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Jacqueline Novogratz: Marshalling a Moral Revolution

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Jacqueline Novogratz: Marshalling a Moral Revolution

"This is the moment for change and there are more who are listening. We need an overall mind shift through every one of our sectors. And there's still a lot of resistance. By definition, that's what the status quo does. However, I do think that in some ways, what we're seeing right now is the cultural shift." - Jacqueline Novogratz

Jacqueline Novogratz, founder and CEO of Acumen, talks about the role of markets in working towards a better world and how the kind of work she does has changed in recent years as the rising generation demands sustainability, inclusion, equity, and justice.

Jacqueline’s organization, Acumen, is a nonprofit impact investment fund that uses entrepreneurial approaches to solve the problems of poverty. Learn more about Acumen on their website and find them on Twitter at @Acumen. Find Jacqueline on Twitter at @JNovogratz.

KH: Burn the Boats is proud to support VoteVets, the nation’s largest and most impactful progressive veterans organization. To learn more, or to join their mission, go to

JN: This is the moment for change and there are more who are listening. We need an overall mind shift through every one of our sectors. And there's still a lot of resistance. By definition, that's what the status quo does. However, I do think that in some ways, what we're seeing right now is the cultural shift.

KH: I’m Ken Harbaugh, and this is Burn the Boats, a podcast about big decisions. On Burn the Boats, I interview political leaders and other history makers about choices they confront when failure is not an option.

My guest today, Jacqueline Novogratz, is the founder and CEO of Acumen, a nonprofit impact investment fund that uses entrepreneurial approaches to solving the problems of poverty, investing in social enterprises serving low income communities. She is also the author of a newly released book, Manifesto For a Moral Revolution. Jacqueline, welcome to Burn the Boats.

JN: Thanks so much, it’s great to be here, Ken.

KH: I really do want to dive into the ideas and the people you present in Manifesto For a Moral Revolution, but I want you to give us a bit of the backstory first. How did you come to this way of thinking about the world, to this line of work, after getting your start on Wall Street?

JN: Well, so I came onto Wall Street at a time of financial crisis actually, the early 1980s. And the crisis was particularly acute in Latin America. And so while I found that I loved the tools of business and finance, what I didn't love was seeing how low-income people were excluded from the banks altogether. Many didn't have confidence even to walk into the doors of the banks. And so that sent me on a journey that landed me in Rwanda of all places, in Central Africa, where I started the first microfinance bank in the country with a small group of Rwandan women. And if my experience with the markets had shown me the power of markets to enable prosperity and bring innovation to existence, the approaches of aid that I was seeing all around me was indeed reaching more low-income people, but too often creating dependency. The combination of those two experiences made me really start to understand that we get it all wrong when we see poverty only in terms of income. We have to see poverty in terms of human dignity, of choice, of opportunity. And I started to ask myself, Ken, if we could use the best of the markets in ways that we controlled them rather than being controlled by them, recognizing their power and their limitations, might we do a better job of bringing choice, dignity, opportunity to low-income people and even solve some of the biggest problems of poverty?

KH: It's that abiding faith in the power of markets I really want to get into, because one of the things that has always struck me about impact investors is that unwillingness to depart from the orthodoxy of the power of markets. I know there are a lot of people who view that with skepticism. As someone with a deep well of knowledge about both Wall Street and developing markets, can you reassure us that a system based on market-driven incentives can be trusted, trusted to address the needs of the poor without taking advantage of those lacking financial and political power?

JN: Well, let me start by saying that I am neither an ideologue nor someone that stands in the concrete of orthodoxy. That all systems depend on the values that underlie those systems and markets are no different. And so I would say that as a start point, markets are a powerful listening device. If I give you a gift, you're unlikely to tell me whether you really like it or not. If I ask you to have some kind of transaction for that gift, I'm more likely to get an honest conversation with you. And that's what happens with poverty as well. When you look at the top down approaches that we've had to aid and development, too often we give people what we think that they need rather than what they truly need. What I've found in using markets as a start point is that it's an exchange between two people in terms of what is valued or not valued. Where it falls short, of course, is where people don't have the income to pay for public critical goods like water, healthcare, education. It also falls short when you're trying to build a new industry that hasn't existed before, like electricity. And that's why we need new tools for using markets, but also understanding that we will not solve these problems with markets alone. And so it's a rather nuanced approach that we take, Ken. It's not a “markets all the way” or “government all the way”. In an interdependent world, we need markets, government, and civil society to work much more hand-in-hand to solve our problems.

