This category includes articles about people, firms and foundations that invest in social good by investing in social entrepreneurs, social impact or pay-for-success bonds, etc.
This category includes articles about people, firms and foundations that invest in social good by investing in social entrepreneurs, social impact or pay-for-success bonds, etc.
This post was originally produced for Forbes.
By some measures, the world is awash in cash, much of it available to be invested in emerging markets with a social purpose. For instance, the world’s largest bank, the Industrial and Commercial Bank of China, has assets of $3.3 trillion. The constraint on impact investing may be expertise rather than capital.
According to Dave Richards, cofounder and Managing Director of Capria Ventures an affiliate of Unitus, explains the constraint. There are, he says, “lots of great entrepreneurs in high-growth emerging markets in Africa, Latin America and Asia and very little early-stage risk capital available, so their businesses aren’t realizing their potential in areas such as agriculture, healthcare, education and technology.”
The cause, he asserts, isn’t the lack of capital. He says, “What’s needed are on-the-ground, knowledgeable, capable fund managers who can provide smart capital and support to the best entrepreneurs.”
To address this problem, Richards says, “We have launched Capria Accelerator, the first global business accelerator for impact fund managers. We are taking our experience of building the leading impact seed fund in India along with Unitus’ experience over a decade of launching multiple fund managers to invest in, support and help capitalize new fund managers backing early-stage startups primarily in markets including Sub-Saharan Africa, South Asia, Southeast Asia, and Latin America.”
“Our goal is to launch 10 early-stage funds over the next 5 years in emerging markets,” he adds.
This approach, training local fund managers to be effective with local investing holds promise, according to Richards. “Local business solutions led by local entrepreneurs are both more likely to succeed (due to understanding local nuances) and provide better (more inclusive) economic development than depending on importing multi-national corporations.”
“Our vision is to build a new generation of local fund managers who can support the development of a growing indigenous entrepreneurial ecosystem in developing countries,” Richards concludes.
On Thursday, March 3, 2016 at 2:00 Eastern, Richards will join me for a live discussion about the Capria Accelerator and its efforts to facilitate growth capital for entrepreneurs in Sub-Saharan Africa, South and Southeast Asia and Latin America. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.
More about Capria Ventures:
Capria Ventures is a global impact investment firm that manages two pioneering ventures: Unitus Seed Fund and Capria Accelerator. Founded in 2012, Unitus Seed Fund is the leading impact venture seed fund investing in startups innovating for the masses in India. Unitus Seed Fund invests in sectors including healthcare, education, mobile, consumer, retail, ecommerce, financial services, and agriculture. Founded in 2015, Capria Accelerator is the first global business accelerator for impact fund managers. Capria Accelerator invests in and supports startup fund managers backing early-stage startups in markets including Sub-Saharan Africa, South Asia, Southeast Asia, and Latin America. Capria is backed by Unitus, a pioneering financial services group that address global problems with innovative, market-driven solutions and has collectively raised more than $1.2 billion since 2005. Capria has offices in Seattle and Bangalore.
Dave Richards is an experienced entrepreneur, executive, and global early-stage investor. In 2012, he cofounded Unitus Seed Fund, now the leading venture seed fund investing in startups innovating for the masses in India. In 2015, Dave cofounded Capria Accelerator, the first global accelerator for impact fund managers. Unitus Seed Fund is an affiliate of Unitus Group, a premier financial services group operating in India and other emerging markets since 2000.
Dave has been an early investor in microfinance and other businesses serving low-income populations. Since 2005, he has been involved with the Unitus Group, helping to lead efforts to select and invest in entrepreneurs in many developing countries. Dave led the Unitus Labs incubator for 2 years including the successful research and spinout of two venture firms: Unitus Impact and Unitus Seed Fund. He also led Unitus Investment Management, the General Partner of Unitus Equity Fund, a pioneering microfinance venture fund, was a board member of Unitus Capital, a leading Bangalore-based investment bank, and was on the investment committee for Unitus Impact.
Previously, Dave developed and led multiple high-growth technology businesses at RealNetworks, Sybase and Symantec SYMC +4.63% from startup to multiple hundred million dollar global enterprises. He is currently a partner with Social Venture Partners Seattle is the cofounder of the SVP Fast Pitch startup angel fund. Dave received his Bachelor of Commerce degree from the University of British Columbia.
This post was originally produced for Forbes.
Nancy Pfund, founder and managing partner of DBL Partners, has invested in some of the biggest and most successful social entrepreneurs of our time, having stakes in both Tesla and SolarCity, among others. Pfund shared some insights with me and will share more live.
First, Pfund predicts a transformation of global energy over the next decade.
Over the next 10 years, investing in energy will shift from being dominated by investing in fossil-based large oil and gas companies ,regulated utility monopolies, and gas-powered car companies to including a plethora of clean technology , digital platforms and consumer-driven solutions providers. This transition will be messy, but will result in a 21st century energy industry that addresses 21st century needs of consumer choice, value, sustainability and reliability . It will also bring electiricity and a ticket to the middle class for the 1.3 billion people on this planet without access to electricity.
Second, she anticipates that millennials will cause a shift in the workplace.
