The Triangular Partnership

It was supposed to be called the “Triangular Partnership.” Room to Read was going to develop the teaching and learning materials, UNICEF was going to fund the effort, and the Ministry of Education in Zambia was going to ensure that teachers were trained and materials were being used in classrooms. This was an exciting opportunity. Room to Read had been creating a lot of buzz in Zambia for the rigorous strategies that we were using to help young children learn to read. Officials from all levels of the government had visited the pilot schools in Kafue district, near the capital of Lusaka, to see our work with children in grades 1 and 2. Children were learning to sound out words in ways that had never been seen before.

Although Room to Read’s reading materials were supposed to supplement the government curriculum, some teachers had been ignoring the government textbook completely and were just using the Room to Read student books instead. Teachers, school principals, and government officials were gaining so much confidence in what they had been seeing that UNICEF was keen to scale the approach nationally. The Ministry of Education seemed enthusiastic to support it.

In September 2012, Cory and Room to Read’s global director of literacy traveled to Zambia to work with the country team in the preparation of a proposal for UNICEF’s consideration. Our proposal was to scale the program in another Chinyanja-speaking area of the country in 2013, expand into a small number of districts with other majority languages in 2014, and go nationwide in 2015.

Just as we were busy crunching numbers and thinking about the logistics of the rollout and the details of the proposal, we received an invitation to participate in a meeting with the education team of the United States Agency for International Development (USAID). USAID had just established three new early reading projects with a total funding level of more than $120 million just for Zambia and wanted to make sure that the organizations currently supporting literacy in the country were working in harmony. The meeting was cordial, but it was clear that USAID had its own priorities and approach and that any collaboration would have to be rooted in its approach and its terms.

Room to Read offered USAID our materials and methods. Even though Room to Read had developed the materials using our own financial resources and staff time, we were excited about the possibility of scaling our successful efforts to benefit children nationwide. Why reinvent materials for millions of dollars and over the course of years when a successful model with local political support from the Zambian government was ready to implement then and there?

Unfortunately, USAID did not accept our offer. The agency had negotiated a bilateral agreement with the government of Zambia, already bid out these three megaprojects, and had approved the new contractors’ scopes of work. It was on the hook for spending the money that was allocated and meeting the stated project objectives. The USAID technical staff were not interested in adopting what was already available but was still amenable to ongoing discussions and information sharing.

Room to Read’s country and global staff spent many hours discussing the possibility of collaboration. Did we want to join forces and be involved in these mass efforts? Our team was uncomfortable that many of the people who would be involved in the USAID efforts were the same people who created the current national approach to reading, one that had pushed Zambia to the lower end of regional assessment scores. In the end, we decided to maintain our autonomy, continue to show the value of our approach as alternative or at least complementary to what USAID would be proposing, and exert our influence by continuing to demonstrate how well our programs were helping children learn.

At that point, although Room to Read still had UNICEF’s trust, the launch of the new USAID projects left questions about the views of the Ministry of Education. We still believed that our literacy work was stronger than any other at the time and that the ministry had the opportunity to use the Triangular Partnership to help many new schoolchildren who otherwise might not learn to read.

However, even with excellent relations and positive support, it was difficult for the Ministry of Education to turn away from the new USAID projects. The projects brought vast new money to pay for textbooks and learning materials, hardware, software, technical assistance, vehicles, and study tours. The deep support of USAID also brought credibility and cachet, a signal of trust that could generate additional financial support from other investors and political goodwill of the international community.

Soon after the USAID projects began in earnest, negotiations regarding the Triangular Partnership began to fall apart. The Ministry of Education began to focus its attention on collaboration with the USAID projects and, over time, UNICEF decreased its enthusiasm for the rollout of Room to Read’s approach to literacy instruction. This was not a surprise. It made perfect sense that a government entity would align itself with the larger sources of power and funding.

This is not meant to be an accusation or cynical point of view. A government entity such as a ministry of education only has limited time and staffing resources. With the best of intentions, ministry officials must make decisions about how to deploy those resources to achieve the best results for its children. It is therefore quite reasonable that the Ministry of Education in Zambia would shift its time to the partner that could provide many times more resources and better positioning in regional and international policy discussions.

