Thanks to Alex Tabarrok for this lead — very interesting:
Novogratz’s experiences eventually developed into the Acumen Fund, a venture capital firm for aid. The idea is to invest patient capital in scalable, for-profit businesses that deliver services to the poor. The fund, for example, has invested in a firm producing drip irrigation systems in Pakistan, a Tanzanian firm that produces mosquito nets and an Indian firm producing internet-telephone kiosks in small villages.
The fact that the businesses have been for-profit has been critical. In selling bed nets for example the Tanzanian firm learned that talking about malaria doesn’t sell. What sells, in the words of one of their top salespersons is, “The color is beautiful, and you can hang the nets in your windows so that your neighbors know how much you care about your family.” As Novogratz puts it:
Beauty, vanity, status and comfort….The rich hold no monopoly on any of it. But we’re a long way from integrating the way people actually make decisions into public policy instead of how we think they should make them.
Patient capital is no panacea–what is?–but by investing in entrepreneurs who must listen to their customers a charitable venture-capital firm can multiply the effectiveness of its philanthropy.
There is a powerful role both for the market and for philanthropy…Philanthropy alone lacks the feedback mechanism of markets, which are the best listening devices we have; and yet markets alone too easily leave the most vulnerable behind. [From Aid Realism for the Idealist]