What’s different is that McCormick stayed long after the waters receded, expanding its efforts to support vanilla farmers in Madagascar, one of the world’s poorest countries. Besides rebuilding primary schools and funding vanilla processing centres in remote communities, it helped create a farmer-owned cooperative, giving farmers more control over their crops. McCormick also teamed up with WWF to make sure vanilla is sustainably farmed, restoring riverbanks and training farmers on water conservation. In addition, the company provides interest-free loans and healthcare insurance to vanilla growers, in concert with the German foreign aid agency and Biovanilla, a local supplier.

All this is good for farmers, who have to make a living in good times and bad, and for the environment that sustains them. It’s good for McCormick, too, helping to assure the company of a long-term supply of vanilla, one of the world’s most popular flavours.

“Improving farmer livelihoods is a major priority,” says Lawrence Kurzius, McCormick’s chairman, president and CEO, who has broadened and deepened the company’s commitment to social and environmental responsibility since becoming its top executive in 2016.

Based in Hunt Valley, Maryland, a suburb of Baltimore, McCormick employs 12,000 people, booked US$5.3 billion in sales last year and sourced agricultural products from more than 80 countries. While other food companies like Ben & Jerry’s and Clif Bar may be better known for their work on sustainability, McCormick’s efforts are serious and wide-ranging, Kurzius explains during an interview over lunch at McCormick headquarters. Prepared by a corporate chef, the menu includes vegetarian “scallops” and a pan-seared North African–spiced rockfish, all of it well seasoned, of course.

McCormick’s approach to sustainability, which the company calls “purpose-led performance,” is embedded throughout the business, Kurzius says, and shapes its dealings with farmers, workers and the planet. “It’s not a program or a project,” he says. “It is a principle that underlies everything that we do.”

Under Kurzius’s leadership, McCormick named Michael Okoroafor as its first full-time vice-president of sustainability, set the company’s first science-based greenhouse gas reduction targets, made a major commitment to renewable energy, and transformed a telephone-company office building into a US$170 million LEED Gold–certified corporate headquarters.

All of this has helped McCormick to land a spot on Corporate Knights’ Global 100 Sustainability Index in each of the last four years and to be ranked first in the food products category for the fourth year in a row, ahead of such better-known companies as Unilever and Campbell Soup.

McCormick shareholders have also done very well. In the last five years, the company’s share price has more than doubled, while the S&P 500 Index has grown by about 35%, as of May 5, 2020. McCormick’s brands include Frank’s RedHot, French’s, Lawry’s, Old Bay, Thai Kitchen, Club House and Zatarain’s, as well as McCormick herbs and spices. Sales to consumers bring in about 60% of revenues. The remainder comes from sales to food and drink companies and restaurants; PepsiCo is its biggest customer, the company says.

Okoroafor is the face of the firm’s sustainability program. The youngest of four children, he was raised in a village in Nigeria, where his mother was a subsistence farmer and his father was a railroad worker. “My mom would farm from morning until night,” he recalls. She encouraged him to work hard, and Okoroafor earned scholarships to a Catholic boarding school, to the University of Nigeria and, eventually, to Michigan State, where he earned a PhD in polymer chemistry. His wife, Ngozi Okoroafor, also holds a PhD in chemistry.

Before arriving at McCormick, Okoroafor worked at Bausch & Lomb, PPG Industries, Coca-Cola and Heinz, accumulating more than 40 patents and helping to develop such innovations as the Coca-Cola PlantBottle, a recyclable PET bottle made partially from plants. His initial focus at McCormick was packaging – the company is seeking to ensure that 100% of its plastic packaging can be reused, recycled or repurposed – but he eagerly accepted the opportunity to work with farmers as well, which reconnected him to his own childhood. “Making an impact is what drives me,” he says.

“We need an enduring supply chain. If we don’t have anything to sell, we don’t make money.”

—Michael Okoroafor

McCormick’s work with farmers focuses on what it calls its five iconic ingredients: vanilla, red pepper, black pepper, oregano and cinnamon. Vanilla is by far the most complex, both in its flavour profile and in the process of cultivating and processing vanilla pods, which come from vine-like plants that wrap themselves around small trees. It’s labour-intensive work that requires patience and good timing: new vanilla vines take several years to mature and have to be pollinated, by hand, during the early-morning hours on the first day that the delicate orchid flowers bloom. Once harvested, bean pods are soaked in hot water at night and dried during the day for as long as a month. “The curing of vanilla is a fusion of art and science,” says Okoroafor. Madagascar produces about 80% of the world’s crop, because climatic and soil conditions are right, labour is cheap, and growing vanilla has become part of the culture.

In the wake of the 2017 cyclone, which hit during a worldwide vanilla shortage, the crops became so valuable that theft was rampant. Farmers also faced exploitation by middlemen, known as collectors, who offered them high-interest loans during the so-called lean season and underpaid them for what they grew. “The net effect is that the farmer is impoverished and the collector is driving a Mercedes,” Okoroafor says. Middlemen also mixed different grades of vanilla or bought premature vanilla to increase their profits, thereby degrading quality.

The risks to McCormick were clear. “We need an enduring supply chain,” Okoroafor says. “If we don’t have anything to sell, we don’t make money.”

With matching funds from USAID, McCormick and the National Cooperative Business Association’s international arm, NCBA CLUSA, organized a co-op of vanilla farmers in the Sava region of Madagascar. Farmers run the co-op and sell a substantial portion of their crop to McCormick. “You’re getting the buyer coming directly to the farmer,” says Jonathan White, director of private sector partnerships at NCBA CLUSA. “When that happens, more opportunities can flow down to the farmer.” Farmers get a fair price, advice about growing and harvesting, and the opportunity to certify their product as organic or fair trade if they choose.

McCormick can count on a steady supply of high-quality vanilla.

Even so, it does not want to become dependent on Madagascar, so it has tried to develop alternative sources of vanilla in Indonesia and East Timor, again working with NCBA CLUSA. Farmers at a well-established cooperative in East Timor called CCT have thrived by growing coffee, which they have sold to Starbucks since the 1990s, but they have begun to grow vanilla and cloves as well, to diversify their sources of income.

Other notable sustainability efforts at McCormick include a partnership with CARE, studying women’s contributions to spice farming. McCormick commissioned the development non-profit to do village-level surveys designed to find ways to improve the status of women producing vanilla in Madagascar, black pepper in Vietnam, red pepper in India and oregano in Turkey. The ultimate goal, the company says, is to recognize the contributions of women and empower them in tangible ways. Rahul Chandran, managing director of CARE consulting, says, “These are really complex issues. They are trailblazing for their sector.”

Internally, the company is also well on its way to meeting goals for diversity and inclusion. Women hold 49% of middle management jobs and 40% of senior management jobs, the company says in its sustainability report. It aims to get those percentages up to 50% by 2025.

Meantime, its climate footprint is shrinking. McCormick has been buying small amounts of solar energy since 2006 but stepped up its commitment last year by making a deal with Constellation, an electricity provider, to purchase solar energy to power its corporate headquarters, four manufacturing plants and distribution centres in Maryland and New Jersey. The initiative will help McCormick achieve its goal of cutting absolute carbon emissions from its own facilities from 2017 levels by 20% by 2025.

Kurzius says all of these efforts are good for business in multiple ways. “Sustainability is increasingly important to investors,” he says, particularly long-term institutional investors such as pension funds and insurance companies.

Corporate customers such as PepsiCo and Walmart also reward the company for its environmental practices. As well, those practices help attract and engage staff. “The best employees want to work for the good guy,” he says.

For Kurzius, there are personal rewards, too. He has been interested in the environment since growing up in Huntsville, Alabama, where he was president of his high school ecology club. An early Tesla buyer, he notes that the parking lot outside company headquarters is equipped with electric-car charging stations.

“I’d like to think this will be one of my legacies,” he says.

Marc Gunther is a veteran journalist, speaker, and writer whose focus is business and sustainability.

The post How McCormick is making sustainability its secret spice appeared first on Corporate Knights.

Is a revolution coming to dinner? Well, maybe.

These authors are calling for a revolution that will be driven by new ways to produce meat alternatives and grow real meat that will all but eliminate meat produced on so-called factory farms. Conventional meat, they say, will be replaced by plant-based alternatives from companies like Beyond Meat and Impossible Foods or, down the line, by so-called clean meat, a term used to describe meat that is grown from animal cells, without the need to raise or slaughter cows, pigs of chickens.

Clean meat “could be the biggest upheaval in how we produce food since the agricultural revolution some ten thousand years ago,” writes Shapiro, a vegan and lifelong animal-welfare activist who until very recently was vice president of policy engagement for the Humane Society of the United States .

Freston, an author, vegan and wellness expert, and Friedrich, the co-founder and executive director of the Good Food Institute, are also advocates. Their book envisions a future in which people look back at “the collective efforts of individuals, entrepreneurs and communities that pushed farmed animal protect from the centre of the plate to the side of it – and then off it entirely.”

The entrepreneurs featured in these books do not lack hubris. Hampton Creek, a company best known for its egg-free Just Mayo, has yet to sell an ounce of meat, but a sign outside the lab where it is developing technology to grow chicken from cell banks says: “DESTINATION: World’s Largest Meat Company by 2030.” Pat Brown, a Stanford biochemist and founder of Impossible Foods, last year told a reporter that “we fully intend to be producing 100 per cent of the ground beef in the world within the next decade or so.”

