The Good Capitalist Party Program 2011

8/7/2019 The Good Capitalist Party Program 2011

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EventBrochure


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Welcome to The Good Capitalist Party 2011

We are thrilled to have you join us for the second annual Good Capitalist Party in Austin, Texas!

This year we are bigger and better than evermore partners, more attendees, more good

capitalists. We have gathered some of the fields leading organizations to be here and help

spread the word that you can do good while being a successful entrepreneur. We hope you will

have engaging conversations with established people in the field of social enterprise as well as

up and comers. In this program you will find articles that define the field as well as

advertisements from our partners and sponsors.

About the Partners

Acumen Fund

Changing the way the world tackles poverty

Our Mission: Acumen Fund exists to help end poverty by changing how the world addresses it.

We invest patient capital to strengthen and scale business models that effectively serve the

poor and we champion this approach as a complement to both charity and pure market

approaches.

Our Vision is that one day every human being will have access to the critical goods and servicesthey need including affordable health, water, housing, energy, agricultural inputs and services

so that they can make decisions and choices for themselves and unleash their full human

potential. This is where dignity starts not just for the poor but for everyone on earth.

SOCAP

SOCAP is a multi-platform organization dedicated to the flow of capital towards social good.

Our event series connects innovators worldwide investors, foundations, institutions and social

entrepreneurs to build a market at the intersection of money and meaning. SOCAP has

received global recognition as a leader in the social capital space.

Changemakers

Changemakers is the worlds nervous system for social good, an electric community of

movers, positive deviants, and rule breakers. Here, people and organizations grow and push

their sectors further and faster to solve the worlds most pressing social problems. The

Changemakers community is a fast track for action, and a place where interconnectivity and

collaboration result in individual, organizational, and systemic change. Join us at

http://www.changemakers.com


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We are an electric community of action; of movers, positivedeviants, and rule breakers. Here, people and organizations grow

as changemakers moving into the unknown and pushing theirsectors further and faster to solve the worlds most pressingsocial problems through collaborative online competitions andan open-source process.

CHANGEMAKERS.COM

IS THE WORLDS NERVOUS SYSTEM FOR

SOCIAL GOOD


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SOCAP is a multi-platform organization dedicated to the flow of capital

towards social good. Our event series connects innovators worldwide

investors, foundations, institutions and social entrepreneurs to build a

market at the intersection of money and meaning. SOCAP has received

global recognition as a leader in the social capital space.

PAST PARTICIPANTS INCLUDE:

[email protected] | WWW.SOCIALCAPITALMARKETS.NET

UPCOMING EVENTS

SOCAP/EUROPEREGISTER NOW!

May 30th - June 1st

Beurs Van Berlage, Amsterdam

SOCAP 11September 7th 9th

Fort Mason, San Francisco

WWW.SOCIALCAPITALMARKETS.NE

AT ThE INTERSECTION Of

MONEy ANd MEANINg


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Interview: Jacqueline Novogratz on the art of investing inbusinesses to change the world

By David Bornstein, October 11, 2010

Jacqueline Novogratz is the founder of theAcumen Fund, a nonprofit venture capital firm, which makes loansand equity investments in companies that deliver health care, water, housing, and energy to underservedmarkets in developing countries. The author ofThe Blue Sweater: Bridging the Gap between Rich and Poorin an Interconnected World, Novogratz recently returned from Pakistan, where shereportedon the human tollof the floods, which have left twenty million people homeless, as well as some of the "uncommon heroes" shemet along the way. Here, she speaks with us about some of Acumen's ventures, where she sees her workheading, and what she really means by social investing.

Dowser: Acumen looks to invest in companies that meet critical human needs and have the potentialto serve at least a million people. What do you see as one of your most promising investments?Novogratz:WaterHealth International. Theyve developed a decentralized distribution model that bringsaffordable water to villagers in India with a simple technology ultraviolet treatment and they sell it at anaffordable price. The $600,000 we initially invested in 2004 not only helped bring in $45 million in additionalinvestment to that company, but supported its success in reaching 300 villages. The government of AndhraPradesh has now contracted for them to build another 300 systems over the next year. There are five othercopy cat companies bringing water to a thousand villages. What I didnt understand was that a singlecompany could actually seed and ultimately help build a new industry. Thats a game changer.

Can you give me another example of a business with huge potential to transform peoples lives?

GEWP.Global Easy Water Products. What they have done is to bring drip irrigation to hundreds of thousandsof farmers. Theyve miniaturized the systems, and made them incrementally expandable. Theyre selling aproduct to low-income farmers that truly allows them to transform their lives. They use less water and energywhile their crop yields increase. Customers see their annual incomes increase by an average of $400 a year.The company has served 30,000 smallholder farmers but theyre just getting started. We initially invested inIDE India which is a nonprofit -- during the prototyping stages. IDE sold more than 125,000 units. Then wecreated the for-profit company GEWP together. We own 50 percent and they own 50 percent. This yeartheyll do $4 million in sales to dollar-a-day farmers. And they believe theyre on track to reach $25 million by2015.
http://www.acumenfund.org/http://www.acumenfund.org/http://www.acumenfund.org/http://www.acumenfund.org/bluesweater/http://www.acumenfund.org/bluesweater/http://www.acumenfund.org/bluesweater/http://www.acumenfund.org/bluesweater/http://blog.acumenfund.org/tag/floods/http://blog.acumenfund.org/tag/floods/http://blog.acumenfund.org/tag/floods/http://www.waterhealth.com/http://www.waterhealth.com/http://www.waterhealth.com/http://www.gewp-india.com/http://www.gewp-india.com/http://www.gewp-india.com/http://www.ide-india.org/ide/drip.shtmlhttp://www.ide-india.org/ide/drip.shtmlhttp://dowser.org/interview-jacqueline-novogratz-on-the-art-of-investing-in-business-to-change-the-world/jacqueline-novogratz/http://www.ide-india.org/ide/drip.shtmlhttp://www.gewp-india.com/http://www.waterhealth.com/http://blog.acumenfund.org/tag/floods/http://www.acumenfund.org/bluesweater/http://www.acumenfund.org/bluesweater/http://www.acumenfund.org/


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Whats one of the most common characteristics you see among the entrepreneurs you work with? They focus on peoples dignity. In Kenya, for example, fifty percent of the population has no access to publicsanitation, no toilets. David Kuria, the founder ofEcotact, has created a company that provides clean, safeand beautiful pay-per-use public latrines and showers on public land. Most public latrines are poorly lit,dangerous and dirty. In Ecotacts facilities, people in uniforms are constantly mopping and cleaning insideand out. They pipe in music. Its all about making the experience pleasant and treating poor people withrespect. Ecotact pays for the upkeep beyond the 5 shilling fee with advertising and marketing. They haveshops on site that sell shoe shines and snacks and food, which is pretty interesting. The governments ofUganda and Tanzania are now talking to David about adopting his model.

What do you think Acumen will be best known for five years from now?I think well be known as one of the key players in the field of alternative energy for the poor. Between ourinvestments inD.Light Design,Husk Power Systems, andSBA Hydro and Renewable Energy systems, wereprobably already helping over a million and a half people have access to light. Its new, but our energyportfolio may ultimately be our most transformational. These companies are not only showing that there areviable alternatives to kerosene, which is dangerous and unhealthy, but they offer people increased income,better health, better schools, and high levels of decreased carbon emissions.

Why energy more than water?To have a real game changer in water, you need government not only to get water priced at a point peoplecan afford and would be willing to pay, but to do it at true scale with regulations. Energy can be a pure privateplay. Poor people are accustomed to paying 20% or more of their income for energy. They typically buy it inkerosene every single day. But theyve never paid for water before and they dont see any reason why theyshould. So your market creation risk, time horizon and cost are much lower in energy than in water. Whenpeople get typhoid or chronic diarrhea, they dont necessarily correlate that to their lack of investment inwater. With light, you pay for it and you see a direct correlation to your productivity and your childrenseducation. It is seen as a direct investment in your future. So even thoughMaslows hierarchywould say gofor clean water first, people will go for energy first.

You told me that you dont like the phrase Doing well by doing good. Yet, thats what comes to mindfor many when they think about social investing. What does it mean to you?It implies that there are easy solutions. That the perfect way to change the world and end poverty is if we allcan make a lot of money doing it. But when you look at poverty and what it takes to break through entrenchedsystems, high levels of fatalism, unbelievable levels of corruption, incredibly bad distribution, no

infrastructure, you are not going to make a lot of money and serve the poor in a way that they can afford. Youmay make a lot of money and serve the poor in usurious ways that keep them poor forever, like many of themafia services do, but if you want to provide systems that are fair and affordable, and that they can trust intothe long term, building them takes a long time. Over time as you really hit scale, you will make money, butweve been in some of our deals for six or seven years and we feel were just starting.