As millenials become the largest part of the workforce, they will transform the sectors of recruiting and career building to make it serve their needs of cultural fit, meaning and fulfillment with tools that they own, like video , media and mobile resources. These tools will better address needs of women and minority millenials as well as traditional male career builders.
Third, Pfund says our food supply will undergo radical changes driven both by consumer demand and technological advances.
Agriculture and food are shifting to a sustainable platform that will increasingly put farmers and consumers first, not traditional agribusiness companies and relationships. Big data will empower farmers to build their communities, making better decisions and purchases with a reduced need for intermediaries. This will result in reduced use of natural resources like energy and water and drive down the levels of chemicals and pesticides used in production. Consumers will create strong demand for healthier and less chemical and natural resource intensive food products.
On Thursday, February 18, 2016 at 1:00 Eastern, Pfund will join me for a live discussion about these insights and more that she will offer for social entrepreneurs. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.
More about DBL Partners:
Double Bottom Line Venture Capital: We invest for both top tier financial returns and social returns. By social returns, we mean that we work to bring social, environmental and economic progress in the region’s and sectors in which we invest. Portfolio companies include Powerlight (sold to SunPower), Tesla , Pandora, SolarCity, MAIYET, The RealReal, Farmer’s Business Network, The Muse.
Nancy E. Pfund is Founder and Managing Partner of DBL Partners, located in San Francisco and Palo Alto. DBL Partners is a venture capital firm whose goal is to combine top-tier financial returns with meaningful social, economic and environmental returns in the regions and sectors in which it invests. As a leading player in the growing field of “impact investing”, DBL has helped to reveal the power of venture capital to promote social change and environmental improvement, and Ms. Pfund writes and speaks frequently on this topic. She sponsors or sits on the board of directors of several companies, including; SolarCity (NASDAQ: SCTY) on both the audit and compensation committees, Farmer’s Business Network, Advanced Microgrid Solutions, Off-Grid Electric, Primus Power, The Muse, and, prior to their public offerings, Tesla Motors and Pandora. Ms. Pfund was featured #17 in the 2014 FORTUNE Inaugural World’s Top 25 Eco-Innovators; and is Chair of the Advisory Council of the Bill Lane Center for the American West at Stanford University; a member of the Advisory Board of: the Lawrence Berkeley National Laboratory (Berkeley Lab); and the UC Davis Center for Energy Efficiency, and a Trustee of the National Geographic Society. She has been a Lecturer in Management at the Stanford Graduate School of Business and the Yale School of Management; and is a C3E Ambassador to the U.S. Clean Energy Education and Empowerment Program, led by the U.S. Department of Energy. She is also a founding officer and director of ABC2, a foundation aimed at accelerating a cure for brain cancer. Ms. Pfund received her BA and MA in anthropology from Stanford University, and her MBA from the Yale School of Management.
This post was originally produced for Forbes.
Former Haitian Prime Minister Laurent Lamothe recently announced the formation of a foundation named in honor of his father, The Dr. Louis G. Lamothe Foundation. The Foundation will fight social injustice in Haiti and complement the work he is already doing through LSL World Initiative.
“The Dr. Louis G Lamothe Foundation is an organization that aims to carry on my father’s work as a socially responsible activist in the fight for an inclusive and united Haitian society,” Lamothe said. “Decades of poverty, squalor, violence, economic insecurity and dictatorship have ravaged our country. As a result, Haiti is one of the poorest countries in the Western Hemisphere with a limited capacity to respond to the effects of political and social instability and natural crises. This Foundation is essential and long overdue as it will focus on providing the Haitian people with opportunities to transform their own country – something my father believed in and fought for.”
Lamothe is also a social entrepreneur and impact investor who leads the LSL World Initiative, which works to arrange innovative financial resources for developing countries around the world. The Foundation will give Lamothe another tool for helping the people of his homeland.
He told me, “I started LSLWI to provide solutions for innovative financing based on my personal experience in the private sector as well as former Prime Minister of Haiti where I had to a do a lot with little, and innovative financing helped a great deal.”
He notes that the success of LSLWI will give “governments the resources to reduce poverty and level the playing field for all their citizens.”
On Thursday, February 11, 2016 at 4:00 Eastern, Lamothe will join me for a live discussion about his work in Haiti and around the world, via both the Foundation and LSLWI. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.
More about the LSL World Initiative:
LSL World Initiative is a global organization dedicated to the socio-economic empowerment of emerging countries, with a proven track record of results that benefit the most vulnerable populations. We help governments attain their sustainable development goals in line with national needs and priorities.
Former Prime Minister, Republic of Haiti
President and Founder of LSLWI, Laurent S. Lamothe successfully served as Prime Minister of Haiti between May 2012 and December 2014, the longest tenure of any Prime Minister in the last three decades. During his time in office, Lamothe presided over the design and implementation of an important social policy agenda that targeted the poorest sectors of the Haitian population. Lamothe also presided over the largest infrastructure development in recent memory that included schools, bridges, roads, and which are now clearly visible throughout Haiti.
Additionally under Lamothe foreign direct investment increased to the highest level since the fall of the Duvalier dictatorship in the mid 1980s. Under his leadership Haiti pursued reforms that made Haiti a safer and more business-friendly country including 15-year tax holidays and tax breaks to companies investing in the island nation, and increasing the police force by 30 percent.
