Hey everybody, here’s the first batch of essay responses for the Echoing Green Fellowship — your feedback is much appreciated!

Download the Essay Questions and Guidelines Here

Your Bold Idea

International Transparency Solutions is a new for-profit social venture designed to connect investors and the developing world through a suite of due diligence and investment oversight solutions. We are committed to delivering cost-effective services to the growing ranks of social investors and 3^rd world investment-seekers – a market where such solutions can radically transform the way we engage the developing world.

Our clients – individual investors, nonprofits, and even government agencies – will eventually be able to login to an online portal providing them access to their global portfolio of investments complete with pictures, video updates, and objective analyses and assessments. Investment-seeking institutions will have a platform on which they can be recognized and rewarded for their integrity through our VeriSign-like “Certification of Anti-Corruption” program. All of this will be facilitated by a network of “Transparency Professionals” tasked with serving as in-country liaisons between investors and their investments.

Our innovative proactive approach to due diligence serves to build confidence around global investment in developing countries while simultaneously facilitating more responsible and effective investment. By creating a more transparent and accountable environment for investment in the developing world, we seek to positively impact the cost-benefit relationship that individuals and organizations use when considering whether or not to partake in corrupt or dishonest activity.

Evolution

Two years ago, I was working for an e-commerce company in Nairobi, Kenya when I noticed so much lost investment potential in both the for- and non-profit sectors due to a high global perception of corruption. I watched as legitimate and hard-working charities worked right alongside organizations that were blatantly corrupt with no way for foreign investors to distinguish between the two. Compounding on this, I watched as US-based nonprofits were sinking money into programs with severe issues and not conducting the due diligence needed to recognize and fix these problems.

While in Kenya, I began work on designing a certification program to help lift honest and accountable organizations above that stigma of corruption and allow them to be recognized and rewarded for their integrity. The rest of the business model began to develop around this concept after I returned to Washington, DC and pursued research and discussions with representatives across the private, public, and independent sectors. After putting two years of work into developing the concept and model, I incorporated the business in March of 2009 and went about laying the groundwork to move forward.

Transparency Solutions is currently working on lining up the resources needed to carry out our pilot-program in Nairobi, Kenya so that we may have a presentable “proof of concept”. There is enormous potential to deepen and broaden our social impact over the course of five years including: expanding our client base, extending into new countries, investing in in-country programs (eg. E-government solutions, SMS-based fraud reporting mechanisms, taxi certification, etc.), and growing our online platforms to increase information accessibility and public engagement.

Innovation

Transparency Solutions takes a truly innovative approach toward ameliorating two key issues impeding investment in the developing world: First, social investors (including nonprofits) do not have access to any affordable and effective solutions for carrying out due diligence; Second, the mere perception of corruption that plagues developing countries is holding back massive investment potential for local investment-seeking institutions (including nonprofits) and is consequently perpetuating an environment for corruption even further!

Existing due diligence firms such as Kroll, Diligence LLC, and TRACE have failed to acknowledge the growing social investment sector and continue to serve the large and wealthy clients who can pay hundreds of thousands of dollars for services designed more for mergers and acquisitions than grassroots-level social impact! On the corruption end, various watchdogs have cropped up around the world however there is no organization out there offering tangible solutions to help curb the root causes that perpetuate this social injustice.

Transparency Solutions is flipping the concept of due diligence on its head to serve this new and growing market with customized solutions that meet their specific needs. Our strategy is built upon creating a network of Transparency Professionals: on-the-ground experts that proactively tap into and develop grassroots-level intelligence networks and carry out assessments of both the organizations we certify and the programs, organizations, and investments that our clients fund and support. Our company targets both ends of the investment spectrum – investors and investment-seekers – to create a more transparent and accountable ecosystem for social investment.

Need

Accessing information, much less credible information, in the developing world has always been a challenge. All one needs to do is consider briefly the Western perception of Africa — the stereotypes that are perpetuated due to a lack of any alternative information. Corruption. War. Disease. Online Scams.

Transparency International publishes an annual Corruption Perceptions Index, which is accompanied by a color-coded map of the world illustrating the “perceived levels” of corruption from country to country. What stands out most on this map is the dark-red that plagues the entire developing world. These perceptions are rooted in truth, and absent any alternative information these perceptions negatively influence the investment climate.

It’s estimated that the World Bank loses 30-40% of its funds to outright corruption. A New York Times article cites millions of dollars in grants awarded to Kenyan nonprofits to fight AIDS – only years later to discover those programs were never carried out. Nonprofit fraud in the United States – one of the more judicious countries of the world – was estimated to account for $40 billion in 2006.

The environment for social investment is one currently mired by a lack of transparency and accountability. This inhibits investment, perpetuates real corruption, and undermines confidence in the social sector’s ability to create lasting and sustainable change.

Transparency Solutions was founded to fill the information asymmetry, connect investors with their investments, and build overall confidence around the investment climate emerging in the Global South. Our programs will make aid and investment programs more efficient and effective, realign investment with integrity and create incentives against corruption.

Programs

The mission of International Transparency Solutions is to “develop innovative solutions that build confidence around global investment in the developing world while fostering a culture or transparency and accountability.” Our clients can be broken down into two basic categories: Investors and Investment-Seekers.

The investor category, right now, targets specifically nonprofits that are working with partner organizations or country offices abroad, foundations with program related investments (PRIs) or grants abroad, and government agencies restrained by “diplomatic security protocol.” Our investor clients will be able to tap into our on-the-ground intelligence networks to conduct pre-investment due diligence, vendor/recipient verification, or conduct a needs assessment. Our post-investment services will allow them to ensure their programs are running smoothly and properly. Our Transparency Professionals will conduct site visits and carry out full assessments of programs to make sure investors have the information they need to make appropriate decisions or report back to their boards and funders.

For investment-seekers, we will offer a “Certification of Anti-Corruption” that uses our global brand of integrity to help lift them above the stigma of corruption. This seal will certify the organization meets a set of “Standards of Transparency and Accountability” and is continually subject to random audit by Transparency Solutions’ in-country staff. Through strategic partnerships, we hope to also offer exclusive access to grants and various discounts to help incentivize program compliance.

Down the pipeline, there is enormous room for innovation and development: e-government platforms, SMS-based reporting mechanisms, and a user-driven charity database, just to name a few ideas!

Please leave your comments on the post, e-mail me a marked-up .doc file, or Contact Me directly!

Thank You!

See Also: Transparency Solutions Root Cause Analysis (Please Review!)

And the Transparency Solutions Innovation Matrix