Business leaders at the World Economic Forum must boost finance for education

As political and business leaders gather in Davos for another year’s World Economic Forum, the Education for All Global Monitoring Report has released a new policy paper  showing that contributions from corporations and private foundations combined total only $683 million a year, equivalent to just 5% that aid donors spend on education. And while aid donors are increasingly backing government-led education plans, private sector contributions often reflect business interests rather than the education needs of the poorest countries.

Private Sector and Education

To put the private sector contributions to education in perspective, $683 million is equivalent to just 0.1% of the two world’s biggest oil companies; it is equal to the cost of just two Airbus A380s, or, alternatively, the same amount people in the USA spend on pizza in just over a week. It is also a tiny amount compared with the $16 billion needed annually to ensure every child is in primary school.

Why does the private sector not give more to education since it is the first to benefit from a skilled workforce? Some argue it is because they aren’t interested in giving to social sectors. But this is not true. They fund health far more than education. Around 53% of US foundations’ grants are allocated to health, compared with only 8% to education.

Others suggest that the private sector, in particular pharmaceutical companies, has far more reason to be interested in health. But this cannot be the only reason. Health has benefited from the support of global business champions such as Bill Gates giving visibility to the vital importance of ensuring every child is vaccinated, for example. But there are not any business leaders of the same stature giving visibility to the need to educate 61 million children out of school.

Not only is $683 million a small amount of money, but a small number of companies contribute most of it. There is clearly room for more companies to join in. Only five corporations give more than $10 million a year each – Banco Santander, Cisco, Intel, Coca Cola and Exxon. These five provide more than half the total amount given by private foundations and corporations together.

Private foundations are more likely to allocate funds in a way that is more closely aligned with aid donors supporting national governments. Yet their contributions comprise just one-fifth of overall private sector contributions. Among foundations reporting their funding, only five provide more than US$5 million a year – Open Society, MasterCard, William and Flora Hewlett, Ford and Carnegie Corporation of New York. Their contributions are important but small. They are comparable to the amount of aid to education from some of the smallest government donors, such as Luxembourg and New Zealand.

There are some reasons for optimism. Less than six months ago, the Global Education First Initiative was launched by the UN Secretary-General, Ban ki-Moon, at the UN General Assembly. The platform of the Initiative included high profile personalities and politicians such as Gordon Brown, the UN Special Envoy for Global Education, H.M. Queen Rania Al Abdullah of the Hashemite Kingdom of Jordan, Aung San Suu Kyi of Myanmar, Julia Gillard, Prime Minister of Australia, Helle Thorning-Schmidt, Prime Minister of Denmark, Mr Jim Yong Kim, President of the World Bank, amongst others. This, combined with the stark reality of EFA Global Monitoring Report statistics released for the launch showing 250 million children are not learning the basics, was enough to encourage the private sector to stand up for education. Over $1.5 billion in pledges were made from corporations and foundations. Western Union alone pledged $1 billion for education globally, equivalent to US$10,000 per day in grants for 1 million days of school.

Davos is a hotbed of influential business leaders who have the potential to accelerate progress towards making Education for All a reality by 2015. I truly hope that the messages from our policy paper will make their way to them via the platforms and side events they will be attending. With their support, education has the potential to break the cycle of poverty of millions of households around the world. There are strong possibilities for it to happen this year. Three passionate supporters for education are likely to be in Davos: Irina Bokova, Director General of UNESCO, Gordon Brown, UN Special Envoy for Global Education and H.M. Queen Rania Al Abdullah of the Hashemite Kingdom of Jordan. Their presence will hopefully help to galvanise support amongst world business leaders to step up their commitments to education. With their help we might soon see an end in sight for all children currently denied the opportunity to be in school and learning.




  1. Essential that education and skills initiatives are driven by employer need. If private-public consortia establishes transparent work-ready and skills definitions and need; then the employability agenda is successful. Clear workforce planning informing workforce initiatives, which draws on accessible labour market intelligence is key to plugging skills gaps and driving vocational education. Employers must be engaged with the skills and talent pipeline – that too starting with schools.

