Brittany Boroian is a volunteer for Acumen Fund based in New York. She is a recent graduate of Global College and will be a Class 12 Kiva Fellow in Africa starting July.

Dear Acumen Fund supporters and readers of this blog,

My name is Brittany Boroian, and I have been volunteering with Acumen Fund since January. Today is my final day of working with Acumen Fund, and I wanted to share with you some of the highlights of this amazing experience.

I first became passionate about Acumen Fund by reading The Blue Sweater , which is a phenomenal book on the life of Jacqueline Novogratz , founder and CEO of Acumen Fund. After working with various micro-finance institutions abroad, this was the perfect book for me to read on a new and compelling approach to tackle global poverty. I felt so connected to Jacqueline’s experiences in Africa and India, and believed that market-based solutions that focused on dignity and empowerment were much more effective that traditional aid-driven approaches. When I arrived at New York for my final semester at Global College, I joined Acumen Fund’s online community and reached out to Yasmina Zaidman , Director of Communications at Acumen Fund, for any way that I could help and learn more about the organization.

I came into Acumen Fund with a fear that since The Blue Sweater was such a passionate and enthusiastic book, that the organization wouldn’t be as idealistic as I had imagined. I had such an experience with a former organization I had worked with, and so I expected that Acumen Fund wouldn’t be as visionary or effective as they were portrayed. Fortunately, this was a completely wrong assumption on my part. My respect and awe for Acumen Fund continues to grow with each day, by the astonishing employees that work so hard to carry out Acumen Fund’s vision, by the volunteers who pop in and out of the office doing numerous and unimaginable feats (varying from working on Acumen Fund’s online database to planning Jacqueline Novogratz’s trip to Japan), and by learning more about Acumen Fund’s investments that really work. I also had the opportunity to become involved in New York for Acumen’s *spark! benefit, which was organized by an incredible group of volunteers who are all extremely dedicated to Acumen Fund’s mission. I felt very proud to be part of this exciting community of people who are all working together to make the world a better place.

I think that the peak of my respect for Acumen Fund occurred during a trip to the Global Health Unite for Sight conference at Yale in mid-April, which featured over 200 leaders on global health and social enterprise, including Jacqueline Novogratz as a keynote speaker. I came to the conference excited, and expecting to learn of 200 more organizations that were doing work just like Acumen Fund. I was wrong in this assumption. Nearly every speaker I listened to lectured the audience on the many problems in global health, and that their organization needed X amount of money to fix it (many without mentioning how they would fix it). But when Jacqueline Novogratz stepped up to the podium, her speech was about the solutions Acumen Fund has been working on to tackle global poverty. I think this is a fundamental difference between Acumen Fund and many other organizations, and I left the conference astounded that I could feel even more awe and respect for their methods to alleviate poverty.

While I leave Acumen Fund with a sense of sadness because my incredible volunteership has ended, I know that this is only the beginning. Microfinance was the spark that pushed me into the field of social entrepreneurship, but I’ve learnt at Acumen Fund that there are many other ways of addressing the problem of poverty. Acumen Fund’s approach of leveraging Patient Capital to combat global poverty is the fuel that feeds a now roaring fire within me. I know that wherever these next steps in my life will take me, I will always bring Acumen Fund along with me, whether it’s preaching stories from The Blue Sweater to whoever will listen, remaining actively engaged on their incredible online community, or being a part of Acumen Fund’s chapters wherever I may end up. One of Acumen Fund’s mission statements is to inspire the next generation to taking action. I feel inspired.

I leave Acumen Fund with immeasurable respect for their organization, enormous passion for the field of social enterprise, and an immense desire to work for them in the future.

Thank you for such an incredible opportunity, Acumen Fund.

To everyone out there who has been wondering if and how you can get involved in Acumen Fund’s work, I strongly encourage you to take action. We have to be the change we want to see in our world. Read The Blue Sweater , explore our Volunteer page, or to reach out to the Acumen Fund team if you have a specific idea in mind! If my volunteer experience was anything to go by, this is a decision you won’t regret!

Best Wishes,

Brittany Boroian

The world has experienced a great loss this weekend, Coimbatore Krishnarao (CK) Prahalad, strategy guru, University of Michigan Professor, and mentor to me and many others passed away on Friday evening.

There are few people who have created a global movement that has changed the way millions of people see the world and CK Prahalad is one of them.  I first heard about CK through his book, “The Fortune at the Bottom of the Pyramid”.  The idealist in me was moved by his words of dignity and a new approach to poverty alleviation and the pragmatist in me was driven by his talk of business models and market opportunity.  I immediately left my job, was accepted to the University of Michigan’s Ross School of Business, and moved to Ann Arbor to learn from this remarkable man. I am merely one of thousands, perhaps millions, who were inspired by Professor Prahalad’s message.

While CK was one of the world’s most respected strategy gurus (ranked #1 in the top 50 global business thinkers) it was clear his life’s mission was to change the way the world thought about poverty.  He believed in the dignity that came with giving the poor a voice and a choice in the decisions they made about their lives.   And most importantly he believed in humility and deep listening.  He once told me that when you do your work go with real humility Blair, for the poor know more about life than you could possibly imagine.

What makes CK so amazing is that he was not walking the halls of the United Nations or the State Department to address poverty; he was waking up Fortune 500 companies to his vision of social change.  He was attempting to convert the seemingly unconvertible, and he was creating an entirely new paradigm in his wake.

CK created a language (Bottom of the Pyramid for example) that allowed the business community to talk about social change and simultaneously allowed the social sector to talk about capitalism as a tool to fight injustice.  This contribution alone demonstrates his sheer brilliance in the face of one of the greatest cultural and ideological divisions of our time.

CK’s work was always grounded in his deep commitment to education.  Despite his fame and prestige he always continued to teach and to listen.  I will never forget my first day in his class when he had assigned 100 business school students, with hundreds more waitlisted, to read philosophy.  The typical MBA’s were waiting for him to deliver his lecture supplying them with their first framework for innovation and instead he asked us to reexamine our lives and the society in which we lived.   Let’s just say that was not the typical assignment for business school, but CK was not a typical man.  He once said to me, “I don’t like to think inside the box, I like to create my own box.”  And he did just that.

Our final exam for the class was to write a two page essay on where we saw ourselves in five years.  My vision was to be at Acumen Fund, and that vision has become a reality.  It is amazing what happens when someone like him asks you about your dreams and then gives you the confidence and support to realize them. CK Prahalad was not just a guru or an icon he was a teacher and a mentor.

Last year I asked CK to speak at the Acumen Fund Fellows Graduation.  During his presentation he told us, “If there was one thing I could wish for it would be to be young again”.  While CK could not have his wish; his voice, his vision, and his passion, now live in those hundred of companies, thousands of social sector organizations, and millions of people around the world who are young enough at heart to hope, to create their own box, and to see the world through a different lens.  These people no longer see the developing world filled with poverty and corruption but instead see these markets filled with opportunity and hope.  CK we will carry on your legacy and as you told us we will “work to see the world not for what it is, but what it can be”.

Thank you Professor Prahalad you will be missed.

• Governor of State Bank of Pakistan Syed Salim Raza’s speech at the recent Pakistan Community Gathering has been covered by several local news sources. Both The International News and The Nation have recently spotlighted his remarks on microfinance and the future of Islamic banking in the sector.

• The Wall Street Journal recently ran a feature on former Acumen Fund Fellow Heidi Krauel and The New Recruits the forthcoming  documentary about the AF Fellows program. Click here to read Gordon Gekko’s Grandchildren.

• It must be the (giving) season. Just this week, NextBillion allies and SME investment pioneers Root Capital and E+Co announced $14M each of new investments and grants. Congrats to our friends and colleagues at both Root and E+Co, both of whom have done pioneering work in the agricultural finance and energy finance sectors, respectively. Click here to read the latest funding rundown.

• SEVEN Fund has just announced an exciting contest for those working in the social entrepreneur space. The “I Am an Entrepreneur” photography competition will be awarding 12 prizes (one per month) for the next year for photographs profiling global entrepreneurs in hopeful and compelling ways. Monthly winners will be awarded $100, and the grand prize winner (selected from the monthly winners) will receive $1000.

• Our friends at Changemakers, with offices in Washington DC, Buenos Aires, Calcutta, and Sao Paulo are now hiring for exciting careers in a variety positions and locations . To learn more, click here.

• Sweta Mangal, CEO & Co-Founder of Dial 1298 for Ambulance was recently awarded the Tata TIE Stree Shakti Award. TiE is an initiative of TIE Mumbai to recognize the relentless effort and resilience displayed by women entrepreneurs in setting up successful ventures and also a bid to create a platform to help them connect, share and network to form trust based partnerships. Congratulations Sweta!