Similarly, the logic of USAID’s decisions also makes sense. The agency has its own constituents. For example, it is only able to do as much work as funding allows, and funding is approved each year by the U.S. Congress. Agency officials must be able to demonstrate the specific value that they add to countries’ development and goodwill. Room to Read could have participated in one or more bids for the ensuing USAID projects, in which case we could have brought our experience directly to bear on one or more of these large-scale activities. However, we didn’t do so at the time. Therefore, why shouldn’t USAID promote its own approach and its own implementing partners?

All the logic in the world, though, could not diminish our disappointment. We felt that our position as a trusted government partner in Zambia was being eroded—and by activities that would not support children’s learning in the same way that we would have. We had painstakingly invested in, monitored, and improved with thought and care our approach long before the USAID projects arrived. We perceived ourselves to be the tortoise that was being outpaced by the wily yet somewhat clumsy hare, the honorable David aiming his tiny slingshot at the all-powerful Goliath. Our global and country staff felt a keen sense of bitterness and frustration at the time that what we thought was a highly successful approach was being overshadowed by bigger forces.

This experience in Zambia was a huge wake-up call for Room to Read. It made us appreciate more starkly that having excellent programming is simply not enough to win a seat at the table in national policy discussions. Newer, less-experienced players can quickly leapfrog long-standing, steady organizations such as Room to Read in their positioning and programming if they are awarded large-scale grants and contracts and given an automatic role in national educational planning. We needed to rethink our approach in a world with increasing competition and real challenges to our historical expertise. We needed to consider whether to join these government-funded projects.

Whether to accept government funding is a decision that many nonprofit organizations face at one time or another on their journeys to scale. Is government funding a reasonable way to achieve your mission and grow your impact? This chapter is meant to help you be more proactive and deliberate in how you think about your choices.

To Take Government Funding or Not to Take Government Funding—The Ongoing Question

Room to Read has always struggled to determine the appropriate role of U.S. government funding and other bilateral foreign assistance funds as part of our organization growth and development.

On the one hand, our reticence to take government funding has been something of a badge of honor. Part of our brand from our earliest days was to be lean, cheap, and cheerful, a scrappy upstart organization that was willing to get its hands dirty to get the best educational services to underserved communities. We often illustrated this image in photos of local partners riding bicycles on dirt roads with bookshelves strapped to the back and set in stark contrast to other photos with international development staff driving shiny, white, USAID-branded Toyota Land Cruisers with all-terrain tires and exhaust snorkels. Again, this was part of our pride, what made us feel special, and what resonated with so many of our early investors.

In many ways, we have continued to hold true to these values. For the most part, we still do not buy large vehicles, hire international staff with big benefits packages, or use maximum allowable U.S. government per diem rates when traveling. We continue to hire country nationals to lead country teams, prioritize effective and efficient implementation, and steer clear of the many meetings and debates that can overwhelm organizations and stymie progress.

Very early in our development, Room to Read took seriously the cautions against government funding. We were told by thoughtful advisors that taking government money can change the entire culture of an organization. Participating in government-funded contracts and grants can reduce autonomy, shift the balance of power in organizational decision making, and generate a self-perpetuating culture of red tape that could infuse the whole organization. Decisions begin to be made based on clients’ expectations, or with an eye to anticipating clients’ expectations and satisfying their paperwork requirements, which does not always produce the most effective solutions.

Accepting government funding can also create dependencies that alter long-term planning. It can even, in extreme situations, push you to act in a way that could compromise your organizational values and mission. It can force organizations to chase funds and contort their programmatic directions to respond to project needs instead of maintaining an efficient organizational focus.

Yet government funding is alluring. When a contract or grant is awarded, it is often at a funding level that is substantially higher than any other single source of funding and provides resources over an extended period. It can also allow you to pay for organizational overhead costs and even, in the case of contracts, offer a lucrative fee. This helps organizations invest much more heavily in their overall work. They can hire staff with competitive salaries and benefits and have the security of multiple years of funding. High levels of guaranteed, multiyear funding create a much different opportunity for longer-term planning. All of this is quite appealing for organizations that are passionate about an important social issue and see a potential opportunity to accelerate their impact.

Government funding also brings a very different culture of compliance than is otherwise necessary. For example, Room to Read has always been serious about its financial management. We have had rigorous financial oversight from our board of directors, including its world-class audit committee, strong financial oversight from our chief finance officers and finance teams, topnotch auditors, and effective financial processing and management systems. Room to Read is one of the very few organizations that have been awarded Charity Navigator’s top four-star rating for 10 years, since 2007, which is every year that the rating system has been in place.