That strikes me as, er, impossible. But there’s no doubt that momentum is building behind alternatives to conventional meat, largely because of the toll that the industrial-scale farming of chickens, pigs and cows takes on the planet, on public health and, of course, on the animals. Food Navigator, a mainstream industry publication, chose cellular agriculture as the No. 1 food and beverage trend to watch in 2018, saying it has “the potential to completely transform the food supply.” The No. 2 trend? Plant-based innovation.

Hey, maybe a revolution is brewing.

Technology, after all, has transformed the way people treat other animals before. The slaughter of whales was ended in the 19th century when the discovery of kerosene eliminated the need for whale oil. Horses that once left piles of stinky manure on New York City streets gave way to cars. Today’s factory farms were enabled by antibiotics, hormones, pesticides, automatic feeders and air conditioning, without which it would be impossible “to cram tens of thousands of chickens or other animals into tiny coops, and produce meat and eggs with unprecedented efficiency – but also with unprecedented misery,” as Yuval Noah Hariri notes in the introduction to Clean Meat.

Shapiro’s Clean Meat is the better of these books. He’s a vegan and an animal-welfare activist but his book is well-researched and fair-minded. He delivers an inside look at Hampton Creek, Memphis Meats, Modern Meadow and Perfect Day, all of them companies that are trying to make meat, milk and leather without animals. He captures the excitement buzzing around these startups. And, to his credit, he grapples with the daunting obstacles facing clean meat: Technological (it’s hard to do), economic (it’s really, really expensive, now) and human (the ick factor that could be associated with consuming meat that was born in a laboratory). He quotes skeptics like Consumer Union’s Michael Hansen and food critic Marion Nestle, who say things like “the market isn’t going to want this” and “what’s wrong with food?”

Indeed, even among those vying to replace conventional meat, there’s debate over what path to take. Pat Brown, whose plant-based Impossible Burger is made from wheat, coconut oil, potatoes and an ingredient called heme, has said that growing real meat from cells is “one of the stupidest ideas ever.” Others argue that most consumers won’t settle for anything less than the taste and sizzle of real meat.

So far, the big money is betting on plant-based meat. Investors in Beyond Meat and Impossible Foods, whose products are  commercially available, include Bill Gates, Asian billionaire Li Ka-shing, venture capitalists Kleiner Perkins and Khosla Ventures, and Twitter co-founders Biz Stone and Evan Williams. Tyson Food owns five percent of Beyond Meat, which has raised about $72 million to date. Hampton Creek, which makes a variety of plant-based products, has raised about $220 million. Impossible Foods has raised about $275 million.

Cultured meat, a newer and riskier business, operates on a smaller scale. It will be years before Modern Meadow (which has raised $53 million), Memphis Meats (20 million) and Perfect Day ($2 million) make products that find their way onto grocery store shelves.

In the meantime, there are countless ways to enjoy what Kathy Freston and Bruce Friedrich call clean protein and avoid animal proteins. They argue, convincingly, that it’s easy to get plenty of protein without consuming animals. Citing scientific studies, they also write that the consumption of animal protein has been associated with heart disease, cancer, obesity, diabetes, Alzheimer’s disease, bone deterioration and impotence. About those claims, I’m skeptical, given our limited understanding of nutrition. Others, of course, blame carbs or sugar for many of those same ills. If you’re confused, join the club.

Freston and Friedrich are on more solid ground when they advise people on how to eat well. Reading Clean Protein led me to try plant-based substitutes for milk, eggs and cheese in the last few days, with mostly happy results. It persuaded me to add more beans and nuts to my diet. The fewer animal products that I consume, the better I feel, and the better I feel about myself.

Sadly, though, it’s unlikely that individual dietary changes, by themselves, will get us where we need to go. As Freston and Friedrich write:

Animal, environmental and health-care nonprofits have been encouraging a shift away from animal agriculture for decades. Nevertheless, meat consumption has gone up dramatically since that time, while the number of vegetarians has barely budged.

Change is hard.  I don’t know if we’re going to get a clean meat revolution. What I do know is that we need one.

The post Beyond meat appeared first on Corporate Knights.

But what if the programs aimed at solving those problems don’t work? Or cost too much? Or create unforeseen consequences? How can they be improved?

Only a handful of foundations try to address those bigger questions. They want, not just to solve problems, but to improve the way we solve problems. One of the most interesting is the Laura and John Arnold Foundation (LJAF), which was created in 2008 and reported assets of $1.7 billion (U.S.) at the end of 2015. The Arnolds – he’s a former hedge fund manager whose net worth is estimated to be $3.3 billion – say the LJAF will

systematically examine areas of society in which underperformance, inefficiency, concentrated power, lack of information, lack of accountability, lack of transparency, lack of balance among interests, or other barriers to human progress and achievement exist

and then apply “a rigorous and comprehensive entrepreneurial problem-solving approach” with the “goal of igniting a renaissance of new ideas and approaches applied to persistent problems.” Whew.

Big ideas, to be sure, but this foundation has already made big waves. As part of a wide-ranging criminal justice initiative, LJAF funded the creation of a database that has changed the way judges in numerous jurisdictions, including the states of Arizona, Kentucky and New Jersey and the city of Chicago, decide which defendants will be released before they go to trial. For better or worse – better, in my view – it’s a vivid example of how philanthropy can change public policy, as this story about bail reform in New Jersey explains.

LJAF stands apart because of its commitment to evidence, both to support its own programs and to improve the work of governments, foundations and nonprofits. In 2015, it launched a division called Evidence-Based Policy and Innovation, which, among other things, funds rigorous evaluations that include, where possible, randomized controlled trials (RCTs) designed to figure out whether programs work. LJAF’s evidence-based policy team is currently funding 41 evaluations of programs on a variety of topics, according to Jon Baron, the foundation’s vice president of evidence-based policy.

These evaluations, Baron told me last week, are “aimed at building the body of social programs with strong replicated evidence of impact on important life outcomes.”

Unhappily, that’s harder than you might think.

Most programs, when tested, don’t work

“A lot of programs claim to be evidence-based,” Baron explains, but “many of them overstate their evidence.” When subjected to rigorous tests, many well-intended programs fall short. “Unfortunately,” Baron says, “they (the tests) usually find that the program being evaluated does not produce the hoped-for effects. There’s a very high proportion of disappointing findings.”

Trained as a lawyer, Baron worked on Capitol Hill and at the Pentagon before founding a DC-based nonprofit called the Coalition for Evidence-Based Policy in 2001. He joined LJAF in its Washington office when the foundation absorbed much of the coalition’s work.

Given the Trump administration’s disregard for facts, let alone evidence-based policy, I asked Baron for, er, evidence that evidence can change how the government operates. A clear example, he told me, is the work of the Nurse Family Partnership, a nonprofit that provides home visits to low-income, first-time mothers; several long-term randomized trials found that these home visits improve children’s well-being, even 10 or 15 years later.

The Bush and Obama administrations expanded funding for the Nurse Family Partnership, its affiliates and similar programs that provide home visits to pregnant women. Current federal funding is about $400m per year. “There’s no question that the evidence drove the funding, in both Democratic and Republican administrations,” Baron said, adding that not all the programs have been rigorously evaluated.

Meantime, many of LJAF’s evaluations are done with foundations and nonprofits. The Michael and Susan Dell Foundation, for example, has backed Bottom Line, a nonprofit that helps low-income, first-time students get into college and graduate; preliminary studies indicate that the program works, so LJAF is funding an RCT being led by academics Andrew Carr of Texas A&M and Ben Castleman of the University of Virginia. “Bottom Line has some pretty good evidence, but they wanted to produce definitive evidence,” Baron said. The Bottom Line study is expected to cost only $159,000, in part because it relies on existing information that track student achievement. “You can do large, low-cost randomized trials,” Baron says, particularly if they build on existing data. The gains from learning which programs work and which don’t should far outweigh the costs if, subsequently, more money flows to effective programs and less is wasted on those that are subpar.

Two other examples of LJAF-funded evaluations:

• A three-year RCT of a program in Baltimore that provides free eyeglasses to disadvantaged students to improve learning. Partners include Johns Hopkins University, the Abell Foundation and Vision to Learn, a Los-Angeles based nonprofit.
• A seven-year RCT of a Big Brothers Big Sisters mentoring program for young people at risk of criminal involvement. The evaluation will track about 2,500 young people at 20 Big Brother Big Sister agencies across the US.

I asked Baron why rigorous evaluations aren’t more common. Cost is often a barrier, he said, and it’s not easy to find researchers with the knowledge and organization skills to carry out RCTs. But “the main bottleneck,” he said, “is that there’s not a strong incentive yet to build this kind of evidence.” Some funders demand evidence of impact, but many do not. “Evidence of effectiveness, in many cases, is not a main criteria in deciding what gets funded,” he said. Which is a little nutty, no?

To promote evidence-based policy, Baron and LJAF have built a website called Straight Talk on Evidence that aims to “distinguish credible findings of program effectiveness from the many others that claim to be.” It’s very good; you can subscribe or follow the blog on Twitter at @NoSpin Evidence. This week, Straight Talk on Evidence called attention to a well-designed study of a program that helped prevent sexual assault on three university campuses in Canada.

