Four interesting takeaways from the GIIN/ Dalberg “Landscape for Impact Investing in South Asia” report

On 18 December 2014, the Global Impact Investing Network (GIIN), in partnership with Dalberg Global Development Advisors, released a report that provides a “state of the market” landscape analysis of the impact investing industry in South Asia. The Landscape for Impact Investing in South Asia looks at the $8.9 billion in deployed impact investment capital in six countries – India, Bangladesh, Pakistan, Myanmar, Nepal, and Sri Lanka – and paints a picture of a “diverse but growing impact investing market across South Asia.”

As the report has circulated amongst the Upaya team, four main points have jumped off the page. Some of them mirror observations we’ve seen through our own experience investing in India, and others shed light on issues we are wrestling with. In no particular order:

Two of the top five areas for impact investment in South Asia – Manufacturing and Agriculture/ Food Processing - are directly contributing to livelihood enhancement. That said, they are still only 17% of the identified market.

Broadly speaking, manufacturing and agri-processing are two broad areas under which our team has focused its livelihood development efforts and we are excited to see them crack the top five areas for impact investment. 

However, the fact that the two segments combined are still a smaller percentage of the impact investment market than each of the top two categories - Financial Services and Energy – shows that we still need to expand the conversation about job creation and its social benefits in the impact investment community.  

“There is also a need to bring less-exposed enterprises into the fold in a number of countries. Even in India, where formal networks of entrepreneurs exist, it is difficult to find enterprises that are not part of these networks.”

This point really hits the heart of one of the biggest challenges in the impact investment space – pipeline. Right now, too many impact funds are only looking at the businesses that self-identify as social enterprises, and are only doing due diligence in that limited pool. The result is a sort of “social venture ghetto” where a subset of entrepreneurs are continually showcased together at business school competitions and conference panels, thus creating the impression that they represent the full scope of social ventures in the space.

Not coincidentally, the investors who have been successful are the ones who have not limited their purview to that ghetto. For Upaya, the majority of entrepreneurs we support do not necessarily self-identify as social enterprises, but simply as businesses operating in poor communities. Friend of Upaya Artha Initiative has taken a similar view of the issue with their Artha Venture Challenge, a competition that has uncovered several great companies outside of the mainstream social enterprise conversation. In both cases, Upaya and Artha have had success in finding the types of investment opportunities that were sitting outside the standard impact investor conversation but are having a positive impact through their work.

“[In India] funds are shifting toward a less opportunistic and more hypothesis-driven approach to selection; in this new approach, these funds start with the identification of a problem in a given sector, then identify a potential solution (hypothesis), and subsequently seek organizations that contribute to this solution.”

Among the team we’ve long been wary of the proliferation of impact investing funds whose portfolio companies are united only by a broad notion of “positive impact” rather than a specific type of change they are working toward.  Our concern is that, without a unifying objective, funds will scatter investments across a variety of issue areas and miss the opportunity to aim significant resources at a specific problem.

Of course, Upaya has developed its own hypothesis – support Small & Growing Businesses that can be large scale employers in ultra poor communities – and are pleased to see that others are starting to bring their own theses into sharp relief. I would certainly point to our friends at Omnivore Partners as a great example of what can happen when a fund pursues clear and measurable outcomes in a specific area (in their case, agricultural supply chains).

In India, “foreign funds are prohibited from investing in debt and, as a result, most of the capital from [foreign] impact funds is deployed through equity instruments. Consequently, small domestic funds are emerging to fulfill the need for early stage debt.”

Accessing affordable working capital debts is a continual challenge for many SGBs in India, including some of Upaya’s partners at various points in their early lifecycle.

For much of the past year, our team has worked with domestic lenders to find creative and effective working capital solutions for our partners. What they are now coming to see that, while smaller domestic lenders are playing a role, these funds still have a big gap to bridge if they are to fulfill the credit needs of SGBs. It is an issue that Sreejith, Tanya, and the team are working hard on, and we are all glad to see this observation in the report.

Seattle Times: Upaya invests in helping India’s poorest of the poor get jobs

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,, a news site covering Seattle's international connections. Sarah Twitter @SeaStute

Upaya, Artha Initiative to Co-Invest, Expand Management Resources Available to Job Creating SGBs in India


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 Wins Seattle Met "Light a Fire" Award!


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.


Sachi and Steve at Light a fire.png

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! 

