Upaya’s Sachi Shenoy and Kate Cochran discuss a new take traditional philanthropy in a piece written for givingcompass.org.
On July 20, 2018, Kate Cochran and Sachi Shenoy, gave an update on Upaya's portfolio and jobholder metrics at the Upaya Breakfast Briefing, hosted at Global Washington. Watch a recording of the event which was streamed live on Facebook!
Farmers around the world face intense pressure. Steadily rising cost of inputs, combined with downward pressure on prices, and price volatility in general, make it difficult to predict how much income one can earn in any given season. Despite the grim trends, I am optimistic that dedicated entrepreneurs and creative business models can usher in the operational and technological innovations that are needed.
Five years. Over 4,000 jobs created. Nearly 200,000 lives changed. And solid evidence that these jobholders are making progress out of extreme poverty!
For any entrepreneur – especially social entrepreneurs – it is critical to collect feedback from the people you are serving.
According to a new World Bank report, 114 million people worldwide moved out of extreme poverty in 2013, accelerating an overall positive trend that researchers have observed over the past two decades. There is much to celebrate: as stated in the report, “the world had almost 1.1 billion fewer poor in 2013 than in 1990, a period in which the world population grew by almost 1.9 billion people.”
India in recent years has made remarkable strides, and is a significant contributor to this trend. Just five years ago, around the time Upaya was getting off the ground, we lamented the fact that experts a few years earlier reported over 400 million people living in abject poverty in India. This put the country on par with — or even exceeding — the same numbers reported for all of the countries in sub-Saharan Africa combined.
Today, India as a country still houses the largest number of people living in extreme poverty, but this figure is now estimated to be 224 million. Economic growth, increased employment, and rising incomes have all contributed to this progress. We at Upaya are proud to play our role in encouraging inclusive growth, and nurturing the development of investable businesses that create lasting, dignified employment for the most marginalized communities.
The World Bank deems a household living under $1.90/day as living in extreme poverty. Upaya ensures that the jobs it helps create pay incomes in excess of this amount. But just as important as the increase in income is ensuring the regularity and stability of that income stream. Households that remain mired in abject poverty are often reliant on cobbling together “odd jobs” in the informal economy – manual labor, trash collection, and even begging when nothing productive materializes – to make ends meet. On a good day, there is work to be had and a wage earned. On a bad day, there is no work, and hence no income. An entire family goes to bed hungry, anxiously hoping that its luck will improve tomorrow. This erratic and uneven and unpredictable existence does not allow a household to build a firm economic foundation and move out of poverty.
In keeping with our mission to create dignified jobs for the poorest of the poor, Upaya from day one has been committed to not only track how many jobs have been created, but also monitor how incomes have improved, and how these incomes have helped previously destitute families make improvements to their quality of life. We refer to this practice of collecting, assessing, and reporting data as social performance management (SPM), and this activity over the years has yielded invaluable insights for our entrepreneurs and other stakeholders. Are households making progress out of poverty in the ways we expect? If not, are there refinements we can make to our interventions to effect better outcomes?
This week, we are releasing a report for Maitri Livelihood Services, one of our partner businesses working in the Northeast states of West Bengal and Assam. Maitri provides skill development, training, and job placement opportunities in the domestic work sector for women from economically disadvantaged backgrounds. Traditionally, women working as housekeepers, cooks, nannies, and at-home nurses have dealt with highly informal work arrangements. It was not uncommon for employers to delay compensation to workers, negotiate below-market wages, and deny workers basic rights in terms of number of hours or working conditions. Maitri is bringing much needed structure and formality to this sector: women who are trained and placed in affluent households are guaranteed a steady and reliable income, an assurance of their rights and safety, and proper recourse in case of any conflict.
Our report demonstrates that Maitri jobholders do indeed benefit from increased, reliable income. It also points to improvements these households are able to make to their quality of life as a result -- such as being able to afford formal electricity and gas connections. The household is less likely to live in extreme poverty the longer a jobholder maintains her relationship with Maitri. We fully expect to see positive improvements in other indicators as time passes, such as housing quality, asset purchases and savings patterns.
