© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B © 2013 Institute for the Future. All rights reserved. SR-1563B Speaker Name | Speaker Title February 2013 GAME ANALYSIS: Top 25 Zones of Future Innovation © 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B

15 | Poverty Hedging 2

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B Beyond the world of microfinance and other methods of building inclusive finance, lies poverty hedging. Much as insurance, social security, and other systems were built to protect people against falling into poverty, there will be a move toward building programs to prevent children born into financial poverty from staying there. Poverty hedging will range from government- sponsored programs to international development projects and more traditional financial inclusion work aimed at providing an opportunity for self-supported poverty hedging | Poverty Hedging | Future Innovation © 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B

The monetary side of poverty was a major point of debate throughout the Catalysts for Change game. Players wanted to know how we get more capital into the hands of the poor. Ideas ranged from the theoretical, such as rethinking our financial system away from constant growth and toward a currency tied to energy creation, to the more pragmatic, such as turning microcredit borrowers into eventual lenders and tying traditional savings methods to modern banking systems. One player took these innovations to a new level, suggesting we create a financial market to hedge against poverty where the profit is donated to poverty alleviation efforts | Poverty Hedging | From the Players © 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B

5 Create annuities/instruments to hedge for your own poverty. E.g. pay $2/mo. In 10 yrs., if poor get food/support payout; if rich, donate benefits.* USA** 15 | Poverty Hedging | Micro-forecasts from the Game *Cards have been lightly edited for readability. **Player location was self selected.

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B 6 Microcredit firm that plays the role of lender, retailer and advisor transforming borrowers to suppliers. Whole foods market is doing this Nigeria 15 | Poverty Hedging | Micro-forecasts from the Game Create annuities/instruments to hedge for your own poverty. E.g. pay $2/mo. In 10 yrs., if poor get food/support payout; if rich, donate benefits. USA

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B 7 Carbon trade at micro level to connect consumers in developed societies to greener but ‘poorer’ societies. Possible with data collection China 15 | Poverty Hedging | Micro-forecasts from the Game Microcredit firm that plays the role of lender, retailer and advisor transforming borrowers to suppliers. Whole foods market is doing this Nigeria Create annuities/instruments to hedge for your own poverty. E.g. pay $2/mo. In 10 yrs., if poor get food/support payout; if rich, donate benefits. USA

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B 8 Develop the usage of micro- finance as a collective instead of individual, thus strengthening local bonds and traditional economies Peru 15 | Poverty Hedging | Micro-forecasts from the Game Microcredit firm that plays the role of lender, retailer and advisor transforming borrowers to suppliers. Whole foods market is doing this Nigeria Create annuities/instruments to hedge for your own poverty. E.g. pay $2/mo. In 10 yrs., if poor get food/support payout; if rich, donate benefits. USA Carbon trade at micro level to connect consumers in developed societies to greener but ‘poorer’ societies. Possible with data collection China

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B 9 In fact, there are initiatives to link traditional ways of saving with the formal ones that financial system requires Peru 15 | Poverty Hedging | Micro-forecasts from the Game Microcredit firm that plays the role of lender, retailer and advisor transforming borrowers to suppliers. Whole foods market is doing this Nigeria Create annuities/instruments to hedge for your own poverty. E.g. pay $2/mo. In 10 yrs., if poor get food/support payout; if rich, donate benefits. USA Carbon trade at micro level to connect consumers in developed societies to greener but ‘poorer’ societies. Possible with data collection China Develop the usage of micro- finance as a collective instead of individual, thus strengthening local bonds and traditional economies Peru

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B 10 Perhaps the governments could contribute a small sum to the child upon birth to be saved and untouched until the child turns 18 Sri Lanka 15 | Poverty Hedging | Micro-forecasts from the Game Microcredit firm that plays the role of lender, retailer and advisor transforming borrowers to suppliers. Whole foods market is doing this Nigeria Create annuities/instruments to hedge for your own poverty. E.g. pay $2/mo. In 10 yrs., if poor get food/support payout; if rich, donate benefits. USA Carbon trade at micro level to connect consumers in developed societies to greener but ‘poorer’ societies. Possible with data collection China Develop the usage of micro- finance as a collective instead of individual, thus strengthening local bonds and traditional economies Peru In fact, there are initiatives to link traditional ways of saving with the formal ones that financial system requires Peru

