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These remarks were presented at a conference sponsored by Hope International on December 1, 2006. 

If there has been a central theme in my life and career, in and out of government, it is that the private non-governmental organizations are uniquely poised to solve the world’s problems.  

What I hope to do this morning is to survey some of the powerful trends in the world that are opening doors for all of us to have a positive impact, and show you how Hope International’s work in promoting micro-enterprise is in the vanguard of that global change. 

One of the least noticed yet most consequential changes that has come in recent years is a decided shift away from the idea of “charity” to results-based approaches to development, both at home and abroad.   The trend has been away from direct aid to more transformational approaches to poverty, approaches which treat the whole person -- body, mind and soul -- and which attempt to strengthen core institutions of family and community, activity that the government is not well suited to do, certainly not on its own.    

The President’s faith-based initiative, which I was privileged to help shape and launch in the White House during the early years of the Administration, was developed with that basic idea in mind – that community-serving organizations are closer to the problem and have a more holistic approach to meeting human needs. Enterprise development geared toward achieving independence for the poor is at the cutting edge of that change.       

Here is the bottom line: the only real solution to poverty that has ever existed is prosperity.  We need to study the problems of Third World poverty with that basic truth in mind, and determine what can be done in partnership with villages to promote broad improvement in living conditions, and not just treat the symptoms of poverty.  That’s what Hope is doing.   

The poor are very capable of capitalism, and the key to capitalist success among the poor is the same as with the rich: capital.  There are many traps into which the poor fall – sickness, disease, illiteracy.  In too many cases opportunities for the poor are held back by rampant government corruption or the lack of property rights and basic legal rights to conduct business under the rule of law, all of which must be addressed if enterprise is to flourish.   But the most consequential trap is a lack of basic economic power, and that is all about capital.   With adequate livelihoods, other problems can be addressed.   What matters is creating the basic building blocks for economic independence. 

We tend to forget that this is how every advanced country developed, including our own.   I don’t know of any person or any country that achieved economic viability by simply being the recipient of free assistance.   The best example of this is how a variety of underdeveloped countries have suddenly and dramatically graduated upward, especially the newly emerging giants of Asia.  While the rich nations of the world were squabbling over who might be able to donate a billion or two more annually in governmental aid to poor countries, China and India created $700 billion in new economic development.  Is it not fair to ask how different the world would be if we were to focus on results; on effective outcomes.  We ought to study success.   If Hope were to succeed in more and more poor villages around the world, help from outsiders would no longer be needed and the former poor would join the armies of compassion who are caring for their poor neighbors.   

The picture of success would be caravans of Western aid and charity workers getting into their SUVs and leaving. I have been to a lot of places and I have never met a poor person whose desire is to permanently be on the receiving end; or to constantly be visited by Americans bearing cameras and check books.  Don’t think for a moment that the poor find that experience dignified, as much as they value our friendship.

So what Hope is really generating is dignity for the poor.  For dignity to be achieved, the poor must be partners in their own development.   Whatever we do on behalf of the poor, it must always be about them, not us.   Too many approaches to poverty have failed because the solutions were presented by the outsider and not owned by the poor themselves.

That, thankfully, is changing.   Let me illustrate.   I have been working with Rick Warren and was just traveling with him in Rwanda last week.   Rick is unveiling a nationwide plan to mobilize the churches of Rwanda in partnership with the nation’s leadership to confront poverty, disease and illiteracy.    One of the objectives of the trip was to evaluate the possibility of Rwanda participating in a global malaria-prevention project; a new private initiative that will be launched by the President and Mrs. Bush shortly. 

The first thing we were required to do as guests in that country was to present the idea to the local leaders council, the village elders, for their consideration.  After discussing the plan they said, “We’re not really interested in bed nets.”   The short term answer, they said, is actually hygiene, sanitation, and education in the proper use of nets and medication.   And actually, they continued, that’s only an acceptable answer as an interim step because the real problem is poverty.  The real problem, they repeated, is poverty.  They are right.

We visited a village health clinic and were ushered before 45 community health workers.  We listened for a brief while, and then my associate asked them “what can we do for you.”  The group leader rose to his feet and in a very polite voice looked at us -- both of us with powerful connections in Washington and multiple advanced degrees -- and said “we weren’t finished telling you what we were doing for ourselves.”  In short, the poor have far more wisdom, ingenuity and inner resources to draw from than they are often given credit, and they must be owners of the solution.  

One thing the poor will never resist is being given the tools to take ownership of their own conditions, which is what micro-enterprise does.   That is the ultimate form of empowerment.

