The PSE Toolbox contains the most important tools, guidelines and websites that help you through the project cycle while engaging with the private sector. You find them below or in the boxes at the right. For inputs on particular thematic areas, check out the menu with specific topic pages on the right side or contact the E+E team (See box - For more information on the right or on the E+E Team page).
The PSE Handbook is the main guidance document for PSE at the SDC and can be downloaded for offline use (see also link below under normative documents). It provides information on the general orientation and principles of PSE at the SDC, guidance on the implementation of PSE projects, and elaborates on the Risk Management Process for partnerships with the private sector, including roles and responsibilities.
Important: SDC operational units are required to involve the CEP (email@example.com) in the early planning stage of any PSE collaboration.
This PSE toolkit was created because we recognize that engaging actively with the private sector on a program level helps us sustainably fulfill our strategic goals articulated in our Vision for Change. We understand that unique challenges arise when we engage the private sector as true partners and want to increase our understanding of how to do this more effectively. We have a desire to improve our skills and capacity agency-wide, so that we are more successful and consistent in our private sector engagement. Finally we want to prioritize private sector engagement (PSE), and a complementary market-driven approach, as a way to leverage resources to achieve sustainable, pro-poor change.
Purpose To identify and map private sector firms working in targeted sectors.
Description In some situations there may be dozens or hundreds of potential private sector partners that we may engage with to meet program goals. In others there may be very few. Understanding who our potential partners are and narrowing that list to a manageable number of options is a critical step. This is done by defining partnership criteria and researching the environment to identify high potential private sector partners.
It is important to recognize that this can be a gradual, iterative process. Often the best partners are not immediately obvious; it requires in-depth market analysis and extensive networking, to determine the most appropriate partners. Who is the best partner also depends on what our program goals are, the level of effort it takes to nurture a relationship with them, cultural and political issues, and other matters outside our influence, including a potential partner’s capacity and other goals and objectives they have unrelated to our programming. This tool is designed to provide a starting point for the networking required to find the best private sector partner and build a productive relationship.
Purpose To identify business sectors where there is opportunity for private sector engagement in support of our program strategies and to focus relationship-building efforts and exploration of partnerships.
Description This is a high-level mapping tool used to identify business sectors with potential to engage private sector partners and organize summary data to support those choices.
This tool is suitable if:
- We have not defined a specific program objective or sector but want to build an understanding of the private sector for future opportunities. This scan is done broadly and well in advance of a specific engagement opportunity.
- We have defined a program objective or concept, perhaps in preparation or response to an RFA, and need to identify feasible business sectors and private firms.
This tool is not suitable if:
- A specific business sector is already identified.
- A private sector partner is already identified. Either of these could occur if the parameters of the funding mandate intervention in a designated sector or with a specific private sector firm.
Purpose To structure research into the risks and compatibility of a potential private sector partner.
Description Due diligence is the process that Mercy Corps uses to determine possible risks and advantages of new private sector partnerships. The inter-related purposes of due diligence is to ensure that partnerships:
1. Are compatible with, and contribute to, our mission to promote secure, productive, and just communities;
2. Do not pose a serious risk to Mercy Corps’ reputation for integrity with the populations we serve, host country governments, the development community, and our donor base.
3. Will not pose any risk to the security and wellbeing of Mercy Corps staff.
In many cases, a due diligence assessment will not result in a “black or white” picture. The due diligence process is designed to present a balanced assessment of the potential positive and negative aspects of new relationships based on each particular case. This will allow the staff negotiating these partnerships to make informed decisions about where, when, and how to partner with specific firms.
Purpose Evaluate a potential private sector partner for feasibility on the administrative, fiscal, technical, legal, political, and social/ethical levels.
Description A feasibility assessment shows the likelihood that engaging with a specific private sector partner will adequately support the program goals. It also looks at what challenges may arise and what steps can be taken to mitigate these challenges. The Feasibility Assessment Tool is not intended to gauge the likelihood of success of the overall program/intervention; that should be completed as part of the program design.
The feasibility assessment is complementary to, yet different than the due diligence process. Due diligence determines whether we would want to partner with a particular private sector firm based on the risk that partnership might present. The feasibility assessment explores whether that partner has the expertise, standing, and orientation to be a successful. It is much more oriented to whether they can meet the strategic program goals. See the Due Diligence Assessment Tool for more information about the due diligence process.
Purpose Identify key stakeholders and evaluate their influence and interest regarding a private sector engagement with Mercy Corps.