Two concluding thoughts: First, LJAF’s commitment to evidence-based policy comes at a time when the validity of social science research–and, for that matter, medical research–is being questioned as never before. (For more, read last month’s fascinating NY Times magazine story, When the Revolution Came for Amy Cuddy.) As it happens, LJAF has a separate initiative on Research Integrity that, among other things, addresses what has been called the replication crisis; it’s funding efforts to reproduce psychology and cancer studies.

Second, LJAF’s work on evidence raises questions about whether other large foundations might want to take a similarly expansive approach to improving philanthropy. The Gates and Raikes Foundations, for example, are trying to improve the quality as well as the quantity of charitable giving, Gates through the Giving Pledge and Giving by All and Raikes with Giving Compass. The Open Philanthropy Project wants to empower the effective altruism community. Thinking even more broadly, some foundations aim to strengthen science or promote democracy because, they believe, those forces are the underlying drivers of health, education and prosperity. Such efforts have the potential to do enormous good–although their benefits will prove hard to measure.

Which reminds us that, valuable as it is, evidence cannot answer all our questions.

This article originally appeared on Nonprofit Chronicles

The post Committed to evidence appeared first on Corporate Knights.

Chickens. Cows. Cookstoves. Toilets. Solar panels. Job training. Clean water.

Western NGOs dole out lots of stuff to help poor people in the global south become less poor. Do such programs work? It’s hard to know, but when researchers for a series of World Bank studies called Moving Out of Poverty asked 3,991 households in 15 countries how they escaped poverty, just three of those households credited “NGO assistance.” Hmm.

What we do know is that economic growth has lifted hundreds of millions of people out of poverty in such places as Botswana, Brazil, China, India, Indonesia, South Korea and Vietnam. With a few glaring exceptions–notably China and Vietnam–these countries benefited from democratic political institutions, relatively stable governments, the rule of law, property rights and trade. “Countries need inclusive economic and political institutions to break out of the cycle of poverty,” write Daron Acemoglu and James Robinson in Why Nations Fail, a sweeping 2012 book about the origins of prosperity and poverty.

Most development economists agree. Chris Blattman, a scholar of international development at the University of Chicago, puts it bluntly: “The problem in the poorest countries today is first and foremost politics.” (This, despite the fact that Blattman is best known as an advocate of cash transfers to alleviate poverty.) Blattman and Harvard prof Lant Pritchett, who are both associated with the Center for Global Development, lately have been engaged in a lively debate about poverty alleviation in blogposts (here and here) and on podcasts with Russ Roberts of EconTalk (here and here), all of it inspired by Bill Gates’ enthusiasm for raising chickens; while Blattman and Pritchett disagree on chickens and cash, they share the view that economic growth, supported by the right political and economic institutions, is the best way to alleviate poverty. As Pritchett has said: “Treating world poverty as if it can be addressed programmatically [by chickens, cash transfers or women’s self-help groups] biases attention away from the real solution to poverty, which is having higher productivity economies.”

How, then, can philanthropists, NGOs and governments help poor countries reform their institutions and enjoy the benefits of economic growth? Again, that’s hard to know, but today’s blogpost will spotlight Spark MicroGrants, a small NGO that practices what’s called community-driven development, an approach that invites communities to design, execute and manage their own aid projects–farms to feed families, power lines, schools or roads. There’s growing evidence, according to Spark, that community-driven development leads not just to more sustainable projects but to “stronger governments and institutions.”

“We help to create local democracy,” says Sasha Fisher, the co-founder and executive director of Spark MicroGrants. “People have have a platform to work together. Citizens become engaged and start driving local change.”

Spark isn’t designed to spark political reform, but when you give people a taste of democracy, well, don’t be surprised if they want more.

Founded in Rwanda in 2010, in partnership with the government, Spark works in five African countries: Uganda, Burundi, the Democratic Republic of the Congo and Ghana, along with Rwanda. It has financed projects in 150 communities and says that 90 per cent of the projects sustain themselves, two years after launch. In 2016, Spark raised about $1.6 million for its work, with more than 80 per cent coming from foundations; its biggest funders include the CRI Foundation, the Draper Richards Kaplan Foundation, the Imago Dei Fund, the Peery Foundation, the Planet Wheeler Foundation, the RA5 Foundation, the Segal Family Foundation and the Woodcock Foundation.

Fisher, who is 28, told me that she co-founded Spark after working for an NGO in South Sudan that was trying to build schools for girls. “What I saw on the ground was a lot of failed aid projects—empty school buildings, broken taps,” she says. Many of the people the group was trying to help were longtime refugees who had become used to the “handout mentality.” She traveled to South Africa and India and came upon small organizations that were serving their communities well. “When people get together and drive change, that’s one of the most beautiful things we can do,” she says.

Working with governments or other partners, Spark identifies needy communities and then sets aside $8,000 for each community that local families decide how to spend. Typically, the communities spend six months, meeting regularly, to set collective goals and develop a plan for a project.

Spark’s local staff provide organizational guidance, but little more. Says Fisher: “They’re not allowed to give ideas. That’s illegal in this process. But they facilitate.” Communities are required to have a plan to keep projects running, either through fees or government support.

The program has evolved over the years, to include the goal-setting process and to set a fixed grant size. (Previously, communities were invited to develop projects costing between $2,000 and $10,000.) Most communities continue to meet after Spark has left, and about three in four develop another project, independent of Spark.

None of this is exactly new. In some regards, it replicates the structure of town meetings, which have been going on in New England since the 17th century (and, in some places, continue to this day.) Whether these small-scale experiments in democracy can spread more widely, and grow to impact national institutions–well, that’s hard to say. But at the very least, Spark is giving poor people what they want, and not what western experts decide they want or need.

Community-driven development is being practiced on a much-bigger scale in Afghanistan, Bolivia, Morocco, Myanmar and Nigeria, according to the World Bank. Meantime, NGOs like Accountability Lab are explicitly trying to build inclusive institutions in places like fight corruption and promote a free press in places like Nepal and Liberia. (See my 2016 blogpost, Accountability Lab: Promoting good government, fighting corruption.) And earlier this month, the John D. and Catherine T. MacArthur Foundation announced grants of nearly $9 million to advance accountability and anti-corruption efforts in Nigeria. These are long-term investments in alleviating poverty that– if they pay off–should do a lot more good than cash or chickens.

The post Reforming institutions through development appeared first on Corporate Knights.

A few things you might not know about Detroit:

So many people are moving into the downtown and midtown areas that worries have arisen about displacing the poor.

When the Detroit Pistons and the Detroit Red Wings move into the new $700m Little Caesars sports complex next fall, Detroit will be the only city in America in which all four major sports teams play downtown.

Some 72 per cent of national business leaders and 83 per cent of local entrepreneurs rate Detroit as an excellent or good place to do business, according to a new survey released last week.

Detroit’s comeback is real, albeit mostly limited, so far, to the city’s core. Still, the changes that have swept through a city that could not pay its bills or deliver basic services just a few years ago have been nothing short of remarkable.

What drove the turnaround? Many things – the leadership of Mayor Mike Duggan, a resurgent auto sector, cohesive business leadership, the rapid growth of Quicken Loans (which employs 15,000 people downtown), a five-year $100m investment in the city from J.P. Morgan Chase and a fierce local pride that never waned, even in the dark days. Philanthropy played an essential role, too.

Capital Impact Partners, a community development financial institution (CDFI) and a major lender in Detroit, has taken investments from government, banks and foundations and turned them into projects that drive economic activity and improve lives. Foundations backing Capital Impact Partners including Kresge, Fisher and Ford.

“Detroit is unique because of the collaboration that has occurred, not only on the philanthropic side, but because the city, community organizations, Wayne State (University) and CDFIs have all  come together,” says Ellis Carr, the president and CEO of Capital Impact Partners. “Everyone believed in the vision.”

I’m writing today about Capital Impact Partners for two reasons. First, there’s been a flurry of interest lately from foundations and other asset managers in what’s typically called impact investing. Impact investing is trendy (ask Bono) but it’s not new: CDFIs like Capital Impact Partners have been doing impact investing for decades.

Second, I’ve got a special place in my heart for Detroit. I lived in Grosse Pointe Park, across the city line, from 1985 to 1991, and reported for the Detroit News and the Detroit for a decade. These were tough times for the city, when it took some effort to Say Nice Things About Detroit – a motto you’d see around town on T-shirts and bumper stickers.

Then things got worse: From 1993 through 2003, no new units of housing were built in downtown Detroit. By contrast, since 2010, Capital Impact Partners has helped finance more than 1,000 housing units, and it’s just one lender among many.

Founded in 1982, Capital Impact Partners has headquarters in suburban Washington, offices in Detroit and Oakland, and a national footprint. It has deployed more than $2bn in loans over the years, supporting affordable housing, cooperatively-owned businesses, dignified aging, health care providers and healthy foods. It also has place-based loan programs devoted to Oakland, Washington, D.C., and Detroit.

A nonprofit, Capital Impact Partners raises its money from banks that have to comply with federal rules requiring them to lend in low- and moderate income neighborhoods, from a Treasury Department CDFI fund (that the Trump administration wants to cut way back) and from foundations, which provide grants or low-interest loans, usually as part of what are called program-related investments.

