On a cold night in February 2008, I read about Amaretch, an Ethiopian girl who had to wake up every morning at 3 a.m. to walk miles, fetch firewood, and sell it. She was ten years old. I remember feeling distraught as I thought about Amaretch’s plight and that of hundreds of millions of girls all around the world who had to lead similar lives. It seemed unfair, and indeed it was.
Inspired by Amartech, and a recent visit to impoverished villages in my home country of Nigeria, I started Poverty Stops Here (PSH) a year later with the help of some friends. Our nonprofit provides poor communities Nigeria access to three things: clean water and sanitation, micro-loans to help individuals start a new business or expand a current one, and education for children. Since 2009, we have successfully raised and invested roughly $300,000 in five different communities. As we celebrate our tenth and final year, I’d like to share some of the lessons I’ve learned that I hope you will find useful as you think about poverty alleviation programs around the world.
Resources alone won’t solve poverty
Poverty almost always shows itself as a lack of resources in poor communities—a lack of food, safe water, sanitation, education, and healthcare—and because of that, many organizations, including Poverty Stops Here, treat poverty primarily as a resource problem.
My co-founders and I started Poverty Stops Here in the hopes of doing everything we could to alleviate the suffering of the many people we met living in economically difficult circumstances. Like other organizations, this commitment led us to invest in very tangible things that we thought would have a direct effect on alleviating poverty, like water wells. There are few feelings in the world better than seeing fresh water gushing out from a well for the first time. It’s hard to describe the joy I felt as I thought about all the children who would no longer have to walk miles just to get water.
But wells, like most other things in life, break down. This happened to us time and again until we stopped building wells. And the same happens with countless other development projects. Schools are constructed, but learning goals aren’t met because teacher absenteeism is high and teacher training is subpar. Hospitals and clinics are built, but many are unsustainable as medical devices break without repair, and healthcare professionals are grossly underpaid. It turns out that resources, on their own, are not enough to create lasting impact.
Any worthwhile investment needs a mechanism to sustain it
As I reflected on the wells Poverty Stops Here had built—and rebuilt—I realized that the organization overlooked a critical component to successful development initiatives: a mechanism for sustainability. Without ensuring our wells had a mechanism for the communities to maintain them, we were not only creating dependence—the opposite of what we wanted to do—but we were also investing in something that would be short-lived. It is one thing to build a well but it is quite another to develop the system necessary to maintain it.
Consider how things might have been different had we taken the time to understand the skills required to fix broken wells and then trained people in the community. Or better yet, what if we had found an organization that needed water as a critical resource for its operations and provided the well in a way that also enabled members of the community use it? The organization would have been incentivized to maintain the well. Another alternative would have been to identify entrepreneurs in the community that could manage it and charge locals a small fee for filing a bucket or jerrican with water.
The actual solution will differ depending on the community in question, but when there isn’t a mechanism to support your investment, the best thing might be to not invest at the time.
Markets are the most powerful way to end poverty
In the course of running Poverty Stops Here, I enrolled at Harvard Business School, where I hoped to gain a broader perspective on how prosperity is created. Through my coursework I was able to see PSH, and other organizations that sought to alleviate poverty, through a different lens. It was there that I learned the power of innovation and markets.
Over the past 30 years, more than one billion people have lifted themselves out of poverty, a majority of whom are from China. As I learned about China’s triumph, I couldn’t help but wonder how the country had accomplished this so quickly. My conclusion: markets.
Markets provide a means by which people can freely trade goods and services. As I completed my coursework and went on to research the topic of how to create prosperity at the Christensen Institute, I learned that when new markets are created to serve large pockets of consumers who’ve previously been left out of the consumption economy, they have tremendous potential to end extreme poverty. The new markets create jobs, result in the building of infrastructure, and generate much-need tax revenue. And because all of these things are tied to a market that helps people make progress, they’re much more sustainable. Unfortunately, there were no markets underlying many of PSH’s activities. As such, our impact was limited.
These things I have learned haven’t caused me to lose hope in nonprofit organizations committed to economic development. I believe there is a place for them, especially in humanitarian crises and other natural disasters. However, for true and lasting development to occur, many of these organizations must begin to ask themselves some tough questions: are we simply focusing on the symptoms of poverty without thinking about sustainability? Is there a market component to our work that can sustain our efforts? Are we creating dependency? If they don’t like the answers—and can’t change course—they might be better off sunsetting their organizations.
After ten years of operations in Nigeria, Poverty Stops Here will shut its doors on September 30 2019.