What Kind of Company Eradicates Poverty?
Michael Fairbanks

A decade ago, with the dawn of the dot.com boom, non- governmental organizations (NGOs) saw an opportunity to fundraise and retool themselves as dynamic hybrids between charity and innovative for-profits. They hired the same types of people, and developed cults of personality around visionaries the way Apple, GOOGLE and Amazon did. The question is: When it comes to eradicating poverty, are NGOs achieving results compared to the private sector?

Even Bono recently made the pivot away from just charity and debt forgiveness. He is lauding indigenous entrepreneurs, and says, "Smart aid aims to put itself out of business in a generation or two." But how does one judge a company that eradicates poverty from one that doesn't? The answer is COW-F.

There are Good and Bad Companies

You are a bad company if you rely upon monopolistic access to raw materials, markets, and government favours; if you see labour as a solely a cost to manage, and if you destroy the patrimony (air, water, beauty) of your country.

You are a good company if: Customers receive a product they value at a competitive price; Owners receive an above average return for treating people well, taking rational risks and making investments that spur innovation. Workers are in a clean and safe environment; and receive training and a high and rising wage; Future Generations are served because the company pays its taxes, and doesn't pollute; unborn generations will inherit clean air and water, and an improved environment.

Do Companies like this Exist?

They do, even in Haiti after the earthquake. Recent press reports indicate that since the earthquake in January of 2010, less than half of the USD 13 billion in pledged funds has been disbursed. It seems that Haiti cannot rely upon anyone to help its citizens, so they must help themselves, which is the essence of the GAMA story.

Mathias Pierre and his wife, Gaelle, started GAMA, which imports and services computer hardware from the USA. Mathias told me once, "I could have gone to America. I had a five-year visa, but I decided to stay, earned scholarships, got my engineering degree, and opened a small computer and software services business."

Mathias started training programs for disadvantaged youth. When the earthquake hit, he loaded up a truck with computers and Internet supplies and headed over to the President's temporary headquarters. The government was online, and up and running in hours-- days before the NGOs arrived. The country was in ruins, but Mathias' employees never missed a paycheck.

Haiti's thoughtful, beleaguered President Rene Preval told me at the time that he did have "some reservations about aid" as the sole source of change, and that he was "open to the private sector" as a way to help rebuild the country.

The Dream to Eradicate Poverty

This is right because even though humanitarian aid may help lift the country out of crisis, it can never grow the country and create prosperity for the average person. It means creating a culture of innovation: finding attractive export market segments to serve with unique, branded products; building new distribution systems; lowering energy and transportation costs; and providing new skills and abilities to Haitian citizens who will be compensated for the high and rising value they create. Even more importantly, it means creating a culture of self- determination.

Mathias says, "One must face his living situation and take action into his own hands for a better future. Step-by-step, the dream is carried out. One-by-one, obstacles are conquered. And the dream is suddenly within reach."

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Michael Fairbanks is co-founder of the SEVEN Fund and a Fellow at the Weatherhead Center for International Affairs at Harvard University.
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