Editor's Note: This post is authored by Giulio Boccaletti, Global Managing Director of Water at the Nature Conservancy, and Gary White, Chief Executive Officer and Co-Founder of Water.org This post was originally featured as part of a "Climate Justice" series produced by The Huffington Post, in conjunction with the U.N.'s 21st Conference of the Parties (COP21) in Paris. You can find the original post here.
In Paris, the world will seek -- once again -- an agreement on the future of climate. Yet for a billion of the poorest people in the world, the language of that agreement will not do nearly enough to address the impacts of climate change they are already feeling today.
Water is how we experience the planet's climate; droughts and floods will overwhelmingly define our experience of climate change. Meeting a growing need for water while the climate is changing will be even harder. Even the richest in the world are susceptible. The drought in the western United States has threatened California's way of life, while the East Coast was recently hit by devastating floods that made places like South Carolina look like Bangladesh.
But it is our world's most vulnerable -- those living on less than U.S. $5 a day -- that should come first in our concerns. The upcoming climate negotiations present us with an opportunity to not only address global emissions, but also test our ability to truly solve interconnected environmental issues like climate and water as a necessary means to avoid social instability worldwide. By scaling innovative financing options, expanding use of available technology and investing in nature-based solutions, we can make water available and affordable to the world's poor, freeing-up household income that drives economies and improving health conditions around the world.
Today, nearly 700 million people around the world lack basic access to water, and a striking 2.4 billion lack access to sanitation. It is not surprising that these numbers contribute to making the water crisis the highest threat to global prosperity. Yet, a persistent misunderstanding of this challenge is the notion that the poor are in this predicament because they cannot pay. The truth is, the poor spend an estimated U.S. $200 billion per year on water access.
The high costs are due in part to what the poor have to pay for bottled and well water due to a lack of infrastructure or the means to tap into infrastructure. Many of those without access rely on informal water vendors -- known as "tanker truck mafia" -- in slums around the world. The price of water in these informal markets is remarkably high and can reach U.S. $15 per cubic meter; compare that to the U.S. $1 per cubic meter paid by households in New York City.
The poor also pay in the forms of forgone income and illness. The World Health Organization estimated that the total global economic losses associated with inadequate water supply and sanitation is approximately U.S. $260 billion annually. In short, the poor incur huge coping costs because they lack access to safe, efficient piped water networks.
Charity alone will not be able to solve global access to water. Conservative estimates of the expenditures required to provide and maintain safe water access is U.S. $1 trillion with only U.S. $8 billion provided in international aid each year.
But what if we could cut those costs in half while also giving the poor much needed access to water at a rate closer to what those in developed countries pay for water and sanitation services? Such a measure would free-up more than U.S. $100 billion per year for those households and would allow dramatic improvements in water security for the vulnerable, which would have a marked stabilizing effect on social structures across the developing world.
This is possible and it does not require inventing new technology, but rather scaling proven solutions that we have seen work on the ground.
Financing urban water connections through micro loans to individuals and community groups is showing real promise in many communities. India and China are home to one-third of those without access to water and more than half of those without access to sanitation. A long trail of countries from Nigeria to Indonesia follow. For the poor that are close to an existing water grid in a city, extending financing to buy last mile connections and toilets can have huge impact in increasing access to services. The work done at Water.org has shown that, when extended a loan to pay a connection fee, people are able to tap into the water supply or build a toilet, and repay the loan in full with consistent reliability -- Water.org's repayment rates exceed 99 percent.
The growth of off-grid water treatment technologies is also showing potential for positive change. The number of rural households without access to water and sanitation is roughly five times higher than that of the urban poor. For these individuals, and some in peri-urban areas, connecting to a public utility is often not an option. Because of falling water treatment costs and the growth of social impact investment capital, there are new possibilities to set-up water kiosks and deliver treated water to dispersed populations. Off-grid solutions, such as those offered by Water Health International, allow rural communities to tap local sources of water and render them potable, at a cost that can greatly undercut their current cost.
And we cannot forget about the benefits of investing in our most basic water infrastructure: nature.The poor often live in degraded watersheds or where utilities are unable to cope with deteriorated water sources. Water funds, which create mechanisms for downstream water users to pay for upstream conservation, have shown that investments in nature-based solutions, such as reforestation and riverbank repair, can improve the quality of the water supply. This drives economic development while saving utilities money by reducing water treatment costs. A recent study conducted by The Nature Conservancy of 500 large cities shows that in at least a quarter of those cities, the savings from reduced treatment costs more than paid for the conservation activity. These interventions disproportionately benefit the rural poor and contribute to a sustainable water management system.
Social entrepreneurs, powered by smart philanthropy and social impact investing, are spurring this trend to leverage market-based solutions in service to the poor, seeing them not as a "problem to be solved" with traditional charity, but as having intrinsic power as customers. Smarter, more efficient solutions allow the poor to redirect their coping costs to affordable, sustainable and higher quality water and sanitation services.