Ellis Carr explains: “We’re able to bring different types of capital together to bring down interest rates…CDFIs are profitable, but we’re not profit-maximizing. We have to be profitable so that we can continue to lend and invest.” 

Its lending program in Detroit has taken many forms. Early on, when banks were unwilling to lend directly to housing developers, Capital Impact financed such projects as The Auburn, a $12.3m mixed-use development in midtown that includes 58 housing units, including 12 set aside for low income tenants, and eight retail stores, including a bookstore and a Thai restaurant.

Carr says: “CDFIs were able to de-risk the transaction and bring in outside capital.” Because Capital Impact Partners is more willing than commercial lenders to take risks in service of a social mission, its lending can help spark a neighborhood’s revitalization. “We can create enough investment and proof of concept, so that the money center banks can them come in,” he says.

The CDFI has also made loans to Detroit charter schools, to a child care center and to an assisted living facility, Carr says. It supports small businesses, too, by, for example, backing a statewide fund called the Michigan Good Food Fund that invests in small businesses that provide affordable, healthy food in poor neighborhoods. Last fall, the fund made $75,000 grants to a startup called the Detroit Black Community Food Security Network, which is developing a grocery store, cafe and community space, and to a nonprofit that wants to expand the Northwest Detroit farmers’ market so it can operate year round.

—

A shift to the neighbourhoods

Capital Impact Partners seeks to do all this work in ways that promote inclusive neighborhoods, meaning that they should accommodate a mix of well-to-do, middle class and poor people. Last year, it published a report looking at ways to address the impact of Detroit’s revival on poor people who are being displaced from their homes.

Some critics say that the city’s recovery “has been highly uneven, resulting in increasing inequality.” Capital Impact Partners and its foundation allies agree that attention must now shift to the city’s sprawling, poor neighborhoods. J.P. Morgan Chase. too, committed another $50 million to Detroit earlier this month, as the Free Press reported.

Because quantifying impact is an issue for impact investors, I ask Ellis Carr how Capital Impact Partners measures the effect of its work. “This is the holy grail that everyone struggles with,” he says.  Right now, Capital Impact Partners tracks outputs – how many units of housing are built, how many students are educated, how many visits are made to a health clinic – but it can’t measure outcomes, i.e., how people’s lives have been changed. Nor can it isolate its own impact from the work of collaborators. Impact investors can’t expect to see how “this dollar is doing exactly that” because too many forces come into play.

I also ask Carr whether foundations could do more to support CDFIs. The top 50 foundations hold about $250bn in assets, according to the Foundation Center, and only a sliver is devoted to program-related or mission-aligned investments.

“We, as CDFIs, are very interested,” Carr says. “Even a small portion of the endowments that exist today could be used for domestic community development. That would unlock a tremendous amount of capital for us to lend.”

This is an opportunity for foundations that is largely being missed. Foundations that care about poverty ought to deploy all of their resources – not just their grants, but their investment assets and their knowledge – to alleviate poverty. But they don’t. Nor do they tend to collaborate well.

So there’s lots for the philanthropic community to learn from Michigan’s foundations and the intermediaries that they support–not just Capital Impact Parters, but Invest Detroit, another CDFI, and the New Economy Initiative, a $100 million project to support entrepreneurs.

As Detroit Mayor Duggan says in the video below: “What the CDFIs in this town have done, they’ve brought about redevelopment at rates I never thought I’d see.” Nice.

The post One key piece of the Detroit turnaround? Philanthropy appeared first on Corporate Knights.

People have migrated for millennia, mostly to escape poverty. Between 1880 and 1930, more than 27 million immigrants entered the US, most from Europe. Some six million blacks left the rural south for cities in the north and midwest between 1910 and 1970, in what’s known as The Great Migration. More recently, Hurricane Katrina prompted one of the biggest resettlements in American history.

Migration is “the simplest and most effective antipoverty program. Pretty much everyone wins,” says Nancy Birdsall, the founder and former president of the Center for Global Development, a Washington think tank.*

And yet, when governments, foundations and nonprofits talk about alleviating poverty, they typically don’t talk about migration. The UN has produced many thousands of words about its sustainable development goals, mentioning migration only in passing.

This is an enormous missed opportunity, argues Michael Clemens, a Harvard-educated economist and a senior fellow at the Center for Global Development. Clemens has been making that argument for more than a decade, notably in an insightful 2010 paper called A Labor Mobility Agenda for Development. He writes:

The globalization of labor—greater mobility for workers across borders—quickly and massively raises migrants’ living standards toward those of rich countries…No known schooling intervention, road project, anti-sweatshop campaign, microcredit program, investment facility, export promotion agency, or any other in situ [in place] development program can surely and immediately raise the earning power of a large group of very poor people to anywhere near this degree.

To his credit, Clemens has been doing more than opining. Working with Sarah Williamson, the executive director of a small NGO called Protect the People and the nonprofit US Association for International Migration, and with funding from the Open Philanthropy Project, Clemens guided and then studied a small-scale effort to bring Haitian farmworkers to the US on temporary visas. It enabled the Haitians to rapidly and dramatically increase their earnings.

“Migration does something that’s almost magical,” Clemens told me. “It immediately transforms the economic productivity of a person.”

Last year, some workers stayed in the US long enough to bring home $5,000 to $20,000, according to Williamson. Some invested that money in school fees for their children. Others had new homes built for their families.

“Our program built more houses in Haiti than the Red Cross,” Williamson says.

Alas, after two years, funding has dried up for the Haiti project. That, it seems to me, reflects a dismal lack of imagination among philanthropists, who have poured many millions of dollars into Haiti and don’t have a lot to show for it. (See this and this and this.) Temporary migration, by contrast, has delivered benefits not only to Haitian farmworkers but also to the US economy –and, importantly, it has the potential to sustain itself after reaching scale. Yet its backers struggle to raise money. What’s wrong with this picture?

I have a soft spot in my heart for immigrants. My grandparents and my father were refugees from Nazi Germany who came to the US in the 1930s. I have good friends who are immigrants. The fact is, as  Clemens has written, “where you are born, not how hard you work, is today the principal determinant of your material well-being.” That strikes me as deeply unfair.

So what was the US response to the earthquake that devastated Haiti in 2010? Many Americans opened their wallets, the US government provided relief and recovery aid, NGOs and aid workers poured in–but Haitians were told to stay put. Hillary Clinton, who was then the Secretary of State, said: “Ordinary and regular immigration laws will apply…which means that we are not going to be accepting into the United States Haitians who are attempting to make it to our shores. They will be interdicted. They will be repatriated.”

Clemens, writing in The Washington Post, urged the Obama administration to admit more Haitians. Haitians were then ineligible for H-2A or H-2B visas, which are designed to admit low skill workers temporarily. In 2012, after securing bipartisan support from Florida US Senators Nelson and Rubio, Clemens, Sarah Williamson of Protect the People and their allies persuaded the Department of Homeland Security to add Haiti to the list of countries eligible for temporary H-2a visas.

But raising philanthropic funds to support Haitian migrants proved difficult. Clemens or Williamson or their partners approached just about every big NGO or foundation working in Haiti. “They weren’t interested in anything related to migration,” Clemens said. Including the Clinton Foundation, I wondered? “All of them,” he said.

—

A grant from the Open Philanthropy Project

Eventually, Protect the People and the US Association for International Migration secured a $1.4 million grant in 2014 from the Open Philanthropy Project, a collaboration of GiveWell and Good Ventures, the philanthropic arm of Facebook co-founder Dustin Moskovitz and his wife Cari Tuna. They pitched a simple idea: Farmers in the US who needed labor but were unable to hire locally would to be matched with workers in Haiti, who would spend two to 10 months in the US and then return home wealthier.

Open Philanthropy had initially hoped that the grant, in its first year, would generate $1 million in additional income for Haitian farmworkers, while laying the groundwork for larger flows of Haitian farmworkers in the future. Things didn’t go according to plan, as Open Philanthropy reported with admirable candor:

The project encountered a number of obstacles, and ultimately fell well short of this goal. Recruiting employers for the Haitian workers was more challenging than anticipated, though by June 2015 our understanding was that the project had received job orders for 95 workers. However, a variety of regulatory barriers in the U.S. and a number of workers’ visa applications being rejected by the U.S. Embassy in Haiti led to only 14 people being able to participate in the program, for an average duration of ~2 months. Accordingly, our current estimate is that the project led to only ~$53,000 of gross income for the participants.

We think there is a decent chance that the project simply encountered bad luck in 2015 and would have been more successful going forward.

Undeterred, Open Philanthropy made a new grant of $550,000 to Protect the People early in 2016. This time around, more Haitian farmers–58 in all–came to the U.S., with some working on a large greenhouse operation in Alabama and others harvesting apples in Oregon.

Again, though, obstacles arose–difficulty in obtaining the visas from the US consulate in Haiti, higher than expected startup and transportation costs. Open Philanthropy declined to fund the program again this year. Williamson says the program needs “a really patient donor” who will give it time to scale. In fact, there’s evidence that the market, once established, will support temporary migrants: The state department reports that more than 108,000 H-2a farmworker visas were issued in FY2015, most to temporary workers from Mexico, Jamaica and Guatemala, who are connected to US employers by labor brokers.

