s Development Innovation Ventures and that it has been able to restart because of $48 million raised from two private donors. They described the effort as a rare continuation after a period when foreign funding was frozen and the administration moved to dismantle parts of the agency that had delivered U.S. foreign aid for decades.
Speaking at the event, Michael Kremer, DIV Fund’s scientific director and a Nobel Prize-winning economist, said the removal of U.S. government support was severe but that private giving cannot fully replace what was lost. “The loss of US government support is a huge blow,” Kremer said. “It’s wonderful that private funders have stepped up to help try to fill part of that gap but it’s only filling part of the gap.”
DIV Fund’s organizers said the fund’s model is built around identifying comparatively low-cost, efficient development interventions and then supporting efforts to expand them to scale. They said this is a different approach from programs that concentrate on areas such as HIV treatment or famine response, which they described as typically requiring larger budgets. The nonprofit also said the fund’s fundraising strategy draws on relationships and a focus aimed at producing measurable results.
Organizers pointed to prior philanthropic support DIV had received while it was still part of USAID, including a $45 million grant from Coefficient Giving, a San Francisco-based funder that is now an anchor donor to DIV Fund. They said the other donor is anonymous. Kremer also described an emphasis on program sustainability—focusing on interventions that may draw revenue or receive support from local governments rather than depending long-term on donor-country funding, a path he said becomes more important when foreign-assistance cuts extend across multiple historic donor countries.
The DIV Fund said it has already allocated $20 million of its $48 million total to former recipients, leaving $28 million available for future grants. It said it plans an open call for applications this year, describing the process as one that can generate new ideas. Outside the structure of USAID, DIV Fund said it wants to work with major donors such as the World Bank and with other countries to take up recommendations and develop similar research funds.
At the same event, Otis Reid, the executive director of Global Health & Wellbeing at Coefficient Giving, argued that as official foreign assistance shrinks, donors face a question about effectiveness. “It just matters a ton if that money is going towards things that are highly effective or moderately effective or not effective,” he said. “And I think DIV can play a really crucial role in moving things from the not effective to very effective part of the spectrum.”
DIV Fund’s approach often relies on research that uses randomized control trials, a design it described as part of how many interventions have been validated. Kathryn Oliver, a professor at the London School of Hygiene and Tropical Medicine who studies how evidence informs policy, said randomized trials are valuable for answering questions about effectiveness compared with usual treatment, but she said they do not provide the full range of information policymakers need. “It is the most robust research design for answering questions about the effectiveness of interventions compared to usual treatment, absolutely,” Oliver said. “But it is not the most robust design for answering any other kind of questions,” including whether populations find approaches acceptable or how interventions compare to other options.
While the nonprofit is restarting independently, its leaders said the question of future engagement with the U.S. government remains open. Co-founder Sasha Gallant said DIV Fund is open to working with the U.S. government. Gallant’s comments came against the backdrop of remarks by Secretary of State Marco Rubio, who characterized USAID as corrupt, costly and ineffective, and of the broader shift organizers described as tearing down an agency that delivered U.S. foreign aid for 60 years.
Congress recently allocated $50 billion for various foreign assistance programs, the report said, which organizers described as more than the administration requested. Gallant said DIV Fund would not replace funding for large programs already supported by extensive evidence or for expensive but valuable humanitarian responses, but she said the nonprofit hopes donor countries continue to fund those broader efforts. “We absolutely should be delivering en masse the things that increase people’s livelihoods and save their lives and keep kids in school,” Gallant said.