Her cofounding a Financial Institution in rwanda where she lived for three years, and she began her career at chase manhattan bank. She is on the board of a number of great organizations such as the aspen institute, and she is also the offer of the she is also the author of a book. There are a lot of key insights that have attracted me to her work. I have known about her for a long time. I am delighted to say that we have become friends over the last few months. We had a terrific dinner the other night at jacquelines apartment here in new york city the other night and we discussed politics and politics in america and around the world and how all of us are better ready to serve the poor. I have been looking forward to this one for a long time. Welcome, jacqueline. Thank you. We will have this conversation at aei that is going to benefit many people, i think. There are many people who knows what acumen does but those who dont, they are going to be amazed. Walk us through one of your recent projects, and just kind of give us the whole flavor of this phenomenon, because that is really what it is. It is not an Investment Vehicle it is a phenomenon. I will start with the investors who are at the very early stages, changed philanthropists. People give us philanthropy. We find those on per newers who are daring to tackle the biggest problems that they see. We are going to give you the example which is it does not immediately come to mind, but ambulances. In india, you have a big bloated, corrupt governmentrun ambulance system. And then you have a small private sector and balance system, and both of which are broken. Both are corrupt. If you needed to go to a hospital, you would coley taxi. If you wanted to go to the morgue, you go to the ambulance. You would call a taxi. If you wanted to go to the morgue, you would call the ambulance. You would pay a bribe. With the pricing model, it is all private. If i take you to the state hospital, you pay. If i take you to a public clinic, it is free. So everything can be serviced through the private sector. No traditional money no traditional investor is going to put money into a system like this. So we take our philanthropy and we by 30 of a company. We use Patient Capital because it has to be longterm. The onto per newers cant risk fail, learn, and start again. I dont think you understood just how much they would have to fight vested interest and the bureaucracy. They would have to teach people that there was actually a legitimate system. They would have to build the market. What happens is that this company is growing and we are continuing to invest not only in that capital that we use more philanthropy to bring in leadership and talent to our ambulance program. That has happened over the last seven years. There was a terrorist attack in mumbai and suddenly, not only does acumen see that this thing works, also the population and the government sees that the city and needs an Emergency Response that they can rely on. And during the cold war eisenhower saw that we only had a private sector Ambulance Company, and what if that was attacked by a nuke . We would not have an Emergency Response system. So the same thing happened in india. This company went from a private company into partnership with government and we could put more traditional capital there at this point within the company and now that little Ambulance Company has 1000 amulets is and 5000 employees and there are 200 Million People across india, and less sunday we opened 1000 ambulances and 5000 employees and 200 Million People across india, and less sunday wlast sunday we opened a new business in pakistan. This is a high rate of change . Oh yeah. But when you look at traditional capital and traditional funds people see money going in and out from three to seven years and they want high returns. So you put in 30 and you bought a 30 share in the embolus company. I cant he because we have not sold the company yet. Oh yeah, yeah, yeah, then i would be talking to the department of justice. Your investors are going to get a big return. Well, remember, our investors in the first phase of this company, acumen will get a return and we will put it back into the portfolio. While this might be a Success Story with a private return towards our capital, there are a lot of starters that helped it happened as well. Sidebyside we need that philanthropy to put talent into the company so that the company could succeed. We built a company that really needed a private any public system for change. We created jobs, and we busted a category, if you will. The mega home run will be when i capital comes back so we can reinvest. Paint a picture for me who are paid a picture for me of people who are investing in the capital. Core is the kind of person who is the kind of person who is investing in acumen . Including the companies in which we operate, we have tax indians, colombians, americans i would say anything from a young person in banking that gives us 5,000 to 10,000 a year, two names that you would recognize, that would give acumen 1 million a year. The reason they do it is because they see not only great inefficiency in the way that we are using philanthropy for change, that it is also about longterm stability. You do not shut it down once you get bored. This is a company that is actually working and working over the longterm. Ambitions are also working with us. Interestingly, corporations are now coming to us. They have all of the same issues that Major Companies have. Major marketing issues. We have partnerships with dow