The Business of Changing the World
By Evan Thomas, as told to GOODOver the past 50 years, the developed West has spent $2.3 trillion on foreign aid. But while it’s great when a company like McDonald’s funds a million-dollar water project, McDonald’s isn’t good at water projects; McDonald’s is good at selling hamburgers. And, unfortunately, there are some that argue that there is little statistical evidence that foreign aid and charity work lead to actual sustainable development. The world is littered with failed water, energy, and public-health projects.Let’s say a firm is hired to build a water-treatment plant anywhere in the United States. It has to follow certain regulations, laws, standards, and practices to meet requirements as dictated by the taxpayers, by the city, by the county that’s paying for it, and by accrediting agencies and organizations. And if that treatment-system fails, most firms will go in and fix it immediately because they are being held accountable by the society.Now take those exact same individual engineers, send them to a developing country on their vacation, on their own time and money as volunteers, and ask them to put in a water-treatment system. If that system fails, many times all you can do is shrug your shoulders. The volunteers walk away with pretty pictures of kids drinking water, and they say, “Well, we tried our best, but we don’t have the resources, time, or money to fix this.”Many times responsibility for these kinds of failures is attributed to a lack of engagement with the local communities. However, all the hand-holding meetings in the world can’t take the place of working over many years to produce trained local technicians, business enterprise, and accountability. You can’t just ask a local farmer to become the community mediator, technician, and entrepreneur when he’s busy farming for his family.There is a structure in business to make sure that a technology is done properly, whereas in philanthropy and in charity work done in the developing world, the same level of accountability isn’t there. Currently, in many programs, the success of a project isn’t tied to a source of future funds, and most performance is self-reported by organizations. As a result, many projects fall into disuse a few years after they’ve been installed. With a for-profit company, if you don’t succeed in providing a product you’ve promised, you’re not going to get more business in the future.What Manna Energy Limited does is a direct combination of programs designed to address humanitarian goals, but through a business mind-set. We’re a for-profit social enterprise whose motivations include looking out for our shareholders, the same way McDonald’s does. But we operate programs that make a difference on a humanitarian level. We do clean-water projects in Rwanda but fund them with carbon credits-which have monetary value just like a cash dollar-through the United Nations’ Clean Development Mechanism. Should one of our projects fail, we are held accountable by the United Nations as well as by the government and people of Rwanda, and could face a significant loss of revenue. So we are incentivized to ensure that our existing technologies are functional, and are not only concerned with what’s next. This structure gives us much more time, many years rather than months, to build local capacity and transfer responsibilities to the local communities.From a sustainability perspective, we’ve created a structure in which we’re held accountable for the actual intent of the program. If a group invests in us, their investment will do something good for people, but we’re also going to give them their money back, with interest. All told, we’re hopeful that we will be able to have a greater humanitarian impact than an equivalently funded nonprofit or international government agency.Evan Thomas is executive vice president of Manna Energy Limited, which is exploring a for-profit model for selling carbon credits to help fund water-purification systems in African schools.
