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Welcome to my blog. I document my passion and interest for innovative business models, smart philanthropy, and social impact investing. 

Enlightened Development: Successful Blueprints to Unleash Systems Change

Enlightened Development: Successful Blueprints to Unleash Systems Change

In June 2016, I had the opportunity to join a panel of some of the world's most successful and inspiring social entrepreneurs at the Global Entrepreneurship Summit (GES) at Stanford University. GES is an innovative conference led by US President Barack Obama. My talk on the video above starts at 00:59. I'm including an additional video here which gives a broader view of the conference. My talk starts at 2:44.

Moderated by Sally Osberg (the President and CEO of the Skoll Foundation), this panel included Willy Foote (Founder and CEO of Root Capital) and Premal Shah (President of Kiva) - two remarkable social entrepreneurs also referred to as "phenomenal disruptors". Focusing on the urgency to create ecosystems that can unleash long-term and large-scale social change, I shared Water.org's story and our blueprint for addressing the global water and sanitation crisis at scale. Having traveled across the world and seen first hand how far too many families, children, and communities are affected by this global challenge, it was truly an honor and exciting to share the story of our work and our CEO and Co-Founder (Gary White), and relate this to the highly impactful work of Root Capital and Kiva.

Challenging the conventional thinking that only charity can respond to the global water and sanitation crisis (which today continues to affect more than 2.4 billion people), I discussed Water.org's strong drive and appetite for innovation which led to the development and scaling of WaterCredit. Leveraging limited philanthropic resources, the WaterCredit model has unlocked much larger pools of social and commercial investment capital to meet the water and sanitation needs of more than 4 million people. Given that charity will never be enough to solve this issue in our lifetime, it's vital that we find ways to attract other sources of capital to match the scale of the problem. Private capital's scale and global reach presents a tremendous opportunity to accelerate progress and impact against the global water crisis.  

So why take this approach? And after 13 years of implementing the WaterCredit model, what have we learned and where are we going next? How have we shifted gears when things stalled or failed? These are many of the points I discussed during this panel. Research and our experience to date shows that at least a fourth of the billions of people who lack access to safe water and sanitation would pay for those services if they just had access to affordable financing in the form of a small loan? This is the demand WaterCredit aims to respond to.

Partnering with 65 local microfinance partners worldwide, Water.org has provided $15.7 million in philanthropic resources to these financial institutions to help them undertake market research and build water and sanitation loan portfolios for the world's poor (WaterCredit). With this support, these partners have attracted more than $220 million in local commercial and social investment capital to provide 1 million loans to families living at the base of the economic pyramid (BOP). While the average philanthropic cost per person of a traditional water project can range from $35-$60, many WaterCredit programs have reduced that cost to $3-7 per person. This presents great potential to use philanthropic resources - which are limited - in a more efficient manner.

Overall, the results of WaterCredit are deeply encouraging: more than 62% of WaterCredit loans reach families earning below $2 a day, WaterCredit loans have a global 99% repayment rate, 93% of WaterCredit loan recipients are women, the average size of a WaterCredit loan is $215, and 4.5 million people have gained access to safe drinking water and/or sanitation thanks to these loans. Meanwhile, the Water.org team has built partnerships with a wide spectrum of key institutional, policy-making, and government organizations to help others (who have a much bigger reach) integrate the WaterCredit model in their efforts, and create a policy environment that is conducive to helping the world's poor gain access to the financial tools they need to meet their water and sanitation needs. 

However, while the prospects for growth and scale globally with the WaterCredit model are inspiring, we are still far from bringing an end to this global crisis. For instance, many of our microfinance partners still face capital constraints, and need access to investment capital in a more reliable and affordable manner to provide more WaterCredit loans to the world's poor - at a level that will truly put a dent in this crisis. 

With the social impact investing market growing at a fast pace, and unlocking significantly more capital for critical global needs; the Water.org team saw a unique opportunity. A chance to connect the immense wealth in the US and Europe found among social impact investors to the demand Water.org hasidentified among its established network for local microfinance institutions for more affordable capital to scale their WaterCredit loan portfolios. With this in mind, Water.org developed and launched its first $11 million social investment fund in 2015, along with its social impact investing initiative - WaterEquity. This first fund is targeting microfinance institutions in India. Building on this, the long-term goal is to invest in a broader array of enterprises serving water and sanitation needs at the BOP worldwide. 

Hence, WaterEquity's goal is to scale WaterCredit, and get closer to meeting the $12 billion demand among the BOP for access to more affordable financing (such as WaterCredit loans) to meet their water and sanitation needs. With a deep understanding of this BOP market, WaterEquity will build the market between social impact investors and enterprises (including Water.org's microfinance institution partners, water utilities, and toilet construction companies) reaching the world's poor with safe water and sanitation services. We hope this will provide an opportunity to build a more inclusive financial ecosystem around water and sanitation supply for the BOP - and unleash systems change. Time will tell but we are excited......

 

 

Water.org Ventures Into Social Impact Investing

Water.org Ventures Into Social Impact Investing

How The Water Crisis Affects Women and Girls

How The Water Crisis Affects Women and Girls