 —

Mixed results

What, then, are the broader lessons to be drawn from the Haitian migrant project?

First, benefits to the Haitians were substantial, as predicted. In 2015, the first year of the project, poor farmworkers who earn about $147 a month in cash income in Haiti were able to earn about $2,300 a month by working at a plant nursery in Alabama or harvesting apples in Oregon. What each worker ordinarily earned in a week in Haiti, he was able to earn in the US in a couple of hours, as Clemens and Hannah Postel of CGD write here.

Second, it seems highly unlikely that migrants are taking jobs away from Americans. To employ workers with H-2a visas, employers must certify that they can’t find Americans to do the work. Interestingly, Clemens studied the use of migrant workers by the North Carolina Growers Association, which is far and away the largest users of H-2a visas in the country. Here’s what he found happened at the height of the Great Recession, according to a report from the CGD and a pro-immigration group called the Partnership for a New American Economy:

In 2011, there were on average 489,000 unemployed people in North Carolina and approximately 6,500 available farm jobs offered through the North Carolina Growers Association. Despite the fact that each of these jobs was in or next to a county with over 10 per cent unemployment, only 268 of the nearly 500,000 unemployed North Carolinians applied for these jobs. More than 90 per cent of those applying (245 people) were hired, but just 163 showed up for the first day of work. A month in, more than half had quit. Only 7 native workers – or 3 per cent of US workers hired – completed the entire growing season.

For better or worse, Americans won’t do these jobs. (Why that is, and what it says about our country, is a topic that I hope to explore in a future post. I’ve just begun reading Tyler Cowen’s The Complacent Class, which addresses that question.)

Third, the US economy benefited from the Haitian migrants, just as it does from other migrant farmworkers. If migrant farmworkers were not available to do the work, it wouldn’t get done. Farmers can’t raise wages high enough to attract US workers and still profit from selling cucumbers, Christmas trees, whatever, according to Clemens.

Philanthropy can play an important role in enabling migration beyond Haiti.

“I hope it will inspire philanthropists to think about opportunities,” Clemens says. “Farm work is just one of the ways to offer life-changing opportunities in a mutually beneficial way.” He has written, for example, about potential “global skills partnerships” in which rich countries create training programs in poor countries. “It’s enormously cheaper to train nurses in Morocco, Malawi or Moldova than it is in Germany,” he says. Some newly-trained nurses could go to Germany, where there’s a shortage, and others could stay home.

In the US, meantime, a coalition of foundations has pledged an impressive $125 million to Flint, Michigan, much of it to serve children who have been poisoned by the city’s water system. But, writing in Alliance, Timothy Ogden says: “It is striking, given the situation, that none of the funds allocated are to help the children of Flint by helping them leave.” Yes, it is striking. It would be smart to structure government benefit programs in ways that make it easier for people to move within the US to find new jobs–and to somehow encourage the jobless to find the “get up and go” that has driven migrants for centuries.

The post Migration appeared first on Corporate Knights.

It’s strange, when you think about it. Most things have a price. A big box of Cheerios costs $3.98. A 1 lb. bag of Starbucks Breakfast Blend costs $12.95. An iPhone 7 costs $649.

But when we donate to charities, what are we buying? And at what cost? That’s more difficult – indeed, it’s often impossible – to know. So how, then, can we compare charities, the way we compare Cheerios to Wheaties, Starbucks to Dunkin’ Donuts or an iPhone to a Samsung Galaxy?

Alas, we can’t.

This makes it harder than it should be to steer our donations to the nonprofits that do the most good.

I’ve been thinking a lot lately about this question of costs. Recently, I had the opportunity to discuss it with a couple of staff members at a global federation of nonprofits called WaterAid. Sarah Dobsevage is director of strategic partnerships at WaterAid America and Vincent Casey is senior WASH (which stands for water, sanitation and hygiene) advisor at WaterAid International in London. WaterAid is a global federation of nonprofits that collects money in rich countries and spends most of it in 38 poor countries, working with local governments and nonprofits to “transform the lives of the poorest and most marginalized people by improving access to clean water, sanitation and hygiene.”

As I’ve written before (see my 2015 blogpost, Water Taps and Information Gaps), there are dozens, perhaps hundreds, of charities that provide water and sanitation to the poor. Among those listed at GuideStar are charity: water, water.org, Water for People, Bread and Water for Africa, Living Water International, Millenium Water Alliance, One Drop Foundation, World Help, and Water is Life. Big anti-poverty NGOs including Care, Catholic Relief Services, Save the Children and WorldVision operate their own WASH programs. They’re funded by governments, foundations, companies and the rest of us.

The problem for anyone who wants to support providing water and sanitation to the poor is figuring out which nonprofits are effective and efficient. Can transparency around pricing help solve that problem? Or, paradoxically, could pricing get in the way of smarter giving?

The first thing to know about providing clean water to the global poor is that it’s more complicated that you’d think. The engineering behind hand-dug wells, drilled wells, rainwater catchment systems, gravity-fed schemes, water purification systems and latrines is relatively straightforward. But complexities arise because every place is different, support from local governments, toilets or hygiene training may or may not be part of a program and, most important, sustaining access to clean water is crucial. Improve International, a small NGO which monitors the sector, says “poor functionality and failure rates for water systems are still high after decades of development.” Maybe the smart money in the WASH sector should go to those organizations that push governments to deliver clean water to their citizens. But how do you put a price on that?

Dollars and non-sense

WaterAid, it turns out, does plenty of government advocacy. But, as Sarah Dobsevage explained to me, some donors hanker to know what they are buying with their donations. That leads to this claim, found on the statistics page of the WaterAid America website:

Just $24 can help provide one person with access to clean water

Hmm. No source is given. Does the estimate take into account work on sanitation and hygiene, or just clean water? Does it include the costs of maintaining sustaining a well or tap over the years? The costs of advocacy? And what does “can help” mean, anyway?

I told Dobsevage that I was skeptical about that  number.

“I’m equally skeptical about that number,” she replied, to her credit.

Coming up with a figure like that isn’t hard. You can take the budget of a water charity, and simply divide it by the number of water points installed or the number of people served. “You can always slice and dice numbers and come up with a nice average,” Dobsevage said. 

The trouble is, water nonprofits do different things in different places, so the figure is meaningless. “It’s not like we’re providing services the way a utility would, where they have names of people and they know much they use,” Dobsevage said.

And yet most water charities make similar claims.

charity: water says:  “$30 can bring clean water to one person every month.”

One Drop says, more vaguely: “$100 can create winning sustainable conditions in which a person’s circumstances are positively changed, providing empowerment and self-reliance.”

Care promises to deliver a three-month emergency supply of water for $30.

Save the Children offers”gifts of joy” that include a school water point for $2,000.

water.org says: “On average, it costs about $25 to provide safe water to one person.

World Vision says: “Your gift of $50 provides one person with clean water that lasts!”

Water.org is one of the few NGOs to explain its price, saying: “This cost is derived from the total organizational costs divided by the total number of people served during the fiscal years of 2010-2013. This equals $23.23, however for the purposes of our messaging we round up to $25.” In the fine print, World Vision says: “We promise to honor your generosity and use your donation in the most effective way possible… Each item is representative of the gift category in which it appears and donations will be used to provide assistance where it is needed most within that category or to address a similar need.”  

Put simply, these prices are more about marketing than they are about costs. Years ago GiveWell described pitches like these – popular ones are about sponsoring a child or buying livestock for a poor family – as “donor illusions.”

Dobsevage says the understandable desire of donors to see just what their money is buying, and at what cost, can lead to budgeting contortions. Corporate donors can be especially demanding, she told me.

“Some of them expect a ridiculous return on investment, quote, unquote,” she said. “They want to see $10 per person. They like the flash. They want the marketing…All that means is that the organization is absorbing the other costs. It doesn’t actually change the costs.”

–

Getting beyond prices

But, if donors can’t engage in comparative shopping for a well or buy clean water for a poor little boy for a year, how can we evaluate an NGO like WaterAid? Even after talking with Dobsevage and Casey, and digging into the website, I came away with more questions than answers.

Because WaterAid operates in so many places, it’s hard to know where to begin. When Dobsevage mentioned a program in Nicaragua, I was curious to know more because I’d recently traveled there. On Nicaragua’s remote Caribbean coast, WaterAid says it trains local people to disinfect wells, drill boreholes, construct rainwater catchment systems and install rope pumps and eco-friendly toilets. This vocational training, in theory, should create a cadre of skilled workers who can serve their communities for years to come. But will the skills training stick?

To its credit, WaterAid America commissioned an external evaluation of its program in Nicaragua and published a warts-and-all summary. The program scored well overall, but evaluators identified weaknesses including “the absence of an explicit policy-advocacy function” and the failure to document findings in Spanish; both were a result of limited funding during the program’s early years. This is a reminder that even well-established interventions depend on execution; much of what any NGO does is done through local staff and local nonprofit partners, whose competence can vary widely from place to place.

