FUNDING AREAS: Financial services for the poor
CONTACT: Visit PeopleFinder for email and phone number (paid subscribers only)
IP TAKE: At Gates, Voorhies directs more than $60 million in grants annually toward fewer than 20 large initiatives that establish necessary infrastructure to bring poor people into the formal, digital financial system.
PROFILE: Not having a bank account is expensive. You can't send, store, or receive money very easily, making it difficult to conduct basic transactions like paying your electric bill or accepting a paycheck. Globally, there is a high correlation between poverty and so-called "financial exclusion," the concept of "unbanked" and existing outside of the formal financial system, relying on cash exchanges and bartering to get by. But whether or not one has a functional checking account, poor people require such things as food, shelter, and other products that cost money. And they pay for these things, regularly.
One of the concepts behind financial inclusion is that when impoverished people enter the formal banking system, they're able to better control their finances and access goods and services they want, when they want and need to. But banks, ATMs, and even internet access don't exist in many parts of the world, essentially relegating some of society's poorest people to the informal economy through no fault of their own. Empowered with functional mobile phones, smart cards, and other electronic systems, however, people in even the most remote parts of the globe can take part in the international, digitized, formal financial system.
Rodger Voorhies, head of the Financial Services for the Poor program at the Bill & Melinda Gates Foundation, works towards sponsoring digital payment systems for the two billion people around the world who don't have any sort of bank account. In Voorhies' view, joining the formal financial system is one important step out of poverty toward a stable existence. Check out his Impatient Optimists blog posts, including Is Cash the Enemy of the Poor?
Voorhies came to Gates after more than 20 years of living in emerging markets, where he worked on expanding the availability of microfinance and other financial services to underserved populations in Africa and Eastern Europe. Most recently, Voorhies was CEO of Opportunity Bank in Serbia, and previously founded the Opportunity Bank of Malawi, the country's first microfinance bank. Voorhies earned his bachelor's degree in business from Biola University (a private evangelical Christian school in Southern California) and his master's in managment from Northwestern University's Kellogg School of Management.
On an annual basis, Gates devotes more than $60 million to its Financial Services for the Poor portfolio. And the grants the foundation makes within this program area are large. Voorhies and his team typically don't make more than 20 grants in a given year, so they're often worth several million dollar each. (Keep in mind that Gates is the biggest spender in American philanthropy; its $34 billion in assets rivals the GDP of some countries.) Voorhies' typical grant recipients are financial institutions, mobile companies, and international organizations with a stake in improving the availability of global financial services.
To give you a better idea of what Voorhies' grants look like, a short list of recent ones:
- $3.2 million to wireless communications company, Tigo Tanzania, to accelerate the adoption of mobile currency and banking practices in Tanzania. This is a 26-month grant.
- $28.3 million to Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, an enterprise owned by the German government, for its contributions to the Alliance for Financial Inclusion, an international network of financial policymakers intent on improving the availability of financial services for the world's poor. This is a 58-month grant.
- $8.4 million to Singapore's Weichu Private Limited to equip policymakers and bankers with necessary technical and data resources to expand access to financial services for poor people in India. This is a 49-month grant.
Interested in Gates funding? Approach a program officer. Gates is happy to work with your good ideas and assist you in developing a grant proposal, but it generally doesn't fund unsolicited proposals. The foundation does regularly post calls for letters of inquiry in programs it's prioritizing at the moment, but anyone whose work aligns with Gates' mission can contact the foundation about potential partnerships at any time. General information on Gates' grantmaking policies is available here.