Cross Posted on India: The Good, The Bad, and The Ugly

As I mentioned in a previous post on my personal blog, one of the best things about working at LifeSpring is the fact that whenever you are feeling a bit low you can go two floors down and check in on new mothers and their babies, the clients of the hospital.

The past Saturday, as I was trying to leave the hospital (due to local political agitation), I had the wonderful opportunity to see a new mother and child, whom I watched delivered through a C-section recently. The mother and her child had returned to LifeSpring for a post-surgical checkup.

An older woman, who I would soon learn is the young mother’s own mother, immediately handed the newborn to me. She looked so much better and was beautiful in every sense of the word. She had grown a full head of hair, and looked so gentle. Perhaps the most interesting or amazing thing about her was the way she slept, with such intention. Having never been around a newborn, I have never realized how intently they sleep, as if sleeping is their only job on earth. Her little hands were clenched in tight fists and as I looked at her I couldn’t help but sort of fall in love with the little thing. She was spectacular.

I turned to the mother, “she is beautiful.”

The mother solemnly replied, “she is?”

“Yes, she is looking so healthy and happy,” I said.

The mother then looked at me and said, “No one has come to see her – my husband and his family refuse to see her because they are angry and upset she is a girl.”

I was astounded and shocked. I simply had no idea how to reply. What do you say? All I could think was here is this perfect little human being, who is, thus far, unmarked by life. But then I thought, is she really?

Coming from the Western world, I was once again forced to swallow the reality of my own privileges. In India, the male child is still favored outright. He eats before any female children, he goes to school before them, and he is valued more than the female children in every other respect. End of story. And this gender bias is a major catalyst for certain malnutrition problems women face. It is also a major factor in many other social woes. In India, it is illegal (at least on paper) to have any test performed which identifies the sex of the child, because of the ever present risk of female infanticide.

And these thoughts don’t even touch on the way it must feel to be the mother of the child, who is a female herself and the mother of the child.

As I am holding this dear baby, I can’t help but think how ridiculous this whole notion is, and all I can wonder about is how this cultural-social bias still exists, even though I fully understand why it exists, and the history behind it.

I continue to hold the child and just say, “she is happy and healthy and that is what matters.” But now I sort of feel like a fraud because, clearly, this is not all that matters. In fact, what matters most is that she is a girl.

The mother slowly dabs away of couple of tears and just remains still, eerily quiet. She is neither disagreeing nor agreeing with me. She is just there – she is just stuck here, a week after major surgery, with an infant no one feels is good enough.

“Is this your first baby?”

“Yes.”

“Will you have another?”

“I don’t’ know,” she shrugs as she looks away from me.

As she looks away, she puts her hand on top of mine, and I turn to her and say, “it will be okay.”

And, honestly, from that moment forward to the moment I find myself writing these words, I have been thinking about that coy little phrase: “it will be okay.” Here I am, white, educated, free and female. So who am I to say this, so palliatively and comfortingly? In reality, it might very well not be okay. And it is not okay now, at this moment. This mother has been abandoned, thus far, by the father of her child. She has been made to feel inadequate, unworthy and shamed. This child I am holding, so small and gentle, has hardly begun life and yet she has already been condemned to a certain sad reality: she is female.

I don’t know why I said “it will be okay.” The more I think about it, the more I begin to believe that I said it more for myself than for this mother.

I’m writing this post on the 16-hr plane ride from New York to Mumbai (via Qatar), thinking about the hectic but exciting past ten days.

Near the end of our time in New York we learned how to shoot and edit videos. Initially, I thought that this video training – with a tough coach teaching us the surprisingly strict conventions for video shooting and editing – was going to be the most difficult part of the week.

But that was before we started the Acumen Fund investment case competition. We split up into two teams, each with five Fellows, and began carefully examining our (simulated but based on real-life) assigned venture’s financial data and business plan. Looking for a success story we could present — and loopholes the Investment Committee may pick up on — we did not leave anything to chance. Market study, risk analysis, social impact, and financial sustainability were just a few of the factors we looked at to convince the Committee to put their money in our investment. A tough, high-stress experience, but definitely one I won’t forget anytime soon.

The minute we closed our cases, while the verdict was still out on our respective investment proposals, we rushed to the Rubin Museum to rehearse our performance for the Investor Gathering the next day. Acumen Fund’s annual IG was the perfect way to end what has been a challenging but extremely rewarding two months in New York. Meeting all of our supporters in person at the IG has shown me just how close knit the community around us really is, and how, as one of our directors puts it, the community is an expression of the power of shared ideas and of uncompromising commitment. I am proud to be part of this organization.

Back here in my uncomfortable plane seat, already falling victim to jetlag-induced insomnia, I take a step back and attempt to give the Fellowship a broader view. While thinking about the future, I can’t help but look at the recent past, with 19 out of the 24 previous Fellows now working in 10 countries as professionals in the social sector. And as I reflect on how I got here, I think about the snowball effect this program has witnessed over the past few months, recently culminating with 568 individuals from 65 countries vying for the ten positions on the 2011 Fellows team.

But looking at the present moment, my thoughts are invariably drawn to my own cohort, all incredibly diverse individuals spanning national, economic, ethnic, religious, social, and political boundaries. As we make our way over to our investee placements, I wonder what they are all thinking on their own plane rides, and what expectations and apprehensions might be racing through their minds when their aircrafts finally touch the ground. For the time being, I am leaving you with a map showing where each of this year’s 10 Fellows will be spending the year.

Stay tuned.

View Acumen Fund 2010 Fellows in a larger map

The event included over forty representatives present – from NGOS, social enterprises, and corporations, to new technology developers – all working to bring clean water to the more than a billion people who currently lack access. While a large array of models and strategies were addressed, participants were all focused on finding action-oriented approaches to marrying treatment technologies with sustainable business models.

Listening to the presentations and interacting with other participants, I was struck by the real desire many had to partner, to pool their respective strengths to make clean water available on a massive scale and in a sustainable way. But while there was this real interest in building partnerships to bring safe drinking water to those at the base of the pyramid, many agreed that it remains unclear how we can move from effective social and technological innovations operating on a small scale to large-scale commercial endeavors. Many spoke of a gap, or disconnect, between great ideas, and the support they need to scale.

I made the case for Patient Capital, a brand of investment that takes into account the long time horizons and significant non-financial support needed to help innovative businesses scale in difficult markets. Patient Capital can, in many cases, serve as the bridge between the early years of an innovative business model’s ramp up, and later stages when a business is established enough to attract commercial capital or grow through its own revenues. This is an approach with which Acumen Fund has made major strides – not only with water, but also with health, agriculture, and housing. As we find in our work throughout the world, so often the problems associated with bringing water to the poor rest on inadequate or poorly maintained infrastructure, and a generalized lack of accountability that traditional aid in this field fosters. By partnering with local entrepreneurs and businesses, such as WHI who were also represented at the event, we’ve found that Patient Capital works.

As a next step, GWC participants agreed they would find ways to work together more proactively, and we saw several exciting potential partnerships emerge between investors and entrepreneurs. We also agreed to gather again in twelve to eighteen months, to share the lessons that come out of these creative partnerships.

As I travel through Orangi Town, a district in northwestern Karachi of approximately 720,000 inhabitants, about an hour away from the city center, the landscape of Karachi shifts. A microcosm of the city, it is inhabited by mohajirs (Indian Muslim refugees), Biharis (Bangladeshi Muslim refugees), Sindhis, Pathans, Punjabis and Balochis. It was known as one of the largest slums in Asia until renowned social scientist and development activist Dr. Akhtar Hameed Khan pioneered the incremental development and bottom-up community development model with the Orangi Pilot Project in the 80’s.

Citi-Acumen Affordable Housing Research Project

Acumen Fund’s housing portfolio has been the most active in Pakistan, where we’ve been investing in housing since 2002.  In 2002, Acumen made its initial housing investment in Saiban’s Khuda ki Basti (God’s Settlement) low-cost housing project, the brainchild of Tasneem Siddiqui, incremental housing development expert extraordinaire. We’ve been committed ever since and are currently supporting its expansion in Lahore that is also underway. (Ann McDougall and Sasha Dichter from the team each wrote about the Khuda Ki Basti model following their respective visits).

Realizing that investment itself might not be enough, Acumen Fund also partnered with Citi Foundation to undertake a research study into low-income housing and housing finance to understand customer demand for housing and housing finance and the current supply. The end goal is to get a grasp of the market for affordable housing, different types of affordable housing models, and current mechanisms the poor utilize to fund housing purchase. Essentially, what is the BoP’s willingness to pay for low-cost housing?

To that end, the Citi-Acumen project comprises primary market research, including demand-side surveys of the major cities across Pakistan, focus group discussions and stakeholder interviews to assess the current market for housing and finance capabilities. Recently, I accompanied one of the surveyors as he went house to house to speak with individuals living in Orangi Town. As I was to learn, quantitative data gathering is often subjective and a matter of judgment and many human variables factor into this ‘quantitative’ exercise.

