Want to end poverty? There is a lot of work to be accomplished. According to GiveWell.org, over 2.5 billion people live on just $2 per day -- more than one-third of all humanity. The vast majority of the population of the African continent is included in those statistics. For some perspective, the United States has roughly 307,000,000 citizens. Given those statistics, the amount of people living on $2 per day is equivalent to nine United States' of Americas. That is a lot of people in poverty -- too many -- that need the help of first world institutions (like business) to empower them. So what has humanity been doing to create lasting solutions to the issue of pervasive poverty?
For starters, the social enterprise movement is alive, well, and rapidly achieving important stakeholder support such as Secretary of State Hillary Clinton's decision to co-sponsor a conference on Social Capital Markets next year. Ashoka is an organization that creates Fellowship opportunities for social entrepreneurs who are "possessed, really possessed by an idea" (in the words of Ashoka Founder Bill Drayton), leveraging an international network of successful Ashoka Fellow social entrepreneurs in order to support and magnify the efforts of social entrepreneurs working both in the United States and abroad. Echoing Green offers similar Fellowship opportunities for social entrepreneurs to excel with businesses that aim to contribute to fixing social challenges like hunger and poverty. Both of these institutions enable social entrepreneurs to integrate cause into businesses that work meaningfully to give opportunity to the billions who, apparently, lack it.
For young adults both American and international, the Unreasonable Institute incubates and trains young social entrepreneurs in a 10-week program to succeed with cause-integrated businesses that can scale to reach at least 1 million people. StartingBloc has emerged as a leader in the social enterprise field, inspiring and activating social entrepreneurs aged 29 and younger to develop their world-changing ambitions to fruition, creating a powerful international Fellows network for social entrepreneurs who have founded cause-integrated companies. And HUB, co-working spaces for social entrepreneurs, have emerged everywhere from Brussels to Sao Paolo to Los Angeles to create work spaces for cause entrepreneurs to conduct their work. These organizations exist and are flourishing; promising testaments to humanity's ability to alleviate poverty worldwide through business.
In the microfinance world, Kiva is a leading institution that has now lent over $174 million to third-world entrepreneurs to grow and scale their businesses. InVenture Fund has innovated from the model of microfinance, developing a micro-venture-capital business model that invests in and nurtures developing world businesses.
As the movements of social enterprise and cause-integrated business mature, a new funding model is proving that scaling innovations for poverty alleviation in the developing world can be both possible and profitable. Enter Acumen Fund, which sees cause-integrated business as "capable of bringing affordable, life-changing products and services to parts of the world where markets have failed."
The company was founded under the principle that the best way to create lasting solutions to poverty is through empowering business. Thomas Friedman has articulated this point well in the context of the African continent: "Africa needs many things, but most of all it needs capitalists who can start and run legal companies. More Bill Gateses, fewer foundations. People grow out of poverty when they create small businesses that employ their neighbors. Nothing else lasts."
Acumen Fund accomplishes its vision of empowering businesses in the developing world through "patient capital". Acumen Fund defines patient capital as a debt or equity investment in an early-stage enterprise improving the quality of life of the poor that extends the time horizon of investment, exercises greater tolerance for risk, and additionally provides management support to help grow the enterprise. Importantly, their chief objective in investing in businesses with patient capital is to maximize social rather than financial returns on investment. The organization has reached over 36 million people in Africa, India and Pakistan.
Cause-integrated business all over the world is benefiting from a groundswell of consumer support, which I covered in my article on "citizen consumers." Later this week tune in as I show you innovative cause-integrated businesses both working to end poverty in the developing world and showing big corporations in the first world that it's possible to turn a profit while turning our world in the direction of a better tomorrow.