KH: I'm really glad to hear you describe it that way, especially the characterization of markets as a starting point. And I want you to give us a concrete example of that from your work. Can you tell us about the hospital system in India that you're investing in and how it indeed relies on a market approach and does see those women patients as customers, but is providing a service that was virtually nonexistent before?

JN: Yeah. The overall hospital system in India, particularly in maternal healthcare where India has one of the worst records in the world in terms of maternal health, typically had been run by the government, big public hospitals. And in fairness, over the last few years, there's been a real public investment in maternal healthcare, but mostly in the infrastructure, not in the service delivery. And so I actually a couple of years ago brought a group in to see one of the public hospitals in Hyderabad just to give some of our philanthropists a sense of what this looks like. And it was really quite extraordinary. While the infrastructure was beautiful on the outside, inside as you got into the maternal health ward, the halls were very dirty. I asked a woman why they were so dirty and she said, "Well, madam, this is for the poor peoples." And to make your way through the hospital, you essentially had to pay bribes. So even before your child was born, you would have to pay someone, usually more for a son than for a daughter. When we finally got into the maternity ward, which I actually didn't want to go into, it was an extraordinary sight: 12 essentially operating tables where women were lying, ome of them fully naked, some of them with just with a cloth over them, blood was, and feces were all over the place. And in the corner were some health workers that were not really seeming to notice what was happening on these tables. And it was really a scene that sent all of the people that I came with almost into a state of just shock and depression. We went right from there to LifeSpring, which is a hospital we actually created with government. It's a 50/50 ownership but trying to bring the rigor of the private sector with the ethos of a public spirit into maternal healthcare. The contrast couldn't have been more stark because LifeSpring sees low-income women as full-fledged customers even if they're charging a very low price. So everything is pink, it's very clean. There's a suggestion box. So women are asked what would make their experience better. The whole sense of cleanliness, price, affordability, respect, and dare I say dignity, that one feels in LifeSpring was the reason that it went very, very quickly from a single hospital that we invested in to 13 in a very short span of time. It's not to say, Ken, that you can't bring that same rigor into the public sector, but it is a mindset and an orientation that sees low-income people as customers and holds ourselves accountable to serving them in such a way as to give them voice and real agency within the system. And so that would be a system where I think for healthcare, we've got to get to a place where everyone has access to healthcare fundamentally, not just in America, but across the world. To do that will require a massive investment by government. And we can also extend that in partnership with private sector and civil society and that's where the conversation for me gets interesting. What is the problem that we are trying to solve, rather than sitting on one side or the other. Because we can solve these problems.

KH: I would imagine that the investment is actually the easy part, it's that cultural change, or as you put it, the new ethos that is really the hard part. I'm also going to guess just based on my limited understanding of the billions that the Indian government is putting into public health that the technology in that public hospital was probably good.

JN: Spectacular.

KH: But there is something, and I think your description is apt, calling out the dignity deficit in the way those patients, those customers are treated that requires a mindset shift. It's not just about economics.