In the coming weeks, we plan to release reports for two other partner businesses, Saahas and ElRhino, as well as a year-end portfolio wide assessment. Preliminary findings reveal significant improvements to household income, job satisfaction, and overall well-being. We view these developments as critically important components in our continued fight against extreme poverty. Knowledge is indeed power … studying the exciting progress our jobholders make over time, and listening closely to their feedback and ideas, allows us to fully engage these hard-working, ambitious women and men and empower them to build pathways to a better life on their own terms.
Upaya is pleased to announce today that longtime Board member Kate Cochran will join the full-time staff as the organization’s first Chief Executive Officer. Cochran brings over 20 years of experience in the private, nonprofit, and public sectors to the role.
Letter from Executive Director, Sachi Shenoy
I’m not a marathon runner. Or a triathlete. Or a mountain climber. In fact, you could say that my only “extreme” passion is my obsession with fighting poverty at Upaya.
That being said, 2015 was my Everest.
When we started Upaya nearly 5 years ago, I knew this would be the hardest work I'd ever done. What I didn’t know was that in 2015, earthquakes, floods and fires would threaten our own offices and our partners', and that our team would be challenged by life-threatening illnesses and staff transitions.
Even in the face of all this adversity, even with this mountain to climb, 2015 has also been our greatest success. Thanks to our team’s dedication and tenacity, we:
- Doubled Upaya’s investment portfolio! (10 partners and counting...)
- Attracted 5x in follow-on investment capital
- Had our 1st exit (and capital reinvestment)
- Doubled our job numbers: Upaya’s partners are now employing 2,329 individuals
The tough stuff is not often featured in year-end letters from small non-profits, but I think it’s an important story to tell. It is not only authentic, it exemplifies our spirit of resilience and teamwork. These are also the same traits we admire in our portfolio partners and their employees. Our newsletter includes profiles of two other fearless individuals: Jamuna and Wilma. I hope you read their stories. Their struggles and successes continue to fuel my commitment to this work, and have helped me raise the bar for 2016.
Next year, our goal is to double our outreach once again, and create over 5,000 jobs in 2016 for families like Jamuna’s. As I share these aspirations, I also extend my deepest gratitude. This work wouldn’t be possible without our very dedicated “base camp” team: You! I thank you sincerely for making this rocky year one that ended with such celebration and victory.
So, I take back what I said. I AM a mountain climber. At Upaya, we all are. We are the risk takers. The do-ers. The believers that it can be done.
Thank you for being a part of this hard, beautiful, life-changing work.
Upaya Social Ventures is proud to welcome Patricia Devereux and Steve Schwartz to the organization’s Board of Directors.
“We are thrilled that Patricia and Steve are joining the Board,” said Upaya’s Executive Director Sachi Shenoy. “Each brings valuable experiences, insights, and relationships that will serve the organization well as it continues to grow,” said Sachi.
Patricia Devereux most recently served as MasterCard’s Executive Director, Global Philanthropy. In this role, she transformed MasterCard’s corporate philanthropy program into a global program with more than 20 partners in 40 countries helping to drive the company’s financial inclusion strategy. She was also instrumental in the creation of the MasterCard Foundation, which is now the fourth largest private foundation in the world.
“Upaya is leading the way in promoting a new model for ending extreme poverty, and I am excited by the opportunity to be a part of this burgeoning movement,” said Patricia.
Steve Schwartz is no stranger to Upaya. As one of the organization’s co-founders, he oversaw marketing communications and operations over Upaya’s first five years. In addition to his transition to Upaya’s Board, Steve also recently joined Tableau Software as the company’s Corporate Social Responsibility Marketing Manager.
