© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B© 2013 Institute for the Future. All rights reserved. SR-1563B

March 2013

Foresight Engine Game Analysis:

25 Zones of Future Innovation

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B

A project by Institute for the Future and The Rockefeller Foundationwww.iftf.org/our-work/global-landscape/catalysts-for-change/catalysts-zones-of-innovation

Contact: Tessa Finlev, tfinlev@iftf.org

© 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.

  

3

15 | Poverty Hedging | Future Innovation

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B

© 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, like rethinking our financial system away from constant

growth toward a currency tied to energy creation, to the more pragmatic, like

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.

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15 | Poverty Hedging | From the Players

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B

© 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/instrumentsto hedge for your own poverty. E.g. pay $2/mo. In 10 yrs., if poor get food/support payout; if rich, donate benefits.

USA

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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/instrumentsto 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/instrumentsto 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/instrumentsto 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/instrumentsto 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/instrumentsto 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/instrumentsto 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/instrumentsto 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 14

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/instrumentsto 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

15

15 | 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: www.fundacioncapital.org

Image Source: http://www.bos.frb.org/commdev/c&b/2010/winter/Butrica_Child_Savings_Accounts.pdf

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B© 2013 Institute for the Future. All rights reserved. SR-1563B

March 2013

Foresight Engine Game Analysis:

25 Zones of Future Innovation

© 2013 Institute for the Future for Rockefeller Foundation. All rights reserved. SR-1563B

A project by Institute for the Future and The Rockefeller Foundationwww.iftf.org/our-work/global-landscape/catalysts-for-change/catalysts-zones-of-innovation

Contact: Tessa Finlev, tfinlev@iftf.org