JN: That's right. And when we think about change and we want it to happen so quickly, what we don't realize is how long it does take, which is why Acumen's whole model centers on patient capital. That we raise philanthropy, and then we invest it, yes, but for 10 to 15 years so that we can actually build the capabilities on the ground to actually execute on what these companies said that they would execute on. I did not understand that when we were first starting, that we didn't just have to build companies, but overall ecosystems. So if you look at LifeSpring just as one example, the model is to use all of these community health workers that will go out into the communities and work with women. Some of whom come from garbage-collecting communities, and they've not had babies in hospitals, or they've only gone to the public health hospitals. They don't think about pre or postnatal care. And so these women will go to their homes and help them, but creating a workforce that has critical thinking in the way that they actually engage with particularly low-income people is in and of itself a great feat. Then you've got to change the doctors’ orientation who come from either a purely private hospital orientation where they're charging for every different thing that they do. That you've got to find that right balance around judgment, around care, around dignity, around accountability, and all of that matters. We also understood that if you didn't have lists that the doctors were checking, you didn't have the same kind of accountability that every patient deserves. And so all of that took time to learn, to build in to a point where this hospital stands with the best in terms of the kinds of results, health, repeat visits, and sense of community that they've been able to create.

KH: Today, Acumen's reach extends well beyond India, well beyond healthcare. Where are you and what are you investing in?

JN: We're across South Asia, East and West Africa, Latin America, the United States. We've invested on the philanthropic side, about 140 million, and those philanthropic dollars have then moved another 850 million. So about a billion dollars, we've moved into these companies that are serving, or have served over 300 million low-income people critical goods and services like electricity, healthcare, education, and agriculture.

KH: You talk about the importance of understanding the values that underlie systems. I think much of that line of thinking must come from your experience on Wall Street. Clearly it applies to how you're rethinking healthcare. But in the world of finance, have you found yourself swimming upstream in terms of trying to shift the values of an industry that really doesn't think long term? I mean, patient capital is a term you had to invent. How do you manage with your colleagues trying to explain the injection of moral values or a moral revolution, if you will, into this business?

JN: Well, the good news is 20 years ago, it was a lot harder than it is right now. And change doesn't happen overnight. And the bad news is, as we are looking at the gaping wounds of every one of our systems right now just laid bare by COVID and reinforced by Black Lives Matter, not only in the United States, but what we're seeing across the world, is that we are starting to see a shift in narrative coming from corporations, coming from governments, coming from, certainly coming from a new generation that is demanding sustainability and inclusion in our companies. I think, and I think this is probably behind your comment, that the financial sector is slowest to move, in part because we're all part of it. And as much as people want to do good, there's still a fear that makes them more conservative when it comes to their investing. And whenever you talk about investing, people go into a mindset of, “am I making more money than other people?” That's not serving us well as a world. And I've really been thinking a lot about what it means to move from patient capital, which is what we have pioneered for so many years, to an ethos that really asks all of us to give more to the world than we take. That includes investors who should be thinking about investing more than we extract, because our whole investing model has been an extraction model. “How much do I get?” Not, “how much am I really giving here?” And that short term mindset just exacerbates that to levels that have resulted in an inequality in the world that is obviously not good for any of us. And again, this is the moment of reckoning to really take that seriously.

KH: I think you've preempted my next question, which is, has something changed to make this possible now? Has there been, I don't know if it's a generational change or some macroeconomic shift, but are we in a special moment or could this have been done 20 years ago?

JN: We're in a special moment. 20 years ago, I knocked on so many doors and even though I had already started several organizations by that time, as you said, worked on Wall Street, I had an MBA. I would sit in offices and be told, "Jacqueline, you clearly don't understand how business works. I make my money here. I maximize my profits. Then I give it away over there." And I knocked on so many doors until I found those first 20 early adopters who were willing to take a bet on a more inclusive patient type of capital, capitalism that was driven by solving problems, not driven by making money. Now, as I said, you're hearing, Ken, this whole conversation about stakeholder capitalism. And what's interesting is I still am in conversations where people will say, "Well, when you go to a stakeholder model and you're looking at how much are your employees paid and is the earth being protected, et cetera, et cetera, there's no rigor, there's no discipline.” And I think “you guys are missing the point. We are beyond that conversation right now.” We have to find the rigor and the discipline that puts equal value on the kind of impact we are creating in the world in positive ways and where we recognize the negatives and we give a hit to how we value our companies and your customers, your employees, and your communities do not want to hear the easy tropes of doing well by doing good and maximize shareholder values is the only way to do that because we've essentially raised unbridled capitalism to the rank of religion. And yet in doing so, we see a generation that sometimes when I'll start talking and they just hear me use words like capitalism or even capital or markets will say, "You're the problem." And I say, "Well, I've worked in socialist economies, I've worked and interacted with almost every kind of economic system. And again, what comes down to it is values." And so we now have the sophistication to have the tools, have the resources, if we keep our eye on the prize, which is solving our toughest problems of poverty. And that's the interesting conversation and we just keep getting waylaid into these other, “but is it profitable? Is it not?” We can figure out the right kind of capital, Ken, once we understand the problem that we're trying to solve and the community for which and with which, importantly, we are trying to solve it.