You describe Acumens capital as patient capital. How patient is it? Our patient capital is really patient. It could be four years, it could be ten years, and if its 12, were in, and ifits 15, were in. As long as we see significant change thats moving in the right direction. People oftenmisunderstand what were about. I was with some guys from the financial sector and they kept saying, Whatare your returns? And I said, I hope we get our capital back. We still have a philanthropic element to do thiswork. And one guy said, In other words, you have negative returns. And I said, If we get 100% of theprincipal back or even 80% back and millions of people have access to clean water, then I would dare you tofind a higher return on investment on the philanthropic dollar anywhere in the world.

I said, You are very comfortable with charity, seeing a 100% loss, send the money out and you never see itagain, and you justify the good its doing in the world even if your metrics are fuzzy. Or youre comfortableseeing 20% returns on your investments with no social impact, and potentially some harm. But you are souncomfortable in this middle section, where you might get the money back, might not, or you might lose 20%.And he said, Yeah, because youre playing the game of business but youre not taking it seriously. And Isaid, I never said we were playing the game of business. Were playing the game of creating change and weare using business as a tool. We are incredibly serious about these businesses succeeding, but we neverforget that these businesses are about tackling poverty.'
http://www.ecotact.org/http://www.ecotact.org/http://www.ecotact.org/http://www.dlightdesign.com/home_global.phphttp://www.dlightdesign.com/home_global.phphttp://www.dlightdesign.com/home_global.phphttp://www.huskpowersystems.com/http://www.huskpowersystems.com/http://www.huskpowersystems.com/http://www.new-ventures.org/company/sba-hydrohttp://www.new-ventures.org/company/sba-hydrohttp://www.new-ventures.org/company/sba-hydrohttp://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needshttp://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needshttp://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needshttp://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needshttp://www.new-ventures.org/company/sba-hydrohttp://www.huskpowersystems.com/http://www.dlightdesign.com/home_global.phphttp://www.ecotact.org/


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August 23rd, 2010 byRabia Ahmed

Rabia Ahmed at NY for Acumen's DIGNITY Benefit, July 2009 | Photo Credit: Steven Lau

A few hours ago, I found my father sitting at the dinner table, counting. When I asked, what he was counting, hemutedly replied Bete, during this week, 63 years ago, my family crossed the border to Pakistan. I had heard thisstory hundreds of times before, from my grandmother, my uncle, but usually from my dad. It was a journey etchedinto his mind, into his bones. It was the story of eating neem plants and walking lots of walking- along a path to thenew world, leaving everything behind for hopes of a peaceful tomorrow.

Years later, my siblings and I enjoyed the humid, sunny, summers in Pakistan. Wed run through the mango groves

on a family farm and sip sugar cane juice in the market. Wed play hide and seek in my grandfathers roof garden andhost pretend doll weddings with my cousins. It was a fairy-tale land, a land which welcomed us with open armswhenever we visited. It was truly blissful.

Nevertheless, each year things changed in Pakistan. The cars looked a little different, the music became more rockand roll and the air became more polluted. The only constant which remained was the home of my grandfather onthe outskirts of Lahore. With its white washed walls, and lattice door frames, it remained mostly how we left it theyear before. The home was five stories high, grand in a modest town, and built around a central open veranda withmultiple bedrooms on each floor. My grandfather had a modern above-ground latrine and air conditioner installedso that his grandchildren were not deprived of their essentials. And every summer, without fail, wed anticipate the
http://blog.acumenfund.org/author/rabia-ahmed/http://blog.acumenfund.org/author/rabia-ahmed/http://blog.acumenfund.org/author/rabia-ahmed/http://maps.google.com/maps?om=0&iwloc=addr&f=q&ll=31.54505%2C74.340683&hl=en&z=11&ie=UTF8http://maps.google.com/maps?om=0&iwloc=addr&f=q&ll=31.54505%2C74.340683&hl=en&z=11&ie=UTF8http://maps.google.com/maps?om=0&iwloc=addr&f=q&ll=31.54505%2C74.340683&hl=en&z=11&ie=UTF8http://blog.acumenfund.org/author/rabia-ahmed/


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monsoons. Theyd come in, hastily from no one direction and with quick winds, gusts of water rushed down on uswith a certain sense of urgency, and we well, wed dance. Youd hear us shrieking and giggling in the same breath

because there was no warning, no sign of the hammering waters; just the sudden opening of the skies. It was anidyllic time and we were constantly told to appreciate the rain because it was such a blessing.

But this year, the blessing has turned into a curse, a real test of spirit.

As I sit here some 7,000 miles away from my old summer home, I cant help but weep for a nation under water. Justthe thought of one in five Pakistanis without a home, without a livelihood and without any imminent hope, issimply unbearable.

Weve read the stories: the tale of a father who tied his son to a tree; of the mother who gave birth to twins in themiddle of the storm; of the family who sat by and watched their cow- their livelihood- weaken and eventually pass

on. And weve seen the staggering statistics 20 million Pakistanis affected, thats more than New York State. Thatsmore than Haiti and Katrina combined. More than Haiti and Katrina combined. Even as I write these words, Imspeechless.

After all, Pakistan is a country divided. It attempts to be modern but is shot at by those clinging to the past. Its aplace where history repeats itself without enough time passing to learn from it. A place where culture and religionconstantly fight each other. Its a place which terrorists now call home and is also a nuclear state. Its a countrythats lost itself, to itself, by itself.

But it is a country that is loved by so many that summered there; whose parents and grandparents fought to set uphomes there, by those who decided to dedicate their lives to helping it reach its potential. Through this catastrophe,

Pakistani-Americans are crying for their fellow Pakistanis back home. Theyre taking action by running fundraisingdrives, and putting together media packs and collecting necessary items. Theyre keeping one another abreast ofactivities from the field and are urging all, each and every person they know, to take action, NOW. Its not just thefeeding and immunizing which needs to be done now, but the rebuilding and revitalizing which needs to happen foryears to come. Its in a state of despair, of helplessness, for a people so resilient, so open-hearted, kind and gentlewho have never asked for anything, but dignity,

There are people to thank, like Fiza Shah, CEO of Developments in Literacy, who builds schools in remote and hardto reach areas of Pakistan and Jacqueline Novogratz, CEO of Acumen Fund who still sees the potential, the hope inPakistans people, a single person who leads an organization that invests in the future of a nation. These two womencontinue to believe in Pakistan, through the heartfelt moments and harrowing sorrows.

So today, I beg, and urge you all to do the same, or at least to take a step. Its impossible to imagine the devastationfrom this far away. Soon enough some other news sensation will take over and most of us will forget the little teary-eyed girl or a mother without milk for her twins. Well forget that although they didnt have much to begin with,whatever they once could call their own has been washed away. Their lives are once again a blank slate. What realityonce was is now but a dream wrapped in a nightmare. So please, pick up your check book, or log into your paypalaccount. Buy some medicines or donate some food.
http://www.youtube.com/watch?v=x4m6j7rSyzYhttp://www.youtube.com/watch?v=x4m6j7rSyzYhttp://www.youtube.com/watch?v=x4m6j7rSyzY


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In this time of pain, hurt and suffering, I remember a quote I once read by Mother Teresa: The paradox of life is ifyou love until it hurts, then there is no more hurt, only love. And Pakistan, we love you and were hurting for you

and that is what I wish for my fellow Pakistanis, only love.