Bulbul Gupta Joins Upaya's Board of Directors

Upaya is proud to announce that Bulbul Gupta has joined the organization’s Board of Directors.  As the Head of Market-Based Approaches at the Clinton Global Initiative, Bulbul works with corporations, non-profits, government, private citizens, and family foundations that rely on the power of markets and market mechanisms to address social and environmental challenges.

“I'm excited to join the Board of Upaya Social Ventures and support the work of this organization in creating jobs at the base of the pyramid in India, something I'm personally and professionally passionate about," said Bulbul. "I look forward to seeing Upaya further prove out its business model and scale with great impact.” 

Bulbul is based in New York City. For more on Bulbul, please visit

Celebrating Women Leaders

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 Partners With 3rd Creek Foundation to Facilitate Knowledge Building, Co-Investment Opportunities

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 and


Sreejith Nedumpully to Speak at IIMB Vista'14 "Entrepreneurship Conclave"

Upaya's Director, Business Development Sreejith Nedumpully has been invited to speak at the Indian Institute of Management Bangalore (IIMB) Vista '14 "Entrepreneurship Conclave." The event gives aspiring entrepreneurs an opportunity to speak with accomplished leaders in a conversational forum.

Sreejith will join Co-Founder Phanindra Sama, BigBasket Co-founder Vipul Parekh, Bangalore Chapter of Mumbai Angels Head Veena Avadhanam, N.S.Raghavan Centre for Entrepreneurial Learning (NSRCEL) professor K Kumar, and filmmaker, author, and entrepreneur Varun Agarwal as speakers. 

Vista'14 is IIMB's Annual International Business Summit and entrepreneurship competition.  The Summit will be held in Bangalore September 26-28. 

Sachi Shenoy Receives "40 Under 40" Selection From the Puget Sound Business Journal

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.

Click here to read an extended Q&A with Sachi (subscription required).

Eco Kargha Receives Funding from Kinara Capital Following Record Sales

Upaya partner Eco Kargha and Bangalore-based Kinara Capital have entered into a working capital debt agreement that will allow the company to meet the demands of a second straight year of a high double-digit sales growth. Terms of the deal were not disclosed. 

“Having worked with Dr. Ravi Chandra and his team since 2012, we are pleased that Kinara Capital is able to provide additional financing to meet the company’s day-to-day business needs,” said Upaya’s Director, Business Development Sreejith Nedumpully. “This deal is one more endorsement of Eco Kargha's growth prospects and a validation of the business model’s ability to positively impact the lives of hand loom weavers,” said Nedumpully. 

Eco Kargha was also recently identified by Unitus Seed Fund as one of the “75 Companies Transforming India’s Livelihoods,” chosen for the company’s “potential for scale and to impact large numbers of Bottom of the Pyramid (BoP) populations.”

What We're Reading August 2014: Summer Breeze

Stanford Graduate School of Business “Does Impact Investing Really Have Impact?” (4 August 2014)

Jyotsna came across this YouTube video of a panel discussion on Impact Investing from the 2013 Social Innovation Summit at the Stanford Graduate School of Business. It led to a good debate around what the merit of impact investment really is, and whether or not it could become a mainstream asset class or another form of venture philanthropy. 

Jyotsna also took pride in noting that Michael Smith from the White House Social Innovation Fund is exhorting exactly the type of evidence-based practice that Upaya holds central to its approach through continually measuring outcomes, refining models, and improving the business program to maximize benefit. He also warns of a trend he sees in investors who seek out innovation by “running after bright shiny objects and creating things people don’t need,” and instead is promoting efforts that are focused on measurably better, outsized positive effects for the public. We couldn’t agree more with this approach.


The Nand & Jeet Khemka Forum Podcast “Artha Initiative: Investing For Impact with Audrey Selian” (August 2014)

Sreejith sent around this great audio interview with Audrey Selian, Director of Rianta Capital’s Artha Challenge in which Audrey hits on some really interesting insights about impact investing. In particular, we felt her comments on sacrificing good investments in search of perfect investments were spot on. She also made some nice points on creating social value in areas where most infrastructure and services are non-existent. Definitely worth the read.


Stanford Social Innovation Review “Fundraising is Fundamental” (26 February 2014)

Laurel sent this piece around to the team in early August. She was struck by the way the authors touted the interesting correlation between forward thinking, innovative nonprofits and discomfort around fundraising.

“The organizations that have the most compelling logic models and the most impressive record of impact (as demonstrated by external impact evaluations) tend to be the worst at raising money—and vice versa ... At many bold and extraordinary nonprofits, people cease to be bold when the topic of fundraising comes up.”

