(The official correction to the April 17 story is to delete any reference to possible return in paragraph 7.

By Simon Jessop

LONDON (Reuters), Global Citizen, an international non profit that aims at ending poverty worldwide, announced on Monday that it will launch six funds each of $1 billion to create social and environmental change in the developing world.

Global Citizen Impact Funds are designed to fill a significant funding gap for countries that struggle to achieve the United Nations 2030 Sustainable Development Goals. These include access to clean water, fighting climate change and providing clean drinking water.

To meet these objectives, the poorest countries in the world need nearly $400 billion per year of external financing, Mick Sheldrick (Global Citizen Chief Policy Officer) told Reuters.

Global Citizen created its funds with partner NPX to help accelerate change. It said that the funds will bring together philanthropists as well as investors through a funding model that is easily scaleable.

The organization hopes to raise donor funds in the coming six- to nine months. It is targeting $25 million per fund. However, most of the selected NGOs could grow quickly to absorb as much as $1 billion.

This model allows investors to give money to the NGO, mostly funds that have impact mandates. The goal is to increase its services with the ultimate aim to hit certain goals. The Global Citizen fund would repay investors if it is successful and the results are independently verified by an independent third party.

The investors would be able to receive a return on capital and the NGO would also get incentivisation payments. Meanwhile, donors could rest assured that only the most successful initiatives would be funded.

Sheldrick expressed his belief that the vehicle has “the potential to be an innovative outcomes-fund vehicle which could transform philanthropy.” It is our hope that, in time, it will lead to an increase of the philanthropic capital for SDG related programmes.

One Acre Fund was selected as one of the NGOs. This fund supports smallholder farmers across Africa in climate action. It also plants and protects more trees.

This plan would support 44 million trees being saved over the next four years. That will lead to 7.4 millions tonnes of carbon dioxide being stored. The plan, if successful could grow to over 1 billion trees in the following decade.

These funds can be used for treatment and prevention of malaria. They will also help children who are in critical situations to their literacy and numeracy.