The Blue Sweater: Bridging the Gap between Rich and Poor in an Interconnected World
by Jacqueline Novogratz

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If you read nothing else, read chapter(s)- Chapter 13

Book Review by Christina Matthews Macfarland

In The Blue Sweater, Acumen Fund founder and CEO Jacqueline Novogratz engagingly describes her journeys in the world of philanthropy.  This book has many elements that make it well worth the read, including beautiful and poignant descriptions of the places and people that Ms. Novogratz encounters during her travels.  However, I plan to discuss this book in a narrower framework, as it relates to the field of philanthropy.  

In The Blue Sweater, Ms. Novogratz discusses her experiences with well-meaning but misguided aid projects in Africa.  Because she discovers that traditional charity often fails at helping the poor to become self-sufficient, she shifts to a new strategy in which she hopes to harness the power of markets to achieve social transformation.  As such, Chapter 13 is of particular relevance. First, Ms. Novogratz discusses her frustrations with traditional charity.  She stresses the importance of building accountability into nonprofit organizations, and her frustrations with the traditional models, which often appear more focused on making donors “feel good than on affecting change.” Ms. Novogratz discusses the hurdle of “changing the lexicon” of philanthropy. Whereas traditional charity speaks of donors and grantees, her aim is to promote a language that is less passive. She also takes issue with the practice of donors typically funding only programs instead of institutions.  Donors often want to be certain that all of their money goes directly to the people who need it most. She argues, convincingly, that this is a perfectly acceptable approach when providing alms or direct charity.  However, no one would invest in a company and not expect it to pay for overhead—for hiring great people, paying the rent, and keeping the lights on.  I admire Ms. Novogratz for her vision of a different institution.

Next, Ms. Novogratz discusses her creation of the Acumen Fund, a venture capital fund that invests in social entrepreneurs who are working to help the world’s destitute populations in places such as Africa, India, and Pakistan. When discussing her idea for the Acumen Fund, Ms. Novogratz states that initially many people confuse her mission with that of microfinance.  However, the goal of her organization is fundamentally different because Acumen Fund does not make tiny loans to individuals, but rather chooses to invest large sums of money into enterprises that aspire to reach at least a million customers (216).  The crux of her approach is the concept of “patient capital”.  Patient capital is defined as neither traditional charity nor traditional business investment, but rather something in-between. Typical venture capitalists and private investors might invest in a deal, seeking returns of 25 to 40 percent, with a fairly short horizon of five to seven years.  However, “patient capital” involves investing money over a longer period of time, with the acknowledgement that returns might be below market.  The Acumen Fund contributes by providing a wide range of management support services to nurture these types of investments. If you want to read fascinating real-world examples of how the Acumen Fund is working on different sustainable projects- from providing mosquito netting to clean water—I suggest you read the book.  It has no shortage of interesting material.

When you finish this compelling book (and I assure you that you will), there are certain themes that will remain with you. This book resonated with me because it reminded of the wisdom imparted upon me by two of my mentors. The problems that Ms. Novogratz is trying to solve are global and her themes are universal.  The Blue Sweater conveys the power of connection and the notion that the problems of the world are communal. Former President of the Community Foundation of Palm Beach and Martin Counties, Shannon Salder Hull taught me years ago that “you can’t afford not to care”. Issues that may seem far removed from the affluent paradise of Palm Beach --the problems of poverty and AIDs in the communities of Belle Glade and Clewiston-- can quickly spread across boundaries.  Similarly, The Blue Sweater discusses the way in which we all have a stake in improving the lives of the marginalized. Also, The Blue Sweater reminds me of the advice of another mentor, Ms. Diana Stanley, Executive Director of The Lord’s Place, a small nonprofit that provides a continuum of care for homeless people in Palm Beach County.  Ms. Stanley constantly speaks about the need to “help people help themselves” and the need to move away from mere “band-aid” approaches that do not get to the heart of the problem. Both Ms. Sadler Hull and Ms. Stanley are spreading the message of the importance of the ties of community while reaching out to others to recognize our common humanity and the inherent dignity of all. It is encouraging that Ms. Novogratz is articulating this message in a beautifully written book and reaching a wide audience.

Overall, The Blue Sweater is an inspiring story about the experiences of Ms. Novogratz and her quest to change the world for the better.  I would recommend this book to anyone who is interested in different philanthropic, nonprofit and for-profit models.  The Blue Sweater is an excellent starting point for anyone who wants to explore a rapidly growing, emerging sector investing in “patient capital” and to reflect on its transformative potential.