unilever, and other companies that are bringing their talent. Have you started more startups like acumen, are there other companies . Since we have started, there are now 300 Investor Funds that we have started. We have also worked on metrics with other organizations to help create almost a trade association called acumen network iris which is looking at standards of the impacts of financial exchanges. We are starting to see a great change. People recognize that we need to do things differently. Private sector, government and investors if we really want to create a system that includes everybody. You talked about Patient Capital. People should not expect to get their money in a month because it takes a long time. You are talking about the ambulance project in india. But you also talked about Patient Capital to be a third way, and that suggests that there are two other ways. What are the first two ways that are inadequate to do it . In some ways, it is connected to my own background. As you say, i started off on wall street. I learned about the power of the market. I also started out into medication in terms of the market, and people are sometimes overexploited. On the other side, when i moved to rwanda, i saw the power of really smart philanthropy and aid and i saw the tendency of the topdown approach in traditional aid and charity to create dependence. If i have learned anything, in this career of mine, that dignity is more important to the spirit than wealth. If we are serious about poverty, have got to find those initiatives that enable people to have freedom and the choice to really participate. So what Patient Capital does as a third way is to take the test of the market and the humanitarian ethos of philanthropy to determine success based on those enterprises that sustain themselves. Therefore, it moves towards profitability by creating sustainable business. That is the optimal mix of hardcore investment and philanthropy which is sidebyside. You create a system in which the poor can really participate. You have given me a couple of criteria for investment, one was about the poor and the other is that it can be sustainable. Those are obviously two of your investment criteria, but i am wondering, how did you know about this amulets company Ambulance Company . How did you know of which company to invest . At first we didnt. We were scrambling to create the idea that this is possible. Now there is something that we feel that works. There is 100 companies for every company we invested. So we are not any different in terms of the numbers of a typical Venture Capital firm. Like you said, is this truly serving the poor . Never too, is this an idea that matters, can we actually change their lives . Number three, who is this onto per newer . Entrepreneur who is this entrepreneur . Did have the ethical fiber that will do this job in a way that will not be corrupt . Do they have the determination and grit to do what they know . And then the last are really around the Business Model. Do we see a Business Model that will move to profitability and we are not spending 10 years if your endgame is 10,000 people . Will it actually reach one Million People or more . This is the exact strategy that you would use as a regular entrepreneur. We just need onto per newers onto per newer e ntrepreneurs to have grit. We want engineers to come in create a water system, but they have never spent any time in a village. That probably is not going to work. Give me an example of a terrific idea that would be unworkable. [laughter] i just want to make sure i dont do this. [laughter] well, probably our first big failure was unfortunately our second investment, or maybe fortunately, because people give us a pass. It was an electromagnetic center. What is that . That was what i learn, if you dont know what that is, you have no business in dealing with it. I really like to saying it when we first did it, but it was a really low cost way to test whether someone had a disease, essentially. You would not have to mess with blood, which is quite problematic in the developing world. Taking a Technology Like that to market costs tens of millions of dollars. And again, not only changing individual behaviors, but changing market structures. On the Water Filtration side, as i think is the hardest areas, is that you will get very Cool Technology you can wear a back pack and take it am house to house and deliver water people ask a care about how their water tastes during a lot. People care whether they trust you and what this water is. Water tastes. A lot. People care whether they trust you, and what this water is. People are often willing to pay a higher price to get it or it we sometimes bring in our own cultural arrogance by thinking we are doing good for others and actually we are being insulting and misguided. Interesting, i know a lot of Venture Capitalist would say that they are really over investing in technology and under investing in relationships. It is basically the human side of all entrepreneurship is emphasized that many of them are not that comfortable with the humans. Venture capital is always looking for those who say, i understand how this integrate into the human spirit. The effect to the electric electromagnetic investment. No, lets not lets not [laughter] lets hear what went wrong. This is about 13 years ago now. It impatiently ill went away . It impatiently all went away . [laughter] it actually made us move away from technology. The insight that we got from it was that our capital was going to go much further by helping