Rabia Ahmed is the Co-Chair of New York for Acumenand the Associate Director of MBA Admissions at the NYUStern School of Business. To find out how you can help, please read this recentpostwhich names a feworganizations working in Pakistan that we trust and who need yoursupport. Please also show your support andstand with Pakistan by adding your name in solidarity tohttp://www.ontheground.pk.
http://en.wikipedia.org/wiki/Mother%20Teresahttp://en.wikipedia.org/wiki/Mother%20Teresahttp://community.acumenfund.org/group/NYfAhttp://community.acumenfund.org/group/NYfAhttp://community.acumenfund.org/group/NYfAhttp://www.stern.nyu.edu/http://www.stern.nyu.edu/http://www.stern.nyu.edu/http://blog.acumenfund.org/2010/08/13/the-pakistan-floods-how-you-can-help/http://blog.acumenfund.org/2010/08/13/the-pakistan-floods-how-you-can-help/http://blog.acumenfund.org/2010/08/13/the-pakistan-floods-how-you-can-help/http://blog.acumenfund.org/2010/08/13/the-pakistan-floods-how-you-can-help/http://blog.acumenfund.org/2010/08/13/the-pakistan-floods-how-you-can-help/http://blog.acumenfund.org/2010/08/13/the-pakistan-floods-how-you-can-help/http://www.ontheground.pk/http://www.ontheground.pk/http://www.ontheground.pk/http://www.ontheground.pk/http://blog.acumenfund.org/2010/08/13/the-pakistan-floods-how-you-can-help/http://blog.acumenfund.org/2010/08/13/the-pakistan-floods-how-you-can-help/http://www.stern.nyu.edu/http://www.stern.nyu.edu/http://community.acumenfund.org/group/NYfAhttp://en.wikipedia.org/wiki/Mother%20Teresa


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Digital Livelihoods For the World's Womenby Leila Chirayath Janah, founder ofSamasource

Why are women so undervalued compared to men?

I've heard many explanations, ranging from culture and religion to evolutionary biology.But none seem quite as salient as this one: women are faced with a dramatic lack ofaccess to opportunities that allow them to use their brains, rather than their bodies, toearn income.

As literacy rates rise and more women are prepared to enter the formal labor force,fewer and fewer jobs are available to them. Oh, the deplorable irony. Even worse, thosewomen that areemployed often work for poverty-level wages, in what is called"vulnerable employment."

To right this paradox, the development community must focus on educating women,

but

more importantly

also connect them to jobs that tap these newly-formed skills.

Luckily, there's a new kind of work out there, and unlike manufacturing, it requires fewinputs. You dont need roads, nor telephone lines, nor brick and mortar to build thisgenerations factories. All you need is a brain and a connection to the Internet. Theprimary input of this new digital work is human intelligence, which we now have inabundance.
http://www.samasource.org/http://www.samasource.org/http://www.samasource.org/


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Any work that can be done digitally, from labeling an image to translating a snippet oftext, is now fair game. This shift is creating a rapid transformation in the types of peoplethat can do digital work. Just as Fords assembly line took production into themainstream and paved the way for the rise of the American middle class, the digitalassembly lines of today allow people with basic training to plug their skills into much

larger work streams that engage hundreds of people on many continents. The Internetis the new factory floor.

Samasource, the organization I founded in 2008, is getting the most out of the Web-based industry by plugging in a new kind of worker: marginalized women, youth, andrefugees living in poverty. This unprecedented connection is creating a value chain thatpumps much-needed capital into some of the poorest parts of the world, like Africa,South Asia, and Haiti, to help advance the social and economic opportunity ofunderserved women.

The income that enters the system from these jobs has a multiplier effect by training

marginalized women in digital work, we not only provide direct employment, but we alsoincrease household spending on health and education, increase a womans wagessubstantially over her lifetime, and decrease the likelihood that she will be forced toleave her community to find work. Providing dignified work to women also reduces thechances that that they will be victims of violence, trafficking, or suffer exploitation in theworkplace.

Investing in womens livelihoods, and connecting them to digital jobs in the neweconomy, can pave the way for sustainable and scalable growth and development atthe bottom of the pyramid. Dignified, meaningful, and lasting employment means morethan mere income it's a new identity, beyond being someone's wife or daughter.

By investing in and spreading the word about innovative, digital work that promoteswomen's employment, we have the power to unlock a vast and untapped pool of talentfaster than ever before. The solution to gender inequality is literally at our fingertips.

We dont have a moment to lose. The women of the world are waiting.

Leila Chirayath Janah is the founder ofSamasource, an award-winning social businessthat connects people living in poverty tomicrowork small, computer-based tasks that

build skills and generate life-changing income. Janah is a frequent speaker on socialentrepreneurship and technology, and her work has been profiled by CBS, CNN, NPR,the BBC, The New York Times, and The New Scientist. She serves on the board ofTechSoupGlobal. She received a BA from Harvard in 2005.
http://samasource.com/http://samasource.com/http://samasource.com/http://www.socialedge.org/blogs/samasourcing/archive/2009/08/25/microwork-and-microfinancehttp://www.socialedge.org/blogs/samasourcing/archive/2009/08/25/microwork-and-microfinancehttp://www.socialedge.org/blogs/samasourcing/archive/2009/08/25/microwork-and-microfinancehttp://techsoup.org/http://techsoup.org/http://techsoup.org/http://www.socialedge.org/blogs/samasourcing/archive/2009/08/25/microwork-and-microfinancehttp://samasource.com/


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Whenever Bill Drayton spoke about social enterprisein the early 1980s his comments met with blank looks.The smart ones would call it an oxymoron, he recalls.

oday the phrase he coined to describe ideas thatcombine business acumen with social reform is often on

the lips of politicians of all hues, from George Bush Snr toAl Gore. The concept has attracted both interest and moneyfrom billionaire fi nanciers, including Warren Buffett. It has

also generated a platform at the World Economic Forum atDavos, and is a standard option at many business schools.

Mr Drayton - who says he has been a social entrepre-

neur since the age of 12 - is specifi c about its meaning.

At some deep intuitive level a social entrepreneurknows they have to change the whole of society, says Mr

Drayton. They are married to a vision.Mr Draytons own vision was to understand that drivers

of economic growth, such as innovation and productivity

gains, could be applied to social problems. Faced with theineffi ciencies of government and the profi t orientation ofthe private sector, he envisaged the rise of the non-profi t, or

citizen sector, as he calls it.A quietly spoken 62-year-old, Mr Drayton was 35

when he founded Ashoka, a global organisation that invests

in social entrepreneurs. People such as Gloria de Souza,

the organisations fi rst Fellow, who worked to moderniseeducation in India; Fabio Rosa, who helped bring cheap

electricity to rural Brazil; and David Green, an Americanwho has made eyecare affordable to thousands of people inIndia.

Ashoka, named after an ancient emperor in India whowas a social innovator, works as a social venture capitalcompany.

It supports entrepreneurs with a small fi nancial invest-ment, access to its network of Fellows, and marketing andbusiness expertise from the likes of McKinsey and Hill &

Knowlton, the public relations company.

Mr Drayton, a former McKinsey management consul-tant, studied law at Harvard and Yale and was an assistant

EPA administrator under Jimmy Carter, working on pio-neering emissions trading projects. He was always moreturned on by social ideas than business and believes that

the social sector is just starting to catch up with business.From an early age Mr Drayton combined his vision

with pragmatism: launching a school newspaper, forming

Yale Legislative Services at the law school and unitingstudents with lawmakers to work together on social policy.There are few things more enjoyable in the world than hav-

ing an idea, building a team of people and helping them fl y.

Mr Drayton, named as one of Americas Best Lead-ers last year by US News & World, started Ashoka with

a budget of $50,000 and the aim of fi nding like-minded

people. The organisation now has a budget of $17m and hasunded 1,700 Fellows across 60 countries, many of whom

have helped bring about change in national policy in theircountries.

When Mr Green became a Fellow in 2000 he had

never heard of the term social entrepreneur, he says. Hehad made expensive medical products available to someof the worlds poorest people. In India, at the Aravind Eye

ospital, two-thirds of cataract operations are now free. MrGreen also replicated his successful self-fi nancing pro-rammes across other areas of health. Support from Ashoka

has enabled him to create the necessary scale to become

a paradigm-shifting venture. Mr Draytons vision is tobring in business partners to create alliances with Ashoka

ellows that span the globe.Some of the social entrepreneurs Ashoka has funded

are already working on a scale to match that of big interna-

ional businesses.Mr Green believes Ashoka is like a teen entering its

20s, on the cusp of creating societal change on a grand

scale.The corporate world is waking up to the fast growth

of the citizen sector, which in Organisation for EconomicCo-operation and Development countries has grown almost

hree times as fast as the rest of the economy since the early1980s. According to research from Johns Hopkins Univer-sity, the sector employed 31m people in the mid-1990s.

Most important, says Mr Drayton, the divide betweenhe social sector and business is being bridged. The citizenroups are talking to the men in suits and beginning to heal

he communications bridge.One of his aims now is to fi nd a way to incorporate the

citizen sector in the global fi nancial system. Mr Drayton

has been visiting US and European fi nancial institutionswith the aim of making social investment attractive tohem.

