This piece is part of a 3-part blog series looking at how GSG National Partners are partnering with local research institutes and think tanks to build the domestic evidence base for impact investing. Learnings are part of a two-year project funded by IDRC and supported by GSG Impact and On Think Tanks (OTT).

Building Consensus for Impact Investing in Colombia with a Leading Local Public Policy Think Tank

In this blog, we delve into NAB Colombia's (the GSG National Partner) collaboration with Fedesarrollo (Fundación para la Educación Superior y el Desarrollo), one of the country’s leading public policy think tanks. Through the collaboration, the Colombia NAB and Fedesarrollo co-developed a research and advocacy strategy that garnered input from diverse populations and regions of Colombia, while demonstrating to policymakers that many of Colombia’s existing policies already align with the practices and principles of impact investing.

KEY HIGHLIGHTS

• The collaboration between Colombia NAB and Fedesarrollo sought to integrate impact investing into public policy. Their advocacy strategy focused on presenting impact investing as commensurate with “the will of the people” and as an opportunity to consolidate policies that already demonstrated alignment with the sector.
• The GSG National Partner consists of impact investing practitioners, yet the local think tank was not familiar with the concepts and principles of impact investing. To address this challenge, the National Partner established a research task force to facilitate the knowledge transfer on impact investing topics and ensure more effective communication with Fedesarrollo.
• Fedesarrollo’s robust network and reputation in the public policy domain not only facilitated gathering diverse feedback from different regions and stakeholders but also bolstered the GSG National Partner’s credibility among diverse populations and government actors.
• The research collaboration with the local think tank established a strategic alliance, positioning the GSG National Partner as an influential actor vis-a-vis the new government.

Last year, ahead of a major presidential election, the Colombia NAB recognised an opportunity to elevate impact investing to the top of the national agenda. As part of an IDRC-funded project, the Colombia NAB collaborated with the well-respected local think tank, Fedesarrollo, to develop a set of policy recommendations for the newly-elected government that would strengthen the country’s impact investment market.

Introducing the Concept of Impact Investing to Colombia’s Public Policy

Since 2015, Colombia has been actively promoting public innovation to enhance public policies. Its National Development Plan (2018–2022) recognised public innovation as a vital factor for sustainable development and emphasised the importance of bolstering institutional conditions to eliminate barriers to innovation within the public sector. The Plan integrated Results-Based Financing (RBF) mechanisms — whereby investors receive a financial return in line with the achievement of predefined outcomes — as an innovative social policy strategy to strengthen employment.

The country has therefore been an early pioneer of RBF in Latin America, implementing other related strategies too, including Social Impact Bonds (SIBs) and performance-based contracts encouraging the inclusion of vulnerable people in the country’s labour market. The Results-Based Payment Fund (Fondo de Pago por Resultados, FPR) was established by the government in 2019 as a public innovation platform to identify best practices in the investment of public resources through results-based payment mechanisms and facilitate the development of new SIBs.

Despite the implicit alignment of existing policies with impact investment principles, legal and regulatory barriers have hindered the full implementation of impact investment programs.

In response, the Colombia NAB conceived of a research project that would help to re-introduce impact investing as a key policy strategy that could be incorporated into the new government’s National Development Plan (2022–2026).

Collaborating with a Well-Respected Political Think Tank

Recognising the ambitious public policy goal ahead of them, the GSG National Partner opted to enlist the support of a research partner who was well known and respected for their policy and economic research, and experienced in turning economic analysis into policy recommendations. Since its establishment in 1970, Fedesarrollo has been involved in driving Colombia’s socioeconomic development through comprehensive research.

At the start, it was challenging for the GSG National Partner, an impact investment practitioner-based organisation, to manage a project with a think tank grounded in applied research methods. To balance the rigour of the research with the practical nature of impact investing, the GSG National Partner established a research task force to facilitate the transfer of knowledge on impact investing topics and ensure more effective communication with Fedesarrollo through periodic meetings.

20 people joined the task force, half of them are the GSG Impact Partnership members and others from other market-building organisations, UNDP, a BCorp business, and government representatives. The GSG National Partner provided access to information and guidance on impact investing practices, including relevant studies and documents shared through a dedicated folder, invitations to insightful webinars and talks, and connections with key figures in the dynamic impact investing ecosystem.

The first steps of Colombia NAB and Fedesarrollo’s joint study involved mapping the Colombian impact investment ecosystem, identifying key players, and the main development challenges of each region in Colombia through interviews and regional meetings. With extensive knowledge of existing legislation and regulations and a strong network among both the government and private sector, Fedesarrollo played a vital role in bringing together the relevant stakeholders for the interviews and meetings.

Recognising the importance of representing public sentiment, they also worked together to ensure the project captured a wide array of voices from different populations and regions in Colombia. As part of their co-designed project, the GSG Impact Partnership representatives spent several months travelling across different regions of Colombia to gather feedback from stakeholders in representative regions of the country. In the end, this enabled them to present policy recommendations that were not only shaped by a well-regarded policy think tank, but also represented the views of diverse populations around Colombia.

Through its collaboration with Fedesarrollo, the GSG National Partner positioned itself as a trusted leader of impact investment vis-a-vis the new government. Through the project, the GSG National Partner was able to build bridges between the public and private sectors through several efforts, ranging from capacity-building for public officials, engaging in high-level discussions, and contributing to the adoption of a national impact investment strategy.

This blog is part of a series featuring collaboration case studies of the GSG National Partners from Ghana, Colombia, and Nigeria. Through these inspiring stories, we showcase the power of local GSG National Partners-researcher collaborations and knowledge-sharing in unlocking the full potential of impact investing, paving the way for a more sustainable and equitable future.

Stay tuned for more impactful narratives showcasing the transformative power of collaboration!