a Delivery System like amulets is. Like ambulances. Now we are starting to look at technology in a different way. Back then, it was the. Dot com boom, and we thought technology was quite a change the world. Now you start to see some real change. Show me the system, show me how you understand distributional show me how you understand how youre going to make decisions much more interesting. That is pretty interesting so the main thing you learn is that exactly what my friends in my Venture Capitals friends will tell you, dont under estimate the role of human interaction. Toby so enamored with dont be so enamored with the tech. Our team is schooled in three real disciplines, financial investing, operation, and then the third which people see as a soft skill but which i would say is one of the hardest skills and that is moral imagination. The ability to put yourself in anothers shoes and build from their perspective. So empathy . Even more than empathy. Yeah, it is empathy in a very pragmatic way. Probably the best story that i have it comes to mind is a Company Called d light, and it is a solar company. We invested in the solar prototype level. It was a light was too big, but at that point we thought, build it and they will come. It had to be iterated many, many times. The Company Sells about 5000 units a month in west africa and it has brought affordable solar lights to many people. I happen to be visiting one of those individuals with a big australian distributor for africa and this person was a tiny woman, a grandmother, and i said to her, why do you tell david what you like and dont like about this light . And with the old Charity Model people would say nice things to you because you have just given them a guess, but with this model, she is a customer. But i did not expect her to be quite as forthcoming as she was and she puts her hands on her hips like this and says well, first, if i could charge my cell phone at the same time i am charging my light, this would be a much of that or product. And i thought, would be a great insight. And then she said second, she gave for recommendations for how she would improve his light. As i was watching this little woman talking to this big man, i thought, this is why i started accuray, this is the power of philanthropy capital. She is not dictating but she is not begging, she is talking to him as an equal. It is in that interaction that you have the ability to inform each other. That dignity that comes from real moral imagination. Not, i am sure to save you, i am here to help you i ensure to build something with you and you have something to bring and i have something to bring, and that is the way the world can actually change. The relationship between two people is remarkably different when one person is a customer rather than someone being a grant recipient or being the recipient of charity, and that is what you are trying to establish, right . In terms of his contracting at whatever i can from you, it is in some ways, the more i think about Venture Capitalism, i think of as a philosophy. It really is based on a more human approach to the kind of capitalism we need to build for the world. I think there is a craving for it. Certainly within this next generation. For sure, and let me drill into that just a little bit more before we go back to Venture Capital. One of the things that is a worry that you and i share. Weve talked about this a number of times now. There is very little political dialogue, but there is an icy silence when people talk to each other, but if you could characterize this as a real shame, and when you think about the Free Enterprise discussion which you are really comfortable with, people think of that as something on the political right. When you think about the poverty discussion, that is something on the left. That is wrong, right . What we do . How can acumen and aei do to build better dialogue . It is not about political win it is about helping people. Any thoughts about this . This is one of the reasons that i so deeply appreciate you as a leader and what you represent and we need more views. So thank you for being you. Thank you. And i just want to make sure that everybody got that [laughter] and we are not afraid to talk about where we disagree, but lets start with the 85 of agreement. Second, i think we need to listen to more voices. Some of the most extraordinary and frankly, surprising conversations, it were incredibly intimidating when i first started them, were from the community. Imagine writing a book him and asking someone, what do you think book, and asking someone, what do you think . We live in a really cool market system. We dont get health care unless we pay up front. So we die. That is a powerful conversation about policy makers, they wish they could listen, starting with the people who who our most impacted by the policies they are creating. Maybe they would start to have a little more empathy and build smarter conversations that translated into smarter policies. So maybe i should bring groups to nairobi and all these places for people to see. Do you think that this insight about the complete harmonious this between poverty relief and Venture Capitalism is understood . What can we is this the same problem we have in the United States . Im going to assume this is not simply relegated to south asia and subsaharan africa. Do you think the poor does not have an of access to everything from the safety net to fair and Free Enterprise . It is absolutely the same in the United States. Where it does differ is that weve got