Third-party evaluations are standard operating procedure at WaterAid, Casey told me, which is a good thing. WaterAid also routinely monitors projects to see if they continue to provide sufficient quantities and qualities of water, another good sign. I also learned that WaterAid is one of five organizations that belong to Agenda for Change, which has developed a set of principles intended to deliver WASH services to everyone on the planet by 2030. That tells me that WaterAid looks beyond wells and water taps to find ways to deliver systemic, lasting change; its partners in Agenda for Change are Aguaconsult, IRC, the Osprey Foundation and Water for People, all respected players in the sector.

Finally, WaterAid has been backed by well-staffed foundations, including the Bill & Melinda Gates Foundation and the Conrad N. Hilton Foundation, which presumably do a good deal of due diligence on their grantees. How do they do it, I wondered? I asked the Gates and Hilton foundations to share their evaluations of WaterAid with me, albeit on short notice. Both declined.* It’s a continuing shame that foundations don’t share their learning as a matter of course. (See my 2016 post, When foundations are uncharitable.) Philanthropy needs more insight and information, not less.

–

Seeking a little help

Would it in fact be helpful if more nonprofits provided more data about the costs of what they do? A few NGOs are radically transparent about costs. GiveDirectly, Watsi, and Donors Choose come to mind, and surely there are others. I find their approach to be refreshing and reassuring. Can it be more widely applied? Should it be? Or are will this only fuel the dreaded “overhead myth.”

Second, if cost comparisons are too crude a way to compare charities, why can’t donors, particularly institutional donors, come together to evaluate charities in ways that go deeper than Charity Navigator, but not as a deep as GiveWell? Some people have tried–you can read my posts about Dean Karlan, Kat Rosqueta and Angela Campbell–but their work has been slow to gain traction. I could imagine a group of meta-charities that focus on specific causes, as Animal Charity Evaluators does, or others that organize regionally, to identify and promote the most effective local nonprofits in Washington, D.C., or San Francisco.

As I’ve written before: There are thousands of nonprofit organizations in the US. Some do great work. Many do not. Wouldn’t it be good to know which is which?

The post Donation notation appeared first on Corporate Knights.

For about 3 billion of the world’s poorest people, the simple act of cooking dinner is fraught with risk. They burn wood, charcoal, dung or crop waste, often on open fires, fouling the air they breathe. It’s no small matter: Household air pollution from cooking fires is thought to be the world’s leading environmental cause of death and disability. And cooking over open fires also contributes to climate change and to deforestation when poor people chop down trees for fuel.

It’s no wonder that governments, nonprofits and businesses have tried for decades to get clean and efficient cookstoves into the homes of the poor. The trouble is, they’ve made very little headway for many reasons. Chief among them is the fact that designing a truly clean, efficient and user-friendly cookstove for a price poor people can afford is devilishly hard.

Lately, though, there are signs of progress. A handful of cookstove companies have attracted support from investors in the U.S. The New York–based non-profit investment fund Acumen has in the last 15 months put money into two U.S.-based companies, Biolite and BURN; Green Energy Biofuels, a Nigerian company; and Greenway Grameen Infra, which focuses on India.

Other funders have stepped up as well. In August, Deutsche Bank made the first loans from a US$4 million cookstove fund to Biolite and Envirofit, a Colorado-based company that is the industry’s sales leader. The Disruptive Innovation Fund, which is overseen by the best-selling author and innovation expert Clayton Christensen and his son, Matt, has invested in Biolite, while the U.S. government’s Overseas Private Investment Corporation has made loans to BURN and Envirofit.

More important, cookstove companies are gaining traction with customers in the global south. Envirofit says it sold 43 percent more cookstoves during the first half of 2016 than during the same period in 2015. Meanwhile, it took BURN more than two years to sell its first 100,000 stoves, and less than half that time to sell the next 100,000, the company says. Biolite plans to ramp up production early next year when it introduces a new model, showing confidence about the future of the industry.

Sean Moore, who works with energy investments at Acumen, says cleaner cookstoves may at long last be catching on. “The cookstove sector has been around for decades, and it’s had a lot of challenges,” he says. Lately, stove designs have improved, financing has become available to the very poor and companies that want to sell stoves have taken a more prominent role in a sector that had been dominated by governments and nonprofits. That gave Acumen the confidence to invest, Moore says: “We found entrepreneurs who were taking market-based solutions to the problems.”

Michael Tsan, a partner at Dalberg Global Development Advisors, which studied cookstoves for a World Bank report, says, “We’ve been grinding away at this problem for 40 years, but things are moving. I don’t think it’s hopeless.” Perhaps the biggest reason, he says, is that poor people are seeing that they can save money on fuels by buying a more efficient stove.

History of failure

Note the words we’ve chosen to describe cookstoves: cleaner, improved and efficient. One word we’ve tried to avoid: clean. That’s because no truly clean cookstove exists, except, perhaps for solar-powered stoves, which are impractical. These terms are unavoidably inexact, but cookstoves from Biotite, BURN and Envirofit — which we’ll call cleaner — are among the best on the market, delivering health, environmental and economic benefits. Local producers manufacture stoves that we’ll describe as improved or efficient; they don’t work as well but they appeal to customers because they are cheaper.

This raises another uncomfortable fact: Cookstoves are at best an imperfect solution to the health, environmental and social problems they are designed to solve. In a more equitable world, poor people would cook the way the rich do, using fuel sources such as electricity or natural gas that don’t cause indoor air pollution. But billions in Africa, South Asia and Latin America don’t have access to electricity or natural gas, or can’t afford them. For now, cookstoves will have to do.

That said, there’s no doubt that cleaner cookstoves, when used properly, deliver benefits. They can improve health by reducing emissions of particulates, which cause respiratory disease. They can curb carbon emissions (many have been subsidized by carbon credits). They can also create jobs and empower women, who traditionally gather the wood used in open fires, says the Global Alliance for Clean Cookstoves, a public-private partnership launched in 2010 by then–U.S. secretary of state Hillary Clinton.

But so far the reality of cookstoves hasn’t lived up to the rhetoric. With the exception of a massive government-financed program in China in the 1990s, no government, philanthropic or commercial cookstove program has been shown to deliver large-scale, measurable health or environmental benefits. Up in Smoke, a 2012 field study by Massachusetts Institute of Technology researchers, found no long-term health or environmental benefits in households in India that had been given a clean stove, mostly because the stoves weren’t properly maintained or were discarded. A World Bank survey published in 2014 concluded: “Three decades of efforts to promote both modern fuels and improved biomass stoves have seen only sporadic success.”

The problems with cookstoves are legion. The vast majority of stoves fail to meet strict World Health Organization standards that are set to protect human health. (Designing a stove that works effectively for fuels that vary in their moisture content or chemical composition is difficult.) The cleanest cookstoves cost US$50 or more, out of reach for the extreme poor, while cheap versions crack or break. What’s more, people who use cookstoves often continue to cook over open fires, a practice known as “stove stacking.” It’s hard to persuade people to abandon traditional methods of cooking that meet their dietary, cultural and economic needs.

“There have been so many failures within the sector,” says BURN founder Peter Scott, who has been designing and building cookstoves since 1997. “Sometimes I’m embarrassed to be part of it.”

Turning things around?

BURN has the potential to turn things around. Headquartered on Vashon Island, Washington, a 20-minute ferry ride from Seattle, BURN sells cookstoves that burn charcoal, mostly to customers in and around cities in Kenya. It employs about 135 people, manufactures stoves at a factory just outside Nairobi that opened in 2014 and sells about 10,000 per month. BURN says it has sold about 200,000 stoves since the plant’s opening and is on track to become profitable this year. The company plans to expand to West Africa next year.

“One of the things that set BURN apart was the quality of the design and the product,” says Yasmina Zaidman, director of strategic partnerships at Acumen. “There was an emphasis on customer-centric design and quality that was validated by independent third parties. The level of rigor stood out.”

BURN’s signature stove, the Jikokoa, retails for about US$40, and is sold by supermarkets, small shops and trusted local partners in Africa, including M-Kopa Solar, one of the fastest growing East African pay-as-you-go solar companies. Financing is available through Equity Bank, one of East Africa’s biggest banks. The Jikokoa captures more than 90 percent of the improved cookstove market in Kenya, according to Acumen’s research.

The stove itself wins plaudits from independent evaluators. Ashden, a British charity that supports sustainable energy, said last year: “The stove lights easily, cooks fast and — from independent tests — produces over 60% less health-damaging particulate matter and carbon monoxide than KCJ [Kenyan ceramic jiko, a locally-made competitor]. Charcoal use is cut by 45%, saving around US$200 per year, or five times the purchase price.” It’s these economic benefits that attract customers. “We sell it around the fuel savings,” Scott says.

Environmentalists are concerned about the charcoal used, production of which leads to the degradation of forests. Still, demand for charcoal and fuelwood is expected to double or triple by 2050 in Africa. Better that the charcoal be burned efficiently, Scott says.

An industry leader

No company has put more clean cookstoves into the world than Envirofit, which has been making stoves for household and institutional markets since 2003. The company reached its one-millionth clean cookstove customer in 2015 and sells stoves in 45 countries in Africa, Asia and Latin America.

Based in Fort Collins, Colorado, Envirofit employs more than 450 people, most at manufacturing and assembly facilities in China, India, Nigeria, Kenya, Honduras and Mexico that have the capacity to produce 100,000 stoves per month. The company’s founders, Tim Bauer and Nathan Lorenz, were named Heroes of the Environment by Time magazine, and its CEO, Ron Bills, was named a social entrepreneur of the year by the Schwab Foundation in March 2016.