Lamothe brought to the office of Prime Minister an entrepreneurial spirit and dynamism that earned him the title of “Entrepreneur of the Year” by Ernst and Young in May 2008. More recently in November 2014, Latin Trade magazine recognized his innovative skills by naming him the year’s Innovative Leader of the Americas. Latin Trade noted that Lamothe “helped establish a paradigm shift for Haiti as a destination for investment, rather than simply for humanitarian aid.”
Having grown up in a country affected by poverty and lack of resources at all levels, this savvy businessman has developed throughout his life a deep sense of social responsibility and a strong tendency to assist those in need. Lamothe is a pragmatist who throughout his role in the public sector emphasized practical solutions over partisan politics to address the urgent needs of Haiti. Lamothe obtained a Bachelor of Arts in political science from Barry University in Miami and in 1996 earned his MBA with honors from University of St. Thomas. In 1998 Lamothe founded Global Voice Group SA (GVG) considered today a world-leading provider of ICT solutions for telecom and fiscal authorities. He served as CEO of GVG until he stepped down to assume his public sector duties with the government of Haiti.
This post was originally produced for Forbes.
Over the past several years as impact investing has captured the attention of the world’s wealthy, people started by asking “what is impact investing?” Today, the question more people are asking is “how do I do impact investing?”
The Global Impact Investing Network, co-founded by Amit Bouri who serves today as the CEO, sits near the center of this discussion. The GIIN (pronounced like jean or gene) is building a database of impact measures in hopes of creating a resources that will help standardize impact measures.
Investors of all sorts are relatively good at measuring return on investment. Many investors, myself included, check their portfolio values daily. Some monitor them throughout the day–even if they aren’t trading. Others fall back to reviewing quarterly and annual statements, but however financial returns are measured, such measures are easy to gather.
The GIIN is helping to make impact measurement just as easy. Impact investors will achieve target impacts unless they have good data with which to measure the impacts.
And let’s be clear, much of what we initially think of as impact is just activity. An investment that increases the number of books in children’s hands isn’t really an impact so much as an intermediate outcome. The impact is the changes, positive we hope, that are yielded in the lives of the children. Are they doing better in school, reading at or above grade level, graduating from high school, matriculating into college, etc.
The GIIN is working to help us measure impact in all its forms.
Bouri is bullish on the future. “Impact investing has the potential to channel significant amounts of private capital to solutions to the worlds most intransigent challenges. Last year was a banner year for impact investing and set the stage for 2016 to be a year of tremendous growth and progress.”
On Thursday, January 28, 2016 at 1:00 PM Eastern, Bouri will join me here for a live discussion about the GIIN and its work to make impact investors more effective. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.
More about The GIIN:
The Global Impact Investing Network is a nonprofit organization dedicated to increasing the scale and effectiveness of impact investing. Impact investments are investments made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return.
Amit Bouri is the Chief Executive Officer and co-founder of the GIIN. His work in impact investing began when he was a strategy consultant with the Monitor Institute. At Monitor he was part of the team that produced the Investing for Social & Environmental Impact report, and he left Monitor to co-found the GIIN in 2009.
Amit’s other projects at the Monitor Institute included strategic planning and organizational development work for nonprofit organizations and foundations. Amit previously worked in the private sector as a strategy consultant with Bain & Company. He left Bain to work in global health at the Elizabeth Glaser Pediatric AIDS Foundation. He also worked in the corporate philanthropy units of Gap GPS +0.00% Inc. and Johnson & Johnson JNJ +0.98%. Amit holds an MBA from Northwestern University’s Kellogg School of Management, an MPA from Harvard University’s John F. Kennedy School of Government, and a BA in Sociology and Anthropology from Swarthmore College. Amit serves on the Board of Directors for Investors’ Circle and SJF Institute.
This post was originally produced for Forbes.
It seems that hardly a day passes without headlines about unarmed black men being killed by police in our country. If there isn’t a new case, we’re trying an old one either in court or in the media.
Ben Hecht, the CEO of Living Cities, a nonprofit group that makes and facilitates impact investments in cities around the country, including my own here in Salt Lake City, explains the broader problem:
US cities are places of great opportunity, hope, change, resilience and energy. Unfortunately, they are also places of great inequality. Home to more than 80% of the population, cities reflect the incredible income, wealth and educational disparities between rich and poor, white and people of color. These disparities not only threaten to hold back the economic prosperity of the nation but threaten our democracy.
Hecht’s colleague, Eileen Neely, Director of Capital Innovation, heads up the Pay for Success program efforts for Living Cities.
Neely says, “We need to blend all types of money–government, philanthropic and private sector capital–together to address growing social disparities and economic inequality in the United States.”
Pay for Success programs focus on paying for results rather than activities and typically are oriented toward prevention rather than remediation. Salt Lake County Mayor Ben McAdams has likened it to building guardrails at the top of the cliff rather than operating a hospital at the bottom.
Neely explains further, “While preventative programs that tackle issues like youth recidivism and chronic homelessness can make a real difference, these programs lack the funding needed to reach all the populations that need them. We need to attract private capital to help expand and scale programs that work.”