In the year when the world is concerning itself with climate change, we must address the current impacts, including global water security. That starts with providing access to basic water and sanitation. By putting the needs of the poor front and center during the climate discussions, we stand to address many of today's greatest social and environmental challenges.
Editor’s Note: This post is the first in our new series, Dilemmas of a WASH Funder, and was guest authored by David Rothschild, principal of the Skoll Foundation’s portfolio team. David explores the dilemmas that he confronts as a WASH funder, including the challenges and opportunities associated with setting ambitious goals and taking risks. If you are a WASH funder and would like to contribute to this series, contact us at: WASHfunders@foundationcenter.org.
What a moment! At an April press conference, the president of the World Bank, Jim Yong Kim, held up a handwritten number and announced, “2030. This is it. This is the global target to end poverty.”
That historic moment also served to underscore some of the dilemmas that I and other WASH (clean water, sanitation, and hygiene) funders grapple with. How do we establish audacious — yet realistic — goals? How do we announce an ambitious goal — such as full water and sanitation coverage in a number of countries — and have confidence that we have a reasonable chance of achieving it?
What should our role as funders be, if not to push boundaries? If we just continue to provide incremental progress, we may never solve this problem. If the president of the World Bank can put forth aggressive goals, then foundation funders can — and should — do the same. After all, moving the needle on the world’s most pressing problems should be our moral imperative.
Don’t get me wrong: I’m not making a “pity-the-poor-funder” type argument. The hard work in the WASH space is being done by governments, NGOs, companies, local water committees, and others that provide frontline solutions. My role as a WASH funder is to look for solutions that can help people and communities solve their water and sanitation challenges in a way that is scalable and changes the paradigm of incremental change. I cannot justify funding projects that simply dig more wells.
But there are serious dilemmas inherent in establishing ambitious goals. Aggressive long-term goals are not the same as project-level goals. They demand that we consider questions related to systems, dependencies, and adjacencies, such as:
- How do we avoid falling into the trap of providing poor solutions for poor people? Is it okay to be comfortable with the stated World Health Organization goal of every household being within 500 meters of a water point — a rather low bar — or should we strive to help communities move themselves out of poverty sooner rather than later by bringing them a greater level of service? Is it okay to sacrifice greater geographic reach in order to provide a smaller number of people with better services?
- How do we square the fact that while water provision and sanitation provision are different endeavors requiring different skill sets and organizational approaches, we often ask organizations and institutions to do both? Is it acceptable to provide access to clean water without providing sanitation? If we are serious about the health benefits of clean water and sanitation provision, shouldn’t we aim for full sanitation coverage? And is it possible to reach 100 percent sanitation coverage without resorting to shaming tactics?
- According to the WHO/UNICEF Joint Monitoring Programme, 30 percent to 60 percent of many water points fail in their first two years.People walk past broken taps and return to polluted water sources. If funders demand sustainable services after a project is implemented, how should we insist on accountability years after projects are implemented and funds accounted for? Might an emphasis on sustainable service commitments lead communities to depend on implementing agencies in ways that are unhealthy?
- Should we insist on full coverage in areas where a portion of the local population isn’t interested in water or sanitation services? Are we comfortable with the idea of 100 percent coverage if it means government forcing the hand of a small reticent population?
- Water is a scarce commodity. We need to fund WASH solutions that consider aquifer depletion and other water resource management issues. Yet WASH organizations often are not engaged on regional water use issues such as water for agricultural use. How can we improve access to water and sanitation while also improving water scarcity situations?
- The vast majority of fresh water is used by the agricultural sector. Why aren’t more linkages made between the agricultural and WASH sectors? How can agricultural water use planning incorporate WASH planning?
While these are tough questions, there are answers to all of them. (Indeed, I can almost hear my friends in the WASH space responding as they read them.) Please post responses in the comments section below — and keep an eye out for a series of articles on these questions on SkollWorldForum.org soon. As WASH funders, we have to tackle these questions, but we should not let that stop us from setting big goals. We should welcome the risk and hold ourselves accountable to our goals.
It is imperative for us to be innovative. The financial contributions of foundations and NGOs in the WASH world are miniscule compared to the total amount spent on WASH activities. The vast majority of WASH projects are implemented by governments and are often supported by multi- or bilateral financial institutions. Indeed, the vast majority of piped water is delivered by publicly-owned entities. The size of the global sanitation “market” over the period 2007-2020 is estimated by the World Bank’s Water and Sanitation Program to be about US $152 billion. (See the WASHfunders funding map for side-by-side comparisons of foundation funding and bi- and multilateral funding.) So what can foundations and other private funders do to make sure our modest financial support for WASH activities is catalytic and ultimately makes a difference?