However, our organizational systems have not been set up with U.S. government compliance as our top priority. We have not kept time sheets across the organization. We have not opted to fly U.S. airline carriers exclusively on flights that depart from or return to the United States, nor have we organized our programmatic or financial reporting systems around U.S. government project reporting criteria.

We have therefore realized that participating in U.S. government projects would require a completely different approach that might not be consistent with the successful systems that we have had in place thus far. It would be a major organizational change, and one that we have been reticent to pursue.

The Challenge of Big Box Development

Part of Room to Read’s reluctance to jump into government funding is a philosophical concern about “big box” development. This phenomenon is like when a large retailer such as Walmart or Home Depot moves into an area. These stores are appealing because they have a huge diversity of goods and lower prices, given their economies of scale, that beat what any other retailer can offer. Consumers are drawn to these stores because the stores meet so many needs in efficient and effective ways.

The problem is that big box stores crowd out local retailers who go out of business because they simply cannot compete. The consequence can be more limited options, less diversity of choice overall, and a consolidation of power such that a smaller number of people control retail offerings and labor market wages and conditions.

Similarly, in international development, the power of bilateral and multilateral agencies is equally as consequential. As was demonstrated in the Zambia example, a major infusion of bilateral support can crowd out local innovation. Organizations that may be doing excellent work but are not a part of the big projects can lose their influence as well as their staff to better-funded contracting organizations, some of which are for-profit businesses. The big projects often capture the attention of government officials and national planning, hire staff with higher salaries and more benefits than local organizations can provide, and bring a sense of momentum and prestige that is difficult to ignore. Like the big box stores, the influence of the bilateral projects can then limit the diversity of otherwise promising practices and wipe out a set of civil society organizations that were otherwise meeting local needs.

This consequence is not inherently bad if the large-scale bilateral projects help achieve at least as much success for children as was being achieved prior to their implementation. But this is not always the case.

As we were developing the vision for Room to Read Accelerator, one of the biggest questions was whether we wanted to undertake government-funded projects as part of our technical-assistance portfolio. Large projects can at times do more harm than good. For example, while large-scale projects bring with them vast amounts of financial resources, many low-income countries do not have the absorptive capacity to use those resources effectively. The consequence can be higher costs for materials and services, bloated labor markets with unsustainable salaries and benefits, and a sense of optimism and promise that often cannot be sustained beyond the three-to-five-year project windows.

In these situations, equipment and materials purchased for the projects cannot be refreshed, trainers and monitors can no longer provide ongoing support at project sites, and the promise of positive outcomes to be achieved in such a short period begins to dissipate. The result can be unmet expectations, cynicism, and reluctance for the next big project, all at the time that local organizations have been marginalized at the expense of the big projects.

Yet, at the same time, it is through large-scale projects that organizations can exert substantial influence and, under the best of circumstances, contribute in a way that really can have positive longer-term results. Prior to joining Room to Read, Cory had overseen national projects in countries as diverse as El Salvador, India, Yemen, and Zambia, and had seen how the power of working with ministries of education on targeted projects could improve educational opportunities for millions of children. In addition, as Room to Read began to think about expanding into government-funded activities, we realized that there was also a consequence for not participating. Opting out of large-scale projects can undermine current organizational efforts and undo previous progress and success.

For these reasons, we’ve had to think hard about participating in future U.S. government–funded projects. What trade-offs were we willing to make? What would be our strategy going forward?

Limited but Strategic Participation in Government-Funded Projects

The real discussion about bilateral funding came when we were preparing Room to Read’s 2015–2019 strategic plan. Several factors spurred our interest. The first was that Room to Read continued to receive regular requests from governments and other nonprofit organizations to help them implement literacy and girls’ education programming. It was always very difficult to decline such gracious requests, but we just did not have the operational expertise to implement such different projects. We were used to implementing full-country programs, with local staff and a long trajectory of work in collaboration with host-country governments and communities. We had not served as technical advisors. And even though we had slowed down substantially in our new country expansion, full-country programming was still our expertise and the operational approach with which we were most comfortable.