Description Stakeholder analysis is a process that systematically develops an objective understanding of who are the key stakeholders related to our engagement, and to recognize how much influence and interest they have in our program. It also establishes a criteria-based prioritization which leads to developing an appropriate engagement strategy.
For SECO, partnering with the private sector is a collaborative arrangement between public-sector and private-sector actors, with a common objective and shared costs or risks.
The private sector is understood to mean private companies or business associations. A collaborative arrangement can range from a Memorandum of Understanding to a commercial contract.
Public-private partnerships (PPPs) have been used since the 1990s to cover contractual agreements under which the private sector delivers an infrastructure product or service and bears certain risks. Such contracts fall under the definition of partnering with the private sector. It should be noted that:
- Partnering with the private sector is different from private sector development (PSD), which is a thematic focus of SECO. PSD focuses on supporting the local private sector by improving the framework conditions for business or strengthening entrepreneurial skills in partner countries.
- Partnering with the private sector does not cover contractual arrangements under which a private firm is contracted to implement a development project on behalf of a donor agency without sharing any costs or risks.
DAC methodologies for measuring the amounts mobilised from the private sector by official development finance interventions
Guarantees, syndicated loans, shares in collective investment vehicles, direct investment in companies, credit lines, simple co-financing arrangements and project finance schemes.
DRAFT -- May 202
The IMF’s research highlights how the uneven playing field between women and men imposes large costs on the global economy. Early IMF studies on the economic impact of gender gaps assumed that men and women were likely to be born with the same potential, but that disparities in access to education, health care, and finance and technology; legal rights; and social and cultural factors prevented women from realizing that potential. In turn, these barriers facing women shrank the pool of talent available to employers (Kochhar, Jain-Chandra, and Newiak 2017).
Delivering through Diversity both tackles the business case and provides a perspective on how to take action on I&D to impact growth and business performance. This latest research reaffirms the global relevance of the correlation between diversity (defined here as a greater proportion of women and ethnically/culturally diverse individuals) in the leadership of large companies and financial outperformance. The research is based on a larger data set of over 1,000 companies covering 12 countries and using two measures of financial performance – profitability (measured as average EBIT margin) and value creation (measured as economic profit margin). As importantly, we studied the I&D efforts of 17 companies representing all major regions and multiple industries to have a more granular view of where in the organization diversity matters most, and crucially, how leading companies have successfully harnessed the potential of I&D to help meet their growth objectives.
Co-creation is an approach to achieving stronger alignment and a clearer view of the 'right' private sector partner for specific impact objectives and to develop pertinent solutions through PSE initiatives. The development of new cross-sector solutions for impact requires innovative and collaborative approaches. Co-creation is the creation of shared value through interaction among a number of stakeholders in an open environment. By bringing different stakeholders together, including private sector actors, new ideas and mutually valued outcomes are created, based on a vast variety of perspectives, insights and experiences.
In order to promote co-creation, the SDC, together with the Competence Center for Social Innovation of the University of St Gallen (CSI-HSG), is adapting and customising to the SDC's needs the Lab of Tomorrow (LoT), an approach developed by the German Corporation for International Cooperation (GIZ). The LoT is a comprehensive process to co-create impact-driven business models to address specific development challenges. Target group centricity, rapid prototyping and iteration are the distinctive features of this approach, providing great potential for transformation. At the core lies a multi-stakeholder innovation workshop bringing together people with different backgrounds and expertise (from civil society, public sector, social enterprises, corporates, etc.). The LoT facilitates the development of novel and effective solutions and fosters shared ownership. To ensure targeted application and maximise the chances of new solutions gaining traction, the innovation workshop leverages the ecosystem around the LoT. In this sense, the LoT allows the SDC and its operational units to jointly develop solutions with its partners that are of mutual interest and which may result in PSE collaborations.
An Executive Education Programme for impact-driven Professionals from the Public Sector
In order to achieve impact on the Sustainable Development Goals in an environment of mounting complexity and uncertainty, the public sector must increasingly take on an entrepreneurial and co-creative role with partners across sectors. Through the immersive learning journey of the Public Entrepreneurship Academy, the participants gain key knowledge in general management, entrepreneurship, agile co-creation, innovation and systems thinking. Simultaneously, the programme encourages participants to engage and leverage curiosity, creativity and experimentation. They learn while doing, integrating new ideas directly into their own work with the support of peers and individual coaching. They become part of a community of public entrepreneurs, collectively defining what public entrepreneurship means across diverse roles and organisations, and exploring how to take action for impact.Developed in a collaboration between the Swiss Agency for Development and Cooperation (SDC) and the Competence Center for Social Innovation at the University of St.Gallen, the Public Entrepreneurship Academy empowers participants with the mindset and skills to accelerate progress on the SDGs through impact-driven private sector engagement, collaboration and entrepreneurial action. It supports them in collaborating and forming partnerships across sectors, taking entrepreneurial action in their roles, innovating and scaling for impact.
