In this episode, Sarah sits down with Richard Thorsten, Chief Insights Officer at Water.org and Heather Arney, Global Director, Insights at Water.org to talk about how the organization scaled its work to serve over 58 million people in 11 countries, and the innovative solutions Water.org is implementing to tackle the global water crisis.
About Our Guests
Richard Thorsten is the Chief Insights Officer at Water.org, and Heather Arney is the Global Director, Insights at Water.org. Rich leads Water.org’s Insights team, which monitors and validates the organization’s impact and generates and disseminates a credible evidence base to advance insights, influence action and direction, and contribute to thought leadership. Rich joined Water.org in 2007, and previously oversaw the growth and development of the organization’s impact strategy and partnerships prior to his current role.
His 25+ year career has included programmatic and leadership roles at Water.org and U.S. conservation organizations. Rich has also consulted for the World Bank and the U.S. Environmental Protection Agency. He holds a master’s and a doctorate degree in planning, with a focus on water and sanitation finance in developing countries.
Heather Arney has over 20 years of international development experience with a focus in the areas of finance, water and sanitation, climate, and gender equality. Since joining Water.org in 2005, Heather has pioneered and scaled its WaterCredit program, expanded international partner networks and capacities, designed and implemented strategic programs, facilitated development of new venture activities and developed information systems and tools for program monitoring/measurement, verification, and research. Prior to joining Water.org, Heather served in the Peace Corps, in the Islamic Republic of Mauritania, West Africa, where she worked with microfinance institutions, and to advance girls’ education. Heather holds a master’s degree in International Affairs.
Transcript
Heather Arney (00:01 ):
The dollars that we have for water sanitation can go much further and reach more people than our previous programing. Through WaterCredit, there’s been more than $4.8 billion that’s been disbursed for water sanitation improvements, and now we’re close to benefiting nearly 60 million people.
Richard Thorsten (00:15 ):
We believe that water is the best investment that the world can make to improve health, empower women, enable access to education, increase family income and change lives.
Heather Arney (00:25):
Those living in poverty, especially women and girls, they’re feeling it first and they’re feeling it worst. So women and girls bear the monetary and time costs. Women and girls must travel these further distances outside their houses to find water or to use a toilet, and that increases the risk of harassment and physical violence.
Sarah Johnson (00:45):
Welcome to the Pathway Podcast. Pathway to Tomorrow is a nonprofit with initiatives in housing, environmental conservation and water security. In this podcast series, we engage with leaders working on solving some of the world’s most challenging problems by exploring innovative solutions being implemented by leading NGOs, nonprofits, think tanks, companies and institutions focused on issues like homelessness, equitable philanthropy, environmental conservation, climate change, and water security.
(01:19):
Our guests today are Richard Thorsten, Chief insights officer at Water.org, and Heather Arney, Global Director for Insights at Water.org. Rich leads Water.org’s Insights team, which monitors and validates the organization’s impact and generates and disseminates a credible evidence base to advance insights, influence action and direction, and contribute to thought leadership. Rich joined Water.org in 2007, and previously oversaw the growth and development of the organization’s impact strategy and partnerships prior to his current role. His 25 plus year career has included programmatic and leadership roles at Water.org and US conservation organizations. Rich has also consulted for the World Bank and the United States Environmental Protection Agency. He holds a Master’s and a Doctorate degree in planning with a focus on Water and Sanitation Finance in developing countries.
(02:07):
Heather Arney has over 20 years of international development experience with a focus in the areas of finance, water and sanitation, and climate and gender equality. Since joining Water.org in 2005, Heather has pioneered and scaled its WaterCredit program, expanded international partner networks and capacities, designed and implemented strategic programs, facilitated development of new venture activities, and developed information systems and tools for program monitoring and measurement, verification and research. Prior to joining Water.org, Heather served in the Peace Corps in the Islamic Republic of Mauritania, West Africa, where she worked with microfinance institutions and also to advance girls’ education. Heather holds a Master’s degree in International Affairs.
(02:50):
Richard and Heather, it’s such a pleasure to have you on today. Thank you so much for joining us. To start us off, can you tell us a bit about what Water.org does and your roles at the organization?
Richard Thorsten (02:57):
Sure. Well, thank you, Sarah, for having us. Water.org is a philanthropic organization that works with partners throughout the world to solve the global water and sanitation crisis. Today, over 750 million people lack basic access to safe water. And over 2.5 billion lack access to sanitation services. Water.org offers smart solutions to help break down financial barriers between people living in poverty and access to safe water and sanitation. We believe that water is the best investment that the world can make to improve health, empower women, enable access to education, increase family income and change lives.