Second, as described earlier, given the huge influx of international funding for the literacy part of our work, we were starting to see substantial new competition from other organizations for host-country governments’ time and support. Participating in government-funded and other technical assistance projects could be an important way to maintain our leadership in countries where our programming was strong and could make an important contribution to national educational reforms.

Of course, this was also a partly defensive play. After all, we otherwise risked losing staff or approval to continue working. This was particularly true in countries in which newer USAID projects were developing teaching and learning materials to be used across an entire country. If we were not a part of these projects and did not influence the new national planning for literacy, then we would either be forced to support an approach with which we might not feel comfortable or simply lose the opportunity to work at all.

Third, if we could manage government-funded projects appropriately, they could represent a good way to build our organizational capacity over time. These projects could provide multiyear funding at a high enough level to reduce pressure on our annual fundraising targets. At such a level, projects could finance organizational priorities that might not otherwise be possible.

Last, the fact that we had started to create more standardized worldwide curricula and instructional materials for our regular work meant that we now had well-defined materials that could be shared with others, such as through government-funded activities. In the past, when our operational approach was focused exclusively on implementing full-country programs, it was difficult to figure out how our work could accommodate project activities. Now, with strong program modules in place, it was easier to think about moving past full-country programming to activities organized by a short-term project approach.

For all these reasons, we built a new technical-assistance practice area, Accelerator, into our 2015–2019 strategic plan. The expectation was that we would experiment with large-scale technical assistance projects, including government-funded projects, at least as a short-term trial. We would try it for a few years to learn whether the benefits would be worth the costs and the shift in at least some of our focus to this new way of operating. We would then conduct a review midway through the strategic period to reflect on the extent to which we would build this approach more broadly into our future work.

A Slippery Slope

In some ways, the bridge to government-funded work had started to be built even before we made the full commitment in the 2015–2019 strategic plan. Our first forays into government funding felt innocent enough. In fact, our first grant from the U.S. government was like funding from other investors. It was easy to accept, as it did not bear consequences any different than anything else we had done in the past—a starter drug, to be sure.

Room to Read had received a generous government grant through the support of a Room to Read advocate at the State Department, who learned about Room to Read through the U.S.-India Business Council. In addition, the U.S. ambassador to Sri Lanka heard about Room to Read’s programming part of the national recovery efforts after the deadly tsunami swept the country. Impressed with our work, he championed ongoing State Department support for Room to Read’s reading and girls’ education efforts not only in Sri Lanka but also in India and Nepal.

Administratively, we treated the grant like funding from any other large-scale investor. We used our regular tracking systems to monitor the implementation of project activities and our regular reporting systems to update the State Department on progress over time. Our State Department grant liaison also helped us substantially in the requisite paperwork and even advocated for more expansive project opportunities. The result, beginning in 2010, was a fantastic collaboration between Room to Read and the State Department that extended four years and served thousands of children across Bangladesh, India, the Maldives, Nepal, and Sri Lanka.

Room to Read’s second U.S. government project also came about more by happenstance than strategic planning. Catholic Relief Services (CRS) reached out to Room to Read in 2010 to ask whether we wanted to partner with them on a competitive proposal for a food-assisted education project in the Lao People’s Democratic Republic. This cooperative agreement was sponsored by the U.S. Department of Agriculture. Although food-assisted education was far from Room to Read’s expertise, CRS was looking for a partner to provide the wraparound reading activities that would be required for the project. Room to Read was one of the few international educational organizations that was operating in Laos at the time, and we thought this could be a good way to augment our impact. We agreed to join CRS’s bid, contributed the concept of “reading circles” to the proposal per CRS’s guidance, and with CRS, were successful in winning the competition.

Over the next few years, Room to Read served as a sub-awardee to CRS in what was admittedly a difficult experience. We worked through many challenges during that period, from delays in overall project implementation to shortfalls in our own performance, to figuring out how to account for project activities within our organizational planning and accounting processes. The experience was an important one in that it helped us begin to understand the on-the-ground challenges of implementing services with very different considerations and reporting requirements than in the past. We realized that success in government-funded projects was not necessarily defined in terms of growing impact; it was just as much about responding adequately to U.S. government expectations.

