Millions of people across the world are dying for lack of access to clean, potable water and unhygienic sanitation, and this is unacceptable in this day and age.
Although many countries are donating charitable contributions to various countries, the truth is that there is insufficient charity in the world to actually make a difference; It would take approximately $200 billion per year in charity for a minimum of five years straight to give water access to everyone. Currently there is around $8 billion going into all the assistance for water and sanitation.
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In reality though, there is already around $500 billion a year in the system from the poor who are paying in terms of time and paying the water vendors selling water in their slums because they cannot afford to connect to the water utility; these are what are called “coping costs.”
In Bangalore, India, for instance, individuals can pay vendors around 20 rupees a day for water and another 20 rupees a day for use of a toilet in the slums. These 40 rupees every day create a cycle that means that they cannot afford to connect to the public utility.
Giving individuals such as this an easily-repayable loan to connect to public utilities through a foundation such as the Caterpillar Foundation, which provided funding for Water.org’s WaterCredit program was a great help, but not on a large enough scale.
Social Impact Investing came about via Water.org creating a fund, into which they put the first million dollars. Other investors came to the table and the first fund of $11 million was created. Investors get a 2 to 3% financial return each year over seven years, but also have a massive Social Impact. Approximately 1 million people will get access to water and sanitation via this first fund, and this fund has resulted in a separate spin-off entity called WaterEquity which will focus solely on Social Impact Investing for individuals needing water and sanitation. The next fund will be a $50 million fund.
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