so many different Public Programs that are often dysfunctional. They could be made more functional if Companies Just pushed. When you look at our health care system, the United States spends far and away more money on both private health care and Public Health care than any other country in the world, and yet you look at how our numbers are getting worse and worse and worse, particularly for the poor. We rate like anglo like bangladesh. Africanamerican males versus bangladeshi males. On life expectancy, Maternal Mortality rates it is the same in mississippi and alabama. It is very bad. Rates like the city of alabama. Some of the poorest countries are worst. How do we change that . The opportunities for social entrepreneurs. But a way to create a more efficient way to get people axis that saves money and measures that the country will celebrate those changes, rather than yelling at each other because of ideological risks. When you look at a crystal ball a little bit, how we can fix problems of poverty, somebody else who does that is alaska is bill gates. The bill gates. Bill gates made a prediction, we can define property the way we want, like under five dollars a day. The way we look at it is under three dollars a day. He said poverty will be effectively eradicated by the year 2035. What do you think . I think if your definition of true property is a technical definition of somebody making less than five dollars a day, or countries who fall under the category, that is a real possibility. If your definition of true property, which is our definition in acumen, which is much more connected to Human Dignity, having the choice and freedom, and i saved to send my children to school aa little bit higher. I think that, our world would be so much more than the world we all want if we look at property in both material and psychological terms. We all want the same thing. But we have a long way to go, by definition in the distaste we do not have poverty, but a quarter of our kids go to bed hungry at night. That is when we need to define poverty based on a lack of capability, a lack of choice. Interesting, it is more of a need that suggest, of course there will of course there will be challenges at 2015. 25 of schoolchildren does not need the medical needs. How can this all work . Unless you make sure you have people who are willing to participate. The definition of need, of course it is complicated, tommy a little bit more, what does it mean for people to have Human Dignity . It means that when i wake up in the morning i actually have the opportunity to work, in many places which we work people have been resettled government hasnt and they have to take a bus into town for two hours in the hope that somebody will hire them for the day labour. That often does not happen so they do not go. It means that you do not have to prostitute yourself or go to a Money Laundering place that will keep your family in poverty, you need to keep a child alive and healthy. It means they are children can go to the school you want, the way to get their kids on food. It means to get the basics, taking care of so that you can really start to dream. When you figure 3,000,000,000 people on the planet making leicester less than three dollars a day, youre missing the opportunity for those people to be amish lessons and einsteins. What i can say right now, is that poor people are not losses. If you treat poor people badly, in the sense that we treat them as assets will get them capital and i will give them an success and dignity. Is this your approach . Do you think you can join my team . [laughter] this is revolutionary. Let me give you an example of the third way. Im sorry you eating lunch, but if you are stop. Year 3 Million People living in the slums in nairobi. You have almost 2,000,000 people. These are places which are known for the on safety places. There is no infrastructure, the market says no way are we ever going to go into these places. The charities say, these people need toilets. But what do you do with the waste, who would ever want to go there . Or people do is defecate in a plastic bag or paper and throw it. So that is there for everybody to get sick. This is where the millennium is so amazing, if you look at that problem for a market perspective, from a solution perspective based on dignity. They said, okay. Lets create a toilet that people really want to go to. That is a technical thing to separated, and never smells, you clean after use, you pay five shillings for an adult two per kid. That turns into a fertiliser. The idea is that you will go onto the market. Building a new market for human organic fertiliser is going to be sounds turkey. Turkey deal. Were getting now 300 toilets are open running. If this thing works, and it may take 10 years, we might have a model for sanitation that actually provides jobs, create better agriculture and brings Human Dignity. That is the way we should start thinking. Is not just people that assets. Do not go there. [laughter] i was going a really bad track. Thank you for saving me. Before we turn to the audience, we have about 20 minutes left. We have a little young people here. Who would want to be you . I want to be you. I would like you to give us some advice. You work for manhattan bank, for the traditional sector, you travelled, you cannot just do that. It is not a career, it is something that takes a lot of time, when are you going to tell the ordinary people who want to put spain this but do not have your background. They want to get involved and have a value. What would you