    1. As an educator, I agree. Transparent work-ready skills are needed. That was the beauty of the industrial economy.

      During the industrial era, the school’s primary mission was to graduate the masses from high school. The classroom was (and in too many cases still is) the sacred, untouchable domain of the teacher who served/serves as the “soliloquizing authority” much like the foreman in a factory or a manager in an office.
      In an educational civilization created during the social and economic context of industrialization, schools and teachers were neither required to nor needed to educate ALL children equally and well as we must during this era of innovation and globalization. Designed to prepare students for life in the prosperous, industrial economy, an “invisible curriculum” of rote memorization, rigid uniformity, punctuality, silence, and obedience was integrated into the daily classroom content.
      Alas, this model is gone with the wind and a new definitive model has not yet been born.

      However, we do need to create a school /classroom culture where students learn to face failure, overcome mistakes, problem-seek, confront conflict, cooperate, and communicate.
      Lorraine Richardson

  2. Repeating my tweet: “@Pauline_RoseGMR You are right, but … Challenge is to persuade governments that #education is a key investment and not a political risk.” – @JAJorgensen

    That is, weighing “the cost of just two Airbus A380s” against the value of education is a weak argument. It’s not a choice facing business leaders. They need convincing case stories correlating education investment with employment rates, innovation success, competitiveness, quality of life, etc., on which evidence should not be difficult to get. Corporate social responsibility a supporting argument.

    The trade-off between tanks and rockets versus health and education would apply more to a government skilled in using zero-base budgeting. The Nordic countries and Singapore, for example, seem to have found the right balance for their national budget.

    1. Hi Jens

      Many thanks for your comment. I fully agree with you that ultimately education should be a government responsibility, and they need to see the benefits – includling in terms of economic growth, peace, and other positive outcomes. At the same time, some of the poorest countries cannot afford to foot the entire bill of education – we currently need $16 bil for primary education alone.

      Comparisons with Airbuses and pizzas (or the profits of companies) are intended to capture the imagination and media headlines, but we agree wholeheartedly that this is not enough on its own. Case studies based on evidence are needed to show that investing in education is beneficial, and should ideally be the basis for policymaking. Our Report provides exactly this evidence-base, as do all of our communications throughout the year.

      As for this particular story, half of the battle is proposing something counter intuitive which captures the public’s imagination enough for them to retweet, write about or quote during any exchanges with influential parties who, in this case, might be conversing on davos corridors. Such communications are written in the hope that they will spread this sentiment to others in a joint bid for more financing for education.

      And it is not just about private sector money. Thanks to the promotion of Bill Gates, health has managed to get a much higher profile which has helped also promote attention amongst governments. We don’t have such a business champion in education, unfortunately.

      I look forward to further exchanges on these important issues


      1. Hi Pauline,

        We are obviously talking the same language :-). However, perhaps I should backtrack on the need for ‘evidence-based correlations’ to confirm the benefit of investing in education = in people.

        The payoff is so evident; everybody knows it! How did any person or group of people – from successful entrepreneurs and Nobel Prize winners to highly-developed countries reach their standing if it was not for their education and skills (and good health) as a fundamental minimum in the first place?

        The constraints lie elsewhere: business leaders thinking it’s the government’s responsibility; certain governments fearing a too well-educated and vocal population; other governments ‘using’ the funds for different purposes; and some prioritizing short-term economic or political gain over the longer-term value of education.

        So you are right about the need to capture the imagination of decision-makers and the media. But how and with what message? I’m still not sure that Airbuses and pizzas are that helpful. What about a prestigious Education Prize? “Flattery will get you anywhere!”

  3. These numbers indicate the US needs to do more. Education in the developing world, particularly of girls, is the antidote to poverty and other social ills.

  4. In traditional budgeting the role of corporate/private sector is not calculated, provisioned for or recorded formally. Whilst the Security Exchange Commission of Pakistan (SECP) emphasizes annual reporting by companies regarding corporate giving there is no mechanism to track this at field level. It is important to have a more institutionalized and robust mechanism for attracting private sector’s support to education that is part of the innovative financing for the sector. This requires a paradigm shift in how corporate core business for the sector is incentivized and tracked. .. Baela Raza Jamil ITA/SAFED Pakistan

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