As a foundation funder, it can be easy to fall into the feel-good trap of simply providing more access to wells. Although that will help people, in the larger scheme of things it won’t move us closer to a global solution to the WASH crisis. As funders of social entrepreneurship in the WASH field, we at the Skoll Foundation have an obligation to push the envelope and establish aggressive long-term goals. We need to find those institutions that are shifting the paradigm, opening new markets, changing systems and demonstrating success at scale. We are proud of the groundbreaking work our grantees are doing. Organizations like EcoPeace, Gram Vikas, Water for People, and Water.org are challenging the status quo and bringing innovation and long-term solutions to the water and sanitation field.
As funders, we need to push the sector to work at scale, improve or abandon failing systems, and not accept incremental change. Indeed, that is much of what social entrepreneurship is about. Doing any less than that would mean we were just one more drop of help in an ocean of problems.
Editor’s Note:This guest blog is authored by Jim Chu, CEO of dloHaiti, a for-profit, investor-led initiative to provide cleaner and more affordable drinking water for underserved Haitians. Named after the Haitian Creole word for water, dloHaiti recently earned a top distinction from Imagine H2O — a global business plan competition and accelerator for water startups. In this blog, Jim discusses the merits of market-based approaches to WASH solutions.
Invariably, we are shown scenes of handpumps in poor villages in Africa or Latin America and happy children drinking water. We instinctively reach for our checkbooks, ready to fund worthy WASH projects that change people’s lives for the better.
When statistics later reveal that most charity-driven WASH projects fail or that the majority of the handpumps in those pictures stop functioning within a few years, most of us usually don’t pay attention. (According to a 2007 UNICEF study, 40% of the handpumps in Africa no longer function and most handpumps have a functional life of 3-5 years.) We like to believe that if we provide enough money — or the right technology or more equipment — we can solve most of the issues of the poor in developing countries. For many charitable projects, especially in WASH, this is a mistaken belief.
Sustainable water and sanitation infrastructure — whether it’s a large water treatment center, a network of pipes, or just a community handpump — requires the right institutions to make it work long-term. Whether you call it “capital asset management,” “community-managed systems,” or just “sustainability,” it means that the recurring income, technical skills, supply chain support, and the right financial incentives need to be in place to keep things working. For many donor-funded, NGO-driven projects, this is an important aspect that’s missing.
However, there are already well-established institutions in almost every country that can provide sustainability: the government and the private sector. But many fear governments in poor countries. Isn’t it their failure to provide basic services to its citizens that is the root of the problem? Who wants to give money to governments whose leaders will just shift it to an overseas bank account? Even more, many fear private markets and business in particular. Providing water shouldn’t be about making money. Water is a basic human right, after all, so shouldn’t it be free?
This line of thinking leads to a situation similar to that in Haiti, where I’ve been working in WASH since 2010. The government is starved of funds to drive any meaningful change, much less multi-billion dollar projects. The private sector thus provides much of the services for potable water to the population. Unfortunately, their model relies on water trucking and is wasteful, dirty, and expensive. The Haitian consumer suffers, paying 12 cents per gallon for treated potable water — that’s 80 times more than the average price of municipal water in the U.S. Meanwhile, well-intentioned NGOs put in place programs that are only stopgaps, or they stop working after funding dries up because there is no sustainable capital asset management model in place. Worse, their efforts can put well-run local water providers out of business. I call Haiti a WASH equipment graveyard; I’ve seen enough non-functioning and abandoned water systems in Haiti to lose all hope — and I confess that I’ve contributed to some of that myself.
Successful WASH projects need to have a clear strategy for ensuring that the right institutions, resources, and incentives stay in place to keep it self-perpetuating — or even expanding — once philanthropic funding ends. Governments clearly have a strong role to play, and the endgame is strengthening — and cleaning up — their capacity to properly regulate and eventually execute a comprehensive WASH strategy for their populations. NGOs cannot replace the long-term role of the government.
Philanthropic capital could also do more to leverage the private sector to achieve social goals. An impactful role for donors is to facilitate innovations that businesses can then implement at scale. Donors can also support entrepreneurs who are trying to solve hard social problems by creating better, cheaper products and services that serve the basic needs of the poor.
So what’s standing in the way of applying more market-driven approaches in philanthropy? Some of the barriers to a productive business-philanthropic partnership are cultural. Whether it’s about risk-taking, understanding markets, or views on profit, a bar conversation between a Doctors Without Borders volunteer and a marketing manager at Apple has a good chance it will end in tears. But businesses should not be seen just as a source of philanthropic funding or a group to be disdained. The same people who are creating breakthrough consumer products or taking big risks to innovate for profit could be spending their time figuring out the best market-driven ways to lower the cost of water in Haiti.