say to people . We have had to build a load of tools. The first thing that we did, was created a program for those who really want to go into this work. We take 10 people a year. Now we get about 1200 applications from 12 countries. When we have even more need in the countries that we started, wwe started with regional programmes, we have in pakistan and west africa. We got another 2000 applications for those programs. You start to see the offer out there. We told young people to start chapters, there is one even in washington. There is five or 700 people in the washington chapter. These are Young Professionals who want to get involved in this work. Activism is just one channel to do it. The chapter member said, can you not give us some of the training your giving to our fellows . We started doing it in leadership, social metrics 100,000 people are taking those courses this year. You go online, and you take those courses and start learning. There will be opportunities to building your own social enterprise. Obviously, financially supporting organisations. In some ways what you do with this generation, there is almost an over reverence for the enterpreneur. You need new thinking. Four people were ever they are to start training the way they define their own success, whether youre working for a corporation, in wall street or in a church. You should think, is my actions bring in more freedom and dignity to other people . When you start shifting in this way we can start creating more unconventional partnerships to make the change that the world is crying for. That my actions to date neglect more dignity . Im going to turn to the audience now. You talked about chapters, he talked about courses that people can do, yyou talked about the fact that investing capital in the organisation is a great thing to do, on the website you get all the information for these things. People who want to get involved can do to your website. What is the website . Acumen. Org. Im a research associate, i was wondering if you could elaborate a little on how you work with a government structure and the Civil Society, and what you do when you see the structure barrier . Acumen did not start thinking about working with the government. It is one of the companies that worked with us which partners with the government. The real innovation that i am starting to see in the world, is coming from corporations. I have literally had conversations with three different ceos that have either the technology that we are talking about. They are either too small or too hard to roll out a low income markets. They and their employees are starting to ask themselves, if we can do this, we have the moral obligation to do it. I think that is a huge opportunity for different kinds of partnerships. That is pushing the Civil Society to learn more about the corporate, as well as a corporate to learn how to work with smaller individuals. The way we have learned this way, we do everything from innovation to bring Senior Leaders to work with our company. It is really about Building Trust and a relationship, aand ensuring there is alignment. Some people start with relationships but not honest in what they are going to get out of the deal. If we do not get better with a language around that will get the same can of defunction. Lets go right here. One of the questions we get on the chapter is half there been any successes . Beside the financial returns what are the other characteristics . We have existed of the 88 million, we brought back around 14 million. That will be reinvested. This is a tricky question that we think entirely about if you exit for the fact of exiting . There is more Financial Resources coming back to acumen, but you need to show the world something. This three companies that we are looking at is casual assets. I think that the short term side is very much overrated. We have to wait for this to play out 10 years, you going to see is a real exits. The second one, in addition to exit, when i get success i really start to think about those category breaking innovations that were not have happened without this kind of investment. Now youre in a 40 million and proven company, that is consuming to grow, we are also seeing a platform on which you can build the kind of products. That company would have spun from others, one that is a joint venture between a Seller Company and another which is a mobile banking platform. Based on the inside but the poor want access to more than light. We had to do hard work for is five years, but the real thing is that you pay a little bit every day. Economists say if you are paying four dollars a month for your solar, aand five dollars a month for a kerosene. Now with mobile mac kink you can pay . 