Country and global team members were not completely naïve in going into the Laos project. We realized at the time that the project was going to be different from our normal implementation and tried to gear up as much as possible. Nevertheless, it was new for us to work on a U.S. government project and as a sub-awardee. This required responsiveness to U.S. government rules and regulations and to the management style of the prime implementing organization. Similarly, CRS had to balance its own leadership with the expectations of the USDA partners, the government of Laos, and the circumstances of the project, which created more complexities than anticipated in the original award.

One example is the province of Savannakhet, where the project was located. This province has substantial ethnic and linguistic diversity. Neither Room to Read nor CRS were necessarily prepared for the implications of this on Room to Read’s ability to support the reading development of young children. As much as Room to Read believes in the importance of supporting young children’s reading in their first language, we were not prepared for such language diversity at the time. Room to Read’s expertise was in the Lao language only, and we were still a few years from being able to support programming for children who speak other Laotian languages. This constraint severely limited our responsiveness during the site-selection process and subsequent project implementation.

As Room to Read began to learn more about U.S. government–funded projects, we started to monitor this new potential funding stream more closely. Part of the rationale for accepting the early projects was that we could do so without substantial organizational changes. If we kept our funding under $500,000 in any single year, then we would not be subject to a higher level of U.S. government scrutiny and compliance requirements (for example, time reporting and recognition of revenue). This was not based on any kind of desire to cheat, be duplicitous, or hide anything. We were confident and proud of the systems that we had put in place to be good stewards of our investors’ money, including investments from the first U.S. government–funded projects. We simply wanted to delay decisions about the larger changes to our systems that would require adjustments to our approach to operations and decision making.

Unfortunately, as part of this early period, we incorrectly recorded revenue in the first quarter of 2014—on receipt of payment—that was a reimbursement for expenses accrued in the last quarter of 2013. After making the necessary correction, we found that we had exceeded the government-funding threshold in 2013 at the lower level of scrutiny, and we were required to conduct what was then called an “A-133 audit.” This reference was to the U.S. Office of Management and Budget’s Circular A-133, which specified the audit requirements for organizations that expend at a certain level in a specific fiscal year. Not surprisingly, the audit results identified systems that needed to be improved to comply with U.S. government requirements for organizations that receive funding at this higher level.

In typical Room to Read fashion, we were open and transparent about the audit outcomes and began to chip away at the immediate audit recommendations. However, the findings also forced us to face the issue head-on that we had been resisting for years: How did we want to incorporate government funding into our overall organizational strategy going forward?

The good news is that the audit results came out at the time that we were beginning to think about our next strategic plan. We could therefore make government funding part of the larger organizational decision about direction over the next five years and ensure that we were planning appropriately. But should we start to consider participating more actively in government-funded activities?

A Complex Innovation

We approached the question about government funding as well as the broader issue of Room to Read as a provider of technical assistance as what Govindarajan and Trimble¹ call a “complex innovation.” This is the kind of project that goes far beyond ordinary day-to-day process improvements and what can easily be absorbed relatively easily by the existing organizational infrastructure. Complex innovations require dedicated teams, different processes, and strategies for coexisting with and supporting the existing “performance engine” as smoothly as possible. Perhaps the most important challenge with complex innovations is figuring out how to ensure that the innovation complements the overall organizational mission while not choking the existing systems that are the reasons for the organizational accomplishment in the first place. The success of such an endeavor requires a deep appreciation of this challenge, thoughtful planning, and goodwill between everyone involved in the process.

As part of the 2015–2019 strategic planning process, we realized that investing in U.S. government–funded projects would require changes across the board. It would require a new level of detail in our standard procedures for spending and accounting, staffing, program development, and operations. For example, it would require us to “Fly America.” This is a U.S. government regulation to fly on U.S. carriers on outbound flights from and inbound flights to the United States, even in situations in which flights are more expensive than with non-U.S. carriers. It would also require staff to record hours in dreaded timesheets.

This is a tracking system that some private companies, such as law firms, use one way or another. It is a process that helps organizations keep track of people’s time and allocate costs across projects. It is a common and reasonable request that is not difficult to implement but is perhaps an intimidating and off-putting cultural change for nonprofit organizations that have not had such systems in place in the past.