KH: When it comes to values and the realignment of incentives that we're seeing, I want to prod you to give a little credit to the coming generation, which you do in your book and I'm going to quote directly. You wrote, "a new generation is now rising. One that is more conscious of how they live, what they buy, and where they work. Many are unwilling to work for companies unless those companies are committed to sustainability and recognize that with power must come accountability." So, I agree with you that we are in a special moment, and it's not one that we created, it's one that my kids are creating.

JN: I'm so glad you said that. In fact, it was a little, or a lot, embarrassing to me when my book came out on May 5th and suddenly there was a generation in the streets, and I was thinking, “they're the ones that are calling for the moral revolution.” And I am so heartened that they are doing that. They are calling it all out and they have been calling it all out, but there was no way we, our generation, could ignore it when they were in the streets. And what I realized is that what my book is about is more what it actually takes to build those institutions we have not yet fully re-imagined to live up to what is now needed, and that's when the hard work begins.

KH: So if the energy and the idealism and the vision might rest with, as you call them, the rising generation, yet the capital and the power and the access rests with the succeeding generation, are the worlds you inhabit listening? Are they seeing what is happening and reacting and reconsidering the values that have held sway for so long and rethinking short term investments in favor of patient capital? I mean, you could run down the list of things that need to change that you are advocating. Is there a potential moment for real acceleration here or are you still slogging away?

JN: This is the moment for change and there are more who are listening. We need an overall mind shift through every one of our sectors. And there's still a lot of resistance. By definition, that's what the status quo does. However, I do think that in some ways what we're seeing right now is the cultural shift. And you're hearing again, I keep going back, Ken, to narrative. You're hearing many people, not just pay lip service, but want to be part of the change. The hard work is then recognizing that everybody's got to give to be part of that change. And so you are starting to see some real movements. They still are coming typically from the bottom up and they need to be met from those with power, those with resources, those with networks. And so often we think about money, but social capital, our connections are equally, if not more powerful that our generation can really offer. Where I'm starting to see role models and business models, which is my obsession, like who are the new role models and business models? This is a generation that is tired of heroes, tired of the entrepreneur as fully celebrated. It's almost a mantra at Acumen, “we don't need another hero, we need a million heroic acts.” And so I guess I'm starting to see, like if I look at the coffee industry, which has been so broken for many, many generations, but also not transparent. And so you've got a $200 billion industry, the smallholder farmers who are responsible for most of the coffee that we buy often can't even cover their costs of production. And so I'm starting to see a new generation of entrepreneurs that are working with the farmers, getting close to them, understanding their production costs, negotiating a buyer's price that is often two to four times what the global commodities prices would dictate. And then providing clear transparency because of the technologies that we have all the way through the supply chain, all the way to the person who buys a latte at a retail store. And it was slow going, but now you're starting to see not yet the mega companies, but the hundred million dollar companies like Stumptown choose to buy coffee from companies like Azahar out of Colombia at this much elevated price. Because as I said before, customers and employees are demanding it. And the leaders want to do the right thing too, but we need to be pushing and recognizing that as individuals, we have much more power than we think we do. That gives me hope. Now we have to build on that ground swell and not let cynicism allow a reversion to what was before. There is no option to go back to what was. We have to create that new normal.