“From the very beginning Sachi, Sriram [Gutta, Upaya’s third co-founder] and I talked about
While Upaya welcomes Patricia and Steve to the Board, the organization must also say a heartfelt thank you to Deepika Mogilishetty and Sonny Garg as their board terms come to an end. Each played a pivotal role in Upaya’s evolution in its earliest days and has expressed continued support for the organization in the coming years.
Upaya and LAF: Creative Venture Fund (LAF:CVF) have come together to build skills and create thousands of jobs for young women and men living in India’s poorest communities. Through this partnership, Upaya and LAF:CVF will identify, invest in, and provide business development support to promising early-stage ventures with significant youth employment potential via Upaya’s LiftUP Project initiative.
Together, the two organizations will work to support multiple new ventures and create significant new employment opportunities across India.
LAF:CVF is a venture philanthropy fund that invests in employment and empowerment initiatives that provide vulnerable youth around the world with the means to create a better life for themselves. This partnership lays the groundwork for LAF:CVF to make its first investments in India following similar efforts in Haiti and Kenya.
“Not enough organizations are focused on giving youth opportunities to build critical life and job skills while also ensuring they have the opportunity to utilize those skills to earn a viable living,” said LAF:CVF Executive Director Kate Genereux. “Sachi and her team have an incredible track record of providing critical financial and advisory support to promising entrepreneurs who have, in turn, become large scale employers of young people in their areas,” said Genereux.
Upaya’s flagship program, the Life-Changing Interventions for the Ultra Poor (LiftUP) Project incubates early-stage enterprises in low-income communities by combining patient seed equity funding with hands-on financial management support. Upaya’s goal is to help each enterprise reach financial stability, scale, and become a significant local employer.
“From our initial conversations it was clear that LAF:CVF leadership shared Upaya’s vision of poverty alleviation and youth empowerment through employment. We are thrilled to translate that philosophy into action and help young men and women from poor communities earn a stable, dignified living.”
Upaya was profiled in the 12 December 2014 edition of the Seattle Times. In the article, Upaya co-founders Sachi Shenoy and Steve Schwartz talk about the organization's evolution, the challenges of the work, and how the Upaya model is changing lives.
Extreme poverty is an unavoidable reality in India. The first time I traveled in the country — as an inexperienced and idealistic 20-year-old backpacker — I was shocked by the families living on the street, the children begging for food, the old women breaking rocks on the side of the road.
I wondered what could be done to help these people — the poorest of the poor. Some travelers gave them money, others didn’t. One (loosely) quoted the Bible by saying “Sarah, the poor are always with us.”
Everyone seemed convinced that extreme poverty was an intractable problem beyond straightforward solutions.
But Sachi Shenoy disagrees. She says these “ultrapoor” just need jobs.
“In India we estimate that there are almost 400 million people living under the extreme poverty line. ... One of the root causes (is) unemployment and underemployment” explains Shenoy, executive director and a co-founder of Seattle-based nonprofit Upaya Social Ventures.
Upaya — which recently received a grant from The Seattle International Foundation, the foundation that funds this column — hopes to address that unemployment by investing in business ventures that have the potential to expand and employ those who otherwise have few, or no employment opportunities.
Shenoy says she was inspired to start Upaya while working for a microfinance organization in Delhi, India. Microfinance is a development approach that lends money to poor people, usually for small-business ventures. She says the microfinance approach tends to focus on the “midlevel poor” — people who made $2 to $4 a day — rather than the “ultrapoor” — those who make less than $1.25 a day.
“There was a cutoff for being too affluent and then there were people we would do surveys on and say, ‘These people are too poor; they’re too much of a credit risk,’ ” says Shenoy, describing the selection process for microfinance applicants. “That’s when my interest got piqued ... If we’re really trying to alleviate poverty, what do we do about the extreme poor?”
Her answer was Upaya, which focuses on entrepreneurs who have ideas with big business (and thus big employment) potential. They offer investment (not loans) with the hope of creating jobs for those often left behind by microfinance.