Having Our Cake and Eating It, Too

After many hours of debate, discussion, expert opinions, cautions, points, and counterpoints, Room to Read committed itself formally to government funding as part of our 2015–2019 strategic plan. We had already started to go down this road with a few small projects anyway and decided to take the bigger leap. We made what many people believed was a Faustian bargain to become proactive in seeking U.S. government funding and investing in the necessary planning and systems that go along with it. We believed that the possible benefits outweighed the costs. The question was how to do so in a way that would minimize the negative consequences and, importantly, not compromise our organizational values.

This issue was extremely important, as Room to Read’s success to this point had been rooted substantially in people’s passion, not only for our mission but also for our approach. Our staff and investors liked the fact that Room to Read was scrappy, cheap, and cheerful, and rejected Land Cruisers for bicycles. This orientation was important not only for staff around the world but also for the people who had invested in Room to Read’s first 15 years of success.

The consequence was to create safeguards that would, ideally, allow us to benefit from government funding but also to retain as much of Room to Read’s positive culture as possible. For example, we made the decision that we would not allow government funding to exceed 30% of all funding. (Even now, government funding accounts for less than 10% of annual operating expenses.)

In some ways, this threshold was somewhat arbitrary. It could have just as easily been 20%, 35%, or something else. The idea, though, was that we would cap the overall proportion of future work from this funding source at a meaningful level but also to make sure that we maintain our strong focus on other funding sources.

The most important question for any project was about opportunity costs. How does the decision to take on a government-funded project compare to the decision to take on a new privately funded project, or simply to continue to support direct implementation? What are the relative benefits to children? Are we helping enough children and at a deep enough level to be worth it? What are the relative costs in terms of staff time and the need for new organizational compliance infrastructure? Could we successfully incorporate the new systems and approaches into our work in a way that would be additive, or, as Govindarajan and Trimble have warned, could they possibly damage or break our existing performance engine?

Early Impressions

As of the writing of this manuscript, we are now more than two and a half years into the new strategic plan period. Our experiences to date with government-funded projects have already exceeded our initial expectations. These include four new U.S. government–supported projects. In all instances, we seem to be achieving or set up to achieve substantial strategic influence on large-scale state and national educational reform efforts.

In three of the four instances, we are a subcontractor on nationwide early-grade reading efforts. The first is as a subcontractor on a national early grade reading reform project in Nepal. In seconding three country office staff members to the project, Room to Read’s role had been to lead the overall technical work on the project, and, in particular, to support the development of the early grade reading curriculum as well as the teaching and learning materials. The project also selected Room to Read’s core grade 1 and 2 reading curricula as the basis for the larger-scale curricular rollout across the country. Second, Room to Read is serving as the lead in reading and writing materials development for a large project in Tanzania serving 6 of the 25 regions in the country; third, we are serving as the technical lead in reading and writing activities for a national early-grade reading project in Rwanda—the goal of which is to support more than 1.5 million primary schoolchildren throughout the country.

Our roles in all three of these projects came about through regular USAID contracts. In the case of Tanzania and Rwanda, Room to Read joined prime contractors on competitive proposals that ended up winning the bids. For Nepal, one of those contractors asked us to join its project after it had won the contract. All three projects have enabled Room to Read to play strategic roles in scaling effective literacy programming at regional and national policy levels.

The challenge in all these projects is that Room to Read’s contribution to the technical work is substantial, but the price is also very high. In Nepal, for example, Room to Read seconded three of our most senior staff members to the project. These included the country director, program manager for instructional design and teacher support, and program manager for quality reading materials.

These critical positions are difficult to fill on a temporary basis for the project period at a time when Room to Read also has a comprehensive work plan and existing commitments. It takes a considerable amount of time to recruit new staff members and prepare them for their new responsibilities. This task becomes that much more difficult when the positions are only two to three years in length, as experienced professionals are looking for longer-term job security.

In addition, Room to Read contributed its grade 1 and 2 reading curricula to the project to be the starting point for the new national approach. It has already been rolled out in six districts, with many more planned this year. A few years ago, after the project leadership and government of Nepal realized that it would be too late to develop a new curriculum, the project asked national and international organizations working on literacy reform to present their approaches for consideration. Room to Read was honored that its curriculum was selected through this competition to be the basis for the national model.