He is also focusing on the next generation. Ashoka isabout to take its US-based Youth Venture, which encour-ages young people to launch their own social businesses, to

urope.We dont expect everyone to be a continental-scale

pattern-changer but we do think that when someone sees an

opportunity for change in society they should take it, saysr Drayton.

How can you expect not to have inequalities when

only a few take the initiative? Our ultimate aim is to makeeveryone a changemaker.

ASIA WEDNESDAY MARCH 1 2 0 0 6

F N NCIAL TIMESThe steady rise of the citizen sectorBy Clare Goff


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December 16th, 2010 byNate Laurell

A couple of weeks ago, I had the opportunity to spend the week with a group of Acumen Fund partners in Nairobi,Kenya. During the course of the week, we visited many of Acumens investments and met with their local team. Ivebeen an investor and partner in Acumen Fund for over three years and recently joined theirAdvisory Council.

We cut through the dust, bouncing along on the copperearth on what Kenya calls a road. We are on our way to an

ophthalmological outreach camp in Karatina, a couple hoursnorth of Nairobi. The camp is run by Dr. Kibata, the founderofUHEAL. Dr. Kibata grew up on a small farm and watchedhis father go blind due to diabetic retinopathy. Diabetes is anenormous problem in parts of East Africa and India anduntreated can lead to blindness. Dr. Kibatas core clinic islocated in Nairobi, but he has conducted a handful ofoutreach camps to reach patients in the rural areas. Todaywe are visiting one such camp. We pull up and find hundredsof patients waiting outside on plastic chairs to see thedoctor. Theyve heard about the camp through word of

mouth or radio advertisements and have come from the surrounding villages. Today hell see over 200 patients,about 10% of whom will need laser surgery to prevent blindness. The patients work their way through an eye exam(conducted in a dark room with sheets hanging on the windows to block out the sun), blood pressuremeasurement, and blood testing, and lastly they see the doctor. Dr. Kibata is the only doctor in the region who canperform these surgeries, and there is one functioning laser in the country. He operates on a cross-subsidy modelwhere patients in Nairobi who can afford the surgery help underwrite the costs of the outreach camp in rural areas.With the work today, hell just break even. Its early days, but there is a clear path for enormous impact. And soon,hell be able to help even more people as Acumens investment will help him purchase a laser and fit it into a van tocreate a mobile clinic for UHEAL.

In downtown Nairobi, we see a similar business model. David Kuria, the founder ofEcotact, a public sanitation

company, shows us his Iko Toilet, a pay-for-use toilet. David, the designer and an architect by training, is addressingthe dangerous lack of public sanitation in the slums of Kenya. Like Dr. Kibata, he relies on a cross-subsidy modelwhere the downtown toilets in commercial districts help underwrite the cost of toilets in the slums. Ecotact has 26toilets in operation with over 4 million uses last year, and customers pay 5 shillings (about 7 cents) per use. We visita facility in the downtown business district, and business is booming. This unit leases out space to a smallrefreshment store and a shoeshine operation off the back. Its a beautiful day, and there is a line for shoes to beshined. The toilet in the slum is less busy, but a steady stream of people flow through. Its a hard problemhow doyou convince someone to pay for something typically viewed as free (going to the bathroom) out of very limitedincome? David has a unique approach: make sanitation sexy. Hes had Miss Kenya, the vice president, and various
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other Kenyan celebrities visit his facilities. Still, its an uphill battlethe fact that the business even exists shines alight on the governments inability to provide basic services, and David has to negotiate the land lease with the

government each time he opens a new facility.

In Kibera, we meet other aspiring entrepreneurs. There is ayouth group that has built a greenhouse on what was previously atrash pile; their tomatoes are just starting to sprout. And theyveinstalled a pay-for-use toilet similar to Ecotactssuccess bringscompetition, after all. The youth group meets in a structure onthe edge of a ravine where the railroad to Uganda comes throughKibera sits on both sides of these tracks. The railroad technicallyowns 100 meters of land on each side and could reclaim it atanytime. We visitHot Sun Films, a film school and production

company in the middle of Kibera. Through the gate, crammedinto a small room, we find iMacs and a group of young directorsbrimming with excitement. Their latest movie,Together

Supreme, is being shown at the Vancouver International Film Festival. We leave as the prayer bells begin to ring,passing a bright red wall painted withEnjoy a Coca-Cola. It seems iMacs and Cokes are universal.

We find out at the airport that our flight to Kitale is a couple hours late, andwe eventually leave at 2:30pm on our scheduled 11:30am flight,necessitating several calls to reschedule an entire afternoon of visits. On ourway to western Kenya near the border of Uganda, the dual-prop plane swayswith the currents as we climb. The landscape changes from dry arid plains

to green rolling hills dotted with teepees of drying corn. Its harvest time,and farmers are busy. As we pull off the airstrip, school kids are waiting inuniform. They come out to watch the one daily flight land. After lunch, wehead off to see an agricultural finance organization that makes loans foragricultural assets.

The organization has over 8,000 members, over half of whom are women,and on our visit, we meet a community of borrowers. A small group hasformed in order to get access to capital. A handful of members can have aloan out at any given time, and once it is repaid, other members requestaccess. Loans are for a cow, a chicken coop, and the group asks about getting a loan for a milk chiller that they all

could use collectively. The committee does the due diligence on each member, who first must be active in thegroup for a number of months, then raise a down payment, pass a house visit, and finally submit a formal projectwith detailed plans justifying the loan amount requested. The group is led by a 71-year-old woman as sharp as ever.If she was in charge of due diligence at the banks here, we wouldnt have had a financial crisis. The group structureinherently creates accountability, and the loans go to assets (livestock and equipment) that pay real yields in theform of eggs and milk.

From there, we head off to visit test plots of hybrid seeds developed and distributed byWestern Seed Company.The farmers walk us through various plots, past corn taller than we are, and were trailed by kids excited to get their
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19/35

pictures taken. Western Seed makes a variety of seeds that have been selected based on the high elevation andwater traits unique to the area. The seeds are more productive, but convincing farmers to change is hard business.

Most farmers here farm a half acre to a hectare in total, so over the course of a lifetime, a farmer may make only 40choices on what to plant, and the resulting harvest determines not only financial success but whether the familywill have enough food for the year. Innovation in agriculture inevitably takes a long time because the feedback cycleis often measured in years. We head back to Kitale, passing a flipped truck on the highwaythe roads are probablythe most dangerous part of the trip. After a fantastic dinner by candlelight (power is out in Kitale), we head back tothe Kitale Club, which is a relic from the past. You can imagine some fine British chaps exchanging big-game storiessitting around the fire. You can golf the beautiful 9-hole golf course if you dont mind the monkeys on the course orthe occasional cow wandering through.

The next day, Saleem Esmail, the founder and CEO ofWestern Seed, leads us on a tour of the Western Seed

facility. Saleem is a fifth-generation Kenyan, a Muslim, andfrom Southeast Asia. Hes an inspiring entrepreneur, andyou just want to follow him no matter where it leads. Thelast couple years, demand has outpaced supply, and Saleemneeds to increase productivity. With help from an Acumeninvestment, hell do this by purchasing and cultivating hisown land to grow seeds that are then processed at hisfacility. His alternative to Acumens investment is a loan at16% from a local bank that demands 200% collateral madeup of both assets and guarantees from the board. You cansee what patient capital really means with Saleem. It takes

him on average 3 years to convert a customer from thecompetitors seeds, he has to plan 2-3 years in advance to ensure he has the proper stock ready, the weather isalways unpredictable, farmers frequently do not have enough fertilizer, and he has limited access to financing. ButSaleem has a plan, and hes as sharp as any CEO youve met. He talks about the need to put cashflow to work (if youcant, he says, youre stagnant), about how critical good people are (his team is incredible, and morale is high in theplant), and how they work 24 hours a day in shifts if needed to address a problem. Im always so impressed byfarmersthe job requires them to be incredible business people.