Pride

Pride plays a big role in influencing and skewing responses, especially when it comes to answering questions on matters of personal finance, savings and expenses. The nature of our survey was such that respondents will often mistake us for loan officers from banks, leading them to sometimes exaggerate and inflate savings in the hope that they qualify for a loan. Indeed as I was to experience, we were met with a mix of high optimism from some and deep suspicion from others who thought we were bank officers offering loans or government officials on inspection checks. Munir Ahmed (Lead Surveyor) was careful to have coached his enumerators in advance about instigating false hopes within respondents and indeed their ensuing explanation that we were here only to seek the community’s “rai” (opinion) and “mushvara” (advice) so that we may educate those who are in a position to help them – brought about a change in attitude towards us.

Still, there were others who remained suspicious of our work, an attitude exacerbated by the fact that work like this tends to get collective attention by neighbors and others around. One gentleman who was increasingly agitated by the personal nature of questions asked us to “close the interview” once we approached the topic of household expenditures and savings.

Personal pride can also manifest itself in less hostile ways. One respondent, Mahmood-ul-Hasan Qadir, a madarassah (Islamic school) school teacher briefly engaged a perturbed enumerator in a game of tug of war when he tried to pry the questionnaire out of the enumerators hand so he could write down his own answers. The question posed at the time was about his income, and the respondent’s constant self-conscious glances towards me made me realize that he did not want me (the only female in the room) to hear his income. I immediately busied myself with my tea (he was the only respondent who invited us into his home) to save him any embarrassment he might be feeling. At some point in the interview, he was asked how he had financed the construction of a new room that cost Rs.30,000 (USD 360) to which his son interjected, “Through the BC” (Bank committee, see below). After some moments, his father reprimanded him quietly, “Don’t say BC, tell them it was through the help of friends and family,” indicating to one of the options on the survey. Upon further probing, we found out the father had received money from an uncle’s wife to expedite his family’s home construction. He commented later, “I realized that we should be assisting you honestly in this endeavor,” his conscience overcoming any embarrassment he might have felt at receiving help or charity from friends/family.

Unfortunately, there were many others who failed ultimately to understand our role or intention of the exercise. The mindset of those who believed that we would be making some monetary profit out of the exercise tended to echo their own prejudice – and it was often these people who were not willing to participate until we told them what “faida” (benefit) it held for them. As in every community, there were some who were satisfied with the fact that they would not see any monetary or any other immediate benefit, but that in the long term this research could possibly improve the chances of organizations better understanding and meeting the needs of their future generations. And then there were those who couldn’t care less and just walked away.

The BoP’s Savings and Loan Profile: Savings, Lump Sums and BC committees

The most common method of financing big purchases was through savings with BC committees. This reinforces the idea that, given the absence of formal credit or perhaps the undesirability of its institutional stipulations, members of a community will find a way to meet their needs internally. In the case of the residents of the communities I visited, they needed:

• Access to lump sums of money in the anticipation of big events or expenses, and
• The discipline to save this lump sum of money.

This discipline component is related purely to the social aspect of BC committees. Once a party has committed to contributing to a BC, they will push themselves not to renege on installments for fear of breaking the social contract. Once again pride has a big part to play, and as many families told me, they will go a long way to avoid “looking bad” or being scorned for non-payment. Though Microfinance Institutions have incorporated the aspect of “social collateral” into their operations, as one respondent we interviewed told us, an institutional loan is still viewed as foreign and does not warrant the same discipline as a community-managed BC committee does.

The most common amounts of the total BC were Rs.50, 000 (US$600) or Rs.100, 000 (US$1,200) and the average monthly installment was Rs. 2000 (US$ 24). Depending on the size, the total duration of the BC’s ranged from 1 to 4 years. This indicates a preference for short-term credit.

Housing Finance and Borrowing on Credit

Most of the respondents who indicated interest in procuring a loan for home construction or home improvement – and indeed, anybody who had knowledge of financing and interest – were of a certain demographic. By and large, this group consisted of micro entrepreneurs such as tailors and shop owners. A majority of them indicated first a preference for loans to expand their business and then for home construction or improvement loans.

Most families who had taken out a loan in the past from moneylenders or purchased home construction materials on credit from thallawallas (building-parts manufacturers/suppliers) had done it at high interest rates and were caught in a cycle of perpetual debt, usually only able to pay back the monthly interest and never the principal. In fact, most respondents did not exhibit enough of an understanding of principal and interest to realize how they were trapping themselves further in a vicious cycle of debt. As I reflected on this, I realized what a crucial role MFIs must play in educating and empowering their customers to make responsible financial decisions.

Other sources of loans were also mostly informal, such as loans from friends or family and credit from neighborhood stores. This was in small amounts and frequently to cover cash shortfalls experienced on a month-by-month basis.

As I discovered, there is so much to be learned from these surveys — and not just from the questions that we asked. Next week, I’ll share some true-life experiences of the surveyors that demonstrate the challenges and insights that arise from this work.

By the age of five, I was fortunate to have lived in two vastly different continents, while being raised with a set of values and language from a third. These varied experiences have shaped my compassion for humanity.

I was born in Accra, Ghana, a nation on the coast of West Africa. In the early 1960s, my maternal grandfather, a mechanical and agricultural engineer, was sent to Ghana on deputation from India as Chief Engineer of Agriculture, a sector that was considered the backbone of the Ghanian economy. His mandate was to automate the crop cultivation process for the cassava plant, the most important staple food crop in Ghana. Previously, the cassava crop cultivation process was very labor-intensive and many of the farmers that subsisted on this crop for their livelihood could not earn enough to lift themselves out of poverty. The machines my grandfather invented to automate the cultivation process substantially helped increase the farmers crop yield and led to higher incomes for farmers.

With this backdrop, I grew up with an acute understanding of the plight of the Ghanaian farmer. In Ghana, the highest incidence of poverty occurs in the agricultural sector and is dominated by small holder farmers. These farmers worked long hours in intense heat and faced chronic food insecurity. Their families lived in decrepit, overcrowded shacks with boarded up windows and inadequate ventilation. They slept on dirty mats on earthen floors and had limited access to safe water, electricity or plumbing. Meanwhile, their sparsely clothed children ran through the flooded streets and lacked any opportunity to get an education.

Despite these hardships, the spirit of the Ghanaian people was remarkable; they were happy, sociable people with an optimistic outlook. This picture of poverty has always stuck in my mind, and although my grandfather played a small role in helping alleviate some of the poverty, I realized at an early age that there was still a lot of work to be done in helping the impoverished.

When I was five, my parents immigrated to the U.S. to pursue their post-graduate studies. My paternal grandmother, a native of Peshawar, Pakistan, came to live with us. While my parents were very busy post-graduate students, my grandmother primarily cared for me and my siblings. She not only instilled in us a deep appreciation for the rich Indian culture but also taught us how to speak Punjabi, her native tongue. I recall the vivid stories my grandmother recounted about her childhood in Peshawar and how difficult life became after the 1947 Partition, which divided the Indian subcontinent into Hindu-dominated but nominally secular India and the newly created Muslim state of Pakistan. Because my widowed grandmother was Hindu, she was forced to leave Pakistan with my father. They migrated to India as refugees, homeless and without any monetary support. The hardships they faced in reconstructing their lives were innumerable. My father, who was a very hardworking and ambitious student, did whatever it took to excel in school. Thanks to the scholarships he received and a few professors along the way who truly believed in him, my father attained his engineering degree and was finally able to rise out of poverty and stand on his own feet. Although my grandmother passed away over twenty years ago, her stories have stayed with me and my compassion for the underprivileged has only grown with each visit to India.

After business school, I worked on Wall Street as an equity research analyst. I have always been intrigued by what makes certain companies successful while others, with a seemingly good product or service, don’t make it off the ground. I focused my attention on undiscovered small capitalization stocks that I believed would flourish and whose stock price appreciation would bring it into the mid/large-cap world in the next two to five years. I took a multi-faceted approach to analyzing these companies — focusing not only on their valuation, earnings and business model but also on their market opportunity (something that wasn’t clearly defined for these small companies), distribution model, competitive positioning, relationships with vendors and customers and management style. I employed a “kick the tires” style of research where I regularly called company customers, vendors, competitors, employees, creditors and industry experts to get a “true” picture of a company’s health and its future prospects. It was very hard work and it required a long-term perspective but it translated into high quality stock picking. Although my work was respected by my hedge-fund clients, after more than fifteen years on Wall Street I decided to take a back seat and spend more time with my family while pursuing other interests. I wanted the next chapter of my life to be more about helping others and “giving back.”