The authors throw out a number of ideas for overcoming this "unfortunate inverse correlation." One strategy is approaching external actors as potential collaborators and passionate partners in the fight to end poverty, instead of as potential funders. This attitude can humanize all players and lead to deeper personal relationships. It also opens up an organization to support in a wider variety of forms - be it moral, in-kind, strategic or material. Of course, she noted that we at Upaya also accept snacks.


Upaya Selected to Join the Aspen Network of Development Entrepreneurs (ANDE)

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.

What We're Reading July 2014: Communication Breakdown

Fast Company Co.Exist “Sustainability Doesn't Mean Less Profit, It Means Profit Forever” (16 June 2014)

Phillip Barlag of World 50 takes a deeper look at the intersection of profitability and social good. This quote in particular stood out:

Sustainability thus becomes about evaluating your business for its ability to endure forever. It becomes about identifying the roadblocks to infinite market success and finding a way around or through them. It is not as much about good for good sake, but the enlightened self-interest of pursuit of doing well in a sustained manner.” 

This is a point we often make at Upaya when talking about the entrepreneurs we work with, some of whom may not always self-identify as “social entrepreneurs.” For many, they are focused on building profitable enterprises with the clear understanding that the positive externalities of doing so will allow them to play a transformative role in their communities for some time. 


The Chronicle of Philanthropy “How Foundations Can Be the Risk Takers They Want to Be” (16 June 2014) 

Kevin Jennings at the Arcus Foundation asks if foundation funding has become an impediment to innovation? He argues in part for a more honest conversation with grantmakers about failures and he longs for a forum in which nonprofits could present case studies on failed ventures in much the same way venture capitalists do.

This sort of “learning through failure” concept is not new and not limited to the entrepreneurship space. Physicians have been holding Morbidity and Mortality (M&M) Conferences for over a century. It was in this spirit that I moderated a panel titled “We F$&#ed Up!” at the 2013 Global Washington Conference, designed to give three development professionals a safe space to talk about their struggles.

With a packed room of more than 100 funders and nonprofit professionals, each panelist talked openly about the high-wire act of learning from their mistakes without the fear of losing support by alarming their funders. Their hesitation was understandable - in a sector where good intentions are the primary currency, many people are reluctant to disappoint. But as Jennings argues, if innovation is the goal, then a paradigm shift and open dialog about goals may be necessary on all sides.


Stanford Social Innovation Review “Filling Out the Middle” (Winter 2014 Issue)

This article gives a good overview of the Aspen Network of Development Entrepreneurs (ANDE) and their efforts to support the growth of small and growing businesses (SGBs).

In many ways the ANDE approach of embracing a wide variety of organizations recognizes the importance of the sector without endorsing one rigid model over another. Instead, ANDE is playing the role of a credible intermediary by creating forums for best practices to flourish, and connecting those with complementary resources and shared goals.

The article also gives a nice look at ANDE’s approach to promoting social metrics and the desire to standardize measures. As Genevieve Edens, ANDE’s impact assessment manager, put it, by speaking the same language, we can start to compare one company to another, create benchmarks for performance, and create market intelligence.”

If we have any hopes of turning up the volume on the global conversation about small business and dignified employment, a credible forum and common tongue like what ANDE is developing could be the amplifier that is so badly needed.


New Frontiers: Measuring Progress Beyond the Pay Packet


Authored by Upaya's own Jyotsna Taparia, this article was submitted in June to the Devex/ USAID "Frontiers in Development" Essay Competition.  The competition prompted writes to submit their thoughts on a variety of questions under the heading How would you Eradicate Extreme Poverty by 2030? 


Q: Aside from income, how might we define and measure other dimensions of extreme poverty?

Development requires the removal of major sources of unfreedom: poverty as well as tyranny, poor economic opportunities as well as systematic social deprivation, neglect of public facilities as well as intolerance or overactivity of repressive states.
-Amartya Sen (1999), Development as Freedom

For far too long the discourse on poverty has been limited to income or lack of it thereof. The discourse on extreme poverty or absolute poverty has been taking its shape and form since early 80’s. In 1990, the World Bank proposed that global poverty should be measured through the standards of the poorest countries and arrived at a $1 a day poverty threshold, a figure that was last updated to $1.25 a day (based on 2005 PPP)[1]. This definition also became the basis for Millennium Development Goal #1: reduce by half the proportion of extreme poor (those living under $1.25 a day) by 2015.

However, income measures can only go so far as to capture the consumption capacity of an individual, calculated either in monetary terms or nutritional count. They are grossly insufficient in capturing extreme poverty as they do not exhibit any sensitivity towards the depth[2], duration and direction[3] of poverty.

