Acumen Fund and The Blue Sweater Challenge

06/01/2010 12:24 pm ET | Updated May 25, 2011

Hey, it's easy to talk about helping people out of poverty, but really hard to actually do it in a serious, sustainable way.

The folks at the Acumen Fund find ways to get that done, providing the initial funding to make it work.

The deal is to find ways to kick-start real small business, which is the great generator of jobs.

Normally, Acumen Fund makes big bets on new businesses that serve the poor --
averaging $1 million. But their CEO Jacqueline Novogratz found a way to adapt that
model when she spoke to a book club organized by residents of a Nairobi slum. Here's
the story, as written by Jacqueline, describing how inspired she was by the
organizers of the book club

On the spot, I announced The Blue Sweater Challenge. We would use the award money from Wofford to create a challenge to individuals and groups who made the most change in their community. We would start by choosing three groups and award them $1,000 each, and I would present the awards personally when I returned in three months.

In the past three months, that group did a lot more than figure out details. They decided to have a business plan competition, and then drafted members of the Acumen team and others to provide training and business plan assistance on each of three week-ends. Nearly 80 individuals submitted plans which they then whittled to 16. Judges from top community organizations were then brought in to analyze the finalists; and last Sunday, the judges selected five winners and gave on "Innovation Award" for the most creative idea. Instead of grants, they insisted on making one year loans and charging nominal interest ("according to Acumen's value system", Gerry explained to me)....

I'm guessing the energies of at least 50 people were released in the best possible way with a catalyst of $3,000. You may ask why the judges chose six winners rather than three. Two reasons: first, the majority of businesses needed only $500 to get started; and second, they were so inspired by the professionalism, enthusiasm and intelligence of the plans, that some of the judges pitched in their own money as well.

I can only imagine the sense of hope people in the community felt by seeing their neighbors win for a change.  Inspiring stuff, for real.