MaRS Centre for Impact Investing is now seeking a Senior Associate, Capital Advisory Services! From persistent poverty to climate change, we face entrenched social and environmental problems. Fortunately, a growing number of charities, non-profits, co-ops and for-profit companies are building business models to tackle these problems. They are turning to investors for the financing to […]Read More ›
The Quest for Dignity, not Dependence
“Dignity is more important than bread.” Basma Bouazizi said these words when referring to her brother Mohamed, the Tunisian who set himself on fire just over a year ago and sparked a global movement and inspiration for change. Her mother, Mannoubia added, “My son set himself on fire for dignity.” Mohamed and other global citizens have been recognized this year by TIME Magazine, who announced this year’s “Person of the Year” to be “The Protester.”
Impoverished communities around the world have demonstrated that access to finance can enable them to create sustainable livelihoods instead of relying on hand-outs. However, the mentality that citizens must be dependent on governmental support and other forms of aid is often extremely hard to change, and access to finance that empowers them can be just as difficult to obtain. Attending Toronto for Acumen’s Dignity in Focus event earlier this month led me to reflect again on the challenges of accessing finance, on the incredible impact it can have, and the admirable model of Acumen Fund.
While working with a foundation in rural Ecuador, I was exposed to the effects that the mentality of their “hand-out” model had on a local community that consisted almost entirely of farmers. The community members were living in fear, because they knew that if the foundation ran dry of money, their livelihoods would be severely affected. They suffered from severe changes in weather patterns that affected the quality of their crops, as well as unfair prices from intermediaries. The farmers were therefore left with no bargaining power, as they had no other way to sell their produce.
We discovered that a solution to this would be to create a farmers’ market to allow them to sell their crops locally, at fair prices. After approaching the foundation to request a minimal-sized loan to start this project, we found they were not supportive. I quickly learned that the handout model, which creates long-term dependency, can be very hard to break. We then approached the local municipality for a loan. After 6 months, hours upon hours of meetings, and getting permissions from countless governmental departments, the municipality finally agreed to a loan.
The project has since flourished and has allowed farmers to gain reliable incomes; they were able to pay back the loan in less than 3 months. I share this story because it demonstrates that this simple solution, which required only a small amount of financing, was extremely difficult to obtain but made a lasting impact to the community.
Attending Toronto for Acumen’s Dignity in Focus event reminded me that the dependency mentality is slowing changing around the world, and there are success stories in every corner where impact investors such as the Acumen Fund invest. The photographs emphasized that everyone is entitled to the tools that will bring them dignity in their own community.
Acumen Fund provides social finance to ideas that have the potential to be far more scalable than the traditional handout approach can handle, yet find it incredibly challenging to access financing. They work on the belief that people seek dignity, not dependence. Protesters around the world have fought and given their lives in order that this message be heard.
Note: Toronto for Acumen has partnered with SocialFinance.ca to produce a series of posts following on from the Dignity in Focus photo fundraiser held earlier this month. This series introduces a host of new faces to social finance, placing their thoughts about Dignity in Focus in the context of impact investing.
Photo credit: http://www.flickr.com/photos/cjb22222222/5373435731/