For more than two decades Novogratz has been working as a philanthropist in Africa and other parts of the developing world.
In her book, The Blue Sweater, she tells the story of how she came across a little boy in the Rwandan capital, Kigali. He was wearing the sweater – her blue sweater. More than ten years earlier she had donated it to Goodwill, in the United States.
“I was jogging one morning in Kigali, when I saw this young boy wearing my sweater,” she says. “So I ran up to him…and there was my name on the collar of that little boy’s sweater.”
Novogratz tells her story with a sense of good humor. That random meeting with her sweater in a remote African town was, to her, a testament to the interconnectedness of human beings around the world. She calls it an epiphany that made her understand the importance of giving.
“This action that had been taken by me and my mother a decade earlier had come back to me…through a young boy,” she says. It also reinforced the notion that “our action and inaction…can impact people we might never know…and that to me is the most important metaphor that the blue sweater creates.”
Novogratz was not in Rwanda as tourist. She was helping set up the country’s first women’s cooperatives union, also called a micro-finance bank. She had been a successful banker in New York but left that job after working in a South American slum. She was trying to help “poor Brazilians who,” she said, “were working so hard but not having access to bank credit.” She was inspired to combine her skills as a banker and her passion for philanthropy.
Her boss at the bank turned down her suggestion for a program facilitating loans to the poor. So in 2001, she created Acumen, a non-profit global venture fund that uses ‘entrepreneurial approaches to solve the problems of global poverty.’ Novogratz is not very keen on giving aid to poor countries. This is an idea she shares with many opponents of the current foreign aid regime.”Pure aid and charity in the traditional way is not going to solve poverty and too often creates dependence”
Capitalism with a humanitarian ethos
She says that her work with Acumen proves that small amounts of cash donations combined the right business approach could help fight poverty in low income communities. She has already invested millions of dollars in small business ventures that have a social impact on their societies.
Entrepreneurs in developing countries that have benefited from small loans have been able to develop their big business ideas and are delivering affordable “critical goods and services – like health, water, housing and energy – through innovative, market-oriented approaches.”
The “Blue Sweater” is a story that does not have an ending. It is an ongoing narrative about fighting global poverty. Like any ongoing story, it has its own challenges. Both personal as a person who works in different cultures, and professional as a head of an organization that seeks to blend capitalism with humanitarianism.