She adds, “Financing vehicles such as Pay for Success (PFS) can offer competitive rates of return, which is more attractive to private investors, and can help move impact investing into the mainstream.”
Neely explains the basic economics of a PFS deal structure: “In a PFS deal, philanthropic and private investors provide funding for social programs and government only pays them back if the project meets certain agreed-upon outcomes. This means that government resources and taxpayer dollars are only spent on effective programs that measurably improve the lives of community members.”
One of the big challenges with the model is the cost to put a program together. Bringing all of the parties together, organizing metrics for measurement, finding program providers, contracting among the local government, the investors and the program providers and all of the people working on the deal takes time and money.
Living Cities, she says, is “now striving to increase the scalability of the model with our recently announced Pay for Success Construction Loan. The Construction Loan covers the upfront costs necessary for service providers, project managers and evaluators to construct a PFS project, which had traditionally been a grant fund and a barrier preventing the PFS field from growing more rapidly.”
Neely says she would like to see more PFS deals done so that the model can be fine-tuned so it can be applied more efficiently across the country.
Hecht’s vision for cities is nothing short of a complete overhaul of tradition.
This will take overhauling outdated models of citizen engagement and cumbersome bureaucratic structures. I believe that governments will cease investing precious resources and energy into programs that don’t work, and start scaling the programs that are making real impact in the lives of low-income people. Finally, I see experimentation and commitment to harness both philanthropic and private capital to make a material difference in underserved communities and to invest not just in physical infrastructure, but also in human capital.
On Thursday, January 28, 2016 at noon Eastern, Hecht and Neely will join me here for a live discussion about the role that impact investing and Pay for Success can play in addressing the challenges of America’s inner-cities, including especially the concerns of the #blacklivesmatter movement. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.
More about Living Cities:
Living Cities harnesses the collective power of 22 of the world’s largest foundations and financial institutions to develop and scale new approaches for creating opportunities for low-income people and improving the cities where they live. Its investments, research, networks, and convenings catalyze fresh thinking and combine support for innovative, local approaches with real-time sharing of learning to accelerate adoption in more places.
Ben Hecht was appointed President & CEO of Living Cities in July, 2007. Since that time, the organization has adopted a broad, integrative agenda that harnesses the collective knowledge of its 22 member foundations and financial institutions to benefit low-income people and the cities where they live. Living Cities deploys a unique blend of more than $140 million in grants, loans and influence to re-engineer obsolete public systems and connect low-income people and underinvested places to opportunity.
Prior to joining Living Cities, Mr. Hecht co-founded One Economy Corporation, a non-profit organization focused on connecting low-income people to the economic mainstream through innovative, online content and increased broadband access. Immediately before One Economy, Mr. Hecht was Senior Vice President at the Enterprise Foundation.
Mr. Hecht received his JD from Georgetown University Law Center and his CPA from the State of Maryland. For 10 years, he taught at Georgetown University Law Center and built the premier housing and community development clinical program in the country. Ben is currently Chairman of EveryoneOn, a national initiative founded by the Federal Communications Commission to connect low-income Americans to digital opportunity. He also sits on the National Advisory Board for StriveTogether and Duke University’s Center for Advancement of Social Entrepreneurship (CASE) Advisory Council.
Eileen Neely joined Living Cities in December 2012 as the Associate Director of Capital Formation. She was named the Director of Capital Innovation in May 2014. Prior to joining Living Cities, she was the Director of Strategic Planning at the District of Columbia Housing Authority since May 2011. In this position, Eileen oversaw the development, implementation and measurement of the Agency’s Strategic Plan and Moving to Work Plan.
Previously Eileen was the Chief Operating Officer of the Fresno Housing Authority in Fresno, California. Eileen assisted the Executive Director in the transformation of the Housing Authority – changing the corporate culture, establishing a broader role within the community, modernizing business practices, tightening financial controls, and expanding their programs to serve more low- and moderate-income families. She was responsible for all the internal operations of the Housing Authority, including Accounting and Finance, Information Technology, Human Resources, and Communications and Public Relations.
Prior to moving to Fresno, Eileen was the Director of Public Entity Lending at Fannie Mae in Washington, DC. At Fannie Mae she provided technical assistance and financing to cities, counties and housing authorities throughout the country to help them address their pressing housing needs. Eileen started at Fannie Mae as the Manager of Economic Forecasting where she developed the company’s forecast for the economy, including interest rates, housing indicators, and other measures of the economy.
Eileen has her Master’s Degree in Economics from Carnegie Mellon University in Pittsburgh, PA, and her Bachelor’s Degree in Mathematics and Economics from Hiram College in Hiram, OH.
This post was originally produced for Forbes.
There are more and more people doing impact investing in Africa, seeking both to be of help to the people there and to take advantage of the rapidly growing economies there. Matt Davis of RENEW LLC is one of this breed of impact investors.
Davis says, “There is both a development challenge and a market challenge in Africa that we are addressing.”
“The development challenge is that the financial systems in many countries in Africa are fragmented, and little to no capital is available to finance the growth of small and mid-size businesses (SMEs),” he explains. “At the top of the economic pyramid, bank and institutional financiers tend to back large multinationals. At the bottom, microfinance institutions lend only small amounts at high rates to micro-enterprises. But there is nothing to finance small and growing businesses. Thus, we have what is called the ‘missing middle’ in these economies, and SMEs are inhibited from growing into large companies, creating jobs, generating tax revenue, and stabilizing the economy along the way.”