Inside the cookstove sector, though, Envirofit has detractors. They grumble that the company has been propped up for years by the Shell Foundation, which made about US$15 million in grants to Envirofit beginning in 2007. Many of its stoves have been sold in bulk to governments and nonprofits, and supported by carbon credits, so they need not compete on price and value in the retail marketplace.

About 450,000 Envirofit stoves in India and Africa have been supported by carbon credits, according to a May 2015 report from the Global Alliance for Clean Cookstoves. Whatever one thinks about carbon credits for cookstoves — and they are controversial — they distort the market by providing subsidies and cannot be relied upon as a long-term revenue source. Maybe that’s why Envirofit says it doesn’t depend on carbon revenues anymore.

The stoves themselves get mixed reviews. In Honduras, for example, Envirofit has sold about 160,000 stoves to a government-funded nonprofit that gives them to the poor. Sebastian Africano, international director of a U.S.-based nonprofit called Trees, Water & People that also builds stoves in Honduras, says, “The government just blankets entire areas with [Envirofit] stoves. Some work well, but others had quality issues with griddles warping and chimneys falling apart.”

Envirofit’s distributors praise the stoves, however. Mercy Corps, a nonprofit aid organization based in Portland, Oregon, has given many woodstoves to customers in Myanmar and found the Envirofit stove to be “head and shoulders above the others,” says David Nicholson, the group’s director of environment, energy and climate change. Julius Ahiekpor, director of the nonprofit Centre for Energy, Environment and Sustainable Development in Ghana, is another satisfied distributor. “We sell mostly through word of mouth,” he says. Both the Myanmar and Ghana projects are supported by carbon credits and foundation grants.

Cooking and electricity 

Meantime, Brooklyn, N.Y.–based Biolite has carved out its own niche with an unusual stove that generates electricity as well as heat for cooking. It’s sold to backpackers and campers in rich countries as well as to the global poor. “The recreation business is something we’re personally passionate about,” says Jonathan Cedar, Biolite’s co-founder. “But it’s fundamentally a tool to help us reliably and sustainably accomplish the big objective,” which is to deliver clean, affordable household energy to the poor.

Biolite says its HomeStove, which burns wood, dung and crop residues, cuts fuel consumption by 50 percent and reduces particulate matter and carbon emissions by 90 percent. Both the HomeStove and Biolite’s CampStove, which is sold by retailers like REI and Lowe’s, incorporate technology that harvests heat from the fire to produce two watts of electric power, enough to charge a mobile phone or LED light — which is included with the stoves.

“The electricity access has brought men into the decision making, and got husbands really excited about something that will benefit the wife,” Cedar says.

Biolite employs about 100 people. Since its founding in 2009, the company has raised about US$10 million, mostly from private investors, including over US$1 million from Kickstarter. Acumen’s Moore says: “We think in the next five to seven years it could be a truly global company that could attract [significantly more] capital.”

Sales in poor countries have been modest, to date: About 15,000 HomeStoves, which sell for between US$50 and US$70, have been sold in India, Kenya and Uganda. Biolite is working to bring down the costs of its new model with support from a U.S. Department of Energy grant.

Profitable industry, healthy customers

Will all this lead to a thriving cleaner cookstove industry? It’s hard to know because the privately held companies don’t share financial data. What’s more, most experts think that local manufacturers, who sell lower-quality stoves at lower prices, outsell the U.S.-based companies. “I can name 20 different entrepreneurs across Africa who sells 350 to 500 stoves a month, or more, and the numbers add up,” says Elisha Moore Delate, an independent consultant and cookstove expert based in Nairobi. These cheaper stoves may not deliver the health or environmental benefits of higher quality ones, but they do save poor people money, which is no small thing.

More importantly, will cleaner efficient cookstoves improve the health of customers and state of the global environment? That’s also hard to know because reliable data on their real-life performance is scarce. But, again, even improved cookstoves are better for the health of the poor — and the planet — than cooking over open fires. Until people in the global south have better access to electricity or natural gas — the preferred options in the developed world — improved cookstoves will have to do.

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Mauricio Lim Miller spent about two decades leading an anti-poverty organization in the San Francisco Bay Area, and he did it well, so well that President Clinton invited him to the 1999 State of the Union address. But Miller was disillusioned. “I became very cynical about my work,” he told me.

He had come to believe that social service programs in the US focus too much on the weaknesses of poor people, treating them as victims who need fixing, while failing to capitalize on their strengths. He thought about his mother, a Mexican immigrant, who had a third-grade education but pushed him to get a college degree, which he did at UC Berkeley. “She was very smart. She was very resourceful,” he said. “But no one saw that. People put her in a box. She hated that.”

In 2001, with a push from Jerry Brown, who was then the mayor of Oakland, Miller started the Family Independence Initiative, a nonprofit that enables poor people to connect with one another, share ideas and resources — and then mostly stays out of the way.

“Humanity’s very diverse,” Miller said. “You’re never going to figure it out from the top.”

The program seems to work. It has expanded into Boston, New Orleans and Albuquerque from its base in California. Miller has been named to a White House advisory panel on community services, chosen as an Ashoka fellow and recognized by the MacArthur Foundation with a so-called genius award.

But here’s the thing: Despite the acclaim for Miller and, more importantly, the evidence that FII improves people’s lives, FII remains small. It worked with about 2,000 families and raised about $6.3 million last year. Many foundations have supported FII, but mostly with modest grants, leaving hundreds of families on waiting lists, seeking to participate.

I had lunch with Mauricio Miller and Jesus Gerena, FII’s managing partner, last week at Opportunity Collaboration. Held in Cancun, Mexico, OC, as it’s known, is a five-day confab of about 400 people from nonprofits, business, foundations and government who work on alleviating poverty. I attended as a Boehm Media Fellow, thanks to the generosity of the Boehm Gladen Foundation led by Ron and Marlys Boehm.

Miller, who is 70, is an unpretentious guy with an easy laugh. He holds strong opinions. Too many anti-poverty programs don’t work, he told me, but they persist because poor people don’t have power, and many of the government and nonprofit people in charge — “poverty pimps,” he called them — have little incentive to change. He does not spare himself from this critique. “For 20 years,” he said, “I had a job because people were poor.”

FII puts the families in charge. They get financial support–either a computer or a $350 credit to buy one, along with about $100 to $150 a month to pay them for the time they spend entering detailed information about their finances, education, housing, employment and social networks into a database where their progress is closely tracked. They are also required to attend monthly meetings with a self-selected group of peers, where participants help one another, hold one another accountable and share ideas, resources and connections.

What Miller wants to do, in essence, is recreate the conditions that enabled millions of Americans–waves of immigrants, as well as people born here–to escape poverty. Said Miller: “It’s called ‘keeping up with the Joneses.’”

Peers replace case managers.”We want a pure model where no one is telling the families what to do,” Miller said. How pure? “We fired four staff who tried to be helpful,” he said. I thought he was joking, but no. As David Bornstein wrote in The New York Times back in 2011, Miller believed that “the assumption of incapacity behind the helpfulness was a big part of the problem.”

Instead of advice, FII offers incentives. Families that qualify can get small grants to match their savings, scholarship funds and access to KivaZip loans to start businesses. But again, support from peers is key. More than 50 groups around the country have formed lending circles, to lend one another money. FII has also built a social network for participants, called Up Together. There, people connect to share advice and opportunities.

How’s the program working? By most accounts, very well. A 2011 report from the New America Foundation, citing FII’s own data, says participating families in Oakland who completed the two-year initiative increased their incomes by 27 percent on average, and 40 percent bought homes within three years. (About 10 percent drop out, Miller told me.) According to Greenlight Fund, which supports FII’s Boston work, 41 percent of families that start below the poverty level climb above it in three years and 46 percent of Boston families reported that their health improved. Other studies found that participants had more savings and less debt, and that their kids did better in school. Anecdotal success stories abound.

That said, FII wants to improve its technology and to expand. Five hundred families are on a waiting list in Boston. “We need to move onto apps and phones,” Miller said. Jesus Gerena, who’s his heir apparent, said FII aims to reach tens of thousands of families in five years.

Can FII scale?

It won’t be easy. According to FII’s latest Form 990, the group’s biggest donor in 2015 was the little-known Ray & Tye Noorda Foundation, which gave $1.5 million. FII has also been supported by the Eos, F.B. Heron, Kellogg, Kresge, and McGregor Foundations, among others, and by the New Profit, a so-called venture philanthropy fund. The Fortitude Fund, a new vehicle for the philanthropic giving of investor Bill Ackman and his wife Karen, is an enthusiastic supporter, its managing director, Amy Herskovitz, told me.

Why isn’t more money flowing to FII? The US government, after all, spends hundreds of billions of dollars annually, if not quite $1 trillion, to help the poor, and nonprofits that deliver human services brought in another $45 billion last year. If FII’s self-help model truly works, it could be adapted or adopted by others.

I’m speculating but I can think of three reasons why FII remains small.

First, although Miller tells the FII story well, the organization needs to  better document its impact. It’s hard to find data on its website about program costs and results. It’s also hard to find an annual financial report, Form 990 or list of people on the group’s board, which isn’t reassuring. Transparency matters more than ever these days.