KH: Is that story about the entrepreneurs working with coffee growers in Colombia, is that an example of markets as a listening mechanism? Because I didn't completely understand that at first.

JN: Hah. That is a great question. It depends on who the market is. When it comes to commodities, those markets actually had been priced mostly by Wall Street traders looking at the globe, not at individual countries. And so in a way that doesn't actually conform to the customer, right? It conforms to price and demand on a global level. So if Brazil has a huge, what's called a bumper crop, produces more coffee than they had thought they would produce, because it's such a mover on a global basis, the price of coffee can go way down to let's say under a dollar a pound. That is the price that's passed along to the smallholder farmer. So the market is a listening device to customers and to supply, but the stakeholders, in this case, the employees, the farmers are not considered whatsoever. They are the voiceless, they're the voices unheard in this story. And that is how they've gotten... they've had no negotiating power. They take whatever price that they can get. So yes, the market listens to supply and demand, and yes, the market listens to the customer, but the market does not listen to the employees. And there are a lot of industries like that. That's the piece that's broken and has to change. And that's where we can talk about stakeholder capitalism and it sounds like in these big broad terms, but when the chips are down, it goes to a much granular level of are you seeing the poorest people on the planet who are those typically responsible for not only producing our food, building many of our products, providing all of the services that so many of us rely on and they are not receiving any compensation whatsoever because they are not considered in the overall equation of how ultimately customers interact with the markets they are dealing with.

KH: You described that overlooking of those critical elements of the market equation as something that's broken. But I think some might argue that that's not a bug of the system, that's a feature of the system when the end goal is driven by arbitrage. You want to get something for as little as you can pay for it and sell for as much as you can pay for it, feels like we have to revert back to your original prescription of injecting new values. Not fixing a broken system, but re-imagining the values that underlie that system.

JN: An entirely new ethos. And that's why when I started to write the book, I was - maybe at some point will write a more technical book on actually, how do you build these companies step-by-step? But I realized that wasn't the point. It's exactly what you're saying, Ken. The point is many of those values have been there, we didn't know that they were there. Now with transparency, it's impossible not to see. And once you have seen something, it becomes impossible to unsee it. One of the things I've really learned is that we are the system, so therefore we can change the system.

KH: I want to ask you about the revolution part of your moral revolution, especially in the way it anticipates a conflict of values. I'm wondering how you think about that in an age where we need moral clarity more than ever and we see values in irreconcilable conflict, but you also have talked and written a lot about being able to hold two truths in tension. And I'm really uncomfortable with that in an era where there are not always good people on both sides, if you know what I'm talking about.

JN: Yea. I think it's a spectacular point and there are truths that we have to hold as immutable and fundamental. And here's the piece that- what I have learned from my time in Rwanda, I started the first microfinance bank there and seven years later, the genocide occurred. I ended up discovering that the people with whom I had worked played every conceivable role of the genocide, including being perpetrators. I discovered in that time that we have monsters and angels inside all of us, and leadership really matters. Rwanda at the time was going through a time of real insecurity. And it became very easy for demagogues to prey on those monsters, which are really our broken parts, our shames, our insecurities, our fears, blame other people for problems that were shared and make people do terrible things that they would not ever normally do. We have seen this play itself out in history. We're at that point again in history in so many countries around the world where we're seeing people prey on fear and insecurity. And so I am not saying we'll find the truth in either side. What I am saying is that I fundamentally believe that we share so many more values than we do not share, and that our work also is to identify that common minimum of shared values and move from that place. I work in some of the most conservative communities in the world as an American woman and have had to learn how to navigate different belief systems. Finding ways to navigate across lines of religion where you're talking about beliefs, you're not talking only about values, is really tricky territory. And yet when it comes to having conversations about getting their children educated, knowing that their children will be proud of them, and moving the conversation to those places where we do agree, that requires that when they say, as a for instance, "I don't want to take a vaccine for polio because my religious leader has told me that it is haram, or it is forbidden, or that the Americans have injected it with HIV," whatever conspiracy theories you want to say, I don't start by saying, "You're close-minded." I start by saying, "This is a time of no trust and I understand that fear. And at the same time, two villages over, you've seen 30% of the kids get polio until the vaccine came in.” And it may not be a conversation that ends right then, but a relationship starts to build. And from that relationship can become more of an open-mindedness. And so I don't think there are good and bad people, Ken. I don't. I think that there are good and bad influences inside all of us. And we're at a moment where things have accelerated so quickly that it becomes really easy to use a tribal mentality, a mob mentality, to jump in with a group and feel safe because we are identified with the group and do things we would never do or never think that we would do. Reinhold Niebuhr says that groups are more immoral than individuals and I deeply have seen that to be true now having gone and lived in and worked in too many communities that went from peace to outright destroying each other.