We head back to Nariobi and, over the balance of the week, see variety of companies. Theresd.Light, founded bySam Goldman and Ned Tozun, that produces solar lanterns to replace kerosene. Theyve sold 350,000 lanternsalready throughout Africa, India, and Southeast Asia. Sams mission is to eradicate kerosene, which kills well over a

million people in the developing world every year, from both fire and indoor pollution. We learn of a fire earlier inthe year from a spilled kerosene lamp that killed several girls in Tanzania, and Sams motivation for starting thecompany came years ago when a friend of his was badly burned in a similar fire. In Tanzania, d.Light is gettingtraction through schools as students receive a $6 lantern to study with at night included in their school fees. Thelamp runs on a 3w bulb, and newer versions have the ability to charge your cellphone. Often people have to travel 2hours to charge their phones on car batteries, so this is a great improvement. Still, the cost is relatively high, andadoption is somewhat slow, but d.Light is making steady progress.
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We visit the factories ofInsta, a company with a license agreement to make a calorically dense and nutritionally richnut-paste-based product for distribution through various aid agencies. The product is often prescribed as medicine

to get HIV patients BMIs high enough to go on antivirals. Insta is the model globally and the leader in the space, butstill the work is complicated. Payments are irregular and the reliability of supplies (peanuts, milk) volatile. Acumenrecently provided working capital to move forward on a batch of the product. Still, despite the critical importanceof the nutritional supplement to those most in need, hard work lies ahead.

We visitBotanical Extracts EPZ Limited (BEEPZ). From a locally grown plant, BEEPZ extracts artemisinin, which isthen used in antimalaria medicine. Hailedby Thomas Friedmanin the New York Timesa number of years ago, thecompany has had a tough go. Pricing for the drugs has been volatile and extraction efficiency hard to achieve.BEEPZ is running a couple days a week now, producing in limited quantities.

We end the day on a positive note at a housing development

built byJamii Bora, a local microfinance bank with 170,000members, making it the largest in Kenya. The development ispart of a plan to provide housing and community to peoplecurrently living in the slums. A group of women greet us as wearrive, and after some singing and dancing (in which we areincluded), they show us their work. Theyve made literallymillions of bricks and roof tiles for homes that will beconstructed. We visit the local school, the well, the water-treatment ponds, the clinic, and their homes. The woman are soexcited about and proud of the development, and its amazingto think how far theyve come, from the slums we visited earlier

in the week to two-bedroom houses with running water. Peopleare moving in that day, and theres a real sense of community that you can just feel.

I leave each business thinking just how complicated these problems are. They touch on behavioral economics,marketing, finance, public policy, ethics, technology, and education. The problems exist an environment with littlephysical infrastructurepoor roads constitute 40-50% of the cost to transport goods, and there are frequent poweroutages. The effects of climate change are being felt so directly that the conversation has shifted from mitigation toadaptation already. I worry about how little institutional and governmental support there is, thinking back to Dr.Kibatas eye clinic, which, adding confusion to inefficiency, is regulated by the Ministry of Health and competeswith organizations selling glasses, who are regulated by the Minister of Culture and Social Services, often withdifferent plans and conflicting incentives. These businesses operate in a country with a life expectancy of 54.5 years.

Each of these entrepreneurs isand I say this intending only the highest praiseunreasonable, slightlycrazy, andincredibly inspiring. Its unreasonable people who create change. Whether its the 200 patients that UHEAL sawthe day we were there, the 350,000 lanterns d.Light has sold, the 8,000 members of the agricultural financeorganization, or the 1200 tons of seed Saleem will produce at Western Seed, each one is producing real, measurablechange. While they all might not make it, theres not one of them I wouldnt be proud to be invested in.

This is what I love about Acumenit backs local entrepreneurs to solve the hardest problems for the people mostin need. If you can prove the model, the sector follows. Theres now $4 coming into these sectors for every $1Acumen puts up. You realize that aid has become a business, and while intentions are good, there are vested
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interests and incumbents often all too concerned with protecting their own positions first and foremost. And in thiswell-intentioned world filled with white SUVs, Acumen gets dirty. Their people on the ground have a working

relationship with each of their investments. These guys dont presume to know the answers, but they know theprocess that leads to answers and the systems of accountability that increase the chances of success. The problemsare complicatedif they were easy, they would have been solved a couple billion dollars agobut Acumen iscreating measurable, repeatable examples of success founded on the belief that people want dignity, notdependence.

For ways to get involved with Acumen, please visitwww.acumenfund.orgor join alocal community chapterin yourarea.

Thispostoriginally appeared onNate Laurells blog,New Frontier: Solutions for an Accelerating World, where hewrites on energy and the application of markets to various social issues. Nate is a board member and advisor to

several technology-driven financial firms and recently joined the Acumen FundGlobal Advisory Board.
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Here is a concise history

of the modern world, according toBill Drayton. Well, no: In real life, Bill

Drayton would never -- could never,

its fair to say -- be so concise. He is an

expansive thinker of remarkable intensity,

not easily gathered in -- a mind informed

by infl uences as diverse as Gandhi and

Hubert Humphrey, and as likely as not

to travel intellectual parts sundry and

exotic before returning, methodically,

triumphant, to . . . the point.

So here is Bill Draytons history of

the modern world, made concise by us.The Industrial Revolution of the 1700s

split society into two unequal halves.

Commerce became entrepreneurial

and competitive, its compounding

productivity gains sparking rapid income

growth. But enlightenment bypassed

societys other half, the half concerned

with education and public welfare and

the environment. As the consumer sector

grew more productive, the social sector,

supported by taxes and protected from

competition, fell ever further behind.

And then, about 25 years ago,

something happened. Well let Drayton

describe the moment: We could see it,

he recalls. The system was beginning

to change. It was like hearing the ice

breaking up at the end of winter in a lake.

Creak, creak, groan, crash! The need was

so big, the gap so huge, the opportunity

to learn right before peoples eyes. When

do systems begin to change? When

entrepreneurs decide its time.

Or, to the point, when Drayton does.Drayton is founder and chief executive

of a group called Ashoka. It is not

hyperbolic to call Ashoka this centurys

(much better) version of the United

Way, and Drayton the most important

innovator of any sort out there -- a seer

who has correctly predicted the rise

of the citizen sector in the past two

decades and an audacious visionary of

what will yet come.

Ashoka, named for a peace-minded

third century BC Indian emperor, has

identifi ed and supported 1,500-plus

Fellows, as it calls them, in 53 nations

since Drayton founded it in 1980. (Five

of them are winners of our 2005 Socia

Capitalist Awards.) It seeks out socia

entrepreneurs with enormous ideas

- solutions of such ambition and force

that they cannot be denied. They are

pioneers like Mary Allegretti, a Brazilian

who thought of legally separating rubber

extraction rights from land-ownership

rights in the Amazon rain forest to giveindigenous rubber tappers economic

standing -- and then made it happen.

What Drayton has created is a network

of incalculable power. Its not so much

about funding, though Fellows do

receive a modest stipend. Rather, these

entrepreneurs, who typically work alone

amid hostile circumstances, get support

ideas, and, quite literally, protection

(When one Ashoka Fellow in Brazi

F ST CMPANYA OJANUARY 2005


23/35

attracted the ire, and

gunshots, of local

police for his drug

rehab program, other

Brazilian Fellows

intervened with the

state governor, andthe problem went

away.) How do you

market a big idea?

How do you run a big

organization? How do

you combat corrupt

local politicians? The

answers come from

other Ashoka Fellows.

The potential

of this emergingnetwork is what gets

Bill Draytons blood

coursing. Because he

can see whats going

on now, as clearly as

he did 25 years ago.

Societys citizen sector

is expanding rapidly,

irresistibly. Ashoka

itself is growing, too: Its budget was set

to jump 50%, to $30 million, in 2004.

What happens in the next fi ve years,he thinks, will prove crucial to, well,

everything -- fi nally redressing the chasm

between consumer and social sectors.

An entrepreneur plows the fi eld,

Drayton says, and it weakens the idea

that change isnt possible. He seeds with

some very user-friendly idea. The next

entrepreneur comes, and theres more

plowing, more seeding. Then hundreds.

As we wire the world together, ideas fl ow

from Bangladesh to the United States

and Brazil, and back. This becomes

multiplicative. The network becomes a

distribution channel.

Drayton, 61, is a slight man, nearly

inconspicuous, with thin hair and a

frumpy suit. Self-effacing and unfailingly

deferential, he is not charismatic in any

traditional sense. When he speaks, it is

at something just above a whisper -- and

not always on message. David Bornstein,

whose recent book How to Change

the World (Oxford University Press,

2004) dwells on Ashoka, recalls askingDrayton to speak up above the din of

traffi c outside his apartment building.

Drayton, typically, responded with an

expert 20-minute discourse on the effect

of canyons on noise.

But beneath the eccentric-uncle

veneer is a willful and fearless thinker, a

crusader of near-monastic devotion to

the possibility of massive social change.

