Doing more with less: What a room full of global development leaders said about cost-effectiveness

The global development sector is navigating a moment of genuine reckoning. The collapse of USAID and the retreat of major European donors have left a funding vacuum that philanthropy cannot fill. Organizations that built reputations on rigor and results have been forced to lay off talented people and discontinue proven programs; not because they failed, but because the environment around them fundamentally changed.

That was the frank opening from Meg Battle, IDinsight’s Senior Director of External Affairs, who set the tone for an invite-only dinner co-hosted with the Livelihood Impact Fund. The question animating the evening: in a world of constraint, how do we ensure every dollar drives the most possible good?

But cost-effectiveness isn’t just about survival, it’s about ambition. Getting this right means unlocking outsized impact at exactly the moment the world needs it most. It’s how organizations can build programs that governments can adopt and scale to reach millions of people.

Cost-effectiveness is a continuous journey

Rachel Proefke, Associate Director of Impact and Learning at LIF, opened with a candid account of how her organization has approached this challenge. LIF funds on what it calls ROI; for every dollar invested in programming, how many dollars of income gains does it unlock for participants?

But Rachel was equally clear about what that framework is not. It is not a filter organizations must pass before LIF will engage. “We don’t step back and wait for better data to materialize,” she said. Instead, LIF invests in building that evidence base alongside partners, co-funding evaluations, providing in-house technical assistance, and calibrating expectations to where an organization actually is in its journey.

The principle she articulated: operate on 80% of the available data, honestly assess what it tells you, and weigh the cost of chasing the remaining 20% against the time and resources it would consume. It’s a discipline, not a destination.

Rigor is a spectrum

Kayla Hoyer, who leads IDinsight’s Cost Effectiveness Unit, opened with a provocation: there is one cost question she refuses to answer: “Is this program cost-effective?”

The question, she argued, is simply too broad to be useful. Cost-effective compared to what? For which outcome? Over what timeline? The real work begins when organizations get specific: Should we run all five of these programs, or are two of them achieving similar outcomes at very different price points? If our budget is cut by 30%, what do we protect?

Drawing on her experience at IRC, Kayla described working with two senior leaders facing the same decision, whether to discontinue a vocational training program, who needed very different levels of evidence to reach the same conclusion. One was comfortable with back-of-envelope costing alongside academic literature. The other needed new, context-specific analyses before he could move. The cost effectiveness analysis provided what each leader needed to make confident decisions. 

The takeaway: the right level of rigor is not a fixed standard. It depends on who needs to be convinced, by when, and what decision is actually on the table. The sector spent decades championing RCTs, and rightly so but in the current environment, waiting two years for trial results is often a luxury that no longer exists.

Scaling requires more than efficiency

Florence Santos, who leads Evidence and Insight at CARE and is embedding a cost-effectiveness lens across its 100-country portfolio, brought a different frame: cost-effectiveness is not one thing, it’s two.

The first is efficiency; optimizing delivery so the same dollars reach more people. CARE is part of the Dioptra consortium, pooling cost data across eight major INGOs to benchmark and improve delivery of programs like malnutrition treatment. A 20% efficiency gain across the organizations involved could mean 500,000 additional children treated for acute malnutrition each year.

The second is scale; designing programs that governments can actually adopt and run themselves. Florence described a farmer field business schools program in Tanzania, where the government expressed interest in scaling it nationally. The question they asked was entirely reasonable: what would it actually cost us to do this? CARE realized they didn’t have a clean answer, because what a pilot costs an INGO is rarely what it costs a government with different infrastructure, different constraints, and fixed staffing.

That, she argued, is the harder discipline: being willing to strip a program back to its essential components without hollowing out the thing that made it work.

Learning as a daily practice

Paul Wang of The Agency Fund (and an IDinsight co-founder) closed the evening’s remarks with a pointed observation: the gap between what organizations currently achieve and what they could achieve isn’t incremental, it’s exponential. Using data to learn and improve continuously can make NGOs many times more effective and this ‘reward’, he stated, is worth the difficult effort in culture change, investment and tools required in pursuit of cost-effective outcomes. 

Cost-effectiveness isn’t a formula. It’s a commitment to asking more precise questions, meeting partners where they are, and building the sector’s collective capacity to make better decisions with the available data, even if it is imperfect.

That conversation is only beginning.

Interested in learning more about IDinsight’s Cost Effectiveness Unit? Explore our menu of services and discover ways we can support you, or reach out to meg.battle@idinsight.org or kayla.hoyer@idinsight.org for further support.