In his seminal work Development as Freedom (1999), Nobel laureate Amartya Sen outlines how the development debate should be structured. Sen postulates that development is closely linked to three sets of freedom: economic, social and political. Poverty in this framework is described as absence of at least one freedom. According to Joseph Wrensinski, a lifelong activist and founder of the ATD Fourth World, extreme poverty is a “... lack of basic security [that] simultaneously affects several aspects of people’s lives, when it is prolonged and when it severely compromises people’s chances of regaining their rights and of reassuming their responsibilities in the foreseeable future.” The underpinnings of this approach are largely similar to what Sen proposes - poverty is deeper than just the state of material deprivation and is not static in time.

From the postulations of Sen and Wrensinski, it’s clear that extreme poverty is a result of three crucial factors:

a. Availability and efficiency of human, financial and physical assets

b. Inequality in the availability of opportunities and ability to exercise agency

c. Interaction with measurable deprivations that reinforce the impact of others

Despite the longstanding focus on income as the sole indication, a significant body of work has emerged establishing the multidimensional nature of poverty both at the household and at the community level. However, identification of the extremely poor based on this multidimensionality poses its own set of unique challenges. For example, if the indicators being used are income, school attendance, nutritional status and health status, then there are some scholars who argue that a household falling below the minimum threshold on any one of the indicators should be considered poor. There are still others who contend that households should score low on all indicators in order to qualify as poor. With these conflicting approaches to poverty identification, one runs the risk of erroneously including or excluding a fraction of the poor population when developing programme interventions (also known as an error of commission or omission.)

Extreme poverty measurement is much more complex than a simple error of omission or commission. It has been observed that deprivation of one indicator actually has negative impact on other indicators, resulting in a self-perpetuating cycle of poverty that is often referred to as the “vicious cycle of poverty.” Thus any discussion of alternative measures must look at these trailing indicators as well as leading ones. These additional indicators can not only capture the effect of extreme poverty, but also show us the progress being made by a household. For example, a household that cannot afford to send its children to school will see them working either with their parents or elsewhere. The lack of formal education and skills won’t allow them to compete in the more remunerative skilled job market and will often result in a lower household income.

Following this logic, it is useful to look deeper at some of the trailing indicators of extreme poverty that are common to all contexts and benchmark them against established trends, such as:

      Households that typically spend more than 50% of their income on food expenditure are more sensitive to income shocks and less likely to avail of services like health and education. Deprivation for these households would be on multiple counts - lack of food, education, quality health care and other services.  Therefore an increase in income should result in a decline in the food expenditure to income ratio[4] but also a concurrent increase in the uptake of the other services.

      Households relying on manual labour (informal and unorganized) as their primary source of income are more likely to be in the extreme poor category as the availability of work is not only infrequent and erratic in nature but also low paying. Therefore, tracking changes in the nature of the work that generates income for the family can provide valuable insights.

      The presence or absence of certain classes of assets is also an indicator of the extent of poverty in the household. A low percentage ownership of productive assets (land, livestock, simple machinery and tools etc.) is a likely trailing indicator of extreme poverty. 

      Households rate of electrification against local and regional statistics. Electrification has a direct impact on trailing indicators - household assets, cooking and refrigeration, educational success - and therefore is often prioritized by households as income stabilizes or increases. Admittedly, the legality of such connections is often murky at best, but it is nonetheless an indicator of a household’s day-to-day income situation.

Because extreme poverty is relative, we must look at each case in the context of a larger community. Geography and surroundings play an important role in determining the common minimum threshold for a poverty measure or even if the measure will prove to be valuable in providing insights into the extent of deprivation. Therefore, the goal of poverty measurement should not be to create a one-size-fits-all multidimensional index but rather a set of robust indicators that is most relevant to the local context. While this route may not allow for seamless cross comparison, it is successful in achieving a high degree of universality.


[1]Ravillion et. al (2008). Dollar a Day revisited,

[2]Depth of poverty is related to the extent by which a household falls below the poverty line threshold.

[3]Households also show movement out of poverty to fall back again due to external shocks (for example, detection of an ailment with prolonged treatment, natural calamities etc.)

[4]For a richer discussion on this refer to

What We're Reading June 2014: Let's See Action

A few interesting articles and a podcast from around the internet.