“You can think of us as the angel funders for small businesses in India,” says Shenoy, explaining that Upaya makes a point of working with entrepreneurs who may have trouble attracting traditional investors or securing bank loans. The investments (usually between $10,000 and $75,000) go to businesses from areas that have a large concentrations of “ultrapoor.”
The goal is to help grow promising businesses with capital as well as mentorship. In exchange, business owners promise to hire the poorest people in their region as jobs are created.
In the past three years, Upaya has invested in six businesses, ranging from a dairy collective to a company that makes “luxury paper” out of rhino and elephant dung, and an operation that turns fallen palm leaves into biodegradable plates. All told Upaya ventures now employ more than 1,100 people in jobs that pay, on average, between $2.25 and $4 a day.
It’s still a tiny paycheck for a tiny percentage of the millions living in desperate poverty. But it’s enough to move those few from that dangerous ultrapoor category to the more stable midlevel-poor group. At this level people can begin to secure housing, eat regularly, keep kids in school and even address chronic health problems — all developments that Shenoy says they’ve seen among workers employed by their Upaya ventures.
Creating stable, decent-pay jobs in some of India’s poorest (and often) rural communities is a difficult business. Shenoy says their first business (the dairy collective) endured religious unrest and droughts in the first year. It was an experience that taught them to think in “contingency plans” and to closely consult with entrepreneurs about specific needs (special accountants to help prevent corruption and bribery, for example).
But it’s worth it to reach those who might not otherwise be reached, says Steve Schwartz, a fellow co-founder of Upaya. For him, the mission boils down to one of simple belief.
“The best way to get someone out of extreme poverty,” says Schwartz, “is to pay them better than someone living in extreme poverty.”
Maybe the “ultrapoor” aren’t such an intractable problem after all.
Sarah Stuteville is a multimedia journalist and co-founder of The Seattle Globalist, www.seattleglobalist.com, a news site covering Seattle's international connections. Sarah Stuteville:email@example.com. Twitter @SeaStute
Upaya Social Ventures and the Artha Initiative are proud to announce that they have formalized a collaboration through which they will work together to develop a pipeline of and co-invest in India’s Small and Growing Business (SGB) sector.
Together the two organizations will deploy seed capital to help these SGBs scale and create employment for the poor, share best practices around sound financial management, and disseminate tools and training for the benefit of India's wider SGB ecosystem.
“In order to promote entrepreneurship in India, the barriers to financial management skill development must be addressed and be paired with improved access to patient investment capital that best meets the entrepreneurs’ needs,” said Artha Initiative Director Audrey Selian. “This partnership does exactly that by improving the access to management resources and seed capital for the next great wave of Indian entrepreneurs,” said Selian.
Upaya and Artha have each found that when early stage entrepreneurs receive seed funding and have the resources to master basic financial management practices, their confidence greatly improves and they are far more likely to see a new venture through its tumultuous first year. By equipping entrepreneurs with financial management tools and a roadmap for their use, they have been able to reduce the risk and uncertainty inherent in a new venture and, in turn, attract follow-on debt and equity investment needed to grow the business.
Through this collaboration Upaya will share its tools and training materials for dissemination across Artha’s platforms and networks.
“Although a number of tools are already available, the uptake by entrepreneurs currently is minimal as most tools are geared towards later stage businesses,” said Upaya’s Executive Director Sachi Shenoy. “Entrepreneurs find the more general templates difficult to adapt to their specific business models,” said Shenoy.
In addition to sharing materials and best practices among the two organizations, Upaya will explore co-investments in job creating businesses that participate in the Artha Venture Challenge. Furthermore, Upaya will leverage the Artha Platform, an online community and website dedicated to building relationships between sector participants, to expand the pool of resources available to its partners as they continue to scale.
This is the second co-investment and tool-sharing partnership of its type for Upaya, following an announcement earlier this year of a similar collaboration with 3rd Creek Foundation.
