Impact Investment: How philanthropy can alter networks
This blog post is about a TED Talk by Sasha Dichter and the company that he founded- The Acumen Fund. This non-profit organization was created under the ideal of being an impact investment fund. Impact investment is the idea of improving society by using capital and investing in solving social problems. This is often done in third world countries such as India and Pakistan where many villages do not even have light. What was interesting about this talk was the mindset that Dichter explains that caused him to make his philanthropy so successful. The difference between the way that he approached impact investment and the way others did was that he aimed for the medium between being philanthropic and wanting to gain something out of the cause. Many other companies focused purely on the gains that they would get out of serving the cause. He recognized that the problem was that people were too focused on what they could gain out of trying to social problems rather being altruistic and focusing on how others could be helped from an investment in finding a solution. Dichter changed the way he thought through his “Generosity Experiment.” In this experiment, he changed his overall mindset towards being philanthropic by making himself say yes unconditionally to giving to charities and those who asked him for money. By acting in this way, Dichter was able to focus on helping the people rather than looking at the potential investment and return that could come later on from a better economy in impoverished regions. In one of his projects he used grants and funding from the Indian government to improve the lives of villagers who were without electricity or running water. The company invested in a cheaper solution to creating electricity for one dollar a light bulb using husk power. The gains from this project were ultimately higher, allowing the village’s economy to improve greatly as well. Through his philanthropy and investment in creating a social solution, he was able to successfully improve the lives of impoverished villages in India.
This frame of thought creates a bridge between two social networks that do not normally come in contact with each other. The problems that impoverished nations often face are usually neglected by upper classes, creating a distinct and large gap between the two networks. Philanthropy in general is a connection between the wealthy and impoverished social networks because of its nature. If approached in the same way as the Acumen Fund, it can often create a smaller gap between these two social networks by fixing social problems that are often neglected or hard to solve without the help of others. The networks that we talk about that are often disconnected by socioeconomic status can be altered through philanthropic actions.
http://www.ted.com/talks/sasha_dichter.html