Investment and Early Childhood Development (ECD) are both about the future. Investment is about transferring today’s purchasing power to the future, with an expectation for positive returns. ECD is about the foundation for individual and societal progress that has an economic and social payback for all.
Both need vision and forward thinking.
However, that is where the similarities might end, because globally, investment in ECD is extremely limited.
There is compelling and credible evidence that the early years of a child’s life are the foundation for individuals, families, communities and for building sustainable societies. Rigorous economic analyses have modelled both the returns on investment and cost of inaction when it comes to early intervention programmes.
ECD programmes can break the cycle of intergenerational poverty by establishing equality in adult earnings. For example, research from Jamaica has shown the power of ECD for highly vulnerable children, who ended up closing the earning gap between themselves and their more advantaged peers. This result was not seen for the vulnerable children who did not receive the ECD intervention.
But despite the voluminous evidence, programmes for young children and families are among the most underfunded.
Government or public funding for ECD typically comes from two sectors – health and education. In general, in developing countries it is estimated that less than 5% of GDP is allocated to education and on average 2% to health. Programmes for young children and families receive only a very marginal proportion of health and education spending. While the exact percentages are not calculated, it is estimated that on average 0.5% of this are directed towards children.
The other source of investment in ECD is private sector funding. This source is not homogenous and consists of money and contributions from individuals, households, community members, business and philanthropy. Typically the family and household contribution to ECD is in the form of user fees.
Business investment is both for provision of programmes, (for example, in preschools), and more recently social impact bonds for financing social services. Philanthropy is a significant source of funding for ECD. However, this category is quite diverse, with some funders supporting individual projects and others forming part of larger organisational level partnerships, with a joint agenda.
For UNICEF, one such key partner is the H&M Conscious Foundation. Working together with us to encourage an increased financial investment in ECD, the Foundation is supporting 3 countries – Chile, Montenegro and South Africa – to develop strong national investment cases for ECD. These, in turn, will be used to advocate for increased government budget allocations for services for young children. These countries represent geographic and demographic diversity and level of maturity of their ECD programmes, and the final results of this work are anticipated in 2016.
This partnership also has an important role to play in demonstrating the value of partnerships in supporting sustainable programmes, particularly for the post-2015 development agenda. On 4 December the UN secretary general released his synthesis report The Road to Dignity by 2030: Ending Poverty, Transforming All Lives and Protecting the Planet. The finance architecture laid out in the synthesis report presents a very different model for financing the SDGs compared to the MDGs. There is a stronger role for private sector with national to support development.
ECD, as presented in the report, is part of the new transformational agenda as a clear strategy for investment in “people.” This offers an opportunity to engage a wider range of investors in ECD.
Investment is a commitment, it is about making choices based on a set of values and the willingness to pay for them. As of now, ECD does not appear to be a priority for public, private or civil society investment, except for a few investors. If we are to increase investment in ECD, we need to make a stronger investment case and highlight noteworthy partnerships that can provide exemplars for supporting programmes, and ultimately, all young children.
Pia Rebello Britto is the senior adviser on Early Childhood Development at UNICEF HQ in New York.
Copy on this page is paid for and provided by UNICEF, sponsor of the children: the next business agenda hub