We are very pleased to contribute our staff and organizational materials for larger-scale implementation. This outcome fits extremely well with our organizational goals and is consistent with our 2015–2019 strategic plan to “do more with less.” This project has given Room to Read the opportunity to leverage its thought leadership and materials to benefit many more children in Nepal than would have otherwise been the case. At the same time, Room to Read’s total financial compensation for this contribution is less than 1% of the total contract value. We receive funding for the staff salaries and a small amount of technical assistance but were not compensated in any way for our thought leadership in developing the teaching and learning materials in the first place. More on this later.

The opportunity cost for this work has been immense. And while Room to Read receives a fee for its services, these funds are nowhere near the costs for setting up the organizational systems to implement the work, the unaccounted time of organizational staff to support the efforts, and the drain on administration for our regular program implementation. However, even with the high costs, we still plan to consider similar kinds of projects in other countries, too, as they give us a real opportunity to help more children and increase our impact.

One possibility could be for Room to Read to become a prime implementer on future USAID projects. This would give us the opportunity to play a larger role in project design and implementation, as well as receive the kind of compensation that would really help to grow our organizational work overall.

The challenge is that the entry cost for becoming a successful prime implementer on USAID projects is astronomically high. It requires a completely different operational structure built on U.S. government regulations and planning for competitive proposals. Building this administrative infrastructure is possible and could even be justifiably charged to the government over time as required compliance costs.

Many of the prime organizations with which we work devote hundreds of thousands of dollars to compete for large USAID contracts. They maintain regular communications with USAID staff around the world and monitor program cycles to learn up to 12–18 months ahead of time when new project competitions will take place. They track the international travel of USAID staff and send their own staff to countries months ahead of any new project to gain an edge in the competitive process. They set up new country offices, often begin some work with their own money to demonstrate some working history in the country, develop new relationships with government officials, recruit for international staff, and secure exclusive partnerships with international and local organizations to advantage themselves for new projects.

By the time a new request for proposals hits the street, most competitive organizations have already spent months in strategic positioning, learning the nuances of USAID’s interests, and even writing the more standard parts of proposals. In this kind of competitive environment, organizations such as Room to Read that do not have these systems in place or the experience in writing competitive U.S. government proposals are at a substantial disadvantage.

One exciting development is Room to Read’s fourth USAID project, which does provide a substantial leadership opportunity for longer-term, large-scale change. This is a five-year cooperative agreement that Room to Read and USAID launched in India in 2015 to support reading for children in two large states: Chhattisgarh and Uttarakhand. The combined populations of these two states is approximately 35.6 million people, which would place them between Canada and Uganda as the 38th most populous country in the world. The opportunity for large-scale change in this project is therefore as large as any of our other activities to date.

The history of this partnership goes back a few years when Room to Read was considering the future direction of our work in India, one of our earliest countries of implementation. From our earliest days there, our country director had wanted us to spread our work around the country to gain visibility and credibility for our activities. The challenge was that in a country the size of India and with the limited financial resources available, our footprint was never big enough in any one state to create a critical mass or a proof of concept for scale. Over time, we realized that we would be more successful if we were to focus our efforts and therefore made the difficult decision to consolidate our work in fewer locations to make a bigger difference and use the results from more concentrated activities to advocate for future growth.

Although the logic of the decision was strong, the change had huge consequences for our work. This required changes in staffing—either relocating or laying off staff members—as well as stressing positive relationships with local and state governments that we had developed over many years. The state leaders of Chhattisgarh and Uttarakhand were particularly vocal about their disappointment. They had appreciated Room to Read’s partnership, realized that there was much more work to do, and had hoped that Room to Read would work with their districts for many more years.

It was through difficult discussions with state leaders that we realized exiting an area could be just as challenging or even more so than starting up in a new area. This process required thoughtful planning, excellent diplomatic and transparent communication skills, and, just as importantly, some way to ensure that the good work we had done in a region could be sustained over time. As part of our exit strategy, we began to work closely with state educational officials to share our methods for library development and reading instruction so the states could continue to support their schools over time.

Room to Read staff and state officials were so enthusiastic about this collaboration that we decided to petition USAID to fund these sustainability efforts. USAID was happy to support this kind of a partnership. After more than a year of negotiations and planning, the result was a five-year project in which Room to Read would provide intensive support to 50 model schools in each state and then train state officials to continue Room to Read–type support in approximately ten times more schools in the future.