(He is unmarried and childless, and lives

in a simple apartment a few blocks from

Ashokas offi ces in Arlington, Virginia.)

He fi rst dedicated himself to the idea of

Ashoka while a Harvard undergraduate in

the early 1960s, then nurtured it through

his years at Oxford, Yale Law, McKinsey,

and the Environmental Protection

Agency. Bill is totally committed to

an important idea, and has unshakable

faith in whats hes doing and in the value

of each persons life toward effecting

change, says Julien Phillips, who worked

with Drayton at McKinsey and was one

of Ashokas founding directors. That

a tremendously powerful combination.

Really, all you need to know about Bil

Drayton is this: His father was an explorerin the Sahara and British Columbia, and

his mother a musician and impresario

That is Drayton: a creative explorer and

promoter -- of ideas. And if his plan

comes off, ideas will drive Ashokas

future. Ashoka is morphing into a

knowledge-management organization

the sum of its ideas, as Sushmita

Ghosh, its president, puts it. Projec

managers in Virginia and elsewhere are

charged with spotting emerging trendsand connecting the dots. They apply

solutions that have worked in one part

of the world to problems in another, link

together similar innovations to amplify

their impact, and package ideas in ways

that take them from local to global in

reach. It resembles, in that way, the

Catholic order of Jesuit priests, the only

truly effective global service organization

Drayton knows of.

Take a relatively simple problem

that of alpacas. In mountain villagesof Bolivia, poor farmers with smal

alpaca herds traditionally have relied

on unimaginably primitive production

methods, using the edges of tin cans to

shear wool. A local organization came

up with an answer: a simple but effi cient

distribution system that grades wool

creating fi nancial incentives for farmers

to buy shears and wash the fi ber -

eventually raising their incomes.

Its a great solution for Bolivian

villagers. But what about alpaca farmers

elsewhere in South America, or herders

of similar livestock around the world

In fact, Ashoka has demonstrated the

Bolivian model to sheep farmers on

Nepals Tibetan plateau -- and they

understood it immediately. Making that

sort of knowledge transfer happen al

the time is something Ashoka is trying

Illustration by Brian Stauffer


24/35

to systematize, so that global networks

of small producers can constantly share

innovations that improve their fi nancial

prospects.

Next big idea: Global partnerships

between social entrepreneurs and

business. To Drayton, these hybrid value

chains are a no-brainer; the divergence

of the consumer and citizen sectors was

a nonsensical historical accident in

the fi rst place, and their reintegration is

profoundly important for the health of

both. Business must use social networks

to reach new markets. And the citizen

sector needs the marketplace to gain

fi nancial sustainability.

Heres one example of such

collaboration: Cemex, the big Mexican

cement producer, has invented a plan

that encourages families in urban

slums to save for cement to build

home additions, then provides them

with discounted engineering services.

Community activists love the scheme,

since it promises to alleviate family abuse

sparked by overcrowding. And its great

in principle for Cemex, which penetrates

a diffi cult market and gets paid upfront,

to boot.

But Cemex is having trouble retaining

the reps it trains to promote the savings

plan. So in the city of Puebla, Ashoka

hooked the company up with Patricia

Nava, an Ashoka Fellow who has created

a Mary Kay-like network to provide

sex education and AIDS prevention

training. The strategy calls for Cemex touse Navas existing distribution system

paying commissions to safe-sex educators

when they refer cement customers. The

partnership, Nava hopes, will allow

us to increase the life quality of many

people while [creating] new alternatives

to generate money for projects.

The bigger idea, yet untested: Cemex

and other companies use Navas network

to sell other products. Or Cemex hooks

up with similar social entrepreneurs

to distribute cement across Mexico

and elsewhere. Think of it as a matrix

The challenge for us is fi nding ways

to institutionalize this, says Valeria

Budinich, the Ashoka vice president who

oversees the initiative.

And the really bigger idea, the

uebergoal, is that ultimately, innovative

strategies like this one will spread

themselves without Ashokas help. A

hundred years from now, the fi eld wil

know how to do this, Drayton says. Thepattern will be obvious. Well be able

to recognize a group of entrepreneurs

coming up around the world on a new

issue.

We will do so, he expects, because of

structures and tools being established

now. Already, Ashoka has launched the

makings of a global accelerator for socia

entrepreneurs. McKinsey is providing

management consulting, Hill & Knowlton

the public relations expertise, and the

International Senior Lawyers Project the

legal support. Its also negotiating with

several fi nancial institutions to create

new mechanisms for fi nancing -- and

its toying with the notion of an online

marketplace where entrepreneurs and

funders could fi nd each other. Drayton is

even piloting a professional-services fi rm

called Social Entrepreneur Associates

Photograph by David Deal


25/35

- like a McKinsey populated by citizen-

sector professionals.

If this all comes to pass? Well,

Drayton was meeting two years ago with

eBay founder Pierre Omidyar, whose

Omidyar Network ultimately committed

to investing $20 million over fi ve yearsin Ashoka. Drayton described Ashokas

central goal -- to speed and make possible

the emergence of an entrepreneurial

citizen sector. Omidyar pressed: Thats

an intermediate goal. What are you really

after? It was a good question, Drayton

realized.

And he thought, We have this network

of entrepreneurs, all of them seeding

social innovation. That is changing a

lot of things, upsetting local patterns,weakening existing structures, weakening

the idea that things are the way they

are. Its an invitation for people to step

up and do things differently. That fi rst

change touches a series of people who

werent doing this before. Theyre not

passive anymore. Theyre full citizens,

change makers.

As of right then, Ashoka embraced a

new goal: Everyone a change maker.

Think about the implications for

society of that change, Drayton marvels.The number of angry, frustrated,

unhappy people would be dramatically

reduced. And the probability of problems

outrunning problem solvers would go

away. Wed laugh at the idea. Every single

being becomes a white blood cell that

solves problems.

Its late in the evening, the skies outside

are pitch-black, and Drayton is hacking

with a nasty cold acquired on his travels

But he keeps talking. These ideas are too

big and too important to be bound by

schedules, or dinner, or exhaustion.

Drayton speaks often of Jean

Monnet, the brilliant fi nancier anddiplomat who, in the 1940s and 1950s

drove for the unifi cation of Europe

Monnet understood that a continenta

organization could solve problems that

individual nations couldnt -- and he set

in motion a dynamic that would produce

20 years after his death, the Euro-based

common monetary system.

Its clear to me, Drayton says, that

you cant solve the worlds problems

unless you deal with them on a globalevel. Our fi eld has to be integrated from

the local right up to the global. From the

beginning, weve had to fi ght against al

national divisiveness. You can see the

fi eld moving up and accelerating. But a

a global level, wheres the Jean Monnet?

Ive wondered for years, who is the

Monnet were looking for?

We are, perhaps, looking at him.

Keith H. Hammonds

([email protected]) isFASTCOMPANYs deputy editor.

Fast Company is the fastest-growing business magazine ever, having gone from zero to a circulation of

725,000 and 3.2 million readers in seven years. Fast Company readers are successful, affl uent, educated

and infl uential business leaders. 82% are between the ages of 25 and 54 with a median age of 44. They

have a median individual income of $85,000 and a household income of $119,000. 93% are professionals

or managers, 53% are in top management, and 37% are a business owner or partner.


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Interview: Acumen Funds Sasha Dichter on trends to look for in2011

By Tamara Schweitzer, January 25, 2011

As the director of business development atAcumen Fund, a globalventure fund that invests in entrepreneurial approaches to poverty, SashaDichter has a firm grasp on the evolving discussion around capital forsocial enterprise. A well-knownbloggeron the topic of philanthropy,generosity, and social change, Dichter talked to Dowser about hispredictions for the coming year in social entrepreneurship, focusing onnew approaches to funding social enterprise, and why the sector needs auniversal metric system now more than ever.

Dowser: What trends have you noticed emerging based on thebusinesses that Acumen Fund has invested in recently?Dichter: In terms of a recent investment demonstrating some trends, Iwould point to a company called Husk Power. They are operating in ruralIndia near the Nepalese border where there is a population of 85 million, but only 10 percent have access toelectricity. The Indian government has deemed that 20,000 of the villages in this rural area are out of reachfor receiving electricity by standard means. Husk Power was founded to reach those villages, and they areusing discarded rice husks to power generators that can service up to four villages each. We invested in thema year and a half ago and they are currently serving 130 villages and over 150,000 people. They keep costsdown because they are using rice husks that are left to rot. They have found a business model that worksand created a product that is affordable.

