6. Who are Your Funders? The Special Case of Funding from Donors and Governments

If you receive funding from donors or government organizations, you need to think beyond the value proposition for your immediate clients. If you are a profit-oriented tech hub that generates all of its funding directly from clients, identifying your value proposition within your overarching goal and business model framework provides you with a sound basis to understand which metrics matter for business analytics. But if your funders provide you with resources so that you create value for someone else, you will also need to understand the funders' own success metrics.

Tech hubs often have several different public and private funders and sponsors. It is important to find common ground between the goals of all funders and of the hub itself. Funding rarely comes without strings attached, and not all funding will allow you to directly work towards your own long-term goal. If you have diverse partners from government agencies, to multinationals, to grassroots organizations, you need to be sensitive to their respective goals and their success metrics to be able to identify the best possible business analytics approach for your hub.

The basic alignment between your funders' goals and your own should come from the value proposition for your clients - this is what ultimately determines your funders' impact. Governments and donors are not your clients, as you do not provide value directly for them. Their reason for funding you is that they believe that you are better positioned than they are to provide value to someone else, "beneficiaries" in international development language - in this case, early-stage tech entrepreneurs and start-ups. In other words, by providing value to your clients, you help your funders have a positive impact on others' lives, instead of generating profit or utility for themselves.

Governments and donors have their own vision and logic on how activities lead to impact, which they often codify in an impact model or a "theory of change." For instance, a donor might conceptualize that business mentoring for young software developers leads them to start and run sustainable and growth-oriented businesses, which means that more people are employed and more taxes paid than without the mentoring. So, mentoring ultimately contributes to socio-economic development and improved quality of life. In infoDev's case, the envisioned impact is related to private sector development, so the focus is on metrics such as job creation and revenue generation through start-ups (see box 8).

Box 8: A success on many levels: the case of Kopo Kopo

One of mLab East Africa's most successful incubation graduates is the mobile financial services company Kopo Kopo. In just a few years of operation, the enterprise created about 50 jobs and served more than 10,000 small business customers. In 2013, Kopo Kopo secured series A funding of $2.6 million. Kopo Kopo attributes substantial value to the support that it received from the mLab in its early days (see http://www.infodev.org/mobile- entrepreneur-case-studies).

For mLab East Africa, Kopo Kopo greatly contributed to its targets to increase revenues and investments of incubatees. For infoDev and the Digital Entrepreneurship Program, both the job creation effect and Kopo Kopo's function as a role model and active member of the Nairobi innovation ecosystem were important private sector development results. Finally, for infoDev's donors, such as the government of Finland, Kopo Kopo represents an example how growth-oriented mobile application enterprises broadly contribute to socio-economic development in low-income countries, in this case by increasing financial inclusion of small businesses and transformative impact on payments.


If you want your business analytics to fit in with your funders' impact models, you should work with them to identify existing and potential overlaps, and do so proactively and continuously. Many problems that grant recipients have with reporting through scorecards and logframes stem from the underlying problem that funders can have somewhat different perspectives and priorities. They might use a different language, not fully aware of your constraints and local realities. Donor and government funders also tend to request as much information as they can to assess any potential impact that their funding has generated, which can put pressure on you, given your resource constraints and narrower focus. Your funders are also held to higher-level impact and results agreements that they made with their own funders or governing bodies. In this complicated and indirect communication and codification chain, overlaps might not be obvious and tracking and evaluation might become more cumbersome than it should be. It will help if you engage in a dialogue with your funder to continuously understand their requirements and communicate your own.

Ideally, impact models and your value proposition are interlocked in a coherent logic. Usually, donors and governments fund an array of projects like yours, and your project is only part of their program portfolio. This means that your performance feeds into your funders' activities that are conceptualized to lead to some type of wider-scale impact. Ideally, the impact models of higher-level programs are aligned, and the value you create contributes to the start of your funders' results chains (see figure 3). While it is not your responsibility to be intimately familiar with all higher-level impact models, general awareness of how your results are interlocked with this can help you to better communicate with your funder and work towards better alignment, or think about solutions when alignment cannot be reached.

figure 3

Figure 3: Alignment of a tech hub business model with funders' impact models with infoDev as an example. Source: Catherine Amelink.

Your government or donor funder can often be a valuable source of information to decide your business analytics approach. The fact that your government and donor funders usually manage several projects like yours can help you conduct benchmarking and comparisons with other tech hubs. For instance, infoDev brought together mLab and mHub managers from across the globe about once per year and, at the end of the grant period, codified lessons in several reports (see box 6). Another example is the effort of the German Agency for International Cooperation (GIZ) to work with Afrilabs. Together, they organized two annual reunions in Berlin that helped African hub managers to coordinate and strategize a joint agenda.8 Knowledge-oriented international organizations are also increasingly publishing rich reports on innovation ecosystems in developing countries. While direct comparisons of concrete results figures (for example, number of start-ups created) can lead to unfair comparisons that neglect the ecosystem context, most of these resources use both qualitative and quantitative evidence that you can use as "enriched benchmarks" and learning material.