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B 11 Then like carbon caps, poverty remediation opportunities could be traded. USA Microcredit firm that plays the role of lender, retailer and advisor transforming borrowers to suppliers. Whole foods market is doing this Nigeria Create annuities/instruments to hedge for your own poverty. E.g. pay $2/mo. In 10 yrs., if poor get food/support payout; if rich, donate benefits. USA Carbon trade at micro level to connect consumers in developed societies to greener but ‘poorer’ societies. Possible with data collection China Develop the usage of micro- finance as a collective instead of individual, thus strengthening local bonds and traditional economies Peru In fact, there are initiatives to link traditional ways of saving with the formal ones that financial system requires Peru perhaps the governments could contribute a small sum to the child upon birth to be saved and untouched until the child turns 18 Sri Lanka 15 | Poverty Hedging | Micro-forecasts from the Game

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B 12 An increasing number of commercial banks in India are now allowing proxies including local grocery stores to act in their place. India 15 | Poverty Hedging | Micro-forecasts from the Game Microcredit firm that plays the role of lender, retailer and advisor transforming borrowers to suppliers. Whole foods market is doing this Nigeria Create annuities/instruments to hedge for your own poverty. E.g. pay $2/mo. In 10 yrs., if poor get food/support payout; if rich, donate benefits. USA Carbon trade at micro level to connect consumers in developed societies to greener but ‘poorer’ societies. Possible with data collection China Develop the usage of micro- finance as a collective instead of individual, thus strengthening local bonds and traditional economies Peru In fact, there are initiatives to link traditional ways of saving with the formal ones that financial system requires Peru perhaps the governments could contribute a small sum to the child upon birth to be saved and untouched until the child turns 18 Sri Lanka Then like carbon caps, poverty remediation opportunities could be traded. USA

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B 13 Transition from national or regional prosperity model. As nations don’t exist in isolation. For example a warring Somalia impacts Kenya Nigeria 15 | Poverty Hedging | Micro-forecasts from the Game Microcredit firm that plays the role of lender, retailer and advisor transforming borrowers to suppliers. Whole foods market is doing this Nigeria Create annuities/instruments to hedge for your own poverty. E.g. pay $2/mo. In 10 yrs., if poor get food/support payout; if rich, donate benefits. USA Carbon trade at micro level to connect consumers in developed societies to greener but ‘poorer’ societies. Possible with data collection China Develop the usage of micro- finance as a collective instead of individual, thus strengthening local bonds and traditional economies Peru In fact, there are initiatives to link traditional ways of saving with the formal ones that financial system requires Peru perhaps the governments could contribute a small sum to the child upon birth to be saved and untouched until the child turns 18 Sri Lanka Then like carbon caps, poverty remediation opportunities could be traded. USA An increasing number of commercial banks in India are now allowing proxies including local grocery stores to act in their place. India

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B | Poverty Hedging | Micro-forecasts from the Game Microcredit firm that plays the role of lender, retailer and advisor transforming borrowers to suppliers. Whole foods market is doing this Nigeria Create annuities/instruments to hedge for your own poverty. E.g. pay $2/mo. In 10 yrs., if poor get food/support payout; if rich, donate benefits. USA Carbon trade at micro level to connect consumers in developed societies to greener but ‘poorer’ societies. Possible with data collection China Develop the usage of micro- finance as a collective instead of individual, thus strengthening local bonds and traditional economies Peru In fact, there are initiatives to link traditional ways of saving with the formal ones that financial system requires Peru perhaps the governments could contribute a small sum to the child upon birth to be saved and untouched until the child turns 18 Sri Lanka Then like carbon caps, poverty remediation opportunities could be traded. USA Transition from national or regional prosperity model. As nations don’t exist in isolation. For example a warring Somalia impacts Kenya Nigeria An increasing number of commercial banks in India are now allowing proxies including local grocery stores to act in their place. India

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B Signals from the Present | Poverty Hedging

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B 16 Following in the footsteps of Mexico, Korea, and Singapore, the Coalition is working towards universal savings accounts for every child at birth in the United States. Fundación Capital Fundación Capital is a group of Latin American economists building a new economic paradigm for the region. Many of their projects are built on top of government-sponsored Conditional Cash Transfer systems, adding game mechanics and digital tools to promote financial literacy and saving. 15 | Poverty Hedging | Signals from the Present Child Savings Account Coalition Image Source: Image Source: ld_Savings_Accounts.pdf ld_Savings_Accounts.pdf