Moving to the second challenge, Davis says, “The market challenge is related to supply and demand. The supply of private equity is growing across Africa, as international investors move in seeking higher risk adjusted returns. Yet these investors are not able to find enough companies able absorb the minimum investments they are willing or able to make. Addressing both challenges requires a new financial actor and intermediary to stimulate financing and growth for SMEs.”
Davis led the creation of the Impact Angel Network (IAN) to invest in Africa, with an initial focus on Ethiopia. “The IAN addresses the problem of the ‘missing middle’ by being a source of financing for SMEs. The IAN invests in professionally vetted and managed companies in Africa that are led by strong management teams looking to scale. RENEW manages the IAN’s portfolio in-country and addresses a trust and skill gap that has kept many U.S. investors from being active on the continent of Africa.”
RENEW is operating at a relatively small scale, filling the gap in the missing middle. This space is thinly populated in part because the administrative and logistical costs of running a small fund making six-figure investments overwhelms returns. Grants from development agencies make the economics work for RENEW.
Davis says, “And the development community (organizations like USAID), makes these investments economically feasible by lowering the transaction and management costs that would normally be borne by the investors. This model, or public private partnership between the IAN, RENEW, and the development community, is working, and the IAN is now one of the most active and largest investors in Ethiopia on a transaction basis.”
Davis sees their role in Africa as a catalyst to help struggling countries there gain greater independence from multi-lateral and other aid organizations. “RENEW intends to scale our model and implement it in other countries across the continent. Over time we would like to see offices in 20 countries, and professional teams in each country managing hundreds of companies that are creating thousands of jobs. As the companies that the IAN invests in grow, they will provide jobs and taxable revenue to the government, which can then finance the programs that are currently being covered by international aid organizations,” Davis concludes.
On Thursday, January 14, 2016 at 4:00 Eastern, Davis will join me here for a live discussion about their work in Africa. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.
More about RENEW LLC:
RENEW LLC founded and manages the Impact Angel Network (IAN); the largest U.S. angel network for Africa. The IAN’s mission is to invest in high quality, high potential companies in Africa, support their growth, and achieve attractive financial returns and sustainable social impact from their investments. RENEW is a U.S. investment adviser that manages the IAN’s portfolio from its office in Africa. RENEW’s team of lawyers, financial analysts, and business consultants find and vet promising businesses in Africa, present them to the IAN, and grow them into world-class companies. The IAN and RENEW believe that many growing businesses, together, can create the engine that lifts entire nations out of poverty.
Matthew Davis is founder and partner at RENEW LLC. Mr. Davis has extensive experience working with U.S. and African government leaders, and structuring and facilitating international private equity investments. Mr. Davis is a founding member of RENEW’s Impact Angel Network. Prior to founding RENEW, Mr. Davis worked as a principal consultant at the Touchstone Consulting Group, a strategy and management consulting firm. As a consultant he advised executives and government leaders on strategies for environmental sustainability, international development, health policy, information technology, and finance. Mr. Davis has an undergraduate degree in physics and a master’s of science in physics and business from the University of Utah, and is a CFA charterholder.
This post was originally produced for Forbes.
Water.org is leading a revolution in the provision of clean drinking water in the developing world, turning the recipients of charity into regular water customers through microloans funded by impact investments.
Gary White, CEO of Water.org, explains the problem, noting, “The poor are not a problem to be solved, they are the solution. I see constant innovation in the financial sector—new models, new products. Water.org is applying that kind of thinking to the philanthropic sector—creating new opportunities for private and philanthropic capital to make systemic change. Access to water and sanitation has been the focus of charity. But there’s a market-based solution. We realized that if we could provide the poor with access to small loans at reasonable rates, we could get them into the water system. And not as charity, but as customers.”
White explains further, “Changes in the water supply & sanitation (WSS) market at the Base of the Economic Pyramid (BOP) have unleashed significant new demand for WSS services. There have been significant gains in reducing poverty over the last two decades, and the trend will continue with support from the international community to eradicate extreme poverty by 2030. These socioeconomic changes are driving an increased willingness and ability to pay for improved water access and water quality as well as improved sanitation.”
“We created WaterCredit to unleash the power of the poor. By enabling the poor to finance toilets and taps in their own homes, we’re spreading capital costs across a broader swath of stakeholders,” he adds.
While these are still early days, Water.org is past the pilot phase and is scaling up its WaterCredit initiative. White explains the progress and impact:
Evidence from Water.org’s and WSP’S existing programs in Bangladesh, India, Kenya and the Philippines demonstrate that a viable market can be made for financing water and sanitation improvements. MFIs have developed and launched water and sanitation lending programs that have disbursed over $120 million in loans. A conclusion from the programs have shown that as access to water and sanitation credit became available, low-income clients chose to take out loans and were able to repay those loans.
Water and sanitation lending programs have demonstrated benefits for financial institutions, development partners and most importantly clients and their households. These findings indicate that microfinance principles can be successfully applied to the water and sanitation sector and leverage funding to achieve greater reach than traditional subsidy based models. Governments and NGOs can work with MFIs, as both demand generators and financiers, to help accelerate access to safe water and sanitation.
