measuring poverty beyond a dollar a day

(Photo credit: Allianz Knowledge Partnersite)

How do you measure the worth or suffering of someone’s life? We’ve all seen the ads where a white man walks through desolate streets as malnourished children cling to his hands. He tells us that we can help and that these children can be helped for just a dollar a day. So why do these commercials play year after year if all that is needed is a dollar a day?

The truth is that a dollar a day tells you very little about those children, the reason for their lack of nourishment, or the history or their countries, communities, and families. For years international agencies and non-governmental organizations (NGOs) have been using the Human Development Index (HDI) created by the United Nations Development Program. The HDI is a set of statistics used to rank a country based on “human development” (i.e. mortality rates, life expectancy, etc.) The original idea was to “to shift the focus of development economics from national income accounting to people centered policies.”

The HDI and its statistics built such programs as the Millennium Development Goals (MDGs) and many had criticisms. Some argued that the HDI was still too nation focused or that measuring material wealth could never promote “human development” thus ending poverty. Just yesterday the Oxford Poverty and Human Development Initiative (OPHI) of Oxford University and the Human Development Report Office of the UNDP announced a new way to measure poverty called the Multidimensional Poverty Index (MPI). Director of the UNDP Human Development Report Office, Dr. Jeni Klugman, said. “The MPI provides a fuller measure of poverty than the traditional dollar-a-day formulas.” She noted that the MPI assesses critical factors at the family level and it will be used to compliment the HDI by examining broader aspects of well-being.

As our understandings of the root causes of poverty increase so must our means of measuring its affects. While some are focused on pulling our heart strings with “dollar a day” lines, the larger development institutions are working to become more innovative in their approaches to measure poverty.

While the MPI is a positive step in the right direction, it seems that it will still be very broadly focused and may still lose the “people centered” perspective. As large development institutions focus and innovate measures for poverty, why have they not just asked those most affected?

something new for the new year

A group that has really captivated my interest this year has been the Acumen Fund. They do amazing work towards creating change and sustainable solutions to global poverty issues with people at the center. Check out their work and what they do, I would encourage you all to get involved in the new year! Have a good one!

Acumen Fund Philosophy
Who we are and why we exist:
Acumen Fund is a non-profit venture fund that uses entrepreneurial approaches to solve the problems of global poverty. We build financially sustainable and scalable organizations that deliver affordable, critical goods and services that target the four billion people living on less than $4 a day. We adhere to a disciplined process in selecting and managing our philanthropic investments as well as in measuring the social and financial returns.

How we work:
We identify some of the world’s best entrepreneurs and organizations focused on delivering critical, affordable goods and services – such as water, healthcare, and housing – to improve livelihoods, health and opportunities for the poor.

Our investment process:
Using the skills of business, the flexible capital of philanthropy, and the rigor of the marketplace, we aim to develop and deliver systems-changing solutions to the world’s problems. Our investment approach focuses on organizational sustainability, strong leadership and scalability through managerial support and financial investment.

Measuring results:
Within each investment organization, we focus on the areas of design, pricing, distribution and marketing of critical goods and services to the poor. We measure and share both social and financial returns of our investments, as well as our own financial sustainability and the strength of our community. Our risk management aims to generate positive returns where possible and recover a substantial portion of their capital to reinvest in new philanthropic ventures.