During this time, I read a lot about the power of microfinance in alleviating poverty. I liked the concept because it empowered the poor by leveraging their entrepreneurial spirit and placing the potential for success in their own hands rather than simply giving them handouts. Last spring, I heard Acumen Fund CEO Jacqueline Novogratz interviewed on National Public Radio while promoting her book, The Blue Sweater. As she described her philosophy — specifically her entrepreneurial approach to solving global poverty with “patient” capital — and explained how Acumen Fund stands on the shoulders of microfinance, I was intrigued. I immediately bought her book and read it from cover to cover. I was not only spellbound by her vivid storytelling but also particularly impressed by the social entrepreneurs in whom Acumen Fund invests and works alongside. Finding the right social entrepreneurs in whom to invest reminded me of my work finding undiscovered small-capitalization companies, but the reward is considerably more fulfilling.

I was so inspired by The Blue Sweater that I went to a book reading in Manhattan to personally meet Jacqueline and ask how I can get involved. I am excited to find ways to channel my compassion for the poor in India and Africa, to leverage my investment skill set and to be part of the Acumen Fund community working to effect real change.

Jacqueline Novogratz, Founder and CEO of Acumen Fund, and Tim Brown, CEO of renowned innovation and design firm IDEO, are old friends with a world-changing business partnership. Last week at the University of California at Berkeley, they united on stage for the first time to discuss human-centered poverty alleviation.  Another close friend (and Acumen Fund board member), Stuart Davidson of Labrador Ventures, moderated the discussion. The intimate and engaging conversation addressed the intersection between design and development, which has made a partnership between two seemingly different organizations so profoundly impactful.

Jacqueline and Tim’s friendship began at a TED conference, where Jacqueline was discussing water issues in the developing world, and IDEO had just recently been involved in a design project with KickStart aimed at increasing access to water. They immediately realized that they were both working towards a very similar goal: helping people innovate in order to grow. Jacqueline explained that “we were putting ourselves in other people’s shoes to better understand what they want, and that’s design thinking; that was a whole new lexicon for Acumen Fund.”

According to Tim, IDEO’s questioning process is about “drilling down and spending enough time to get beneath the surface. Making people notice things they might not have noticed themselves.” The challenge with bringing this method into development is being aware of cultural context. For that reason, he emphasized the importance of getting design thinking out into the world.

To support this effort, IDEO has developed an incredible guide, called the Human Centered Design Toolkit, to help organizations and entrepreneurs use design thinking in their work with impoverished communities. The aim, as Tim explained, is for people in need to be co-collaborators, for design thinking to be a co-owned process. This approach, in these extreme markets, will lead to innovations never dreamed of in the developed world.

Stuart brought up a common question in discussions about social entrepreneurship and innovation: how does this scale? “It’s not about the insight scaling, it’s about the ideas scaling,” Tim explained. The process is about getting ideas; then you develop the ideas which are truly scalable. Jacqueline noted that many top down approaches are scalable in theory, but they don’t work effectively and lose traction quickly if locals are not involved from the start.

The discussion shifted to how the language of the industry has changed over time. In Jacqueline’s opinion, “language precedes change.” She recalled that eight years ago, when Acumen Fund started, she had to argue with individuals who refused to be called “investors” because they weren’t getting any financial return. Now the concept of social return on investment is becoming widely accepted. The lexicon of the industry is shifting and acknowledging the power of an investment-oriented approach.

At the core of the investment approach is a full respect for all human beings, a sentiment that continually surfaced throughout the conversation. Market-based approaches aim to treat people as consumers, who despite their income level, desire all the things we desire. Jacqueline explained that instead of telling people what they “should” do, it’s about asking what people want as consumers and truly listening. In forcing accountability and investing in growth, we are able to actionably demonstrate a belief that all people are capable of achieving success.

The sessions closing sentiment related to each firms contribution to change in the developing world. Tim explained IDEO is about enabling choice; creating new choices that didn’t exist, so that people can make them if they desire. At the core of what both firms seek to produce, Jacqueline concluded, “real dignity ultimately comes from choice and opportunity.”

The event was hosted by Global Initiatives, a student run organization at UC Berkeley’s Haas School of Business, focused on exploring market-based approaches to international development. The discussion was part of a Haas class called Market Based Approaches to Poverty Alleviation taught by former Acumen Fund Fellows Jocelyn Wyatt and David Lehr. Not your average business school course, this is one of the many opportunities offered by Haas, bringing innovative market-based approaches to students with a passion for social change.

The event was sponsored by The Center for Nonprofit and Public Leadership, The Lester Center for Entrepreneurship and Innovation and the Blum Center for Developing Economies.

Editor’s note: Video of the event can be seen on YouTube.

Julia is a summer associate in the East Africa office for Acumen Fund working in the energy portfolio. He is also a second year MBA student at Columbia Business School where she is an active member of the Social Enterprise Program and co-director of Pangea Advisors. Prior to Columbia, she worked for four years at KPMG Advisory where she advised private equity firms in their investments in Madrid, London and various international offices. Julia received a diploma in Business Studies from the Universidad Pontificia de Comillas, Madrid.

“Pata stima, lipa pole-pole” (swahili) means “Find electricity, pay slowly”. This advertising campaign can be found in newspapers and on bill boards all around Kenya.  The campaign promotes a joint initiative of KPLC (the state-owned energy distributor) and Equity Bank to provide loans to those low income consumers willing to get connected to the grid but unable to pay the full $660 fee up-front.

These types of measures are much needed in Kenya. It is widely understood that Kenya has an under-developed energy sector, with insufficient power supply and low demand. But it is not until one experiences the power outages that one realizes how much urgent action is needed. Kenya energy per capita consumption is around 130 Kwh which is 18 times below the world average and only 15.3% of the population has energy access, falling to 3.8% in rural areas.

Biomass energy accounts for about 70% of all energy consumed while petroleum and electricity account for only 21% and 9%, respectively. Hydro Power constitutes 71% of this capacity and is mainly provided by the state-owned generator company, Ken Gen. Independent Power Producers (IPPs) have not had historically a relevant role in the market, but this trend is changing with the current liberalization of the sector. Current power deficit is aggravated by the deforestation of the Mau Forest and the closure of the Masinga hydro power plant due to drought.  Drought is on-going in Kenya and other hydro power dams may soon face closure as well.

But not everything is bad news, as a summer associate at Acumen Fund, I feel lucky to be here to live a moment of transformation in the sector.  Transformation has taken place from both the public and the private sector side. The public sector has realized the importance of bringing the private sector on-board and has announced a feed-in-tariff in which KPLC will sign a PPA (Power Purchase Agreement) and pay a tariff to those IPPs operating wind, hydro and biomass technologies selling power to the grid. This new incentive will help many projects become commercially viable. On the private sector side, there has been an increase in the interest of producing energy and of improving access for low income communities. It is encouraging to see that, despite not having any government incentive or subsidy, solar companies are exploring products, financial schemes and distribution networks to reach rural areas and/or low income consumers.

In the one month that I have spent at Acumen in Nairobi, I have dedicated half of my time to conduct research of the energy sector and talked to all types of players in the industry from the regulatory body, the UN, the International Finance Corporation, IPPs and potential entrepreneurs and I have learned a great deal about the sector along the way. The other half of my time has been spent analyzing potential investment opportunities for Acumen. These have been memorable experiences and I will always remember the emotion on the face of an entrepreneur as he signed the PPA for his small hydro power plant.

Acumen has tremendous opportunity in the energy sector in East Africa, although it doesn’t lack important challenges. Amongst them, ensuring that the private sector initiatives effectively reach low income communities and are not just driven by the new economic incentives, addressing the real energy needs of the low income consumers with appropriate strategies, and sorting out the necessary financing and distribution. A long way forward, but for sure Acumen has energy for that and for more!

Last week, I was lucky enough to be involved in a conversation about where Acumen Fund might be in 20 years. We discussed the potential for Acumen to move into new geographies, including potentially investing in the United States. During this discussion, CEO Jacqueline Novogratz made a comment about how “parts of the developing world would look like the developed world and vice versa” in the future.

This comment sparked my memory, and I recalled the Measure of America project, which disaggregates the Human Development Index calculations for the US by state and Congressional district boundaries.  This is an amazing, interactive resource using detailed data and new technology to increase awareness and, in doing so, drive change. Measure of America’s mission “is to stimulate a fact-based public debate about and political attention to human development issues in the U.S. and to empower people to hold elected officials accountable for progress on issues we all care about: health, education, and income.”

The New York Times Economix bloggers covered the project under the title, “Rich Country Within a Poor One“. If you have time, check out some of the interactive maps; you will see the story we all know, but in a much more granular level and with a slick interface that helps you really make sense of the information. What emerges of course is nuance – the US is a “rich country” where so many are poor, so many don’t have access to health care or a quality education.

