Laurance Allen of Value News Network reports on a conversation with Philip Berber, founder of A Glimmer of Hope Foundation and one of the honorees at this year's Clinton Global Initiative.
Governments from around the world and international financial institutions such as the World Bank have poured hundreds of billions of dollars into Africa over the past half century. Meanwhile, improvement in the standard of living across the continent has been negligible, and impact measurement of aid projects is rare, preventing agencies from identifying best practices.
In contrast, A Glimmer of Hope Foundation is deploying new methods of disbursement. They have so far invested $35 million in 4,000+ projects in Ethiopia from 2001 through 2009 in the areas of health, education, water and sanitation, veterinary service, and micro-loans. Founder Philip Berber articulates his "better way" as follows:
This amount of money appears as a mere pilot program when compared to the aid industry as a whole, but Berber stresses the importance of the economics of designing appropriate and airtight channels of distribution. Without carefully designing the entire channel of distribution, he says, flawed, leaky, and failed models will be the inevitable result. Philip Berber cites Graham Hancock's book The Lords of Poverty: The Power, Prestige, and Corruption of the International Aid Business as having a profound impact on his motivation to improve aid transparency and effectiveness.
Moving from his native Dublin to London in 1979, Philip Berber worked in marketing before founding his first start-up in 1988 called Financia. The company provided advanced financial market analysis and predictive technologies. Then, in 1991, the Houston-based Frontier Financial bought Financia and Philip transferred to Texas with his wife Donna. In 1995, the family moved to Austin where Philip started CyBerCorp, an online trading company, which later sold to Charles Schwab for $488 million.
Even as Berber turned to social enterprise in 2001 he was still skeptical about the endeavor. He explains that his real epiphany did not blossom until his first trip to Ethiopia with Donna, at which point he dropped his commercial activities to devote himself full-time to the organization:
Humanitarian aid in the form of clean water, sanitation, and schools takes a great deal of time to coordinate with local governments and other critical partners, but Berber believes his business model is scalable at the pace he has set for A Glimmer of Hope. Far more scalable is the organization's entry into micro-lending. By carefully partnering with the best three or four micro-lending banks operating in Ethiopia the Berbers believe they can scale faster by relying on existing infrastructure.
The social enterprise innovation in Berber's model is the "100% Promise" where the foundation covers all the overhead costs so that donations can be channeled directly to recipients:
With the organization covering all overhead cost, the 100% Promise means that the Berbers' system can be more efficient than analogous programs administered by USAID.
The organization's overhead is currently running at about $2 million per year and the effectiveness of the business model has attracted an important group of partners. The Michael & Susan Dell Foundation, charity: water, H2O Africa, and Whole Planet (Whole Foods) have all chosen A Glimmer of Hope to be their implementing partner for major initiatives in Ethiopia. With substantially more money coming in than their modest overhead, these passionate social entrepreneurs are bringing a little glimmer to every project they complete.