How to Land a $2 Million Social Venture Investment
Social entrepreneurs are driven by passion. We are people who have bold ideas to solve huge challenges, and have almost singular vision to the execution of our idea. Our products are our babies…
Unsafe drinking water is a pressing problem in global health and development, with about 1 billion people in the developing world lacking access to it. Diarrhea, which is linked to inadequate drinking water and sanitation, kills more children than malaria, AIDS, and measles put together.
Additionally, according to the World Health Organization, developing countries with improved drinking water and sanitation grow 3.7 percent annually on average. Yet many entrepreneurs have tried and failed to solve the problem. In Kenya, Population Services International marketed a chlorine filtration system called WaterGuard. WaterGuard’s products were both cheap and scientifically proven to diminish diarrhea — but only 10 percent of people with access used them.
For the amount of money and energy being put into the marketing and implementation, WaterGuard, among many other similar initiatives, wasn’t making the kind of impact the developing world needed. Then, after Harvard and Berkeley researchers, with the help of Innovations for Poverty Action, found a solution to WaterGuard’s community engagement problem, Population Services International gave Evidence Action the go ahead to develop the Dispensers for Safe Water project.
In 2013, Dispensers for Safe Water officially put its method to practice in Kenya and, later, in Malawi. From there, it developed a reputation in the social enterprise community for efficiency, effectiveness and innovation. This eventually attracted investors that made expansion possible, and the project focused on Uganda where, after decades of conflict, only 21 percent of the population has access to safe drinking water.
Today, with a $2 million investment from the $45 million Innovative Investment Alliance, Dispensers for Safe Water is rapidly expanding throughout Uganda, using WaterGuard’s filtration method. But the project had plenty of growing pains before it earned the $2 million investment, and today its model is very different. Centered on innovative financing and adaptable, sustained, consumer-based implementation, this model was created for staying power.
The Innovation Investment Alliance
The Innovation Investment Alliance is a unique partnership between the Skoll Foundation and USAID, supported by Mercy Corps, to grant over $40 million to proven, transformative, and innovative social enterprises to scale their impact. The Innovation Investment Alliance was founded on the shared belief that collaboration among public, private, and non-profit sectors can combine skills and resources to find scalable solutions to widespread, seemingly intractable problems, such as poverty, climate change and conflict.
Mercy Corps, known for expertise in developing in-country programming and impact measurement, joined the alliance in 2012 to compliment USAID’s expertise in scaling development solutions and the Skoll Foundation’s expertise in “investing in, connecting and celebrating social entrepreneurs who help them drive solutions to the world’s most pressing problems,” says Mercy Corps.
The alliance only invests in the most promising social entrepreneurs with proven innovations. Evidence Action’s meticulous planning and prior evidence of impact gave it an edge over the competition.
Providing Evidence of the Model’s Effectiveness
The Dispensers for Safe Water team believed that chlorine filters must be accessible, free, and located directly at the community’s water source in order to continually engage community members. The team’s ideas presented a seemingly simple solution to WaterGuard’s issues, but it took diligent planning.
First, Evidence Action publicized findings on the effectiveness of chlorine, using proven science and the pressing problem of diarrheal disease as leverage for introducing its innovative idea for how to make people actually use chlorine filtration. The project team then publicized the results of extensive WaterGuard research. The findings stressed that the Kenyans with free chlorine dispensers at the site of the community’s water source used the method the most. So the team created a model to install dispensers — according to requests — directly at the community’s water source. The water source is fitted with a valve that delivers a small, consistent amount of chlorine. With the right amount of chlorine, community members can fill empty buckets or jerricans with safe water. The service is free.
But the work didn’t slow down after the plan was formulated. The team had to convince potential investors that its “baby” could fend for itself.
An Innovative Business Model
Money is the essential nutrient for any entrepreneur’s idea. Evidence Action manages its money in versatile, outside-the-box ways. The team doesn’t only market itself to potential donors through its water filtration method; it also presents its business model as a promising foundation for the project’s continued success. The team proves its commitment to economic self-sufficiency and sustainability with evidence of profit generation and cost-effective production.
The researchers found that dispensers are the most cost-effective water filtration method. To generate revenue, Dispensers for Safe Water sells carbon credits. After the Clean Development Mechanism of the Kyoto Protocol codified and created carbon emission goals for individual nations, projects in developing countries can gain credits that can be sold for profit.
The project earns carbon credits because using chlorine as a filter, rather than using firewood to boil water, reduces carbon emissions.
“There is no other organization that has this dual focus: Determine rigorously and scientifically evaluated interventions with proven impact that we turn into highly scalable programs with operations and business models that are able to touch millions of people,” said Katrin Verclas, Evidence Action’s director of global communications and advocacy.”
Sustainable, Adaptive Implementation
This project empowers people living in poverty by giving them ultimate control over their resources.
Once the dispensers are set up, an elected community member encourages use of the dispenser, reports any problems, and refills the dispenser with chlorine. Field staff and trained community members are on hand if anything goes wrong with the dispenser.
Evidence Action’s approach ensures investors that their money isn’t wasted on a project that community members won’t use. In order to ensure sustained effectiveness, team members in the field make measurements of the percentage of households using chlorine.
Attracting partners and investors is an integral part of the process, too. Dispensers for Safe Water continues to attract more partners in order to fund its ambitious goals. When two districts in Uganda suffered an outbreak of cholera, Unicef and World Vision Uganda took note of the project’s effectiveness, and marketed the dispensers — at no cost to Evidence Action.
Looking to the Future
With a lot of foresight in their beginning stages, devoted social entrepreneurs can bring lasting change to the world’s most vulnerable communities.
From a laboratory, to a budding idea, to Kenya and Malawi, and finally, expansion into Uganda, Dispensers for Safe Water has hit its stride. And it continues to improve and grow. After only three years in the field with its safe water program, Evidence Action’s scalable, innovative methodology foretells the future of global development, Verclas says.
Paige Poorman is an intern with Mercy Corps.
This post was originally published on Global Envision, a blog site managed by Mercy Corps. It has been republished with permission.
Top photo: Evidence Action Facebook