On Thursday, January 7, 2016 at 4:00 Eastern, White will join me here for a live discussion about WaterCredit. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.
More about Water.org:
For more than twenty years, Water.org has been at the forefront of developing and delivering solutions to the water crisis. Founded by Gary White and Matt Damon, Water.org pioneers innovative, community-driven and market-based initiatives to ensure all people have access to safe water and sanitation; giving women hope, children health and communities a future. To date, Water.org has positively transformed the lives of more than three million people living around the world.
Gary White is Chief Executive Officer and Co-founder of Water.org, a nonprofit organization dedicated to empowering people in the developing world to gain access to safe water and sanitation. (Water.org is the resulting organization of the July 2009 merger between WaterPartners, co-founded by White in 1990, and H2O Africa, co-founded by actor Matt Damon). White’s entrepreneurial vision has driven innovations in the way water and sanitation projects are delivered and financed, and these innovations now serve as a model in the sector.
White has led Water.org during a period of rapid expansion, growing revenue by an average annual rate of 50 percent since 1994 and positioning Water.org as an innovative leader in the global water supply and sanitation space. He developed the organization’s WaterCredit Initiative, creating new financing options for poor populations to meet their water supply and sanitation needs.
White is a leading advisor in the water and sanitation space, counseling organizations such as the Michael & Susan Dell Foundation, MasterCard Foundation, PepsiCo Foundation, Hewlett Foundation, and Diageo on responses to the global water crisis. White is a founding board member of the Millennium Water Alliance and Water Advocates.
In 2002 he received the Distinguished Alumnus Award presented by the School of Public Health at the University of NC-Chapel Hill. In 2003, he was named a fellow of the British American Project. In 2008, he was inducted into the Philanthropy World Hall of Fame. In March 2009, WaterPartners received the Skoll Foundation’s Award for Social Entrepreneurship and White was inducted into the community of Skoll Social Entrepreneurs. In October 2009, White received the ONEXONE Difference Award for his work over the past two decades in addressing the global water crisis. In 2009, he was named an advisor to the Clinton Global Initiative. In 2010, he was named the Kansas City Global Citizen of the Year by the mayor of Kansas City, MO. In 2011 he was named to the TIME 100 list of the world’s most influential people. Also in 2011 he was named one of 28 Alumni of Distinction among a pool of more than 50,000 living graduates of Missouri University of Science and Technology. In 2012 White received the World Social Impact Award from the World Policy Institute as well as being named one of the Schwab Foundation Social Entrepreneurs of 2012. Most recently Gary was invited to join the World Economic Forum’s Global Agenda Council on Water.
White’s educational credentials include three degrees in Civil and Environmental Engineering from the University of North Carolina at Chapel Hill and the Missouri University of Science & Technology.
“My story starts with a near drowning when I was 15 years old. This experience clarified in my mind the urgency to make an impact while we can,” begins Tony Loyd, the podcaster who produces “Social Entrepreneur.”
He continues, “As an adult, I was successful by many standards. I was an executive with a handful of Fortune 500 companies. However, at times I was conflicted. Some of the companies that I worked for had a powerful mission, but a toxic work environment. Other companies had a wonderful environment with great camaraderie, but their mission was not producing the kind of world I want to live in. I have been asked by these companies to lobby for causes that went against my values.”
He explains how he made the leap to podcasting, “In late 2013, I had a crisis of conscious. I began to write a series of blog posts called ‘My Jerry Maguire Moment.’ Through writing, I began to clarify my thoughts. It was then that I really understood the power of business to do good in the world. I left my corporate job and began to explore my options. I mentored early stage social entrepreneurs through a program at the University of Minnesota called Acara. I began to write a book. I was interviewing experts for the book and I realized that these interviews would make a good podcast.”
Tony didn’t start out in his career on the top of the pile. He says, “I was born in Arkansas in fairly simple circumstances. In high school I graduated 250th of 259. As a younger man, I drove a truck and worked as a janitor. I did not obtain my college degree until my mid-thirties.”
He went on to have a brilliant career, which he describes in more modest terms, “However, I made some good decisions too. I worked hard, read positive content every day and boldly led teams to create value for some large corporations. I really specialized in leading teams in times of transformation. So, having earned my executive role the hard way, it was difficult to walk away from that life. It was quite the lucrative life. In order to begin again, I had to walk away to nothing. No job. No team. No financial security.”
“I am not alone. Let me explain,” he says. “I honestly believe that there are only two forces in the world: fear and love. At this point in history, technology magnifies whichever of these two forces we choose to focus on. If you want to find examples of fear, you don’t have to look far. Technology delivers reasons to fear to our inbox and our social media streams. Self-serving individuals are finding ways to magnify that fear and to exploit our fear. It seems that fear is growing by the day.”
He acknowledges that there is reason to fear. “Yes, our problems are larger than ever before: climate change, social injustice, shortages of clean water and more. By the time we hit the year 2050, we’re going to have to more than double our global food production. How are we going to do that without destroying the planet?”