The reason I think they are illustrative of a trend is because we have taken equity in the company, but they

have also been able to bring in a lot of local capital to get to where they are at now and keep buildinggenerators. They receive a lot of subsidy from the Indian government, so half is grant funding and half isinvestment funding. This illustrates the ways in which social enterprises are getting creative in combiningdifferent sources of capital. I think what's going to happen is we are going to get more comfortable coming upwith different types of funding solutions for social enterprises, rather than just relying on one source.

You talked about creating different types of funding solutions for social enterprises. Do you think thatmeans it's going to be easier for social enterprises to get funding in the coming year?I think it's hard to say. There's definitely more investing happening and there's more money going around. Idon't think we've seen enough yet to determine how it's going to play out for social enterprises. It's going tobe a matter of what kind of money is available and how do the investors connect with the potential socialenterprises. There's no doubt the sector is growing and there's more activity, particularly with impact

investing. But it's going to be up to the leaders in the sector to be transparent and there is still the question ofwhat criteria they are going to use to measure the impact of the investment. As long as there is a rigorousfocus on who the customer is, what their needs are, and how to serve those needs, it's great to have morecapital come into the sector. But, there's always risk involved with investing, and I worry about situationswhere social enterprises might over promise and under deliver.

There seems to be a lot of excitement around impact investing. What is your assessment?There's a huge gap between the amount of talking people are doing and the amount of impact investing thatis actually happening. The recent impact investing report put out by JP Morgan was a great synthesis ofwhere we are right now in terms of creating a new asset class, and that's fine as we're building a new marketaround this capital. But 2011 will start to be the year of watching how this all plays out. The trend is that
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there's a lot of growth and excitement, and more interest in impact investing, but the onus will be on us to bereally clear about what this asset class is all about. Is it about impact or investing? Hopefully it's about both.

Can you talk about the growing need to measure the impact that social enterprises are having?Right now we're starting to see a trend towards creating universal metrics to measure that impact. We'regoing to need to move from the conceptualization and building of the tools to really using them to analyze theactivity and show results in this sector. I think we're going to see more organizations adopting some type ofprogram or tool to help them report data. For example,Pulseis a tool that Acumen Fund developed for thisthat is now being used by 50 of our peer organizations to help them measure the impact of their own

portfolios. If we are all using the same tool, we can start to aggregate the data and then we have a way tocompare what's happening in this sector. This is something that may take a long time to get into placebecause we are in the early days of this evolution, but as we get more data and better data, we will be able tostart aggregating it for this sector.

What are some of the challenges your organization has faced in the past year, and how do you planto tackle those going forward?I'll speak from the perspective of the sector as a whole because I've noticed that there's been more interest insocial change from the bigger public companies and the folks in the Washington. However, there's atendency to put this type of work into one box or the other. One of the big challenges has been what wemean by our space, and going back to the discussion of creating metrics, what do we think success reallylooks like for this sector? There's a big difference in success for those who are creating a large-scalebusiness that will affect as many poor people as possible, and the financial returns on those businesses atplaces like Goldman Sachs. It's a question of what your yardstick is. But, as the sector grows, either we'regoing to define how we measure success, or others will define it for us.

What's next for Acumen Fund and what are some of the goals you have for 2011?We're coming up on our 10-year anniversary and we're looking broadly this year at what we can share withthe world that we've accomplished not just in terms of capital investment, but how many lives have weimpacted, how many game-changing new businesses have we supported? Were also expandinggeographically into West Africa and looking into expanding into education, and we also know that this is goingto be a year of synthesis for us to really capture what weve learned in these last 10 years.

Interview has been edited and condensed.
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Changemakers is an international community of innovators guided by Ashokas vision for systems-

change. We bring visibility to new and emerging ideas that have the ability to transform the world.

2011ASHOKASChangemakeHERS

THENExT

100 YEaRSof

INNovaTIoN...

CelebratingInternationalWomens DayCentennial

AS PART OF WOMENS HISTORY MONTH AND THE GLOBAL

CENTENARY YEAR OF INTERNATIONAL WOMENS DAY, THE

CHANGEMAKERS IDEA EXCHANGE BLOGWILL FEATURE

OUTSTANDING WOMEN WHO HAVE IMPROVED OUR

WORLD THROUGH THEIR ACTIONS.

Were excited to share with you this opportunity to inspire uture generations o

changemakers to create a better world or women.

Our community is growing every day and includes over 100,000 active members

and more than 12,000 world-changing solutions. Changemakers attracts over

400,000 ollowers on Twitter, Facebook and our blog, Idea ExChange. They arewaiting to hear rom you!

Each eatured innovator will be linked to the other honorees networks or greater

infuence and collective impact. Women have accomplished so much in the

past 100 years what needs to happen in the next decade to really accelerate

womens progress around the globe?

www.Changemakers.com

To be recognized on Idea ExChange, please confrm

by Friday, February 18, 2011

Erin [email protected] 947.5987

Christopher Roy [email protected] 374.0682

Were highlighting the most

infuential voices across 5 themes:

1. Scaling ideas:Inspirational womenbuilding networks o infuence

2. Unlocking wealth:Savvy women re-inventing economic empowerment

3. Designing local:Innovative womenleveraging technology

4. Transorming health:Contemporarywomen envisioning healthy societies

5. Playing air:Strong women competingor womens equality through sport

Ashokas Changemakers recognizes your

contribution to womens empowerment and

would like to honor you in MaRCH 2011.
http://www.ashoka.org/http://changemakers.com/http://changemakers.com/http://changemakers.com/http://changemakers.com/http://changemakers.com/http://changemakers.com/http://changemakers.com/http://changemakers.com/http://changemakers.com/http://changemakers.com/http://www.ashoka.org/


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GCVSOCIAL IMPACT INCUBATOR

IMPLEMENTING INNOVATION. The GCV Social Impact Incubator is an intensive three-monthprogram. Each week addresses a single strategic challenge, presented by successfulentrepreneurs, academics and venture capitalists. With the support of MBA students andexperienced mentors, the entrepreneurs are required to present their companies response tothe challenge the following week, for critique by their peers. Together the class builds a robustcommercial strategy to implement and scale each entrepreneur's vision for social innovation.Through a parallel series of workshops, finance and marketing interns develop comprehensivefinancial projections and compelling graphic presentations to meet the expectations of theinvestment community.

EDUCATING INVESTORS. Our goal is to offer a

practical demonstration to a skepticalinvestment community that unmet social needsprovide the foundation of new marketopportunities. GCV's 2010 Investor Showcasewas attended by over 100 members of the Mid-Atlantic venture community. Last year'snational Road Show series engaged theattention of the most visible members of theVenture Capital and Venture Philanthropycommunities, who brought our companies theattention of hundreds of thousands of theirfollowers.

ANATIONAL PLATFORM. Our program projects entrepreneurs into the marketplace for money andideas. Nearly half of the companies obtained funding. Two were selected to launch at DEMO,the most selective national technology conference. Several have received national recognition,winning the MIT Entrepreneurship Prize, theWharton Africa Prize and the DIYA Prize, India'shighest award for social enterprise. A GCV 2009graduate was selected by Business Week as oneof the top three social enterprises in the country.

A LOCAL ASSET. GCV attracts the best ideas insocial entrepreneurship to Philadelphia. IN 2010we had teams commuting in from New York toD.C. and had entrepreneurs relocate from SanFrancisco to launch their start-ups. GCV hasattracted applicants from five continents and hashosted entrepreneurs from the UK, India andChina.

GOOD COMPANY VENTURES

A GoodCompany reconciles purpose andprofit. GoodCompany Ventures is anonprofit community of service defined by

the needs of social entrepreneurs. TheGCV Social Impact Incubator identifiesentrepreneurs with innovative ideas forsocial impact and helps them implementthese ideas with the strategies andresources of venture capitalists.

www.GoodCom an Ventures.or

GCV's New York Road Show: Fred Wilson, Jacob Gray,Ro er Ehrenber and ac ueline Novo ratz.


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Power-law and why we fail to solve social problemsbyJohn Converse Townsend, Ashokas Changemakers

What if some social problems may be easier to solve than to manage? And what ifsolving said problems violates our moral intuitions and our political institutions?

A real-world application of this potential social disservice can be found in the homeless crisis.

In the 1980s, the federalgovernment reduced fundingfor low-income housing, after havingspent billions of dollars on housing a decade earlier. The reason being that taxpayers arguedthat social programs werenot the responsibilityof local government, nor were they theresponsibility of the federal government, argued the Reagan administration.