My intention is not to be dismissive of pure charity and various forms of emergency humanitarian assistance.   When the poor are dying from HIV-AIDS, malaria and a variety of other diseases, there is a place for us to be good Samaritans.   But even as we are providing humanitarian assistance we should imagine the time when the weak are strong enough to provide for their own care.    What the Rwandans really hope for is that the next time we arrive it will not be to solve their Malaria or HIV-AIDs problem, which they will have done for themselves, but rather to explore investments, buy products, or spend our money on eco-tourism.   I can think of no other outcome that would more dramatically change the face of Africa than if a once dirt-poor country experienced that transformation.  Can you imagine the effect if the next China, India or Singapore was in Africa?  It would leave the entire world hopeful.

I was asked me to spend a few moments talking about global trends.  Any discussion of world poverty must acknowledge that the news from the Third World is often depressingly bad.  Three billion of the planet’s inhabitants, fully one half of the world’s population live on $2 a day or less, and according to the UN, 842 million are chronically hungry. Drought, disease and illiteracy are pervasive.

Perhaps the most worrisome factor emerging on the global stage is seemingly intractable ethnic and sectarian conflicts that are oblivious to the boundaries of nation-states, and which are even exacerbated in some cases by rapid democratization.  Some are describing what appears to be a near collapse of sovereign states in the poorest regions with more territory controlled by criminal gangs and sectarian militia.

Somewhere between 40 and 50 of the world’s poorest countries appear hopelessly dysfunctional.   Thirty countries are at the edge of civil war, according to Georg Kell of the UN.   Sixty countries are crippled by systemic corruption. 

These are daunting challenges, and the conditions of poverty in some regions of the world may continue to worsen before improving.    

Still, in the midst of all this there is a growing sense that the conditions exist for general improvements in Third World poverty and for strengthening social and economic institutions.   We know far more today about what works and what doesn’t work.    

If the 20^th century was about top-down, rule-driven bureaucracy, the 21^st century will be about social entrepreneurs, private philanthropy, public-private partnerships, and global grassroots linkages involving the faith and civic communities. 

Time was not long ago when the subject of world poverty came up our strong inclination was to leave it to the professionals and to the big international institutions to address.  No more.  

The private sector, business, philanthropists and faith-based agencies are increasingly eclipsing government agencies in the role they are playing.

The last thing I did in the Administration was to coordinate the private-sector response to the tsunami disaster almost two years ago in the Indian Ocean.   

The U.S. Congress appropriated $657 million after months of consideration, but by that time the private sector had already donated nearly $2 billion, a ratio of three to one.  Dozens of corporations instantly put into operation pre-existing emergency response systems consisting of databases of staff experts who had signed up in advance to volunteer, donate products, provided supply chain know how, and communications systems.  Entire operating units were engaged and in many cases remained behind to sponsor the construction of clinics, schools and homes.

Congregations rushed aid to the front lines faster than government.

Never before in history has a single congregation (Saddleback) assembled an electronic database of over 300,000 pastors and leaders, able to take up a collection and immediately transfer millions to local congregations. In this case, Saddleback was able to set up systems to care for tsunami victims in Sri Lanka.

The same remarkable result occurred with Katrina.   It remains a largely untold story, but through a network of churches, food, water and resettlement assistance was being offered to the front lines long before big institutions like the Red Cross and the federal government could coordinate their plans.  

We are entering an era of “bottom up” innovation and discovery.   

This is an era in which American business ingenuity will aid the poor in the most remote Third World villages, where American private firms routinely partner with small businesses in the developing world to supply badly missing components for business success, such as improved storage, processing, marketing and distribution systems.

If you notice the kiosks featuring Rwandan coffee at Costcos, that was a project that was inspired entirely by the partnership that has evolved between the Rwandan people and a variety of American business and faith-based leaders. Costco has made the broader distribution of Rwandan coffee possible because it stepped forward to help on processing, branding, and marketing, all of the links that the Rwandans themselves could not produce by themselves.

Technical solutions to problems plaguing the Third World are proliferating at a dizzying pace.    For almost every major development problem there is a known remedy and successful models -- for killer diseases, for water and sanitation problems, and agricultural techniques such as planting and cultivation and conservation.   

Scientists have completed the genetic mapping of the rice plant, making it possible to develop seeds that are more drought resistant and which grow in colder climates.  