On the other hand, he notes, there is reason to choose love. “However, technology also allows us to express love in ways that were never before possible. Breakthrough technologies are making new realities possible. Global communication allows positive ideas to spread quickly around the world. People can find ways to help like never before in history.”
“As for me, I choose love. I believe there is a massive tribe out there who is also choosing love. Because I am interviewing standard bearers of love, people are attracted to the podcast, Social Entrepreneur. I am not alone. It feels to me like there is a great awakening.”
The data seem to suggest that love is the right course. “Several times since we launched, Social Entrepreneur has been #1 in four New & Noteworthy iTunes categories simultaneously. That is not something that I have accomplished. I cannot put myself at the top of these categories. That only happens if people are subscribing, rating and reviewing the podcast. Our audience has grown by an average of 80% per week for every week since we have launched. In the end, love wins,” he concludes.
On Thursday, January 7, 2015 at noon Eastern, Tony will join me here for a live discussion about his journey. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.
More about Social Entrepreneur:
Social Entrepreneur is a podcast for aspiring and early-stage social entrepreneurs, and for those who want to make an impact on the world. Three times per week we interview social entrepreneurs, founders, investors and thought leaders. We hear the stories that led them to becoming change makers. We talk about the grand challenges in the world and the solutions that they are creating. The guests give advice for early stage and aspiring social entrepreneurs. We always end each episode with a call to action. If you’re ready to change the world, join us.
Tony has provided leadership to Fortune 500 and mid-size organizations for over 25 years. He has extensive experience working with senior executive leaders to direct global initiatives that align talent solutions to corporate goals. Through his innovative approaches, he has enabled his clients to achieve significant improvements in processes, productivity, quality, and customer satisfaction while reducing costs and improving bottom line results.
Tony is currently the Host of Social Entrepreneur where he spends his time with changemakers who are making an impact on the world.
Before launching Social Entrepreneur, Tony worked with global brands such as Buffalo Wild Wings, Medtronic, Diversey and John Deere. He has conducted strategic planning, led organizational design, created talent management strategy and conducted high potential development workshops. Tony created the learning strategy and led the start-up and operation of two world-class corporate universities. Tony has directed the development of up to 120,000 personnel in sixty countries. His breakthrough ideas enabled companies to dramatically increase worldwide training participation, while transforming the training organization from a cost center to a revenue neutral operation.
Prior to his work at John Deere, Tony was a Human Performance Improvement consultant, working with customers as varied as the US Department of Energy, AT&T, Alcoa and the State of Colorado.
The word “sustainable” has two distinct, though related meanings in the realm of social entrepreneurship and impact investing. First, a business that is environmentally friendly and/or supports a more just society is often said to be sustainable and, second, a business that generates revenue and is financially self-sustaining and therefore not reliant on donations is also said to be sustainable.
While, I suspect, some use the term intentionally to cover both concepts, such use, in my opinion, is so vague as to rob the word of all its meaning.
It appears to me that the word sustainable was first used to apply to a business to convey the idea that the business is not only environmentally sustainable but that it is socially sustainable, that is that it doesn’t exploit employees, customers or other stakeholders, especially any who may be otherwise disadvantaged. For expediency, I’ll use the short-hand environmentally and socially sustainable to describe this use.
Using sustainable to describe a business as being financially self-sustaining on the other hand is a relatively new use and one that is confusing. First, the same group of people—the social good community of nonprofits, social entrepreneurs, impact investors and philanthropists—have been using sustainable (and more commonly sustainability) to describe businesses that are environmentally and socially responsibility.
Additionally, the for-profit world, apart from social entrepreneurs, has never used the term sustainable to describe a for-profit business’s ability to generate the required cash flow to support its operations without outside capital, yet it is exactly that feature of a for-profit business that social entrepreneurs wish to invoke when they use sustainable in this context.
The need for a term to describe a social enterprise as being financially self-sustaining is real, however. In the nonprofit world and among those deeply and primarily committed to a social mission, the idea of making a profit for its own sake is less important and to some repugnant. The appeal of a business model, however, that doesn’t require fundraising by constantly asking for donations—large or small—is huge. So, in an effort to avoid invoking the word profit, especially when trying to describe activities within a nonprofit entity that would make it more financially self-sustaining the word “sustainable” has become a clumsy short-hand.
The overlapping and somewhat incongruent definitions for the single term sustainable robs the word of its meaning in either context. If you simply say to an investor that you are creating a business that is sustainable, it isn’t at all clear what you mean. If the word you choose to use doesn’t convey a clear and definitive meaning in a reasonably complete context we need new words.
Therefore, I would argue for using the term self-sustaining to refer to the idea of being financially self-sustaining as you can reasonably infer from the typical context of the reference what is meant. I would also like to preserve the word sustainable as a reference to environmental and social sustainability.
If we adopt these two phrases as I propose, our ability to communicate these two critical ideas central to the social entrepreneurship movement to one another and to outsiders would be significantly enhanced.
So, what do you think? Does it make sense to socialize this idea a little bit to see if we can develop clearer language within our community?
This post was originally produced for Forbes.
Omidyar Network, an impact investing pioneer, recently published a new report entitled “Frontier Capital” on impact investing. Given the attention that has been paid to the Chan Zuckerberg Initiative, which parallels the structure of the Omidyar Network in some respects–critically allowing for both impact investing and traditional philanthropy–I’ve taken time with Paula Goldman, a report author and Senior Director, Global Lead for Impact Investing at Omidyar Network to get her take on the report.
