NEW YORK (May 11, 2012) — When UNICEF identifies a time-sensitive need for an essential supply—anti-malarial mosquito nets before a rainy season's onset, a critical medicine in short supply, or a vaccine to prevent an epidemic's spread—the call goes out for funding. At UNICEF's Copenhagen warehouse and its five global supply hubs, available commodities are readied for shipment. But despite its track record for rapid and effective response, UNICEF is always looking for ways to further speed the delivery of critical materials to vulnerable children and families. The Bridge Fund is the U.S. Fund for UNICEF's new, innovative financial tool for steamlining that process.
The Bridge Fund provides UNICEF's Supply Division with a flexible mechanism to reduce or eliminate gaps between the moment a critical need for supplies is identified and when funding becomes available. The UNICEF Supply Division procures $2 billion worth of supplies and equipment annually, and while UNICEF's global funders eventually pay for these goods, obtaining these funds can sometimes take weeks or months. Cash flow gaps and procurement hurdles arise because UNICEF’s governing Board prohibits the organization from taking on loan obligations to fund its work. The Bridge Fund provides UNICEF’s Supply Division with cash to bridge procurement costs until regular payments become available.
Established in 2011 by the U.S. Fund for UNICEF, the Bridge Fund consists of investors including foundations, corporations, and financial institutions, as well as individual philanthropists. Investors fund net worth grants, below-market-rate loans, and guarantees—creating a pool of cash that helps essential goods reach children in need as quickly as possible. An added benefit—rapidly obtaining more flexible funding allows the Supply Division to secure better pricing for materials and reduce shipping costs, freeing up more money to spend on vital commodities.
Prudential Financial, Inc. became the first corporation to support the Bridge Fund with a five-year, $7.5 million investment made through its Social Investment Program. "We were impressed with the level of social impact the Bridge Fund's innovative revolving pool model makes possible," says Ommeed Sathe, vice president, Social Investment Program at Prudential. "By deploying funds as needed which are then replenished through regular funding sources, Prudential’s capital is used several times over the term of the investment to help UNICEF deliver critical services such as vaccines and mosquito nets much more quickly."
The UNICEF Supply Division submits a funding request to Bridge Fund management. The Bridge Fund makes sure the request meets the threshold for prudent, high-impact use of funds. Then, the Bridge Fund's Board rapidly evaluates this underwriting assessment to decide whether to release the funds. If the Supply Division request is approved, a grant is provided. Finally, commitments are secured from global funders of UNICEF's work to replenish the Fund's capital at a clear point in the future.
It's a win-win scenario for investors, UNICEF, and most importantly, the world's vulnerable children.