By Blair Campbell
Last spring, Profit contributing writer Kate Pavao spoke with microfinance expert Jacqueline Novogratz, whose book The Blue Sweater (Rodale Books) came out earlier this year in paperback. The Blue Sweater is a memoir about Novogratz’ lifelong efforts to fight poverty, so named for a sweater she donated to Goodwill as a teenager and stumbled upon years later while working in Rwanda, where it was being worn by a young boy. Formerly a banker at Chase Manhattan, Novogratz is the founder and CEO of the Acumen Fund, a nonprofit that uses entrepreneurial approaches to solve problems of global poverty. When she spoke to Profit, Novogratz talked about the current economic situation as “an enormous opportunity for the world”: “This is the moment to ask what will it take for us to extend the financial systems and markets to reach every person on the planet.” More excerpts from that interview appear below.
Novogratz on “letting the work teach you” in emerging markets: When we’re looking at the emerging market and the bottom of the pyramid, in particular, there’s a real role for incrementalism. There’s a real role for looking at the poor as customers, understanding their preferences like you would any other market and building solutions from that perspective. Let the work teach you, and be very comfortable not only with identifying mistakes and failures, but also with learning from them. Then you can scale over time, often with partners, including nonprofits and government.
On the primary lesson of her book: The lesson is not to continue to reinvent the wheel. To learn from my own trajectory of coming to the developing world to save it and recognizing that with low-income people, nobody wants other people to come and save them. What we want is to get the challenges in front of us minimized so we can solve our own problems and make our own choices.
On the Acumen Fund’s concept of “philanthropic capital:” [It’s about] recognizing on one hand that markets alone have not worked to solve the problems of poverty, and on the other that traditional aid charity has not worked to solve the problem of poverty. But in the middle there is a role for using philanthropic capital—not for a handout, but for investments in entrepreneurs that are looking for ways to sell affordable quality services to low-income people so that they can have access to healthcare and water and housing in such a way that they can have more control of their lives. If we start from that premise and we recognize that dignity is most important to the human spirit, and we build solutions from that perspective, I believe we can have a real shot at ending poverty.
On why now is the time for nonprofits and corporations to come closer together: You are seeing corporations move toward greater sustainability and a real interest not in the same old corporate social responsibility but in actually integrating the skills and assets the business has to create change. And on the other side, you are seeing nonprofits looking to integrate more business practices and partnerships into the work they do so they have a better chance at actually scaling and reaching many more people in a way that’s accountable and sustainable.
Photography by Shutterstock