Irrigation technologies are evolving fast.  Systems for delivering clean water efficiently are being deployed so that women don’t need to spend four hours a day walking great distances to purchase water and can instead grow micro-enterprises.  American entrepreneurs are figuring out how to install local solar energy systems to power clinics, schools and cyber-cafes.   

As columnist Nicholas Kristoff put it, “It is exhilarating to see how little it takes to make a difference,” referring the modest interventions by Bill Gates and others to control ancient scourges like river blindness and leprosy.         

This is an era is which exploding outflows of private assistance make the debate over official foreign aid less and less reality-based.   The U.S. is constantly taking heat from the international community and foreign aid advocates for being stingy in its foreign assistance.  Yet public commitments of taxpayers dollars, now approaching $20 billion annually, don’t begin to capture the increasing contributions being made every year by American firms, universities, congregations, NGOs, and even payments (remittances) by immigrant workers to relatives back home, which are now approaching $60 billion annually.    

But even the outflow of money doesn’t really capture the reality.  The picture that Americans normally have of charity is of donations of private cash being made by businesses and individuals to humanitarian groups who often go forth and deliver services. But that doesn’t begin to capture the variety of services that are routinely contributed by American individuals, firms, universities and civic organizations.   

This is the era of an entirely new global corporate citizenship movement in which companies look for ways to combine profit-making with social-responsibility strategies.  Growing numbers of corporations are embracing the creed of promoting volunteerism and are combining business investment with strategic philanthropy and even hands-on private emergency assistance. 

This is the era of technology in which barriers are blasted away and people are empowered.  It is an age in which something so technically simple as the cell phone is rapidly eliminating not only the obstacles of distance but barriers that deny the poor access to information about their own governments—barriers that once prevented them from having a voice in their own destiny.  

Today, roughly 9 percent of Africans are mobile phone subscribers, and this newfound electronic connectivity is allowing the poor to overcome one of the great obstacles to economic advancement: isolation.  

The biggest advantage of the cell phone is that it frees up time for more productive activity.  Now, when a rural woman takes her long daily trek for water, she immediately takes out her cell phone, checks in with her husband who is working in a steel factory 250 miles away, takes care of her banking, monitors her ailing mother who is bedfast in a clinic several towns away, and takes care of supply orders for her micro-enterprise.

This telecommunications revolution is accelerating a greater connection by the poor to information sources and to advocacy networks that are bringing unprecedented pressure on tyrannical regimes, heralding a new era of powerful grassroots movements to curb corruption and promote rule of law.

This is the era of global civil society, in which voluntary associations are proliferating and creating the first global electorate.   As one observer put it, the world is in the midst of an “associational revolution,” which is producing a “power shift” of potentially historic dimensions.     

This is the “century of the non-profit,” in which non-profits, fueled by a growing private philanthropy, form at a faster pace than businesses, creating careers for college graduates with degrees from one of a growing number of universities offering majors in non-profit management.     

This is the era, in short, of “bottom up” participatory civil society and market-based private enterprise.   The tendency of Americans to join or form voluntary associations “of a thousand kinds” that Tocqueville observed as he surveyed American social life in the 19^th century is now becoming a global phenomenon in the 21^st century.  Philanthropy, volunteerism and civic association are no longer so uniquely American.

Today, thanks to both increased wealth-driven philanthropy and the wonders of technology, private voluntary organizations that engage, develop and mobilize citizens are emerging as the greatest social and political phenomena of the 21^st century.   Civil Society is, at its core, America’s most important export. 

Alexis de Tocqueville spoke of a powerful “tendency” in the America he observed.   “Americans,” he said, “of all ages, all conditions, and all dispositions constantly form associations.” Central to America’s founding vision was the idea that state would not play a dominant role and would not interfere with or undermine the vital functioning of private voluntary organizations, which although private served numerous roles that were as publicly beneficial as the functions of government.

The number of private organizations with international operations in Tocqueville's era in the 19^th century was 32.  Today, although the precise numbers are not available, estimates of the number of international NGOs range up to 40,000.   

Peter Drucker, the eminent business consultant and scholar said that voluntary group action at the community level is “that peculiarly American form of behavior.”  According to Drucker “nothing sets this country as much apart from the rest of the Western world as its almost instinctive reliance on voluntary, and often spontaneous, group action for the most important social purposes.” 

Over a million non-profit organizations now operate in America, employing 12.5 million people, comprising fully 7.5 percent of the U.S. gross domestic product.   Worldwide, the non-profit sector comprises almost 5 percent of the GDP. 