KH: Well, thank you so much Jacqueline for your time, for coming on Burn the Boats. We end every show with the same question. What is the toughest, bravest decision you've ever been a part of, either had to make yourself or witnessed?

JN: I think the toughest, bravest decisions always come down to people, Ken, and I, speaking to a Navy pilot, I hesitate to talk about those physical- I've done a lot of courageous or maybe reckless things to go into places that landed me in shootouts and put myself at great risk. Those didn't feel as courageous because I think courage is when you do something that you deeply fear and that you know will really hurt. As a young person, leaving and moving to Africa where there was no infrastructure and no real job, that was scary too. But I would say the bravest decision I made was when Acumen went through, probably an existential crisis about 10 years ago. When the impact sector was intrigued by the idea of patient capital and yet so many came into the sector and what they heard was, “you can make money and solve the world's biggest problems.” And I found that really offensive, yet it was extremely seductive, particularly for young people who wanted careers where they felt valued in a society that values and defines success as money, power, and fame. And so I got so much pressure from so many stakeholders to get with the program and move Acumen to be a for-profit and to model and lead this idea of impact investing where you didn't have to trade off returns for impact. And yet every fiber in my body knew that was the wrong way to go, because we were dealing with some of the poorest, most marginalized communities in the world. And there had to be a different way, a braver way to know that people would sometimes look at us and say, "They're not real. They're not serious because they're not making all of this money." But that if we hung in there long enough, we would show the kind of impact that smart capital invested in the right character, connected to a powerful values-driven community could be and could make. But it meant that I lost a lot of team members. It meant that I lost funders. It meant that I had times when I worried about the relevance of this organization that I had created to change the world. And that was lonely and brave. It could have gone the other way and we could have closed down and I could have been the nonprofit woman that tried really hard. And instead now I feel quite certain that we're on the right side of history and that we are going to be a part of helping to not only talk about, but provide role models and business models for stakeholder models of using markets, but not being controlled by them, partnering with government and civil society to solve some of the toughest problems of our generation. And that will be my work until I die.

KH: Thank you again, Jacqueline. It's been an honor having you.

JN: It's been an honor to be on the show. Thank you.

KH: Thanks again to Jacqueline Novogratz for joining me. Her new book is called Manifesto for a Moral Revolution and you can find her on Twitter at @jnovogratz. Learn more about Acumen at

Next week on Burn the Boats, I’m talking to Jake Wood - Marine Corps combat veteran and CEO and co-founder of Team Rubicon, a disaster relief organization that retrains military veterans to deploy as emergency responders.

If you enjoyed today’s episode of Burn the Boats, please rate and review us on iTunes - it really helps other listeners find the show.

Thanks to our partner, VoteVets. Their mission is to give a voice to veterans on matters of national security, veterans’ care, and issues that affect the lives of those who have served. VoteVets is backed by more than 700,000 veterans, family members, and their supporters. To learn more, go to

Burn the Boats is a production of Evergreen Podcasts. Our producer is Isabel Robertson. Audio engineer is Sean Rule-Hoffman. Special thanks to Evergreen executive producers Joan Andrews, Michael DeAloia, and David Moss.

I’m Ken Harbaugh and this is Burn the Boats, a podcast about big decisions.

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