Second, the absence of an independent evaluation of FII might put off some funders. Miller might want to talk to Dean Karlan of ImpactMatters. (See my 2015 post, If not overhead, then what? Maybe this.) Or the Ford Foundation, with its focus on inequality, might want to look at FII.

Third, and I hope I’m wrong about this, the well-educated foundation executives who spend their time developing “theories of change” or deciding what “outcomes” they want to buy might be put off by FII’s hands-off approach. They might sense that working from the bottom up threatens the premise of their latest top-down “innovation.” Or they simply might find it hard to believe that poor people know they need better than the rest of us do.

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Some nonprofits, and people working inside nonprofits, pursue the same strategy, year after year, without stopping to ask whether they are having an impact. Not Linda Greer, an influential senior scientist at the Natural Resources Defense Council, who for the past 25 years has worked to get companies to clean up their act.

Originally a Washington insider, Greer has lobbied the federal government; worked closely with Dow Chemical, a notorious polluter; wangled her way into Apple to get the company to take responsibility for its supply chain in China; and, more recently, joined the board of a global apparel industry coalition that, as she sees it, needs to move a lot faster to deal with the environmental impacts of fast fashion.

Greer, who has a PhD in environmental toxicology, is street smart as well as book smart. Over a long lunch in Bethesda, MD, where we are neighbors, we talked about how NGOs can drive companies to change, why environmental nonprofits should not take money from corporations and how she has worked side by side with Ma Jun, China’s best-known environmental leader.

Early on, Greer immersed herself in DC policy and politics, working on pesticide and hazardous waste regulation.”I was up on the Hill every day, or over at EPA,” she recalled. “Big companies defended their chemicals to the death. Very difficult work.” she recalled. While environmentalists won some victories, she came to believe — and some of her antagonists agreed — that they might be able to get more done by seeking common ground.

A breakthrough partnership

Her debates with Dow Chemical lobbyists led to a novel two-year collaboration between NRDC and Dow designed “to discover whether environmentalists armed with detailed information about a company’s business needs and processes could help it find and carry out profitable ways to cut waste,” as The New York Times reported in 1999. Working at a chemical plant in Michigan, Dow and the environmentalists jointly identified an expert consultant, brought in a mediator and uncovered what Greer calls “amazing opportunities” to reduce emissions of chemicals into the air and water in cost-effective ways.The depth and length of the project led Carol Browner, who then led the EPA, to declare: “This partnership will almost certainly become a model nationally among companies looking to improve the environment and improve their bottom line.”

In fact, partnerships between companies (Walmart, McDonald’s, General Mills) and business-friendly green groups (The Nature Conservancy, WWF, Environmental Defense Fund, even Greenpeace) proliferated during the 2000s. They were generally focused on efficiency, a goal shared by the companies and the environmentalists because it saved money and reduced waste. They improved corporate environmental practices but in retrospect, Greer says, they didn’t go far enough. Often, NGOs and companies devised pilot “trophy projects” that look good in sustainability reports but were scaled across the business. Few companies questioned business models that depend on selling more stuff every year.

Greer turned her attention to China after Frances Beinecke, who ran NRDC from 2006 to 2015, was appalled by the air quality on a trip to Beijing. Like bank robber Willie Sutton, who, when asked why he robbed banks, is said to have replied “because that’s where the money is,” Greer saw she could have the greatest impact in China because that’s where the pollution is.

“China had become the workshop of the world–burning as much coal as we were, and growing much faster,” she says. NRDC had opened a Beijing office, and she decided to press multinational companies to take responsibility for the industrial pollution generated by their supply chains there. “Which industry to work on became the next question,” Green recalls.

The electronics and textile industries are among the biggest polluters of water in China. But until Ma Jun, a former journalist and author who started a homegrown Chinese NGO called IPE (for Institute of Public and Environmental Affairs), pulled together government information to build a database of Chinese factories, the problem was difficult to track. Ma Jun had been using his database to name and shame global companies whose suppliers were polluting the air and water, but with mixed results.

“Apple was very high on the list of problem companies, and he couldn’t get Apple to respond to him–at all,” says Greer. “He was making serious allegations about terrible problems, and they were blowing him off.”

Al Gore to the rescue

Greer knew how to change that. She explained the situation to Frances Beinecke, who called Al Gore, a member of Apple’s board of directors. Not long after, Greer and Ma Jun went to Apple’s headquarters in Cupertino where they spent more than five hours making their case to the company’s executives, who were aggrieved at first but fairly quickly became concerned that they might in fact be responsible for pollution problems in China. This was 2010, and Apple was already facing scrutiny over a series of suicides at Foxconn, its biggest Chinese supplier.

“They were worried about the threat to their brand and reputation,” Greer surmises, and agreed to independently investigate Ma Jun’s allegations. From that point on, she says, the company took its environmental responsibility seriously. “They identified problems and took corrective action and they didn’t cut corners.” She identified powerful and committed executives inside the company, notably logistics executive Bill Frederick and environmental engineer Bob Bainbridge.

“Our work with Apple…has been a kick,” Greer later wrote on her blog. She wasn’t satisfied, of course, pointing to ways in which the company needs to improve. But she noted: “The company is serious and detail-oriented and definitely wants to get it right.” But she counts her work with Apple and partnership with Ma Jun as among her proudest professional accomplishments. “I tease him that he is one in a billion,” she says, and he is certainly tackling one of the largest industrial pollution problems the world has ever seen.

Her more recent work with the apparel industry has not been as rewarding–not yet, anyway.

It began in 2009 with a program called Clean By Design intended to address China’s pollution problems. NRDC works with apparel retailers and brands to help their suppliers’ factories reduce their environmental footprint, which includes water and energy use, as well as discharges of toxic chemicals into waterways. They came up with a set of best practices that were “cheap and easy to implement, and they packed a punch, environmentally.” The Clean by Design protocols have been implemented by about 50 factories that supply Gap, H&M, Levi-Strauss and especially Target. “They’ve been the  star of the show,” Greer says. More are in the pipeline, and the results have been stellar, according to an excellent report on the effort funded by the Oak Foundation:

Each and every mill we tracked in the program—the young and the old, the large and the small, woven/knitted/denim fabric, etc.—reduced environmental impact and made money with improvements.

But, as the report notes, there are more than 15,000 textile mills in China alone. While Clean by Design aims to lead by example, not enough factories have been inspired to follow.

“All carrot and no stick”

“Although the program is precisely the ‘win-win’, business-friendly model that companies tell us they are seeking, uptake is slow as molasses,” says Greer. “It definitely has made me cynical about what industry is really willing and able to do voluntarily about its impacts.”

“It’s all carrot and no stick,” she says.

In an effort to promote the Clean by Design program, NRDC joined the Sustainable Apparel Coalition and Greer recently joined its board. With 175 members whose companies account for about 40 percent of the world’s apparel industry, the coalition should be the venue for systemic change. It has a bold vision: “An apparel, footwear and home textiles industry that produces no unnecessary environmental harm and has a positive impact on people and communities.”

But Green has found that, with a few exceptions, most of the companies remained focused on their first tier of suppliers, the cut-and-sew factories where clothes are made. Those factories are important because they are the locus of labor and safety issues. But relatively few firms have gone beyond this first tier to measure the impact — or even publicly identify — the dye-and-finishing mills where fabric is made, and where the environmental problems are greatest.

“If you don’t even know where your fabric comes from, how can you know the factory is environmentally compliant?” Greer asks. Most companies “are totally stuck in the rut of tier one.”

As I recently reported in The Guardian, the coalition has been progressing slowly towards its goal of measuring and reducing the industry’s environmental impact. Greer believes that the people who represent their companies on the coalition are motivated and well-intentioned. But, she says, “a lot of them can’t make things happen” because they are drawn from corporate responsibility departments and don’t have authority over supply chains.

Because NRDC takes no corporate funding, Greer has the freedom to jeer as well as cheer big companies. Environmental NGOs that take funding from their business partners tend to be gentler. But NRDC doesn’t typically take on companies — there are exceptions, like its current campaign against KFC over antibiotics — so it may be up to advocates like Greenpeace International, with its Detox My Fashion campaign, to shine light on abuses and kick companies more forcefully into action.

Most consumers, alas, appear indifferent.

After our interview, I emailed Greer to ask whether her corporate work had influenced her own purchases of electronics and apparel. She replied:

Actually, yes, my experiences have definitely shaped my behavior as a consumer; I selected an iPhone intentionally after the company responded as well as it did to the environmental issues we raised and also went with an iPad…

Clothing is more difficult, since there are not a lot of brands I really respect. But I shop at Target and tell everyone they are the real deal and am willing to spend the big bucks at Patagonia to support their excellent effort in this space. Mostly I focus on consuming less, that feels like the best move anyone can make on the clothing front. When people ask me what I am wearing, I tell them the brand but also mention “and I’ve worn this dozens of times” to get the point across.

Because companies aren’t typically held accountable for the faraway impacts of their suppliers, they have little incentive to change. For foundations with environmental programs, there’s an opportunity here–to fund efforts to awaken consumers to the impacts of the clothes they buy. Without activism, Greer tells me, companies may feel free to ignore even business-friendly solutions to problems they don’t think they have.

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