A new way to think about aid

Somewhere in between ‘dead aid’ and no strings attached hand outs lies ‘patient capital’ a solution that compliments both sides of the aid debate.  Jacqueline Novogratz presents an argument for involving the people of the communities who themselves want to be responsible for driving change in their own lives.

http://www.ted.com/talks/jacqueline_novogratz_a_third_way_to_think_about_aid.html

Based on market economics, ‘patient capital’ encourages innovation and entrepreneurialism in local communities, and involves a high risk tolerance and long term vision on the part of the funders. But most importantly, ‘patient capital’ encourages a partnership between the donors and the recipients where the recipients’ needs drive the funding model. The results are high social impact, and the shift towards the change we all want to see.

e4e’s business model incorporates some of Ms Novogratz’s ideas, with an overall vision to increase local capacity to help empower people and communities to improve their own lives by providing access to energy.

What are your thoughts on the aid debate? Are there holes in the ‘patient capital’ model, are we cranking out too much aid to developing countries? Is there a better approach?

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This entry was posted on Monday, October 19th, 2009 at 6:55 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

One Response to “A new way to think about aid”

  1. John Motuz Says:

    October 22nd, 2009 at 10:00 am

    I have to agree with the ‘patient capital’ model. I firmly believe that just writing checks or blindly throwing money at a problem encourages a dependence on that type of charity and discourages any self reliance, empowerment and growth. From my limited time in Sudan and Chad I was absolutely amazed at the eagerness, ingenuity, hard work and willingness of locals to take ownership of some water well and small power generation plants I was able to assist in developing and constructing. The key was to bring in the local stakeholders at the beginning of the process and then follow their lead as nobody knows better what they need and how best to deliver it than themselves. We were there just to assist in both a financial and engineering manner. By doing this we able to bring in the projects in with a very high degree of success and lower cost by way of “local knowledge & empowerment” efficiencies, the results were fantastic. Many of the projects are still fully operational today with very little outside support and some have taken what they have learnt from working with us to stating their own “water well” business. That is what I think the aid needs to be based on, encouragement of self reliance, empowerment and us there to assist. I know we have all heard this old saying many times but unfortunately it seems many charities fail to follow it. “Give a man a fish – he eats for a day, teach a man to fish and you feed him for a lifetime”

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