The misguided, discouraging assumption was that the homelessness problem fit a normaldistribution. If the vast majority of homeless were inthe same state of semi-permanentdistress, what could possibly be done to help them?

The reality was that homelessness has a power-law distribution: where the activity is at oneextreme. A research database constructed byDennis Culhane, former Boston College graduatestudent and current University of Pennsylvania professor, revealed that the majority of people

are homeless for about a day, and then get on with their lives. But ten percent of the homelesspopulation are episodic users, the heavy drug users, those that rely on homeless shelters:

They were the chronically homeless, who lived in the shelters, sometimes for years

at a time. They were older. Many were mentally ill or physically disabled, and when

we think about homelessness as a social problemthe people sleeping on the

sidewalk, aggressively panhandling, lying drunk in doorways, huddled on subwaygrates and under bridgesit's this group that we have in mind.
http://www.twitter.com/johnctownsendhttp://www.twitter.com/johnctownsendhttp://www.twitter.com/johnctownsendhttp://historymatters.gmu.edu/d/7045/http://historymatters.gmu.edu/d/7045/http://historymatters.gmu.edu/d/7045/http://www.hartford-hwp.com/archives/45/045.htmlhttp://www.hartford-hwp.com/archives/45/045.htmlhttp://www.hartford-hwp.com/archives/45/045.htmlhttp://www.gladwell.com/2006/2006_02_13_a_murray.htmlhttp://www.gladwell.com/2006/2006_02_13_a_murray.htmlhttp://www.gladwell.com/2006/2006_02_13_a_murray.htmlhttp://www.gladwell.com/2006/2006_02_13_a_murray.htmlhttp://www.gladwell.com/2006/2006_02_13_a_murray.htmlhttp://works.bepress.com/dennis_culhane/http://works.bepress.com/dennis_culhane/http://works.bepress.com/dennis_culhane/http://works.bepress.com/dennis_culhane/http://www.gladwell.com/2006/2006_02_13_a_murray.htmlhttp://www.gladwell.com/2006/2006_02_13_a_murray.htmlhttp://www.hartford-hwp.com/archives/45/045.htmlhttp://historymatters.gmu.edu/d/7045/http://www.twitter.com/johnctownsend


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Ten percent? Thats it? What is the hold-up then? The challenge in managing the ten percent isthat they suffer from liver disease, lung abscesses, hypothermia, neurosurgical catastrophes,subdural hematomas, and other complex infections.

The University of California, San Diego Medical Center followed fifteen chronically homelesspersons and found that over a year and a half, they visited their local hospitals emergency room

nearly 500 times, running up bills of about a hundred thousand dollars each. But, expensivehospital bills are only part of the equation. Culhane explained that in New York, over sixty-twomillion dollars was being spent annually to shelter just twenty-five hundred hard-core homeless.

According to Philip Mangano, appointed executive director of the Interagency Council onHomelessness in 2002, running soup kitchens and shelters allows the chronically homeless toremain just that: chronically homeless. Those services are established to address a problemwith an unmanageable middle. Mangano offered this advice to a group of St. Louis socialworkers dealing with a homeless problem in the city:

Take some of your money and rent some apartments and go out to those people,

and literally go out there with the key and say to them, 'This is the key to anapartment. If you come with me right now I am going to give it to you, and you are

going to have that apartment.' It is very much ingrained in me that you do notmanage a social wrong. You should be ending it.

Manganos radical idea to give homeless people a home has worked. In Denver, one of overtwo hundred cities that have adopted his program, care for each homeless person costs fifteenthousand dollars per year -- about a third of what it would cost to keep them on the street. Itsefficient, but is morally complicated, as Malcolm Gladwell describes:

[I]t doesn't seem fair. Thousands of people in the Denver area no doubt live day to

day, work two or three jobs, and are eminently deserving of a helping handand no

one offers them the key to a new apartment. Yet that's just what the guy screaming

obscenities and swigging [mouthwash] gets. When the welfare mom's time on public

assistance runs out, we cut her off. Yet when the homeless man trashes his

apartment we give him another. It's hard not to conclude, in the end, that the

reason we treated the homeless as one hopeless undifferentiated group for so long

is not simply that we didn't know better. It's that we didn't want to know better. It

was easier the old way.

Power-law solutions are polarizing. They offer special treatment for people who dont deserveit and emphasize efficiency over fairness. Dont the ends justify the means? If one of the pillarsof social entrepreneurship is to help people help themselves, shouldnt we sacrifice morality,

our philosophies, our classical approaches in order to achieve social goals? Isnt it worth solvinghomelessness, or poverty, or hunger byany means necessary? After all, the homeless justneed ameal at a restaurant, groceries, and a new pair of pants. And the opportunity to succeed.

Photo courtesy ofDesignMind
http://www.youtube.com/watch?v=4QwFu11yUaE&feature=relatedhttp://www.youtube.com/watch?v=4QwFu11yUaE&feature=relatedhttp://www.thestar.com/news/gta/article/854018--how-panhandlers-use-free-credit-cards?bn=1http://www.thestar.com/news/gta/article/854018--how-panhandlers-use-free-credit-cards?bn=1http://www.thestar.com/news/gta/article/854018--how-panhandlers-use-free-credit-cards?bn=1http://designmind.frogdesign.com/blog/the-betterness-movement-begins.htmlhttp://designmind.frogdesign.com/blog/the-betterness-movement-begins.htmlhttp://designmind.frogdesign.com/blog/the-betterness-movement-begins.htmlhttp://designmind.frogdesign.com/blog/the-betterness-movement-begins.htmlhttp://www.thestar.com/news/gta/article/854018--how-panhandlers-use-free-credit-cards?bn=1http://www.youtube.com/watch?v=4QwFu11yUaE&feature=related


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SUMMARY:Ashokas Harvard Business Review article summary on A NewAlliance for Global Change

AUTHORS: Bill Drayton and Valeria Budinich

There is a new player in the worldcall it the citizen sector.

It is made up mostly of organizations started by social entrepreneurs. These are effective organizations whoseproductivity far exceeds the productivity of traditional philanthropy, government and at times the privatesector.

They figure out how to move mountainsto get irrigation equipment into the hands of rural farmers, to givepeople their sight back for fifty dollars, to finance degrees for students who cant afford them, to protect

peoples privacy, to prevent torture, to transmit news and knowledge, to build houses in slums. They find

genuinely new ways to get things done. And they are growing much bigger and faster than most of us realize.

Companies should not be content with their efforts to be socially responsible. They should be teaming up

with the citizen sector to turn problemsin healthcare, the environment, education, energy, etc.into markets.

Markets that can be both huge and profitable. Their job is not to redistribute some of the wealth they haveearned to pay back society; rather it is to create new valueeconomic and social value. And that literallymeans providing goods and services whose benefits exceed their costs.

How do companies do that? They do it by creating hybrid value chains with organizations in the citizen

sector. These are the same kinds of value chains that Mike Porter wrote about in the 1980s except they havesome new players and new definitions of value. But they still pay attention to segmentation and pricing. Theyearn their cost of capital. They are sustainable because they are profitable. Citizen sector organizations canplay key roles in these value chains, e.g. aggregating demand, providing low cost distribution, earning trust.

For the millions who live in or near poverty, these new value chains turn recipients of charity into customersand suppliers who become economic citizens. But hybrid value chains will be a force in all markets, not justthose at the bottom of the pyramid. For example, companies thinking about getting into the market for

privacy will make a serious strategic mistake if they dont explore alliances with privacy advocates in thecitizen sectornot to get their blessing but to get their ideas about how the privacy space will evolve and whatwill determine value. In general the citizen sector is not only a major source of talent but also a source ofinnovations that can change the ways companies compete.

Banks should be financing these new hybrid business models because they offer predictable risks. Microcreditwas just the beginning of the opportunities they have. There will be heavy demand from people who want totruly invest in social arenas. But banks too may need to team up with the citizen sector.

We need hybrid value chains and the enormous markets they can create. Governments are not going to solveour problems. Nor is philanthropy. Hybrid value chains can. And in the process both greatly raise the level ofthe worlds productivity and create millions of new jobs.

Consider this example.

Onesixth of the worlds population lacks formal housingan untapped $424 billion market. Until recently, itwas impossible for the business world to unlock this potential, because its cost structures and local knowledgewere inadequate fo

The Good Capitalist Party Program 2011

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