A colleague of mine purchased the project’s book and sent out this jarring stat about the sharpest social gradient among congressional districts in the U.S.:  “On average, a resident of the Fourteenth Congressional District (Upper East Side) earns two and a half times as much, lives four years longer, is more than seven times as likely to have a college degree, and is four times less likely to be in poverty than a resident of Sixteenth Congressional District (South Bronx)”

The more data we have, the more clearly we see the there are shades of grey, and the better we can target solutions towards those shades of grey using new tools in the development toolbox and not just our old (and often) blunt instruments.  This resonates clearly in the development debate. When Jeffrey Sachs turn his attention towards Bill Easterly and Dambisa Moyo in the Huffington Post he writes about the shades of grey in traditional aid efforts:

“…most Americans know little about the many crucially successful aid efforts, because Moyo, Easterly, and others lump all kinds of programs – the good and the bad – into one big undifferentiated mass, rather than helping people to understand what is working and how it can be expanded, and what is not working, and should therefore be cut back.”

With more data and new technology, we can tell stories in new ways to help people better understand these shades of grey and better target the world’s biggest problems. This, of course, is the game of Hans Rosling, the TED dynamo and Jacqueline’s fellow speaker at TED@State. Every time Hans gets in front of a crowd, he uses the Trendalyzer to dispel our common myths about the developing world. His famous narrative of course is that the third world is on the same trajectory toward health and prosperity as the West was, and a host of countries are moving a lot faster than the West did. In his latest TED talk on HIV/AIDS he said:

“…So, when we look at the pattern, one thing comes out very clearly: you see the blue bubbles and people say HIV is very high in Africa. I would say, HIV is very different in Africa. You’ll find the highest HIV rate in the world in African countries, and yet you’ll find Senegal, down here, the same rate as United States. And you’ll find Madagascar, and you’ll find a lot of African countries about as low as the rest of the world. It’s this terrible simplification that there’s one Africa and things go on in one way in Africa. We have to stop that. It’s not respectful, and it’s not very clever to think that way.“

Acumen Fund is doing it work to show how and when markets work for the poor, and when they don’t. It is showing when and where patient capital is an alternative to pure markets or philanthropic efforts. It is defining the standards of social performance for patient capital with Pulse. And how can we not forget Wold Metrics day! Acumen is working every day in a smarter way. Hans Rosling closes with this call to action and so will I:

“We hope that when we act on global problems in the future we will not only have the heart, we will not only have the money, but we will also use the brain.”

I attended YV’s celebratory event on Sunday where 35 young Indians, from all walks of life, between the ages of 15-24 were showcased for bringing their ideas on how to create social change to reality. Although the ventures started addressed different needs in society (girls’ education, village water access, slum sanitation, and more), what they all had in common was the young founders’ personal connection to their respective social causes. This is clearly the power behind the program – to enable the belief that even at a young age (or especially at a young age) you can tackle an issue in your community and have a positive impact.

I was reminded of the first question the Fellows were asked when we came together at the start of the program in September, Whose shoulders do you stand on? All our responses were unique, but it was clear that someone had touched each one of us early in our lives to help establish a foundation from which we could grow and develop a strong belief in ourselves.

Whether the social ventures succeed or fail is secondary – what matters most is that each person involved in the program felt empowered to create change. No doubt, the experience will continue to fuel their personal & professional growth. Of all the events I have been to this year as an Acumen Fellow – I feel no one deserved the stage more than these young people.

CARES stands for:
C – Courteous - We will be polite in our communication whether oral or written. We will acknowledge customers and their family members by smiling, making eye contact and offering assistance

A – Attentive – We will attend to customers and families immediately. We will listen carefully to customers needs

R – Respectful – We will respect the dignity of all and will show empathy in our words and action. We will respect all coworkers, customers and their relatives equally.

E – Enthusiastic – We will trust, respect and support customers. We will be timely in meeting deadlines.

S – Safe – When caring for customers we will wash our hands. We will maintain a clean and safe environment for customers and employees.

For all employees joining LifeSpring they are given a booklet that describes the standard behavior in details. Everyone is expected to keep this book with them while at work.

To further emphasize the model behavior LifeSpring used GlobalRickshaw to make a video that demonstrates the CARES protocol in action. All new employees are shown this video during the on-boarding program and expected to behave in this manner.
[youtube= http://www.youtube.com/watch?v=ckzOjEb_Rmw]

Hope you enjoy.

Another insight that I would like to share with everyone is to do with “Dignity”. As I spend more time with Anant Kumar, CEO of LifeSpring I am convinced choice alone is not enough, dignity is equally important. This needs to be incorporated into the company culture if the enterprise wants to deliver these services to the customers with high quality. At LifeSpring no matter what anyone’s origin is, they deserve the same respect. In India there are cultural barriers, educational hierarchies, and organizational hierarchies. All these need to be put aside when
working at LifeSpring. Some examples of such a conflict are husbands of Customers of LifeSpring may be working as drivers at the doctor’s place. So imagine the doctor now having to respect the customer as they would any one else.
Or simply because the nurse is less educated does not mean they can be mistreated by the doctors. So key is respect and thereby dignity must be provided to everyone associated with LifeSpring – customers, team members, and partners.

I’d like to hear from you so please post your comments on what you think about this writeup…

Among this year’s award winners was Jordan Kassalow of VisionSpring, a social venture that Acumen Fund has supported since 2005. Jordan is truly a visionary, pioneering social franchising in India, wholesale partnerships with established organizations in Latin America, South Asia and Africa, and a lean supply chain to India. He is a new global capitalist, combining his business skills with his training as an eye doctor to reach the 400 million people in the world who suffer from being near sighted. The story that he told of when he restored vision to an older woman in Mexico, who had come to him clutching her bible wanting to some day read it again, brought tears to my and many other people’s eyes.

There were too many other memorable moments, including a stunning Jordanian women Soraya Salti, who is bringing business education to young people throughout the Middle East and a pair of human rights activists, Juan Mendez and Paul van Zyl, who have put their lives on the lines for the rights of the oppressed in their home countries, Argentina and South Africa, respectively, and 30 other countries transitioning from conflict to reconciliation.

But to prove Acumen Fund Sustaining Partner Donald Rubin’s point that you need both bread and roses (although it is hard to think of the Skoll Awardees as mere bread), the art stole the evening. KT Tunstall’s stunning voice and innovative rhythmic style lifted everyone’s spirits to join the angels on the ceiling of the theater.

I spent some time at a panel on Community Development (moderated by 2007 Acumen Fund Fellow Keely Stevenson). As always, Martin Burt (Fundacion Paraguaya), Vera Cordeiro (Reneascer) and Craig Kielburger (Free the Children) inspire and impress.

I’ve met Craig on several occasions and he is an extraordinary young man. His organization is about engaging children as responsible global citizens and the curriculum he has developed for children is mandatory in Canadian public middle schools. He is now getting some traction in US schools (tough nuts to crack!) and has also created a summer leadership program for kids. Acumen has several initiatives underway to reach out to engage more directly with teenagers and college students, and Craig has promised me a brainpick on “kid engagement” during his next trip to NY.

Good panel in the afternoon called “(Financial) Power to the People”, featuring three entrepreneurs who have created big online marketplaces: Premal Shah (Kiva.org, online micro-lending), Mari Kuriashi (Global Giving, online donations) and Mads Kjaer (MYC4, online investing). They are all trying to build movements and to give people the sense that they are part of something bigger and dynamic, the goal is “ to broaden the base of social activism”.

By definition, they all deal with huge stakeholder communities, including their respective lenders/donors/investors and have explored various means of keeping them engaged without expending too much bandwidth. One (Premal) talked about having conference calls with thousands of listeners, each with the ability to type in questions. Premal is also thinking about how to close the gap between lender and borrower. Is there a way through a web cam or Skype that the lender could see how the borrower’s business is doing with the loan? And why would the information all need to be going from south to north to make the lender (north) feel good? Why not advice or other non-financial resources going from north to south (or vice versa!) to help the borrower?

These entrepreneurs are not daunted by the enormous numbers in their respective spheres, they only want to increase them . They spoke of crowdsourcing, a new term for me. Mads talked of his dream to create an investment fund with BILLIONS of investors, at one euro a share. He thinks a whole new vocabulary will be crafted in the online social enterprise space and the words haven’t yet been invented (he reminded us that “iron horse” preceded the word “train” and “horseless carriage” preceded the word “car”). They share the dream of making transactions in the social enterprise space as easy as ordering a book from Amazon online and so exciting that the individual tells her friend and the friend tells a friend etc. Mari’s Global Giving not only lets a person make a donation online but also sells gift certificates so that the ultimate recipient can choose to which charity he’d like to donate.