(03:38):
Today, over 58 million people around the world can access better water services or safely use a toilet, thanks to our partnerships around the world. As you mentioned, I serve as water’s Chief Insights Officer, overseeing our insights team, and our team collects, monitors, validates, and reports impact from our partnerships. We also generate and disseminate lessons and insights to improve our impact partnerships and share our evidence base with external stakeholders such as donors and other development practitioners.
Sarah Johnson (04:09):
Thank you for sharing that, Rich. So you’ve both been with the organization for a long time. Heather, since 2005 and Richard since 2007 to today. Can you share what strategies Water.org employed to scale from where it began to where it is today? As you mentioned, serving more than 58 million people in 11 countries.
Heather Arney (04:27):
Yeah. Thank you Sarah, it’s a pleasure to be here. So Richard and I are two of the longest tenured people at Water.org. Back when we joined in the mid 2000s, Water.org was a small nonprofit organization that worked with other nonprofits to build water and sanitation systems, mostly in rural communities in a half a dozen countries. For us, the shift to scale began with an insight – people living in poverty were paying several times more for poor water quality and sanitation facilities than people living in middle and upper income groups. What we noticed is that what people often lacked was just that financing and the ability to obtain improvements and pay for them over time.
Richard Thorsten (05:09 ):
So with those insights, we started experimenting with a model that we called WaterCredit – effectively small loans that households could afford to improve their water and sanitation access. So after a couple of years, we managed to convince a handful of microfinance institutions in India to develop water and sanitation loan products for their customers. The loans were successfully repaid with interest, and people could now access taps and toilets without waiting for governments or charities to intervene. So from there, we really scaled and iterated that model and replicated it across different parts of the world. The model’s success as it grew, attracted more donors who wanted to donate their funds to support this growing and very efficient impact.
(05:55):
We also found that our partners wanted more capital than they could obtain on their own. So several years ago, we created Water Equity, the world’s first asset manager that’s devoted to raising and deploying investments in water and sanitation. We now work with Water Equity to tap into capital markets and turn those investments into impact.
Sarah Johnson (06:14):
That’s incredible. Thank you for sharing that, Richard and Heather. Could you, Heather, explain in a bit more detail how your WaterCredit program works?
Heather Arney (06:22 ):
Yeah, so water credit applies microfinance to bring small, affordable loans to those who really need it, and also the access to expert resources to make home water and sanitation solutions a reality. Through our partner certification, we take time, we do due diligence, to partner with local financial institutions that provide small loans to their clients. So we work with our partners, bring them on board, and once they’re certified, we work with them to develop a water and sanitation loan product. From there, they’re going to pilot it, adjust how they’re implementing the water and sanitation loans based on their learnings, and then scale the water and sanitation loan offerings to their branches of operations.
(07:07):
Our partners work closely in the communities where they operate and often provide education on water and sanitation diseases, and the importance of using a toilet facility and investing in safe drinking water. On average, a water credit loan – a small loan that these loan officers are providing for a water sanitation improvement- is around $366. And that’s really all it takes. But that upfront capital is needed to install a water connection to their home or a toilet in their home.
(07:38):
The loan sizes can be larger or smaller based on the improvement type that they’re taking out. One thing that’s really incredible about WaterCredit is that households are able to make their own decisions on the type of improvement that works best for them and their families. The types of solutions that they’re taking out- the loans and building- are things like piped households, like bringing pipes to the household for water connections, borehole wells, rainwater harvesting systems, water storage tanks, and a variety of toilets that might be connected to the sewer or they might be off grid, such as a septic tank. Borrowers are able to use these loans to install that, and then they can either create a new facility or they can make major repairs to their existing ones. Sometimes it’s just a matter of being able to repair what’s been damaged or to maintain what they currently have.
(08:26):
On average, the borrowers repay these water credit loans over about 18 months, and that makes the loans affordable. And as they’re repaid, the financial institutions, they’re able to take that money, use that money and then have more capital to make additional water credit loans, thus reaching more people. When we first started WaterCredit back in the early 2000s, we didn’t have an evidence base, you know, or really any proof to offer to financial institutions or donors or governments that WaterCredit was a model that could work. It took time to be able to pilot, to demonstrate, and most importantly to prove that there was a demand for these non- income generating loans and that those in poverty were able to demand these loans, but also to repay those loans, thus bringing in much needed capital into the water and sanitation space.
(09:16):
We’ve learned quite a few things over the course of WaterCredit, but the three main takeaways are that the limited dollars that we have for water sanitation can go much further and reach more people than our previous programing. The model benefits financial institutions, both from a business perspective, but also from a social mission perspective and being able to help them reach social impact goals. And thirdly, and most importantly, the households that are taking out these loans and making water and sanitation improvements, they’re benefiting health wise, but also from various socio and economic gains. To date, primarily through WaterCredit, there’s been more than $4.8 billion that’s been disbursed for water sanitation improvements. And now we’re close to benefiting nearly 60 million people.
