investment strategy for early childhood
In 2019, dandolo developed an investment strategy for a major philanthropic organisation to help them break cycles of disadvantage in Australia.
Disadvantage in early childhood can have a devastating impact on a person’s development, leading to life-long negative consequences for health, education and employment. This exposes future generations to disadvantage, which in turn perpetuates the cycle.
Senior consultant Tom Antoniazzi interviewed dandolo director Dr Bronte Adams AM and consultant Jade Peters about the project.
Bronte and Jade, in a nutshell, what did this project involve?
BA: This organisation had an overarching goal to break cycles of disadvantage in Australia. They knew they wanted an investment strategy focused on the development of children from conception to age four, but it was early days – they were still thinking about their priorities and were looking to move beyond talking about the problem, and there were high degrees of freedom to develop a response.
It was therefore particularly important to get clarity on problem definition and project logic: answer a number of key questions:
How do you define the problem?
What are the causal factors?
What are the options to address them?
What is the evidence for the highest impact approaches?
How do you filter down your options to a small number of smart investments?
We also encouraged them to think of their investments across the Foundation as a holistic portfolio with different risk profiles. They really liked this approach and used it to inform their investments overall, beyond early childhood education and care.
Why did this major philanthropic organisation engage dandolo?
BA: I think, as a baseline, dandolo has a reputation for bringing a lot of rigour to our thinking about each project. For this project, we were conscious of not standing back and admiring the problem which can be a trap for work around disadvantage. We wanted to deliver a rigorous framework and recommendations that would stand up to the strongest scrutiny.
We also appreciated how committed this organisation was to breaking cycles of disadvantage. We were able to take their mission on board to engage with the problem in ways that would help them achieve results within the organisation and beyond. This allowed us to ask critical questions about our own work along the way, such as “is it credible?”, “will it get through the Board?”, “will it convince stakeholders?” and “is it packaged in a way it will make a difference?”.
JP: The organisation knew we had extensive experience in the not-for-profit and early childhood sector and that we could help them develop a practical strategy to maximise the impact of their investments.
We also brought experience from a range of different policy areas and industries, which allowed us to think laterally about the complex problem of disadvantage and draw useful analogies (for example, taking the portfolio approach from finance).
Breaking cycles of disadvantage is one of the most ‘wicked’ problems in policy making. How did you handle the enormity of the problem for this project?
BA: I think the client valued the way we took a problem that was very messy and amorphous and reduced its complexity to lucidity and elegance. We did this using dandolo’s framework approach but also knowing when to accept ambiguity and move on from grappling intellectually with the problem. It’s OK to have false starts, but we find that you need to make breakthroughs early to avoid playing catch up for the remainder of the project.
To illustrate this approach, we had a few sessions to define ‘disadvantage’ where we looked at the characteristics of disadvantage and where they were most prominent. But we realised early on that categorising disadvantage by groups of people wasn’t going to solve the problem. We engaged early with practitioners around identifying potential approaches that would be more successful than previous efforts. In doing this, supplemented by our research and internal brainstorming, we identified that place-based solutions that simultaneously support people with different and complex needs were more likely to be successful than specific programs for specific people. This took us from problem definition to options for investment.
How did you approach the project?
I have talked about how we defined ‘disadvantage’ by looking at the literature and talking to experts.
The next question was how to prioritise potential investments to get the best return in terms of reducing cycles of disadvantage. We developed a number of criteria for investment based on the evidence, including ones focused on risk dimensions such as:
Short-term vs long-term investments
Low-risk investments in familiar areas vs high-risk investments in emerging areas with mixed evidence and high reward
Expanding existing initiatives that others are already working on vs trialling new initiatives
Using these criteria, we:
Shortlisted potential investments against the criteria. We picked out a handful of preferred options based on our appreciation of the organisation’s mission.
Thought about risk and implementation implications. This organisation was essentially a start-up and needed to get the strategy up quickly for a key board meeting at the beginning of the year.
What was dandolo’s impact?
JP: dandolo's value add was our ability to cut through the noise to develop an implementable investment strategy. The strategy clearly identified areas where they could play a distinct role to make a significant and long-lasting contribution to reducing disadvantage. This included:
Advocating for improved access to existing government services in maternal and child health for disadvantaged families
Supporting the early childhood and care sector to lift quality, particularly in low socio-economic areas
Leading, coordinating and evaluating the ‘place-based’ agenda
Expanding two existing early years programs
Supporting Aboriginal and Torres Strait Islander-led early learning services
Filling data and evidence gaps
We fundamentally changed the way this major philanthropic organisation thinks about maximising the impact of all investments, not just those in early childhood. Recently the organisation’s board approved a number of new investments across a range of policy areas, including early childhood, education and justice.
BA: It's a bit early to assess the strategy’s impact on breaking cycles of disadvantaged in Australia. However, as the organisation proceeds with implementation, we know they are taking a portfolio approach to make smart investments in things we know work but also higher-risk initiatives that may deliver breakthroughs. They are not making the same mistakes as other organisations, like duplicating government investment.
Why was this project iconic for dandolo?
BA: I think this project was iconic because you don’t often get the chance to work with an organisation with such huge scale and capacity and freedom to act. They were free from the constraints of government, which meant that they were more willing to engage with risk to discover more innovative ways of reducing disadvantage.
It was also iconic because we built a great relationship of trust, respect and enjoyment. We took on their mission and helped them to get their heads around the problem by reducing complexity and taking a structured approach to problem solving.