The number of American’s employed by non-profits has doubled over the past 25 years. Fueling growth in the non-profit sector is a burgeoning private philanthropy.   The number of private foundations tripled since the early 1990s.   Americans, according to the most recent survey, give $250 billion annually to private charity.

Perhaps the most recent and most powerful display of the spontaneous tendency of Americans to join or form non-governmental organizations came in the spontaneous surge of private engagement that came in the immediate aftermath of the Hurricane Katrina, which devastated the Gulf region of the U.S.    Even though 60 percent of the $3.6 billion in private donations went to the American Red Cross, individual Americans on their own private initiative created 400 new non-profits to channel donations and volunteer assistance to victims.  

Also unique to America has been the ever-dynamic role of religion, congregations and faith-based philanthropy in the civic landscape.  The Economist magazine describes religion in America as “a powerful force for generosity.”   More than 250,000 religious organizations in the U.S. account for almost a quarter of all American non-profits.

Religious giving in the United States accounts for a staggering 62 percent of donations, according to the Center on Philanthropy at Indiana University.  Every income group in America, from rich to poor, is more inclined to give to religious than to non-religious non-profits.    

Even in this category of religiously motivated civic engagement it appears that American patterns in philanthropy and civil society are rapidly migrating across continents.   Aid authorities in Britain report that 10 percent of  donations that go to the nation’s 500 largest private organizations are now directed to faith-based organizations.  

One of the most significant yet least known trends is the tendency of foreign constituencies with little to no prior record of donating to religious NGOs suddenly discovering the effectiveness of faith-based organizations, including U.S.-based religious charities.  During the historic outpouring of private donations that followed the tsunami disaster in the Indian Ocean, several American faith-based humanitarian organizations were surprised to discover that hundreds of millions of dollars in donations now flowed into their coffers from places like Australia, Europe and Japan.

The best illustration is World Vision, the prominent Christian humanitarian organization whose budget now approaches $2 billion annually.  According to World Vision’s most recent annual report, out of a budget of just under $2 billion, $92 million came from Germany, $74 million from Hong Kong, $273 million from Australia, $247 million from Canada, $34 million from New Zealand and $25 million from Japan. 

Whenever NGOs enter a country to provide humanitarian aid, their own technological systems are carried in with them and are made available to the communities they serve.  With the widening availability of technology comes the movement of ideas and knowledge that drives democratization.  

All of these factors and more represent a great shift that in our lifetime will make a serious dent in the social and economic problems confronting the third world.

I want to repeat, the opposite of poverty is prosperity.

The global status quo has been bad for the poor.  Nothing has compounded poverty more than for the poor to simply be ignored in the global economy.  

When the poor are irrelevant to global wealth creation, they are dismissed as mere indigents to be taken care of by a private charity or government program.  When the Third World poor can be reached by technology and a spreading global capitalism they become discovered.  To be a potential producer, customer or citizen is to be human.

The problem with much of Africa, the Middle East, and Latin America is too little globalization not too much.  Wealth creation has bypassed them.  

What the forces of globalization will inevitably do to help the poor is push capital, information and connection to markets downward and outward to the most remote reaches of the developing world. 

C.K. Prahalad, in his influential book “The Fortune at the Bottom of the Pyramid,” describes how globalization can open up entire new vistas of investment and wealth creation for the poor.  Long ignored by First World corporations is the enormous wealth that could potentially be created by what he has coined the “bottom of the pyramid,” which includes the 3 billion people who live on less than $2 a day.

Prahalad asks, “What if we mobilized the resources, scale, and scope of large firms to co-create solutions to the problems at the bottom of the pyramid?”  

The question today then is: how can we harness the global changes that are inevitable to build capacities among the poor?   What is our strategy for poverty alleviation in the 21^st century that embraces the best of globalization?

No programming more effectively leverages these positive trends more than micro-enterprise.   Small loans enable poor people to make consequential purchases of equipment, expand product inventories and make modest upgrades in their operations. To our eyes, the investment seems trivial, but a small loan may enable a farmer to add a cow, or a goat, or a seamstress to purchase a sowing machine, a fisherman to upgrade his fishing equipment. 

Frequently, the small improvement in earnings that result make the difference in enabling children to continue in school, to receive badly needed health care or make improvements in nutrition. 

Nothing proves the latent ingenuity of the poor than modest investments of credit. 

The opportunity we have is to exceed the power and reach of charity by partnering with Third World entrepreneurs to expand their access to capital, boost production, and raise incomes.  The people of Hope International are showing that capital and access to wider markets can make a major difference in reducing poverty.   They deserve our support.