The Corporate Philanthropist: The Global Water Crisis - Page 6
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Innovative Financing of Water Projects
The scale of the world’s water and sanitation problem is too large and diverse for philanthropy alone to tackle. Corporations and NGOs have recognized the need to combine traditional grant-making with microfinance and business partnerships to find solutions to the water crisis.
The Global Water Challenge (GWC), a coalition of 24 leading organizations that include corporations (Cargill, Coca-Cola, Dow Chemical, and Procter & Gamble), NGOs, foundations, and research organizations, was formed to foster collaborative learning, leading to solutions to the water crisis. GWC focuses on connecting leaders and investing in sustainable, scalable, and replicable projects around water and sanitation. Studies suggest that half of all water and sanitation projects fail within five years, whereas sustainable projects maintain the water source and build local capacity and trust by involving the surrounding community, government, and businesses.
Paul Faeth, president of Global Water Challenge, says, “We have seen that when someone has an incentive to make sure a system is sustainable, it is more likely to be maintained. A private sector model can provide the impetus for communities to build, operate, and manage successfully.”
In January 2008, Global Water Challenge partnered with Ashoka, an international organization focused on tapping the power of social entrepreneurship to surface innovative solutions and entrepreneurs, to host a Changemakers.net competition, which attracted 264 entries from 54 countries. This online, global, collaborative competition, called “Tapping Local Innovation: Unclogging the Water and Sanitation Crisis,” was launched to discover and support local entrepreneurs with groundbreaking approaches to the world’s water and sanitation crisis. The three winners each received a $5,000 prize, and an investment from the Coca-Cola Foundation allowed GWC to invest another $1 million in several projects that showed promise to scale up.
David Strelneck of Ashoka works closely with Changemakers.net and the social entrepreneurs, called “Ashoka Fellows.” Strelneck says, “The impact of corporate sponsorship goes far beyond funding. When social entrepreneurs have a chance to work with corporate partners, they often gain credibility with the local government and local businesses, and they acquire skills which accelerate and strengthen their work.”
One of the competition winners, David Kuria of Kenya, has created a franchise of innovative “Toilet Malls” or “Iko-Toilets” in the Mathere slum of Nairobi, where 600,000 people lack access to toilets. For about $2, a family can subscribe for unlimited monthly access. Each of the 120 units can serve 1,000 families or about 5,000 people. This waste management and sanitation program delivers public health and environmental benefits through an economically profitable business model. Ecotact combines pay-per-use sanitation services like toilets and showers with other microbusinesses, such as shoe shine vendors and pharmacies, to attract users into the space. The additional vendors strengthen local ownership and ensure long-term maintenance. Kuria has used well-known public figures to spread the message of good personal hygiene and sanitation to reluctant members of the public.
Dow Chemical is also pioneering a water resource conservation program with a $1.5 million investment over three years with the Nature Conservancy in Brazil to restore the Cachoeira’s reservoir, one of six major reservoirs in São Paulo. The aim is to restore degraded areas that surround parts of Cachoeira’s reservoir with a goal of protecting water resources and the quality of life of those who live in the metropolitan region of São Paulo. This program will generate revenue from the sale of carbon credits resulting from the restoration. The Nature Conservancy aims to apply the lessons from this initiative and invest in similar projects in other parts of the Altantic forest of Brazil.
Dow has also provided financial support and 2.1 million pounds of plastic to International Aid for the manufacturing of 300,000 biosand filters, helping two million people access clean drinking water. In addition to its philanthropy initiatives, the Dow Venture Capital business has backed $30 million in loan guarantees for the for-profit enterprise WaterHealth International to help create communitybased entrepreneurial water businesses throughout India.
In 2008, the PepsiCo Foundation committed $4.1 million over three years to WaterPartners’ Water Credit program. This included a revolving loan fund of over $1 million for water and sanitation programs to facilitate the growth of a commercial market for micro-credit loans for water and sanitation. WaterCredit, which has seen a 98% loan repayment in most areas, offers program management and competitive lending to small communities and individuals who lack access to safe water and sanitation, most of whom live on less than $2 a day.
Last year, the PepsiCo Foundation also pledged $3.5 million over three years to Safe Water Network (SWN) to implement small water enterprise solutions in Ghana, India, and Bangladesh as well as rainwater harvesting systems in India. Each project introduces new approaches to delivering safe, reliable, affordable, and appropriate water solutions to impoverished communities in need.
SWN pursues a comprehensive approach that combines multiple sector partnerships with local ownership models to create largescale, sustainable impact. To implement programs on the ground, the PepsiCo Foundation and SWN have partnered with such organizations as WaterHealth International in Ghana and the Bhoruka Charitable Trust in India. SWN also has a strategic partnership with Johns Hopkins University’s Bloomberg School of Public Health to perform rigorous evidence-based research in the field to evaluate health impacts and incorporate real-time learning into program activities.
Kurt Soderlund, Safe Water Network’s Chief Executive Officer, says, “Ties to PepsiCo’s business units help us to better understand local market challenges — in particular the ‘last mile’ requirements to cost-effectively operate in remote, rural areas of the developing world.”
Claire Lyons, Manager, Global Grant Portfolios for the PepsiCo Foundation, says, “SWN understands that a program will never reach scale and be sustainable unless all parts are working and working well. For example, technology will fail over time if monitoring and maintenance costs are not properly addressed.” The PepsiCo Foundation and SWN partnership extends beyond the delivery of water solutions to communities in need. As the PepsiCo Foundation’s “implementation partner,” SWN helps inform the PepsiCo Foundation’s portfolio strategy for its environmental grant-making to best ensure maximum ROI on its funding. SWN is also working with PepsiCo to leverage the expertise of its vast employee and retiree base to support water programs on the ground.
Multinational corporations are partnering with organizations that recognize the benefits of pursuing a combination of grant making and supporting local enterprise. Financial investments in the global water crisis can and should be sustainable and self-regenerating, so that dollars committed can go farther in achieving the goal of universal access to clean water.