Economic Times "What is holding back the social entrepreneur?" (15 May 2014)

Exhibit A for the “too much money is chasing too few entrepreneurs” case:

“An April 2014 study by Intellecap, a strategy advisory firm, highlights the gravity of the situation. Of the $1.6 billion invested in social enterprises since 2000, around 70% was in the financial inclusion space (both microfinance and non-microfinance). Of the investments that went into other sectors—including agriculture, energy, education, healthcare and livelihoods—about 67% was in just 15 enterprises.”

The article also does a great job of breaking down fund economics to explain why more patient investments in ecosystem are virtually impossible. Overall, it is a great look at the challenges faced by early stage entrepreneurs in India.


New York Times “Upscale Dairies Grow in India, Promising Safer Milk” (3 June 2014) 

This article is a nice look at how small investments in quality control and chain of custody management allow dairy companies and farmers to profit more from their efforts.

The connection between pro-poor business models and higher-end goods is growing. Here in Seattle, we have Theo Chocolate, a company that is working hard to create maximum social benefit in their supply chain. To absorb the higher costs Theo has had to create a $4 chocolate bar but rather than cutting costs, the company’s founder Joe Whinney has set out to create the best darn luxury bar he can. And Theo is not alone – the work Arthur Karuletwa is doing with Starbucks is very much in the same spirit


Outlook Business "Social Entrepreneurs Are Reinventing The Wheel" (24 May 2014) 

This is a fascinating interview with Intellecap’s Aparajita Agarwal as she talks about social enterprise in India, the differences from working in Africa, and the constant battle entrepreneurs face when they’re trying to differentiate themselves.

Most interesting for me was the point about entrepreneurs trying to make their idea feel truly unique. I suspect much of this need is driven by interactions with impact investors and the benefit narrative those investors are trying to build around their work. Unlike traditional investors who can look simply at the financials and management team in their due diligence, self-defined impact investors often need to have their imagination captured by the social benefits of the business. As such, entrepreneurs often try to tell a story about how their product or service is “revolutionary” or “innovative,” when the reality is that their business might be most socially beneficial and profitable if they could focus their efforts on the fundamentals.

There is a saying that has been floating around Upaya for a long time that seems relevant here – sometimes a business is not innovative for what it is doing, but for where it is doing it. This interview shows we might not be alone in that thinking.

Do You Want More Upaya? Well You're in Luck!

The re-launch of is more than just new layouts, photos and fonts. It also is an opportunity for us to bring a new voice into the global conversation about ultra poverty, employment, and entrepreneurship. 

The people who make up the Upaya team each bring a unique set of experiences and perspectives to the organization. I would say twice a week I wake up to an email with some article, video, or podcast that one of my colleagues is struck by, and it usually sparks a fascinating dialog among people looking at a single issue from a variety of different angles. Think of it as a cross between Squawk Box, Stanford Social Innovation Review, and Guy Kawasaki’s How to Change the World blog, with a dash of thrown in for a bit of pragmatism and humor. We always thought that one fine day we would  start sharing these conversations with the world, and that day has now come.

So what can you expect from this blog? More than anything, it will be a candid look at the conversation around a new approach to extreme poverty alleviation. Sometimes the conversation will be more academic, other times it will be more casual, but it will always give you an opportunity to learn something new. We will write for entrepreneurs and investors, students and social innovators, philanthropists and philosophers alike, and welcome all readers to share their thoughts in the comments section.

As we set out, we have four types of posts in mind:

  1. “What We’re Seeing” - a list of three interesting articles, multimedia pieces, and events that caught our attention, along with a few lines about what makes them interesting. 
  2. “New Frontiers” - As an organization we’re committed to getting beyond the metros and into communities to learn about new opportunities, and we’re happy to bring readers along on that journey. A member of the Upaya team will profile an industry or geography where we feel there is potential for job creation and explain why. 
  3. “Best Practices” - from our work with our current partners and conversations with peers, we’re constantly learning about the issues entrepreneurs face and new tools to help them be successful.  
  4. “Counterpoint” - Real change requires challenging current assumptions, and as an organization Upaya is not afraid to do just that. If we read or hear something we disagree with in the fields of development, entrepreneurship, or philanthropy, we’ll talk about it. We’re not afraid to take an unpopular opinion, but are always considerate of differing opinions.

One last promise - you have my word that this will not just be a megaphone for updates about Upaya. That what our News page is for. This blog is a place where we can stretch our legs, talk about critical issues, and hear from those who are interested in the same issues we are.

So there you have it. We’ll try to post a few times a month to start, and more frequently as we continue to grow. Questions and comments are always welcome - just give us a shout.

- Steve