Upaya Social Ventures is honored to announce that it has received a 2014 Light a Fire award from Seattle Met magazine, and is the first ever recipient in the publication's “Acting Globally” category. The Light a Fire awards were created three years ago by the magazine as “a celebration of organizations and individuals who make Seattle – and the world – a better place,” according to the publishers.
Co-Founders Sachi Shenoy and Steve Schwartz accepted the award from the publishers at an event held at Canlis restaurant in Seattle on October 21.
“This is a really exciting opportunity to celebrate this new approach to poverty alleviation and economic development with the Seattle community that has supported Upaya since the very beginning,” said Schwartz.
“It is also a great chance to shine the spotlight where it really belongs – on the entrepreneurs who are building these remarkable businesses and the individuals who are receiving steady employment for the first time,” he said.
In addition to the award, Upaya is being profiled in the November issue of Seattle Met magazine. The magazine will be on newsstands starting October 25.
Special thanks to longtime supporter Tim Wade for nominating Upaya for this award!
Representing Upaya at the Clinton Global Initiative for a second year in a row, I was honored to meet Secretary of State Hillary Clinton and share with her Upaya’s successful completion of its Commitment to Action — to double the number of jobs in our portfolio over the past year! The timing could not have been better, either, as Secretary Clinton told the assembled members earlier that day that “We need to provide the support systems that enable … the array of opportunities that women at all ages should have.” I was heartened by this statement, and could not agree more when she followed it up by asserting “work is an essential part of one’s purpose in life.”
A common theme during the meeting was the empowerment of women and girls all over the world, and the discussions made me reflect on our own experience as an organization that has now promoted entrepreneurship for over three years in India’s poorest districts.
We’ve seen with our own eyes the power of women in the workforce. A woman who earns is far more likely to provide nutritious food for her family, send her children to school and save for the future.
We have seen the effect that a woman’s job has on her daughters — they start to believe that they too can be productive and more independent when they are older. They aspire to stay in school, reject the notion of early-teen marriage, and collectively perpetuate a virtuous cycle that will lift their communities out of poverty.
Women entrepreneurs are an especially powerful breed — they are fearless, have overcome seemingly insurmountable societal obstacles to pursue their dreams, and run their companies with a devotion and purpose that is infectious. These entrepreneurs are committed to hiring other women, counseling them through their own challenges at home, and providing a safe haven for them in the workplace. Women helping women, women helping girls … it’s a natural rhythm we kick off when we equip just one in a community with the funds and the right tools to start a business.
Upaya is more determined than ever to identify the women leaders of tomorrow in India and nurture their incredible potential. And after my recent experience, I know we’re not in this alone.
Upaya Social Ventures and 3rd Creek Foundation (3CF) are proud to announce a collaboration through which both organizations will work together to identify, support the development of, and potentially co-invest in Small and Growing Businesses (SGBs) that can create employment for India’s poor.
“We are thrilled to be partnering with 3rd Creek Foundation and strengthening the ecosystem for SGB innovation together,” said Upaya’s Executive Director Sachi Shenoy.
This is a new type of partnership model for Upaya, one that facilitates not just the exchange of ideas and best practices but also opens the door for co-investment in current and future Upaya partners.
“3CF and Upaya share a development philosophy that meaningful employment is key to achieving sustainable poverty alleviation,” said 3CF Executive Director Gwen Straley. “3CF hopes that this collaboration will encourage other foundations and impact investors to take a closer look at the potential that SGBs in emerging markets have to create long-lasting, positive change for those living in poverty,” said Straley.
“While Upaya is often the first investor in a company, we know we can’t do it alone,” said Shenoy, “and by having a channel for co-investment to take place, we can better ensure that early-stage ventures are set up for growth and success.”
3CFis a private family foundation dedicated to helping individuals achieve economic independence. Established in 2007 by Dave and Pam Straley, 3CF supports sustainable development initiatives through charitable grant-making to strong nonprofit partners in impoverished communities worldwide. The foundation seeks to put funds where they will go the farthest and improve the most lives and values projects that take a market-based approach to solving tough social problems. For more information, please visit http://3rdcreek.com/foundation.php and http://www.3rdcreekfoundationblog.org.
Upaya's Executive Director Sachi Shenoy was recently named to the Puget Sound Business Journal's "40 Under 40" list, an honor that "spotlights the top business leaders under the age of 40 who excel in their industry and show dynamic leadership."
Below is a profile of Sachi written by PSBJ Staff Writer Steve Wilhelm for the feature, and subscribers can click the link at the bottom of the page to read an extended Q&A.
Sachita Shenoy was brought up by her parents thinking it’s important to open doors for those who have had fewer opportunities in life, especially back in India.
“Our dinner table conversations at home, my father and mother always talked about what can we do to help family members,” she remembered.
The way she created to do that, and at the same time expanded to a much-larger sense of family, is a lesson in individualistic self-creation.
Her Seattle-based Upaya Social Ventures is a unique mix — part venture capital firm, part global NGO — a nonprofit with a mission of creating good jobs for good people in India.
How many jobs?
Upaya’s six businesses now employ 1,200 people in India, and those businesses are rapidly growing, with a promise of hiring many more.
The idea is that while traditional microfinance usually backs tiny one-person enterprises, Upaya backs people with bigger ideas to create larger companies that will hire a lot more people. Now, one Upaya company makes plates out of leaves, another contract with silk weavers.
“Upaya is investing in and building what we’re calling small and growing businesses, and really growing them so they can create jobs at scale. …We’re not talking about a few jobs;we’re talking about 500, 1,000,” she said. “That’s the way to attack poverty, is to create a virtuous cycle of economic development.”
Now and executive director of Upaya, Shenoy had no way of knowing, earlier on, how her life would evolve.
One good thing was that her Indian-born father, a cardiologist, believe she could do anything she chose.
“I had always been raised with this notion of equality. Gender disparity never entered my mind,” Shenoy said. “I never felt I couldn’t do something because I was a woman and not a man.”
Early on, she thought that the route forward would be to earn a lot of money so she could give it away, so she took courses in economics and became one of the first women on the JP Morgan currency trading desk on Wall Street.
But then she started to think there was a better way, and returned to school to earn an MBA.
“If felt like rather than work in finance in Wall Street and make charitable donations, I wondered if I could make much more impact, be more of player than be a check writer.”
So she moved to India to work in the slums of Delhi on microfinance projects, which led to a job with Unitus, then a Redmond-based microfinance company. And so she moved to the Seattle area.
But when Unitus restructured in 2010, she lost her job but saw an opportunity. She and some partners took over some of the contracts and created a new structure, where her company would support larger enterprises, invest in them and help them navigate the early years of growth.
Upaya is proud to announce that it has accepted membership to the Aspen Institute's prestigious Aspen Network of Development Entrepreneurs (ANDE), a global network of organizations that propel entrepreneurship in emerging markets. Upaya was selected for membership based on its strong focus on job creation through small and growing businesses (SGBs).
The network’s members provide critical financing and business support services to SGBs that create significant economic, environmental, and social impacts in developing countries.
"We are very excited to join ANDE," said Sachi Shenoy, Upaya's Executive Director. "The network has attracted a number of prominent organizations who all believe very strongly in unleashing the potential of small and growing businesses ("SGB's") in developing countries. We look forward to contributing to this important dialogue and partnering with others to make our shared vision a reality.
Members of ANDE include both for and nonprofit investment funds, capacity development providers, research and academic institutions, development finance institutions and corporations from around the world. ANDE currently comprises over 200 members who collectively operate in more than 150 countries.
Two weeks ago I was honored to represent Upaya at the 2013 Clinton Global Initiative! We received widespread praise for our work -- so many attendees were impressed by what our partners have accomplished, against great odds. At the meeting, Upaya made a Commitment to Action to create dignified jobs for the ultra poor, primarily women, in India by October 2014 by doubling the number of enterprise partners in our LiftUP Project network.