The panel talked about organizational issues as well. Mads talked about the complexity of running a non-profit organization in affiliation with a for-profit one. Premal described about how Kiva was on the brink of bankruptcy in the fall of 2006. Then Muhammad Yunus won the Nobel Prize and micro-lending burst onto the global scene. Overnight, Kiva’s volume of business grew exponentially and their website was down four days because it could not handle the volume. Business has continued to grow (Kiva says it raises $1 million in $25 increments every 10 days) and their annual operating budget is $5million—Premal does not want it to increase any further but wants to use more and better technology to increase efficiency and support scaling. Interestingly, Kiva has 12 volunteers for every fulltime employee, but the volunteers need to make a minimum 4 month full-time commitment. His advice to new social entrepreneurs: “keep your burn rate down until serendipity hits”.

Later, I spent some time dropping into other panels. “Expansion Finance for Social Impact” was among the best. The late afternoon session was the awards ceremony for the 9 Skoll Awards. I was particularly excited about Soraya Salti who is dazzling in every way. She is doing great things with Injaz which provides youth business training in 12 Arab countries.

A casual dinner with friends from Rockefeller, Visionspring, Lex Mundi Foundation, McKinsey, Mercy Corps, IDEO, Bamboo Finance, Rockefeller, Ashoka and others made for a very full but enjoyable day.

Micro Drip has been searching for over a year for a competent Operations Manager. Most candidates are either extremely over or under-qualified. As a social business, we simply cannot compete with large multi-national corporations in terms of salary and benefits. Our plight provides further evidence to the gap at middle management that is often present in developing countries.

Recently, I helped develop a start-of-year workshop that was designed to rally the company around a new Vision & Mission and build a feeling of belonging & teamwork (video: www.youtube.com/watch?v=GH4gv2tm_UU). As part of the three-day event, we introduced a strategic task list to help strengthen the company’s foundation in preparation for further expansion. Each employee was assigned at least one strategic task with which they were supposed to outline a logical sequence of steps to complete the task, along with an estimate for how much time each step would take. Yesterday, I reviewed the tasks in detail with several key managers and requested that they jointly create a sequence of steps necessary to complete one of the tasks. I was amazed when they were unable to do it unassisted. After about an hour of coaching the managers through the process, we arrived at a logical plan. It is not that these gentlemen aren’t intelligent, quite the contrary. I attribute their inability to complete the task at hand to two main factors: (1) Traditional Pakistani education system, and (2) A “Yes Boss” culture.

In the traditional Pakistani schooling system, there is often a stronger affinity for rote learning, discipline and respect for authority. In most classrooms in the country, critical thinking skills and problem solving skills are new concepts. This can lead to dependency on superiors in the work environment. Some of the more prestigious schools do embrace independent thinking as a critical concept to teach students, but these schools primarily cater to the elite.

Pakistan is a very hierarchical society. Many bosses in hierarchical cultures simply want to give orders and have their direct reports follow their plans to the letter. They encourage a “Yes Boss” culture in which employees never voice a dissenting opinion. This poses particular problems in Micro Drip, as we are a small company with limited resources. We need capable employees who can think for themselves without having to be guided every step of the way. Ultimately, our company will be stronger if different points of view are better represented, irrespective of where they come from in the organization.

At Micro Drip, we are committed to helping develop our employees to better themselves, but the verdict is still out on how long it will take to introduce a culture of problem solving. We must begin now to think on how we will retain our talent, because once our employees reach a higher level of professionalism, they will be a scarce commodity in an underserved human resources market.

Earlier this evening, New York Times syndicated columnist Nicholas Kristof posted a review of The Blue Sweater on his blog, On the Ground. His entry is entitled Investing to fight poverty:

One of the most interesting innovators in aid and development is Jacqueline Novogratz, a New Yorker, the CEO of the Acumen Fund. She is, what? An aid worker? A banker? A bleeding-heart venture capitalist? A tough-minded philanthropist? All of the above?

On my Southeast Asia swing, I read an advance copy of her memoir, “The Blue Sweater,” which will be published in February [actually, March 3], and it’s a terrific and sober-minded look at the complexities of doing good. She acknowledges that helping people is much harder than it looks, and that donors need to do more listening and less instructing – yet at the end of the day, she believes there are things we can do that really do make a powerful difference to the world’s neediest.

Browse to Kristof’s blog and check out the review: http://kristof.blogs.nytimes.com/2009/01/06/investing-to-fight-poverty/

You can learn more about The Blue Sweater at http://www.thebluesweater.com

Two weeks ago, I joined a group that included Aun Rahman, Acumen Fund Pakistan Country Director, Dr. Sono Khangarani and Saqib Khan, respectively the CEO and COO of Acumen Fund investee Micro Drip to visit Hyderabad in the Sindh region of Pakistan. Micro Drip sells drip irrigation systems to smallholder farmers in Pakistan (check out the company’s web site as well). My colleague Sasha Dichter took a similar trip earlier this year to a different part of Pakistan (Thar), and reflected on What It Means to be Patient: Drip Irrigation in Pakistan’s Thar Desert.

It was the Sunday before a 3-day Eid celebration, and the traffic leaving Karachi was noticeable, even to me (a Karachi novice). Then again, I couldn’t complain. Even the traffic in Pakistan is colorful, what with intricate designs adorning all manner of transport from the smallest rickshaws to buses and large-haul trucks.

But today, the color came not just from trucks, but from our non-human counterparts sitting in traffic. As part of the Eid celebration, families sacrifice an animal to share; as such, many vehicles were transporting goats and cows bound for slaughter; even camels played their part, pulling families along the highway. Later that evening, on our way home, I saw one guy in a rickshaw, his knees up to his chin as his feet rested on two goats, stacked atop one another on the floor of the rickshaw, much like one might stack up suitcases for a long family road trip.

I was eager for the road trip. It was a chance to get out of Karachi, where the inability to simply walk around freely must surely become stifling; it was also a chance to see more of Pakistan’s countryside. The day was facilitated very effectively by National Rural Support Program (NRSP). NRSP is (in Aun’s words) the ‘big brother’ of TharDeep Rural Development Program – the parent organization of Micro Drip – and has been providing agri-specific support to farmers for over 20 years.

In the past few years, NRSP has been offering micro-lending options in addition to agri-services, and the villages we met – like these farmers, pictured at left – with have organized around these micro-loans. The farmers that we met were not users of drip irrigation; in fact, the difficult task of selling drip systems to farmers was a key outcome of the meetings for me.

Many of these farmers have taken on loans between Rs10,000 and Rs30,000, and what we heard from them is that while these loans help them to operate without total dependence on a middle man – ‘Arti’ in Urdu – they barely cover the cost of inputs, let alone any of the other household costs the farmers incur on a daily basis.

Our objective for the day was simple: to listen to farmers. We wanted to hear directly their key concerns, constraints and cost burdens in order to gain a deeper understanding of where drip irrigation might play a role in increasing farm productivity. From a broader perspective, we were also interested in what we should be thinking about as Acumen Fund moves forward with our new agriculture portfolio. I can’t help thinking that my modest report is going to be complimented by a deeper and more colorful analysis in Jacqueline’s journal, so I’ll stick to facts and basics and attempt to relay the key insights we heard from these farmers.

The farmers are incredibly wise. Any solution that Micro Drip – or any other enterprise looking to solve the problems of smallholder ‘productivity’ – puts forward must be designed via an ongoing process of endless discussion with farmers. They know that drip irrigation needs a constant water supply; today, they are lucky to have access to flood irrigation from the canals once a week. Naturally, farmers are skeptical of drip’s impact.

They know that they are lucky to get 3 hours of electricity a day with which to pump the water from their wells, and even that they pay the landlord for – and it’s still cheaper than diesel. ‘Loadshedding’ has become such a common phenomenon throughout the rural areas that, despite the fact that they were speaking to us in their local Sindhi, the English word was common to all.

These farmers are keenly aware that, in 2008 alone, the price of inputs such as fertilizer has risen from Rs500 to Rs1300 on the black market despite the standard rate being Rs600. Their market access is limited to the back market through their historical relationships with Artis (middle men) leading them to hoard fertilizer, which in turn drives the price up more.

They know that even if their yields do increase, it’s often difficult to find a market for their product. This was confirmed in one village where we saw vast piles of cotton (pictured at left), brown and wasting because there was no one to buy, no where to sell. And finally, they know that the loans allow them to cover the costs of these inputs, but do not allow them to break the cycle of debt that the landlords and the Artis further entrench. If only the loans were larger, and the definition on ‘productivity’ broadened even a little, then they might be able to diversify their income sources, break their dependence on a crop that might easily be devastated by a flood or other natural disaster. A larger loan would allow them to buy new clothes, educate their children, pay for healthcare and truly improve their standard of living.