Social Impact Bonds: What, why and how? SDC Seco Briefing Paper
In this paper, Christian Brändli from SECO and Luca Etter from SDC provide an overview on Social Impact Bonds (SIB) and put light on this "new" instrument for donors, listing critical questions and factors to consider before setting up a SIB.
A very well written must-read for everybody who participated at the Savings and Credit Forum on "Blended Finance" in September 2016, and is impatiently awaiting the next in March 2017 on Social Performance Management and Reporting Practices of Financial Institutions and Microfinance Impact Investors.
Social Impact Bonds (SIB) are a relatively “new” instrument for donors to finance development interventions. SECO and SDC have both launched projects that use a variation of SIBs in their partner countries. This paper explains the most important aspects of SIBs and lists critical questions and factors to consider before setting up a SIB. The paper is work in progress and aimed as an input for colleagues who are considering an SIB. It does not represent an official position.
Now published: SDC Case Studies on four innovative Private Sector Partnerships
Four Case Studies about some of SDC’s innovative Private Sector Partnerships (PSE) were just published. They portray 1) Social Impact Incentives (SIINC), 2) Impact-Linked Finance Fund (ILFF), 3) Catalytic Market Facility Aceli Africa (Aceli), and 4) Product Development Partnerships (PDPs). The Case Studies provide an easy to read (and well-layouted) introduction to those projects and mechanisms and can also be shared outside of SDC.
EVPA - Euroean Venture Philantropy Association
EVPA means IMPACT.
EVPA is a unique network at the intersection of finance and purpose, driven by knowledge and focused on impact.
Impact Management Project
IMPACT MANAGEMENT NORMS - A shared logic for managing impacts on people and the planet
From 2016 to 2018, the Impact Management Project (IMP) convened a Practitioner Community of over 3,000 enterprises and investors to build global consensus on how we measure, improve and disclose our positive and negative impacts (otherwise known as “impact management”). The resulting consensus (or “norms”) provide a common logic to help enterprises and investors understand their impacts on people and the planet, so that they can reduce the negative and increase the positive. These resources migrated to Impact Frontiers following the IMP’s conclusion in 2021.
Private Sector Engagement Evidence Gap Map by USAID
Private Sector Engagement Evidence Gap Map - Engagement mapped to key values
Use the map to identify gaps and locate relevant documents. Click a circle to see the documents matching a particular engagment – value pair. Use filters to narrow the documents displayed on the map, or search for documents in list view.
Country Diagnostic Tool
The Country Diagnostic Working Group helps IFIs and DFIs share perspectives and experiences of preparing Country Diagnostics and develop cross-institutional collaboration where possible.
GIIN - IRIS Impact Monitoring System
IRIS+ makes it easier for investors to translate their impact intentions into impact results.
All investors and companies create positive and negative effects on society and the environment. Impact investors seek to maximize the positive and minimize the negative by using the IRIS+ system to integrate social and environmental factors into investment decisions alongside risk and return.
Credible, comparable impact data are needed to inform impact investment decisions and drive greater impact results. IRIS+ solves for this by increasing data clarity and comparability, and it provides streamlined, practical, how-to guidance that impact investors need, all in one easy-to-navigate system. It is a free, publicly available resource that is managed by the Global Impact Investing Network – the global champion of impact investing.
GIIN Website - Global Impact Investing Network
GIIN focuses on reducing barriers to impact investment so more investors can allocate capital to fund solutions to the world's most intractable challenges. GIIN does this by building critical infrastructure and developing activities, education, and research that help accelerate the development of a coherent impact investing industry.
DCED - Private Sector Engagement
Private Sector Engagement (PSE) refers to the interest of donors and others to work more strategically and systematically with business to meet the SDGs. The OECD has proposed a very broad definition of PSE as ‘an activity that aims to engage the private sector for development results, and involves the active participation of the private sector’ (OECD, 2016). The DCED PSE Working Group in its Operational Framework (2019) has focused on two specific PSE strategies: