Articles by Jacqueline Novogratz

Let me congratulate Acumen investee David Kuria, founder of Ecotact, for being named the African Social Entrepreneur of the Year for 2009 by the World Economic Forum! This is fantastic recognition for David and his team’s work on bringing affordable, high quality sanitation services to thousands of people every day. Currently, Ecotact serves more than 9,000 customers daily through 10 toilets operated throughout the city of Nairobi, Kenya and other nearby locations. The toilets cost 5 shillings per use, though individuals also can pay a bit more to take a shower in a clean environment – a real luxury for thousands who travel into the city from the slums and far-flung rural areas to work in offices after long, dusty bus ride. Ecotact is showing that public-private partnerships can work on behalf of all people and we are proud to be a part of this effort.

At a conference last week, I had the pleasure of meeting with Jeff Seabright, Coca-Cola’s Vice President for Environment and Water. He spoke about the company’s policy to reach a water neutral footprint. In other words, for every liter of water Coke extracts from aquifers, it will take action to replenish the earth’s water supply. In some areas, the company is planting trees; in other communities, it is providing drip irrigation to farmers who otherwise would use flood irrigation to water their crops.

This is a thrilling initiative. First, it underscores to me that many of the world’s new standards are likely going to come from corporations who increasingly see themselves as global citizens. Of course, regulation is critical – and I am not naïve about the damage multi-national corporations can cause to the environment. But this is an important step forward, and I do believe that young people especially will hold companies to a higher standard of behavior and the smartest companies will stay ahead of this curve.

This initiative also excites me because it may provide an algorithm not only for corporations but for all of us. What would it take to influence our individual behavior so that we took the attitude that we give back to the world what we take out of it? We now have sophisticated tools to measure our carbon footprint – therefore, we know what steps could be taken to offset it. The same calculations can be done for water.

We could take this further as well, for example, around luxury consumption. What if we each created some sort of match for ourselves, whereby we would contribute to organizations fighting poverty in proportion for what we spend on luxury consumption? In other words, we would not “charge ourselves” for what we think we need in terms of the essentials (and this figure may vary widely according to overall income, of course). But we might contribute to charity at a rate connected to the very non-essential – not only to make us think about what we’re consuming but also create a different kind of redistribution that would be encouraged not by government taxation but by an individual’s own – but perhaps shared – moral code.

In the early years of Acumen Fund, one of our Partners told me that he was considering buying a Lexus when it hit him that he could, instead, buy a good (but less expensive) car, and give the difference to Acumen Fund. Years later, that gift is one of the most meaningful to me. I saw the partner recently and he told me that after seven years, he’s still driving the car and that every now and then, he smiles to himself thinking about the meaning the particular car enabled him to create. There’s something to this idea…

I’m so excited to share the news that Maria Eitel, president of the Nike Foundation and an Acumen Fund advisor, has been asked by President Obama to become the CEO of the Corporation for National and Community Service. Maria’s nomination was announced yesterday during an event with President Obama, the First Lady, Vice President Biden, Sen. Kennedy and others, as the President signed the Serve America Act.

We are so proud to work with Maria and have learned a great deal from her. The work at Nike, focused on girls, is important for the world – and The Girl Effect is one of the best examples I’ve seen of social marketing. If you’ve not seen it, watch it now! I know the Foundation will miss Maria, and at the same time, I believe Maria is uniquely positioned to lead this important work for the US and the world. This next generation of young people is an extraordinary one – finding opportunities to link them to real public service opportunities, not only in the US, but hopefully globally as well, could really change the world.

I know you all join me in wishing Maria our warmest congratulations and support. Hooray Maria!

Photo credit: Flickr user malla_mi; used under a Creative Commons license

I recently gave a keynote address in Milwaukee, Wisconsin to Engineers Without Borders, an amazing group of 12,000 students and activist-engineers who devote themselves to working on global issues at the community level, using their engineering skills as well as a values system grounded in a belief in community partnership. Exciting.

While there, I discovered that Milwaukee is positioning itself as the “Silicon Valley of Water”. Situated on a Great Lake, with four great universities in the area, a history of producing top engineers and a dying industrial sector, a vision focused on bringing forth technologies for clean water on a global basis is thrilling. (John Schmid at the Milwaukee Journal-Sentinel wrote an excellent article connecting this to Acumen; do take a minute to read it.)

I also couldn’t help but think that this approach of retooling some of America’s own cities to focus on transforming other parts of the world could have an incredible impact on transforming the cities themselves. It is this virtual cycle that we need not only to be aware of but to pursue avidly, and to communicate effectively. My mentor John Gardner would often tell me that sometimes you have to “push the inevitable”. Taking our best and brightest and asking them to focus on solving some of the world’s toughest problems from a sense both of humility as well as audacity is what is needed at this critical time in our shared history on the planet.

Nicholas writes a compelling column - At Stake are More Than the Banks - on the need to remember the poor during the G20. He cites a world in which the top 500 individuals earn more than the bottom 400 million combined, and a rising malnutrition/starvation rate.

I read this in the context of considering the prevalence of a debate between whether international aid is a good thing or a bad thing. We’ve got to get away from false dichotomies and move toward more nuanced discussions of what works, what solutions we might try and how we build systems that truly empower people. If we are going to extend the fundamental principle that all human beings are created equal, then this is the time for innovation and invention not only with our financial systems but with our philanthropy and with international development as well.

Indeed, the time is now for moral leadership, for a greater sense of urgency and for thoughtful action.

Credit: Daniel Goodrich

Acumen Fund is eight years old today! It is hard to believe we were approved as a public charity on April 1, 2001 with the ability to raise nonprofit funds and invest loans and equity in both for-profit and nonprofit enterprises. The world was so different then – just after the dot.com bubble burst, just before 9-11, long before the financial crisis. The idea of investing philanthropic funds was a new one, and each day was one of discovery.

Eight years later, our learning curve continues to be steep, but we’ve accomplished a lot and learned enormously through the years. We now hold five investments serving more than a quarter million low-income customers sustainably. Water Health International serves more than 350,000 customers, bringing safe drinking water to 287 villages – and the company intends to grow to a million customers in the next few years.

LifeSpring Hospitals, a healthcare franchise in India - now with six hospitals - is opening a new hospital every 35 days, and the results in terms of women served with safe, reliable healthcare are remarkable. 1298 Ambulances runs a fleet of nearly 100 ambulances, providing services for people of all classes in Indian cities where for too long, people have expected little or no provision of emergency services. A to Z Textile Mills produces 20 million long-lasting bednets yearly, providing protection to nearly 40 million people and employing 7,000. Global Easy Water Products has sold drip irrigation systems to more than 300,000 of the world’s poorest farmers, enabling them to double their yields, on average.

Drishtee is bringing information services to nearly 5,000 Indian villages; and BEEPZ (formerly Advanced Bio-Extracts) is working with 3,500 farmers, producing artemisinin for 60 million doses of malaria treatment yearly. In Pakistan, more than 15,000 people now hold health insurance policies and more than 300,000 women are borrowing – and repaying – their tiny loans. And these are just a few of the 40 investments made by Acumen Fund in South Asia and East Africa. We established Acumen Fund to help create a world where all people had access to affordable, quality basic services like water, healthcare and energy – and we now see a number of important models to do that.

In the past years, we’ve also built a metrics platform - PULSE, formerly PDMS - that is being beta-tested by 50 partner companies, intermediaries and foundations – and we hope this brings greater accountability to measuring social impact as well as financial returns.

We’ve seen 24 Acumen Fund Fellows from around the world participate in our program; and most have gone onto help run important social enterprises or are running social investments funds: I believe we are planting the seeds for the sector’s next generation of leaders.

We’ve built our own team to 60 people in offices not just in New York, but in Pakistan, India and Kenya. These teams are supported by incredible advisors who give more of themselves than we could have hoped – along with our global board and advisory council who make our work possible. And we couldn’t be prouder to be supported by more than 200 Acumen Partners who have contributed significant financial resources, enabling us to have a $40 million portfolio that we hope to grow to $100 million in the next few years. Thanks to everyone who is such a vital part of our community.

Thanks, mostly, to our team members around the world who give so much of themselves every single day. To say it is an honor to work together is an understatement.

It has been an amazing eight year journey; and yet, in some ways, we’re just getting started. There is a lot of work to do, and we’re ready to take on the challenges. We are looking for new and creative ways to raise funds in this difficult economic environment. We are considering questions of talent: more than 600 individuals from top business schools applied for our 10 summer internship spots, and how the world uses this resource is a question we take seriously. We are working on strengthening our performance management as well as bringing for our insights from the work in order to influence others more directly.

These challenges - while big - aren’t daunting, for now we have a platform on which we can stand, one that is strong and clear and focused. I personally have never felt as energized by this work, especially in this historic moment, for we have a real chance to help imagine and reinvent our financial systems so that they can be extended, ultimately, to all people on earth.

Happy Birthday, Acumen!

(Photo used under a Creative Commons license, courtesy of Flickr user Dey)

I’ve recently been asked by several people, including team members at Acumen Fund, whether or not one should give to a beggar. The question has weighed even more heavily this week in India, where beggars have knocked on my car’s window daily. Ultimately, I agree with Dr. Martin Luther King, Jr. who said, “True compassion is more than flinging a coin to a beggar. It comes to see that an edifice which produces beggars needs restructuring.”

Indeed, Acumen Fund’s entire mission is based on principles of dignity and freedom; we work to build systems that enable individuals to access affordable, quality services so that they can make their own decisions and choices. Our deepest philosophy rejects systems that insist only on hand-outs, and yet, we also have learned that sometimes hand-outs are indeed necessary, especially when people are barely surviving.

But too many no’s make a stone of the heart, and some level of inconsistency may be what makes us most interesting and even beautiful as human beings. There are times to give alms, a time just to give a few dollars to a person standing in front of you because he so clearly needs it right there in that moment. There are certainly times to give your coat on a cold night.

Rather than endlessly debate this paradox, our shared goal should be asking ourselves daily what we are doing to help create a world in which all human beings really are treated as equal, a world in which dignity trumps charity, a world in which giving becomes mostly about solving problems while also celebrating small kindnesses daily – as long as they are about the other person and not about yourself.

I write from Nairobi, where people have been dancing in the streets on this historic day of America’s inauguration of its first African-American president, Barack Obama. The Kenyans we’ve met have called him their brother, their son, and even the Second Coming. “He will bring the fighting countries close and end the wars,” a man told me while we were in Kibera, one of this city’s largest slums.

Though expectations of President Obama may be impossibly high, this inauguration has brought the entire world together for a brief moment of unity, hope and inspiration. I couldn’t have felt prouder to be an American, to feel so connected to Kenya, to believe more strongly today than ever that we can all become global citizens in the truest sense of the word. 

President Obama’s speech carried so many themes that lie at the core of Acumen Fund’s mission.  He promised more compassion for those who are suffering in the developing world, and recognized the power - and limitations - of markets, urging a new level of innovation and creativity as we solve the problems ahead. 

Barack Obama’s vision is soaring and powerful, and he will need each and everyone of us, regardless in which country we live, to succeed.  We at Acumen Fund will do all that we can to help and will do so with determined optimism and renewed effort. 

Yes. We. Can…..

This is a terrific blog post from our Advisor and great friend Seth Godin who provides all kinds of ideas for getting involved and doing something worthwhile on Martin Luther King Day. Indeed, he provides thoughts for daily giving and he’s right - if we all gave an hour a day - or even a week - we could transform the world — especially if we did it in ways that amplified important voices, leveraged our resources or enhanced an organization’s sustainability.

Seth suggests we think about highlighting leaders and innovators. Lately, I’ve been thinking a lot about heroes, how we choose them, how we make them, and how and why we follow them. So many of the leaders who’ve most impressed me are the truly unsung heroes and include the customers we serve, the entrepreneurs we support, the teammates, board and partners with whom I’m privileged to work. What can each of us do to bring especially those voices who never get heard to a larger public? My instinct says that we’re getting readier to listen daily, and the time is now to bring forth visionaries who can see a path through the markets that too often ignore the poor and traditional charity that too often sets expectations too low for the poor.

We’d be interested to read your favorite stories of people who have little or nothing and yet manage to survive with dignity and grace, against the odds. Each time I read such a story, it redoubles my commitment to working toward a world where every single one of us really does have the chance to solve our own problems and make our own decisions.

We at Acumen Fund are deeply saddened to learn of yesterday’s terrorist attacks in Mumbai. Our thoughts go out to the victims and their families, our Mumbai-based investees, Fellows and friends and everyone connected to people who have been affected by the attacks. Our personal connection to Mumbai makes the city a home to us, even if we don’t live there.

While watching the TV coverage, I did want to share another feeling of connection, and that was to everyone associated with Acumen-investee Dial 1298 for Ambulance, who have been on the scene and responding to the attacks since they occurred late Wednesday night, as seen in footage on CNN, IBN and other networks.

1298 operates under the ethic of “ambulance service for all.” Per its own policy, it provides free service to all accident and disaster victims - as well as to victims of terrorist attacks. Knowing that a few years ago, the city was so much less equipped to respond to such an emergency underlined the true service that 1298, now with 51 medically-equipped and professionally staffed ambulances, is making to the city where it was founded. We at Acumen Fund feel a great sense of pride, just in seeing how much can be built to change things in a constructive way and in this case, it was due to the hard work of the team at 1298. We thank everyone at the company for the work you do and the ethos of service you hold.

We at Acumen Fund are so proud that Niko Canner, a key advisor to our work, was named in Fortune.com as among “the next generation of management experts who are changing the way business gets done”. As one of the “10 gurus you should know“, Niko stands alongside Nouriel Roubini, the NYU economist famed for predicting the recent economic turmoil, and Don Sull, the professor of management practice at LSE, among others. Niko has been a champion of our talent work and I personally feel incredibly grateful to him for all he and his firm Katzenbach Partners has done to strengthen and expand Acumen’s work.

Congratulations, Niko!

Congratulations to Aravind Eye Hospital for being awarded the 2008 Gates Award for Public Health, which carries a $1 million prize. Aravind joins rare company – previous winners of the Gates Award include the Rotary Foundation, Bangladesh Rural Advancement Committee, The Carter Center and other public health luminaries.

The award is well-deserved. We have known Aravind since Acumen Fund was first established, and although Aravind was one of the first organizations supported by us, it is Acumen Fund who stands proudly on the shoulders of Aravind and not the other way around. Dr. Venkataswamy, who sadly passed away in 2006, founded Aravind in 1976 at the age of 58. His goal: eradicate needless blindness in India.

Dr. V. and his team – mostly family members, including his seven younger siblings – focused on using a rigorous, market-oriented approach to delivering basic services to all people, including the poorest. A sliding scale pricing system enables those who pay to subsidize the cost for those without the means to afford Aravind’s services. Aravind also re-engineered the intra-ocular lens to make it more universally affordable. And critically, the operations are driven by a culture of compassion, respect and dignity for all – and you can feel these values in the hospital’s very halls.

Acumen Fund supported Aravind in 2002 to experiment with building a telemedicine network that would allow doctors at Aravind’s five main hospitals to serve low-income people living in rural areas. Today, Aravind serves more than 2.3 million outpatients and performs 270,000 surgeries annually through its network of hospitals and clinics – making it the world’s largest provider of eye care. Even more staggering is the fact that two-thirds of the outpatient visits and three-quarters of the surgeries were provided to poor clients, at no cost. These milestones are a testament to a system that is both efficient and just.

Dr. Venkataswamy and the Aravind team had a profound effect on me personally. Through knowing this remarkable team, I’ve tried to live more fully the idea that we can hold the discipline of the market and deep compassion at the same time. I’ve worked harder to emphasize the dignity of work. At a very personal level, I think often of what Dr. V. often said: that we can integrate divinity into our lives through not only what we do, but how we do it. It has been such a gift to know this institution.

All of us at Acumen Fund are cheering for the wonderful team at Aravind and look forward to its continued success.