Dr. Sono knows the right questions to ask. He is in his element and it’s an honor to see him in action; he’s the only one of us who can speak directly to the farmers in Sindhi. The questions he asks all three villages get the same unanimous replies: 1) Do you think the cost of inputs is going to come down any time soon, if at all? No is the clear answer. 2) Do you think water will get any easier to get a hold of? Again, no is the immediate consensus. 3) What do you think is the best way to deal with these issues and allow you to become more productive? That, the farmers say, is the billion rupee question!

Dr. Sono discusses drip as an option, although he admits that without solving the bigger infrastructure question that would provide a more reliable water supply, it may not be the best solution for these farmers just yet.

One can’t help but be struck by the deepening and systemic tragedies Pakistan has fought throughout 2008: the continued lack of true leadership and the IMF intervention whose impact raises many more questions on the horizon. There are undoubtedly equally tough times are ahead here. But taking the time to listen to these farmers, to see Dr. Sono’s quiet manner of marketing with truth, and the deep seated commitment of the Acumen Fund Pakistan team (who are all complete rock stars) as well as the commitment I’ve witnessed this week from Jacqueline, Aun, Hunter Boll and Stuart Davidson, I feel a warming sense of hope that by partnering with and learning from local entrepreneurs like Dr. Sono, we might just gain the insights and the humility to give more farmers what they really need: the ability to determine their own definition of productivity and the dignity of providing for themselves.

I’ve been studying, working with and thinking about leadership development for the last seven years, but I never stop being surprised. This past summer, I led an idea session for the Center for Creative Leadership to brainstorm how leadership development could be applied in the context of poverty.

But in this group of East Africans, West Africans, and North Americans, we could barely agree on semantics-leadership for the base of the pyramid, bottom of the pyramid, leadership for the majority, leadership for all…etc. However, no matter what we called it, we all could agree that not only did the poor have little access to leadership development tools, but the research and resources at hand had limited relevance to someone living in poverty.

That is not to say that there aren’t leaders. I have had the honor of meeting leaders born into poverty and raised through adversity who demonstrate true leadership irrespective of socio-economic status.

Living in Ethiopia, I met Solomon (above, left), a young man who lost three of his limbs when the Addis-Djibouti railway overturned on route to Dire Dawa, Ethiopia’s second city. Solomon ended up in one of Mother Theresa’s clinics and tried a variety of prosthetic options, none of them feasible for the life he would lead in Ethiopia.

So he decided to pack it up and return home. Solomon wanted to start his own business, and I worked with him over a period of months to figure out how he could make it happen. Solomon left his old community, where people saw him as half the man he once was, and established one of the most successful video rental shops in his new neighborhood. His business has grown quickly because Solomon has impressed and befriended those around him, and he’s not done yet. He’s sending home money to his mother, employing boys from the street and he dreams of opening a proper internet café.

After such a devastating accident, many in Ethiopia take to the streets as beggars-either by choice or by force-but Solomon chose a different path. His optimism, courage, and work ethic helped him found his shop and attract a growing number of customers each day.

For me, leadership is about unlocking human potential. In my work with the Cherokee Gives Back Foundation and the Acumen Fund, I have struggled to find entrepreneur-leaders and provide them with the financial support needed to succeed and alleviate poverty through market-oriented solutions. But finance is only part of the picture. I have participated in two Leadership Essential programs, designed by the Center for Creative Leadership’s Leadership Beyond Boundaries initiative, and experienced first-hand the impact of “leadership development for the majority.”

I see immediate potential to introduce these tools to a broader audience in East Africa, but I see an even greater opportunity/challenge: How do we take this concept of leadership development and apply it to the people living in the villages and slums? In East Africa, the “pyramid” looks more like the Eiffel Tower – a needle at the top and large in its foundation. I believe that unlocking doors for this “foundation” will require creativity and a cross-disciplinary effort. But I also believe in the power of leadership development to transform the paradigm. Solomon is one of those extraordinary leaders who succeed, no matter the odds. There are many more out there like Solomon, and with appropriate and accessible leadership development, the impact could be revolutionary.

(Times of India, December 3, 2008)

How the lure for respectability made this impoverished laborer believe in the Jehadi cause.

• > The 21 year old captured fidayeen was born at Faridkot Village (population 3000), Dilapur tehsil, of Okara district Punjab province, 50 km east of Multan. Family belongs to Qasai caste. Father, Mohd Amir Iman, runs dahi-puri snack cart, mother, Noori Tai, looks after ramshackle home
• > Ajmal is one of 5 kids. Eldest brother, Afzal 25, works as laborer in Lahore lives near Yadgar Minar. Sister, Rukaiyya Husain, 22 is married in village. Then comes Ajmal. Sister, Suraiyya, 14, and brother Munir, 11, still at home.
• > Ajmal’s poor father can’t keep him in government primary school. In 2000, 13 year old Ajmal, just past class 4, is sent to Afzal in Lahore. The brother, then 17, hardly has means to look after his young brother.
• > Ajmal shuttles between Lahore and Faridkot. In 2005, fights with father and leaves home. Not welcome in Afzal’s house either. Stays at shrine of holy man Syed Ali Hajveri. Like elder brother, works as a laborer.
• > Finds the work degrading. Gets attracted to petty crime. With friend Muzaffar Lal Khan, launches new career in armed robberies. On Dec 21, 2007, Bakr-Eid day, they go to Rawalpindi to buy weapons.
• > It’s here that they run into activists of Jamaat-ud-Dawa – Lashkar-e-Taiba’s political wing – handling out pamphlets about their group. After a brief chat, duo sign up – not because of conviction but for training they might get. That, they feel, would further career in crime.
• > Reach LeT’s base camp, Markaz Taiba. It’s here that Ajmal starts getting influenced by films on India’s “atrocities” in Kashmir, by impassioned speeches by preachers, including LeT chief Hafiz Mohammad Saeed. Starts believing it might be worth sacrificing his worthless life for glory of Islam. Camp gives him sense of belongings that he never had. When he comes home during a 2-month break, finds he is suddenly treated with respect by family and community.
• > After this break, Ajmal chosen for LeT’s basic combat course, Daura Aam. Does well and chosen with small group of 32 for advanced training, Daura Khaas, at camp near Manshera. Does well here too.
• > Selected for high-skill marine commando and navigation training, imparted to the team of 10 fidayeen chosen to attack Mumbai. At 4:45 am, on Nov 23, Ajmal with the unit, sail off from a forlorn creek near Karachi, each equipped with AK-47s, 200 rounds of ammo and grenades.
• > LeT military commander Zaki-ur-Rahman Lakhvi promises Rs. 1.5 lakh (USD 3000) reward.

(end of excerpt from paper)

Everyone talks about the atrocious crimes the terrorists (as they call them) have committed. And I don’t mean to say they haven’t. However, no one is talking about why these people are doing this. The social fabric is not even questioned when you can see from the story of Ajmal (and I call him by his name because he is just has human as you and me) that it is strewn with lack of dignity of labor, lack of education (tied to lack of money), lack of basic family planning. Five children in today’s day and age is a recipe for disaster even in developed worlds given the escalating commodity prices and education costs. Think about the strain on a laborer father. Finally USD 3000 reward to the family is all you need to hire Ajmal and young adolescents like him.

My comments may seem caustic or even combative. But what are we doing about this? Quite frankly I’m tired of listening to theories on how a strategic alliances between countries can end the “war of terror” – to which India has also been inducted!

You can only cure something if you know the root cause.

So “what is the root cause?”

I would love to hear your thoughts on this, please send me comments if you’d like.

Light’s idea that high performing organizations should invest in management and organizational development systems makes sense, but in order for many social businesses to do so, the philanthropic landscape will need to change.

William Foster, partner at leading nonprofit consulting firm Bridgespan Group, recently wrote about the need for foundations to provide “growth capital” grants to later-stage organizations with sound business plans, strategic clarity and a sustainable financing model. In his Stanford Social Innovation Review article, “Money to Grow On,” he suggests that funding organizations should approach grantmaking in a similar way that venture capitalists approach making investments: high performing organizations with proven success should be awarded larger infusions of unrestricted cash to ramp-up and achieve long-term social change.

Foster writes, “Before venture capitalists invest in a company, they conduct a thorough review of the company’s management team, business model, and strategic plan, along with an analysis of the company’s competition and market. More often than not, they walk away from deals that are in many respects attractive. Few nonprofit donors undertake such rigorous due diligence. But they should. ”

For organizations working in the base of the pyramid space, this idea is already starting to take root. VisionSpring recently announced a prospectus, which is aimed at attracting $5 million in growth capital. The prospectus details how resources will be leveraged to create and measure increased social returns. Donors do not have to look far to reference past financial statements or catalogue other partners who are investing in their model — all these details are easy to find and effectively illustrated in the report.