This requirement for scale was a key point in the agreement. USAID chose to fund this activity directly instead of through a competitive request for proposals. The resultant “cooperative agreement,” as distinct from a contract, represents a true partnership among USAID, the two states, and Room to Read. This is the kind of model of demonstration and scaling that has real potential for learning and would be an ideal approach to replicate with USAID and other bilateral and multilateral donors in the future.

Who Owns It?

One of the unexpected consequences of government contracting has been about intellectual property. These are the products and services that we have created using private funds that in part make Room to Read’s contributions so valuable. As we started to think about government-funded projects, we were excited about the opportunity to share our storybooks and program activities with larger numbers of children. After all, that was the overarching purpose of joining these projects. We were even happy to contribute these resources to projects free of charge. We thought that was a pretty good deal given the sunk costs of research and development that had gone into these products.

It is for this reason that we have been somewhat surprised by the U.S. government’s interpretation of this kind of contribution. The current view is that once in-kind products such as these children’s storybooks are included in a project, the U.S. government has a right to use it in any way that it wants. It uses a licensing approach created by the nonprofit Creative Commons called “Creative Commons BY” as the basis for how it expects to use the materials.

Specifically, this means the contributing organization gives the government the irrevocable right to share (that is “copy and redistribute the material in any medium or format”) or adapt (that is, “remix, transform, and build upon the material for any purpose, even commercially”) the materials in any way that it sees fit. This can include use outside the project or country and in any languages. What this means is that when Room to Read would like to donate a storybook or a teaching resource to a project, the U.S. government has the right to let anyone use it, modify it, and charge for it as long as Room to Read receives attribution for the original work.

If the donated content in the project is modified in a substantive way (though what constitutes a substantive modification is not very clear and, at least at this point, decided unilaterally by the government), the contributor must give the actual ownership to the U.S. government. The government can then keep the copyright or assign it to another organization. For example, Room to Read recently donated a set of storybooks to a project. The contents of the books were modified slightly and then incorporated into a larger reader for students to enjoy across the country. Again, the positive outcome is that Room to Read’s work is reaching more children. However, the U.S. government then assigned the ownership of the readers to the host country government. The upshot is that, according to the letter of the law, Room to Read would now have to ask permission to use the modified materials!

In our not-so-humble view and in contrast to our ordinarily progressive view of the world, this appropriation of preexisting material is a huge government overreach. In practical terms, the U.S. government has co-opted our organization’s intellectual property. We do believe that the intent behind the overreach is a good one: more children accessing opportunities to read in a world that has too few books and examples of good teaching and learning materials for children at the earliest stages of their reading skills development. However, there are many ways the government can achieve this goal without seizing an organization’s intellectual property.

We have recommended several strategies in our government-funded projects for ensuring the maximum distribution of materials while maintaining the integrity of Room to Read’s intellectual property. For example, we recommended making the materials available freely in the original languages and formats in which they were published. We also recommended opportunities for other organizations to make derivatives of our publications if they checked with us first to ensure at least some kind of quality control. However, the U.S. government has not yet accepted these recommendations for most projects. We have had to agree to the government’s approach or simply not contribute existing material to these projects. It has been “all or none.”

These are not easy decisions. We have not yet come up with a satisfying approach and still make decisions about in-kind intellectual contributions on a case-by-case basis. We hope to identify better ideas about how to address these issues in the future in a way that is a win for everyone involved.

Key Takeaways

• Timing is everything! When to make a decision to accept bilateral and multilateral funding is important and can affect many aspects of your organizational development.
• Even though government funds can be large and game changing, there are huge costs in terms of change to organizational culture, implementation of new systems, introduction of new compliance and auditing requirements, and work on a reimbursement basis. Costs can be overwhelming and, in the case of building compliance systems, can be difficult to sustain financially without feeling compelled to grow this part of your work even more rapidly over time.
• If you do decide to accept government funding, be particularly mindful to minimize the negative consequences of “big box development.” Do everything you can to continue to promote innovation in local organizations instead of crowding them out.
• Make sure that participating in government-funded projects never puts your organization in a position to compromise its values or forces you to do something that is contrary to your mission.
• Be careful when you contribute existing materials to government projects that you understand what rights you will have to own and use the derivative products.
• In addition, if you decide to accept government funding, be clear about why you are doing so, and let that reason drive how much you accept. For us, the motivation was to help more children, remain competitive, and continue to provide thought leadership in our core program areas.