Defeating Global Poverty

I was recently interviewed by Levi Hug, an economics student at Eastern Oregon University. Here’s a sampling of the Q&A...

Levi: What do you see that’s particularly special about microfinance, when compared to other forms of development?

Dave: I write a blog (defeatpoverty.com) and one of the things I’ve been particularly interested in and been doing a lot of research on is things that can help people get out of poverty on a sustainable basis, versus simply putting bandages on situations—helping someone through a short-term thing, but not necessarily helping them long-term. These things aren’t bad, there are lots of needs for people to be given relief in dire circumstances. But, ultimately what’s much better is to have people be sustainably out of poverty.

Number two, I’m really interested in things that have the potential for scale. One of my heroes is Muhammad Yunus, and one of things he talks about in his book is how some people haven’t liked his approach in pushing for very high volume in serving people. Some people say, “small is beautiful.” And, Yunus’ response is, “well, the reality is that small is small.” Helping five or ten or even 100 people is fine and good, but it’s still small impact. If you want to help a village, an area, a state, a community, a country, whatever scale you’re thinking of, that’s going to require something that can scale. So, microfinance has demonstrated, and it’s one of the few tools that I’ve been able to find historically that has had a large impact on actually lifting people out of extreme poverty on a sustainable basis and at a large volume. So, I’m really interested in things that meet that criteria and microfinance is one of the most interesting ones that I’ve observed. But, there are other things that are starting to be experimented with and are starting to show promise that may have the same characteristics.

Read full interview

Labels: interview, microfinance, my story, poverty

I have supported global poverty reductions since I was a kid. This included sponsoring children through World Vision, sending money for relief efforts on many disasters, funding people volunteering their time to go on mission trip projects to help people with building projects and in many other ways.

While much of this felt good, I have always wondered in the back of my mind whether my contribution were making any long-term impact. Hey, survival-oriented initiatives are important, but they are just that, survival centric, not long-term in their mission. It seemed like for all of our money (multiple trillions of dollars) and good intentions we were making very little impact on poverty … and I was right.

In 2002, my father introduced me to microfinance. My father has been a long-time volunteer board member for World Vision – both on the Canada board and the international board. He often traveled to areas where World Vision was doing their development work to see firsthand how things were going meeting the local World Vision staff, board and clients being served. Being a business person, he immediately was attracted to the new microfinance services organically developing in the local World Vision projects. Today, he is the chairperson of Vision Fund, World Vision’s microfinance arm.

So, I was almost instantly intrigued by the concept of microfinance because of my experience in the venture capital-intensive high-tech business world and my degree in business. I had lots more questions about how microfinance worked and whether it might be having a long-term impact. I began an intensive learning process reading many books on microfinance and scouring around on the Internet for information about how microfinance was developing. I was invited to join an inside strategic planning summit with World Vision where I learned a lot more about the inner workings of microfinance from a business and operations standpoint.

Later I discovered Unitus, a very innovative microfinance organization staffed by socially-minded business people who are attempting to dramatically reduce the number of people in poverty by dramatically accelerating access to microfinance by leveraging global capital markets and applying proven management consulting practices for high-growth businesses. I really liked the Unitus people and I really liked their innovative commercial approach and entrepreneurial culture. I almost immediately volunteered to join with the Unitus team on potential partnership due diligence trips to Argentina, India and Mexico. I joined the Unitus board and then helped facilitate a leadership conference for senior management of some of the world’s most entrepreneurial microfinance institutions (MFIs) in Malaysia. I was continuing to learn about microfinance and using my skills in leading and managing high-growth businesses in return.

As I got interested and involved in microfinance, I started to bump into a variety of thinking and ideas around how to sustainably defeat poverty. One of the common themes was that unless poor people were enabled to increase their income (an economics issue), the poor would stay poor. The interesting fact is that the #1 activity which is leading people sustainably out of poverty is the much maligned and misunderstood globalization movement. Globalization is literally resulting in 100’s of millions of people stuck in generational extreme poverty to start on a new positive cycle of hope. Yes, there is need to fight disease, reduce corruption, create physical infrastructure, more & better education opportunities … all of which are tied to economics and generating more income for poor people.

And so, now I write this blog … read about why I write this blog.

Labels: my story, poverty

I write this blog because I don’t think that people are destined to live in poverty. I believe that everyone has a God-given right to have the opportunity to live in dignity. I am most interested in ideas, activities and approaches which result in sustainably lifting people out of poverty. I’m interested in practical solutions which are highly scalable … that is, once refined and proven can be economically rolled out to help millions if not 10’s or 100’s of million people.

I continue to learn. But learning about ideas, experiments, successes/failures of this nature is very difficult and time-consuming. There is a lot of spin and PR which hides the facts … the “whole truth” as I’ve come to call it. I continue to be frustrated by the lack of transparency and accountability in the so-called “international development” government and NGO sector. So much energy is focused on inputs (e.g. we fed 100 people) and very little on results (e.g. 50 people cross the poverty line and are still there after 5 years.) I’m finding that so much of the interesting high-potential break-throughs are coming from smaller socially-driven organizations (both for-profit and non-profit) which are cash-strapped, but entrepreneurial-minded.

So, I write this blog to share what I’m learning so that you can benefit. And, my hope is that you will challenge my assumptions and conclusions and help me get smarter and become more effective. (BTW, that’s what “add comments” feature is for ;-)

How did I get here? Read about my journey.

Labels: my story, poverty