VisionSpring Chairman and co-founder Jordan Kassalow explained the prospectus’ purpose in a recent interview with Rob Katz: “[it] is all about solving a pain point – that we didn’t have enough capital to execute our vision. So we want to get more dollars up front to build the team and systems to replicate and expand what we’re doing. ” Since its soft launch in June, the Prospectus has already helped raise over $1 million.

Agora Partnerships is another organization serving the BoP that recognizes entrepreneurs’ need for growth capital to create sustainable economic and social value. Agora identifies and advises socially responsible entrepreneurs who want to grow their businesses to create jobs and solve the problems of poverty. Those organizations with the most promising plans are providing with financial resources and additional business development support.

Like many organizations in this space, VisionSpring and Agora Partnerships are hybrid organizations – they combine non-profit tax status with an earned-income business model. Their non-traditional model may make securing traditional grants even harder, especially, perhaps, because their balance sheet shows a steady revenue stream. For these social enterprises, measuring and communicating successful results will be especially critical in securing unrestricted growth capital.

Social enterprises face an uphill battle in many regards – whether in terms of hiring, communications, impact measurement, etc. But when it comes to fundraising, the arguments put forth by William Foster are a useful guide. Like Agora Partnerships and VisionSpring, other social enterprises may choose to use a prospectus to raise the kind of scale-up capital they need to reach sustainability. Over time, we’ll be able to assess the utility of this new approach – but for now, it appears to be working. Just ask Jordan Kassalow.

Description: The Program and Impact team seeks a Program Officer who brings a combination of intellectual curiosity, a passion for social change, a focus on tangible results and a desire to work within a team culture that practices continuous learning and improvement.

The Program Officer will report to one of the senior program staff working on the Skoll Foundation’s “invest” programs (grants and loans directly to social entrepreneurs’ organizations and to other initiatives providing critical services to maximize the social entrepreneurs’ scale of impact).

Program Officers are expected to accept a high degree of individual responsibility for anticipating and meeting deadlines, analyzing and managing opportunities and risk, producing high-quality documents and graphic materials, maintaining records and welcoming feedback with the aim of continuous improvement and contribution to team performance.

Primary Responsibilities:

- Manage a portfolio of grantmaking relationships, including screening and conducting due diligence on grant and loan applications, managing relationships with grantees, developing grant outcomes and milestones, and monitoring grant progress and impact.
- Review letters of inquiry and grant proposals. Draft and edit grant proposal summaries and recommendations for management and board review.
- Participate in the development and implementation of best practices in relationship management across the foundation, with a goal of strategically and seamlessly linking grantees to other foundation services, resources and staff.
- Serve as primary and secondary point person on a variety of foundation grantmaking programs and initiatives (e.g., the annual Skoll Awards for Social Entrepreneurs, Ecosystem Investments and Partnerships, Connect & Celebrate projects, Special Opportunities grants and impact assessment efforts).
- Participate, and at times lead, multidisciplinary teams addressing current and emerging foundation priorities.
- Interface with grant seekers, responding promptly and respectfully to a variety of inquiries.
- Participate in the development of processes to measure, learn from and improve impact.
- Help develop services, in addition to grants, that will provide value to grantees, improving their capabilities, scale and impact.
- Participate as a member of the P&I team in developing the department’s strategic plans.
- Prepare key funding documents related to assigned grants and dockets.
- Monitor assigned grants and take actions as necessary to ensure compliance.
- Undertake special projects, as assigned.
- Maintain collegial working relationships with colleagues and constituents

More information, including qualifications, compensation and application instructions, can be found on the Skoll Foundation’s website.

Or not. To my surprise, there’s an antidote to this sedative trio – and his name is Nachiket Mor. Last night, along with 150 or so others, I sat in rapt attention while Nachiket described his latest thinking on banking at the base of the pyramid in a talk entitled The Next Big Step: Revolutionizing Financial Services Distribution in Rural India. Yes, the event started at 6:30, and they served delicious (but heavy) hors d’oeuvres. And since the auditorium was bright in the late-day sun, the organizers drew the blinds and dimmed the lights. But for the duration of Nachiket’s presentation and through the Q&A, the entire audience sat and stood at attention. It was that good.

I shouldn’t be surprised; Nachiket really knows what he’s talking about. After early-career success at ICICI Bank, he moved to Philadelphia and worked for a hedge fund while pursuing his Ph.D. from the Wharton School. Upon graduation, he returned to India and moved up the ladder at ICICI, joining the Board of Directors until he stepped down last year to become the president of the ICICI Foundation for Inclusive Growth. His passion and life’s work center on financial service delivery in base of the pyramid markets – the subject of last night’s talk.

Nachiket talks about banking low-income consumers in straightforward terms. After all, whether his customer is rich or poor, a banker must do a few things and do them well: take and give money, determine the borrower/saver profile and properly value uncertainty. These basics are the foundation on which the Kshetriya Gramin Financial Services (KGFS) initiative has been started. KGFS is Nachiket’s latest initiative to bring banking services to the BoP, which he’s doing in partnership with the IFMR Trust.

Kshetriya (regional) Gramin (rural) Financial Services is an effort to blanket rural districts with full service bank branches, reversing the typical microfinance model where banks are located in urban areas and MFI officers visit villages periodically. KGFS branches, on the other hand, are open from 6:00 AM to 11:00 PM and offer villagers a range of financial services from savings to loans. Nachiket describes the branches as providing continuous, reliable, convenient and structured financial services, which sounds simple but hasn’t been available to date in many areas of India.

Some key elements of the KGFS business model really struck me last night:

• They recruit bank managers from the Indian Army, which has a well-earned reputation for neutrality. This helps prevent caste- and income-based bias by bank staff against customers.
• Starting an account takes less than 7 minutes; each transaction takes less than 3 minutes. These strict time limits are a response to customers’ complaints about microfinance institutions. MFIs hold lots of meetings – but many see these as a waste of time, especially when the attendees could be at work instead. KGFS wants to respect its customers’ time.
• "Wherever we enter, we will stay" – KGFS is committed to the communities it serves, and is rolling out slowly – first in Tamil Nadu, later in Bihar and Orissa.

If they can pull it off at scale, KGFS will be revolutionary. They are offering savings accounts at 9 percent (vs. government savings rates of about 3 percent). Loans, at full yield to maturity, can be had for 11.25 percent (vs. typical microfinance rates of 30 percent or more). They can offer such attractive rates because they’ve built an IT platform that keeps costs absurdly low ($0.50 per year per account!) The attractiveness of these services is undeniable.

But what stands out from the presentation is Nachiket’s palpable passion for the business of banking the unbanked. He says that every customer is seen as a high-quality, rational human being – an obvious statement, but in a society dominated by caste and income inequality, it’s no small step. Audience questions are answered enthusiastically and honestly, without pretension. If only every presentation could be this compelling.

We will have to keep an eye on KGFS to see how it goes. After all, even Nachiket is straightforward about the possibility that the model won’t work. But, like a true entrepreneur, he understands the power of learning from one’s failures as much as one’s successes. As I left the NYU auditorium last night, I couldn’t help but think that, in the case of KGFS, Nachiket and IFMR Trust will be learning from success in this case.

Thanks to the NYU Microfinance Initiative and the NYU Financial Access Initiative for organizing and hosting the event last night.

By Amy Lin

Proving that BoP services and profit can go hand in hand, Nairobi-based Meridian Medical Centre has been profitably operating three outpatient clinics with one-third of its clients earning only $4 a day. In April 2008, Meridian opened a fourth clinic in Donholm, a low-income Nairobi neighborhood, to cater to a low-income clientele interested in high quality outpatient health care at a reasonable price.

Through a new partnership with Acumen Fund and The Blue Link Mirror Fund, Meridian will open 5 more clinics over the next 3 years in higher density, lower income areas. This expansion will begin in Nairobi, but with an eye to expanding to towns on the periphery of Nairobi. As the Kenyan newspaper The Standard reported on June 17, Meridian’s partnerships will leverage both capital and management expertise—strengthening Meridian’s bottom line while meeting BoP needs.

Meridian’s push into lower-income markets is part of a larger trend of companies recognizing the market potential of the BoP. In Kenya, prominent businesses like Equity Bank and Safaricom (a mobile phone company) have enjoyed explosive growth in recent years, largely due to their success at attracting large volumes of low income clients. Investors are also recognizing the opportunity to profitably serve the BoP, as illustrated in the oversubscription of the Safaricom IPO, which drew 236 billion Kenyan shillings ($3.68 billion).

As Meridian and others launch operations targeted at lower income populations to achieve higher growth rates, in Nairobi as well as in peri-urban or rural areas, the BoP will benefit from the greater choice of products and services. Just as he predicted, Adam Smith’s “invisible hand” is using corporate self-interest to achieve a greater public good.