Ultimately, we need more entrepreneurs who are willing to build new companies that provide financially sustainable solutions to the world’s water challenges. Imagine H2O, a global conduit for water entrepreneurship and innovation, is leading the effort to identify and support promising water startups. The organization’s business plan competition and accelerator program is a powerful path-to-market opportunity for entrepreneurs entering the water sector.
My call to action — whether you are a donor, MBA graduate, or NGO volunteer —is to get business and people in business more involved in what they do best — innovating — to improve the lives of so many at the bottom of the pyramid.
Editor’s Note: Leading up to the U.S. Philanthropy and WASH seminar at World Water Week next Wednesday, August 29th, in Stockholm, we decided to pose three questions to the panel’s esteemed group of foundation and NGO leaders to give you a preview of their conversation. We will post a new interview each day this week so check back daily or sign up for e-mail updates. In this post, David Rothschild, principal of the Skoll Foundation’s portfolio team, speaks about the Foundation’s focus on social entrepreneurship and rethinking traditional funder-grantee relationships to drive large scale change.
1. Describe what your organization does and what your role is.
The Skoll Foundation drives large scale change by investing in, connecting and celebrating social entrepreneurs and the innovators who help them solve the world’s most pressing problems. Jeff Skoll created The Skoll Foundation in 1999 to pursue his vision of a sustainable world of peace and prosperity. Social entrepreneurs are society’s change agents — creators of innovations that disrupt the status quo and transform our world for the better. By identifying the people and programs already bringing positive change around the world, we empower them to extend their reach, deepen their impact, and fundamentally improve society.
We are now one of the leading foundations in the field of social entrepreneurship. Over the past 12 years, we have awarded more than $315 million, including investments in 91 remarkable social entrepreneurs and 74 organizations on five continents around the world that are creating a brighter future for underserved communities. In addition to our grantmaking, we fund a $20 million+ portfolio of program-related and mission-aligned investments. In 2003, we partnered with the Saïd Business School at the University of Oxford to launch the first academic center dedicated to social entrepreneurship, the Skoll Centre for Social Entrepreneurship.
The Skoll Award for Social Entrepreneurship celebrates organizations with high impact innovations that have a proven track record and are poised to scale their impact. Each year the foundation awards 4 to 6 organizations, led by an individual social entrepreneur. The award comes with 3 years of core support funding, usually between $750k and $1.5m total. Along with the award comes significant recognition; the organization becomes part of our family of Skoll Awardees, qualifying it for other opportunities. More information about the Skoll Awards, applications, and criteria can be found here.
Beyond investments and partnerships, we also host the annual Skoll World Forum, the premier conference on social entrepreneurship, and share the stories of social entrepreneurs through partnerships with leading film and broadcast organizations, such as the PBS NewsHour and the Sundance Institute, which help drive public awareness of social entrepreneurship and its potential to address the critical issues of our time.
As a principal of the portfolio team, I manage a variety of key relationships, including funded social entrepreneurs, domain experts, policy makers, corporate partners and co-funders. I develop and structure funding opportunities to drive large scale change in the focus areas of the foundation, with a special emphasis on water and sanitation, as well as tropical deforestation.
2. Tell us one provocative question or issue you hope to tackle on the U.S. Philanthropy and WASH panel, and why.
How can funders and potential grantees get past the “hogwash?” “Reporting” in the traditional sense goes just one way — from grantee to funder. This often ends up as data for the archives. How can we capture information in a way that’s useful for better decision-making by both funders and grantees?
The organizations doing the work on the ground are the ones implementing WASH strategies — they are the ones testing new ideas and approaches, learning from mistakes, and engaging directly with the communities and individuals that need improved WASH outcomes. Ideally, they are constantly innovating and adjusting. Yet traditional funder-grantee relationships can discourage or even stifle innovation. Funder-grantee relationships can be blurred by the desires of funders to only hear about the “impacts” their specific funding is driving, or by NGOs painting an unrealistically rosy picture hoping that funding may follow. Real world learning that leads to improved outcomes often results from talking openly about mistakes and actually making the big course corrections that can be so hard to do. When a funder and grantee have signed a grant agreement focused on specific activities targeting explicit outcomes, a grantee can become wedded to those activities, even if a course correction would actually improve those very outcomes. And if that is true, then what are the impacts that foundations really reward? What’s the behavior change that could unwind this perpetuation of only rewarding successful short-term implementations? How can funders and grantees use reporting processes productively to inform decision-making and achieve desired long-term outcomes? Can we do more to fund on-the-ground, real-time innovation? What are some of the best practices that ensure funder-grantee relationships that drive large scale change — the high impact outcomes we all want?
3. What are you most looking forward to about Stockholm and/or World Water Week?
I haven’t been to World Water Week for a few years, so I am looking forward to reconnecting with friends and colleagues, meeting some new folks, and learning about the latest research, innovations, and progress in the field.