Jacqueline Novogratz, Founder and CEO of Acumen Fund, wants us to get away from the T-shirt-slogan approach to charity.
Here at GOOD, we're fortunate to work with some amazing nonprofit partners. But, to borrow a line from the indelible Reading Rainbow, "don't take our word for it." We caught up with Acumen Fund Founder and CEO Jacqueline Novogratz to learn about Acumen, finding solutions to global poverty, and what keeps her inspired.
What does a $20 donation do for the Acumen Fund?
It makes you a stakeholder in creating real solutions that begin by looking at poor people as individuals. Think about buying shares of stock in solutions that aren't just about giving things away but instead are about making tools and technologies affordable and accessible enough for people to change their own lives. Twenty dollars is an inexpensive share in a future that includes all of us. I could talk about reducing the price of malaria nets, but I think we need to get away from "$10 will save a life" and other slogans that fit on a T-shirt. Instead, we need to build lasting solutions that fundamentally change the system so that everyone can thrive without having to be dependent forever on charity. We're building companies that will help the poor – and bring in far more resources in than we invest – long after we are gone. And we believe that is at the essence of leadership.
What's the most innovative poverty solution you've come across with Acumen?
All of our investments are innovative but not necessarily in the way you might think. Take drip irrigation for example. You wouldn't believe how simple a product this is – just tubing with little holes in it. The innovation was in the entrepreneur seeing poor farmers as potential customers. It's designed specifically for the needs of the poor – it's inexpensive, simple and infinitely expandable. So a subsistence farmer might start out with a system for his or her garden plot, and as the irrigation improves the crop yield (thus generating wealth), the farmer can scale up for larger plots and greater income. And she can thus change her own world and the lives of her children, too. Sell enough of them – and IDE India has already sold nearly 100,000 systems – and the world really does start to change for the poorest among us.
What is "patient capital"?
Capital whose purpose is to generate social and financial value that can be invested for long-term benefits; capital that is available to courageous entrepreneurs taking bigger risks on new ideas who cannot promise large short-term profits, but can offer the possibility of breakthrough business models that make our world more sustainable.
Can you describe what's meant by "global marketplace for the poor"?
It's time for the world to see the poor not just as passive recipients of charity but as full individuals with the desire and potential to participate. The world really does have the potential for one true global marketplace that extends its reach to everyone. Can you imagine the amazing entrepreneurs, inventors, artists that might be unleashed if that happened? A future we create together needs to include every single one of us in a global marketplace – for poor and rich alike actually!
What would it be like to try and live off $4 a day?
It wouldn't be easy for any of us who lead such privileged lives – yet 4 billion people around the world do it, with grace and dignity and tremendous generosity, despite working 16-18 hours a day to eke out and improve their lives.
Aside from donating money, how can the average American get involved in this effort?
Given the interconnectedness of our world, the most important thing is learning about the issues. Poverty is complex. Solving lack of access to water, for example, requires more than just digging a well. The more we can understand about the growing issue of global inequality, the more we can work to find sustainable long-term solutions. Every American can learn more, get connected to efforts that are happening in malaria and agriculture, HIV/AIDS and delivering clean water – and help others understand the issues and what we need to do to change them. People can voice their opinions – contribute to a blog, engage in dialogue, educate friends and family on the issues that face entrepreneurs and consumers in the developing world, and share with them the success stories. Help unleash the talent and imagination of our nation on problems that deserve our attention. Acumen Fund starts with the marketplace, but there is often a policy solution (think of agricultural subsidies and the potential impact on the poor) that will make the market solutions work!
How do you measure your results?
Ultimately, our goal is to change the way people see the poor. Doing that means building organizations that serve millions of people and helping to channel talented people into this sector. So we start with the actual output of what our enterprises are doing – for instance, with A to Z, a malaria bednet manufacturer with whom Acumen Fund helped finance a technology transfer, jobs created exceed 6,000 and more than 20 million people a year now have access to long-lasting bednets. That's a big deal. And our loan was fully repaid. But that's not enough. We also measure what it costs to bring one bednet to one person and then we compare that number to how much it takes to bring a bednet through more traditional charitable approaches. Ultimately, we want to see that our capital – our money – is used for the greatest social impact possible while also generating some small financial return.
If you could have a cocktail with one person, living or dead, who would that be?
Gandhi (although a tea would probably be more appropriate than a cocktail). He, like so many of our heroes, understood the importance of human equality and human dignity. But what I would love to discuss with him is his brilliance as a marketer and communicator. Through symbolism and words, he was able to move a continent and then the world.
Do you have a personal hero in the world of entrepreneurship?
Henry Ford really saw the link between business and consumers – he understood that his workers were also his target market, and he created jobs that lifted wages and he built products that workers could afford.
What's your personal definition of good?
Alive. Engaged. Empathetic. Honest. Curious. Sexy. Humble enough to listen. Giving your best to be part of the solution. Unwilling to accept the status quo. Beautiful. Fun.
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