50 a day for your solar. When you start to look at this kind of learningm ¿ is actually a public good. We are essentially an action think tank, combined to this pragmatic investor leadership organisation. You give an example of being really patient. That the success how long is a Strategic Plan for acumen . Do you know how it is going to look at . We do have an idea. We went to pakistan right after 911. We were there for 30 years, that they were going to be some really hard times, as we know there has been. But if youre really focused on Building Models that are economically sound and other with leaders that will be shifting both the Business Community and government in pakistan, you are looking at its way to 30 year horizon. When i look at that, i see a whole Ecosystem Companies and leaders that are interacting for real change. One quick example, in 10 years you can check this out in pakistan, iit is on the website. There is an ecosystem that is being built in pakistan, we have some of our fellows which left google and apple. One is building an alternative to youtube, because the country showed that youtube. Another is building a vocational company to train the low income workers. Then there is a regional leader, he is making beautiful cobblers. He was to be the apple of pakistan. His website needs a lot of work. Now you have an ecosystem of young innovative leaders. Either not even know it was happening, a kickstart campaign. The goal was 50,000, which is a lot for these workers. They have raised around 47,000 from people around the globe. Not only i do now creating a hero compared to what you see in the news like isis, but you are enabling a community to support the right values. To provide work for other people. To work forward is good enough, and that is what i think, i do not care if acumen is a big firm but is he an ecosystem that is using finance as a tool. Leadership is the most important thing we have to develop in ourselves. We to get rid of correction and to build a world which is for human beings. One quick emphasise, jacqueline talks about a 30 year timeline. A 30 year in a Strategic Plan, she has Something Like a convert talent. There is this notion of 50 years from now acumen is going to be here, we might actually see the face of somebody who is going through one of these projects. Whos next . My name is vanessa, i am a adviser. I want to talk about the role of innovation to empower these individuals and become innovators have you seen effective models . Especially sombre might not have access to online . What you mean by off . Off line. What is exciting is that these online tools are being used by off line communities. This idea of a companymeant, it is very underrated, something we need to think about how we build our companies. I have a quick example even of a young man who read my book and decided to create the clubs across kenya. They have also cratered tedx. When i first met them, one go was working selling eggs on the street. What they need is cheerleaders, then it gathering space and somebody to recognise as an institution that has to be some safety in this class. Too often we have the workshop, and then you go back to the desolate site that if you hold your head to hide somebody is going to push it down. How do we build passages for people that are not only innovating, so they have a group around them which will carry them through. We look for quick results and technical boxes to check. We have time for one more, so were not going to get everybody. You have your last question today. From an investor perspective, you speak about this young people im starting to think about my retirement, i fully share your goals, would you advise any people to put all their money in acumen . 50 in acumen and 50 in other investment. Number two, if you look at the problems in india, when you look at problems like education, where do you frame the problem as private sector concern or is it more of ngo charity . I see these families support, mmy first instinct was i do not have the model of the resources to this person. The product question is when you frame the issue for the private sector, and when her friend as Public Sector . The first question is, shall we give you or your money . The second question, i actually no longer to say, this is a government question this is a private question. 40 of the government schools in india and pakistan. The private sector is not reaching people who are making one dollar a day. They sent their children the even though there is very low learning. The question for me is, can we use the market as a listening device . As a way to understand how we can be more efficient and effective, but not lose all brains in the heart we need every child to be educated so they can be displayed and see the infinite potential, so how do we use our Resources Private and public to ensure that each child has that education. If that is our end, it is not a private sector solution or a public, at least we will have a much healthier those models which actually work. The continued to stay in our agility ideology, will get where were going. She is talking about a radical approach to get things that work for the people who need it the most. Please join me in showing our support. [applause] [people talking] sport journalist and harassed official will talk about the future of the sport college. Is about womens athletics. You can watch it tomorrow at 8 am and 10 pm. Here is a preview. I think, one of the places where were heading right now that is scary to me, especially at the lower tier schools in the big five, as they struggle to catch up i can see a approach of non revenue sports. And they will spend more money on the sports that matter much. There will be a trend i will see. If we would go down the road of football, and basketball players. We are going to be put in a situation as a series of enterprises which will be forced to make their position. The small sports will be eliminated. Those conversations have happened and that is bad for the country, that is bad for limp exports. That is bad foropportunities of people getting out. Members of congress return on monday and extending government funding past december 11. Live coverage at 2 pm in eastern but has on c span. In the senate on c span two. Next a discussion of funding for the us military in effort to defeat isil, and the pentagon response to ebola