Goldman makes three key observations about impact investing for 2016:
Let’s take a look at each of these key issues through Goldman’s eyes.
She notes, “Interest in impact investing is at an all-time high with champions including the Pope and Bill Gates. However, to date, the amount of capital being deployed to impact investing is still relatively small – constituting less than 0.1% of total capital markets today. In 2016, we will see interest in impact investing convert into exponentially more action — taking a significant leap forward from an “unorthodox” idea to more mainstream.”
She explains the parallels between the founding of Omidyar Network and the Chan Zuckerberg Initiative to help make that case that impact assets will grow dramatically.
eBay and Omidyar Network founder Pierre Omidyar recognized early in his journey as a philanthropist that addressing big social challenges would require the use of multiple assets. His experience at eBay was that markets, in particular, are an incredible tool for positive social impact. As a result, in 2004 he created Omidyar Network as both a traditional foundation and an LLC so that he could invest in the right changemaker, regardless of whether it is a for-profit or nonprofit.
The recently announced Chan Zuckerberg Initiative is taking a similar hybrid approach in establishing an LLC that can make for-profit investments in addition to nonprofit grants. I expect others to follow suit in 2016 and beyond.
Goldman looks at the demographics of “NextGens” to drive much of that shift. She notes, “There are incredible demographic shifts underway, including the impending $41T wealth transfer to ‘NextGens.’ We’re also seeing more young investors really drive impact investing. The next generation of investors is more globally aware and connected, viewing investing in a fundamentally different way. 67% of Millennials see investment decisions as a way to express social, political, or environmental values versus only 36% of Baby Boomers – nearly twice as many.”
“For example, Millennial employees at BlackRock BLK -2.80% were a significant influence in the development of the company’s first impact investing fund. Major mainstream investment firms are responding to an increase in demand from Individual and institutional investors alike,” she adds.
Goldman sees emerging markets as a place where impact investing and technology will come together to lead innovation. She explains:
2016 will be the year where entrepreneurs and investors leverage the ubiquity of smartphone technology and demographic shifts to fuel the next wave of innovation and impact in emerging markets. We’ve identified a $3 trillion opportunity just above the base of the pyramid to achieve both financial returns and social impact — what we’ve called “frontier capital,” which is early stage risk capital in emerging markets directed towards businesses that serve those earning between $2 and $8 daily. These people have greater purchasing power and a steadier income than the very bottom of the pyramid, but still benefit greatly from products and services that improve their lives. Companies like Lenddo and MicroEnsure are leveraging technology to create socially impactful businesses that directly serve this population, enabling them to scale more effectively and serve the bottom of the pyramid without subsidy.
On Thursday, December 17, 2015 at noon Eastern, Goldman will join me here for a live discussion about the report and its implications for investing in 2016 and beyond. Tune in here then to watch the interview live. Post questions in the comments below or tweet questions before the interview to @devindthorpe.
More about Omidyar Network:
Omidyar Network is a philanthropic investment firm dedicated to harnessing the power of markets to create opportunity for people to improve their lives. Established in 2004 by eBay founder Pierre Omidyar and his wife Pam, the organization invests in and helps scale innovative organizations to catalyze economic and social change. Omidyar Network has committed US$879 million to for-profit companies and nonprofit organizations that foster economic advancement and encourage individual participation across multiple initiatives, including Consumer Internet & Mobile, Education, Financial Inclusion, Governance & Citizen Engagement, and Property Rights. To learn more, visit www.omidyar.com, and follow on Twitter @omidyarnetwork#PositiveReturns.
Paula Goldman is an entrepreneur, anthropologist, and movement strategist. She leads Omidyar Network’s global efforts to accelerate the impact investing industry through a combination of investments, strategic partnerships, and thought leadership. She also acts as an advisor on advocacy and influence efforts across Omidyar Network investment initiatives. Paula has served on a number of industry advisory boards–including PEERS and the Harvard Business Review’s Insight Center on Scaling Social Impact—and is an inaugural Social Impact Fellow at UC Berkeley’s Haas School of Business. She also serves an advisor to a number of tech start-ups.
Born in Singapore, Paula has lived in eight countries across four continents. Paula came to Omidyar Network with extensive background in frontier markets enterprise, managing businesses ranging from an affordable private school in rural India to a micro-enterprise syndicate in post-war Bosnia. She has led innovations that harness the potential of technology, advocacy, and entertainment. As founder and director of Imagining Ourselves, a project of the International Museum of Women, she led the creation of one of the world’s first online museums, alongside a book, traveling exhibits, and series of global events with more than a million participants. This work was recognized with the 2007 Social Impact Award from the Anita Borg Institute for Women and Technology and a 2008 Muse Award from the American Association of Museums.
Paula earned a PhD from Harvard University, where she studied how unorthodox ideas become mainstream. She holds a masters in public affairs from Princeton and a BA with highest honors from UC Berkeley. She has been on faculty at both UC Berkeley and Mills college and contributes as an author to outlets such as the Financial Times, HBR.org, and Huffington Post.