Sarah Johnson (10:01) :
That’s incredible. Thank you so much for sharing that. And these investments, they result in what sounds like a lifetime impact- something like a well or even infrastructure piping for a house. So that’s just incredible. My next question is for Richard. Richard, can you share a recent water sanitation project that Water.org financed through its WaterCredit program and the impact it had on the community served?
Richard Thorsten (10:24 ):
Yes. So I was actually just in Kenya last week visiting our team and a few of our impact partners. One of them is a financial institution called Family Bank. We’ve worked with Family Bank and other banks in Kenya for several years to develop and scale WaterCredit loan products for individual and small group clients. And more recently, we’ve also enabled them to create water and sanitation loans for small and medium enterprises that operate in the water and sanitation supply chain. So on this trip, we visited with two entrepreneurs who supply water services to nearby residents. These individuals started with Family Bank because they needed water for their own homes. They live in places with limited infrastructure that’s provided by the government or utilities.
(11:10):
Once they started using their new boreholes and water tanks, their neighbors started asking if they might be able to get water from them too. And pretty soon, within a couple of years, these enterprising people began expanding their water facilities to nearby customers with larger sized loans that they could afford. Today, one of those clients provides water to about 5,000 people, and the other one reaches close to 10,000 people. They have moved from securing water for their home to now becoming full time business people, who provide water year round to customers living in relatively water scarce parts of the country.
Sarah Johnson (11:45) :
That’s incredible. So really just the work is empowering people to kind of multiply the impact, which is amazing. Next question I have is for Heather. Heather, can you speak to the impacts of climate change on the global water crisis and how these impacts are affecting women and girls, specifically in the communities you serve? And then as a follow up to that, if you could speak more to what Water.org is doing to address this growing challenge.
Heather Arney (12:10):
Yeah, that’s such an interesting question, Sarah. So we look at water as the primary way in which we feel many of the effects of climate change. There’s either too much water or there’s too little. There’s climate threats like rising sea levels and more frequent extreme events like floods and droughts that affect the water systems that we all rely on. But those living in poverty, especially women and girls, they’re feeling it first and they’re feeling it worst. So women and girls bear a disproportionate burden for water collection and have a greater need for having private and safe sanitation facilities. It’s estimated that women and girls spend an average of 200 million hours every day, just to collect water. And this number is only going to increase with climate change. As water becomes scarcer due to longer and more severe droughts, women will often have to travel longer distances to secure the water. It can often be more expensive and even less safe to drink. In addition to the monetary and time costs, women and girls must travel these further distances outside their houses to find water or to use a toilet, and that increases the risk of harassment and physical violence.
(13:23):
To address these challenges, we partner with local financial institutions and water and sanitation service providers to increase access to reliable water solutions that are able to adapt to climate change. Climate change is happening globally but it’s felt very different locally. And because of that, we work within the local context and we work on a wide variety of activities that can strengthen the local infrastructure to better manage locally shared resources and address the climate changes that are happening within communities.
(13:52):
Programs like WaterCredit are providing solutions that work within an individual’s context. So as I mentioned before, households are able to make the decisions about the type of water sanitation improvements that work best for them. And this includes like a loan for maybe a large water storage tank so that a household can have access to water throughout the dry seasons, making sure that they have water throughout the year. Or if a household is living in a zone that’s potentially in a flood risk zone, then they might build a toilet that’s off the ground that can better withstand the impacts of a flood.
Sarah Johnson (14:27):
Thank you for sharing that, Heather. So my next question is for both of you. Something I like to ask all of our guests is – what would you say are some of the behavioral changes that need to take place in the public and private sectors, as well as on an individual basis, to help advance SDG six – clean water and sanitation for all?
Richard Thorsten (14:46) :
I’ll start with that, Sarah. First of all, it’s a very broad topic. First, I would say that the world is not on track to meet the promise of universal safe water and sanitation for all, as it’s outlined in SDG six. There have been meetings at the United Nations on this – UN water conference back in March, General Assembly conversations. And so the world needs to recommit itself to action. And we all have roles at play to achieve our mission of clean water and sanitation for all.
(15:17):
Governments are generally considered responsible overall for water and sanitation provision. Clearly, there’s opportunities for governments to reprioritize water and sanitation through their policies, regulations, investments, and to make sure that especially those that are living in poverty, at the very base of the economic pyramid, have the same opportunities to obtain water and sanitation as others do. Infrastructure providers, like utilities and companies that provide water and sanitation services, obviously have important roles to play in improving the accessibility, the quality, the quantity of water, and to take steps to ensure that access to clean water and sanitation is climate resilient – because we know climate change, as Heather talked about, continues to be a major threat for the most vulnerable.
(16:08):
Financial institutions and investors, with some of whom we work with, also have roles to play. A big challenge with SDG six is that there simply isn’t enough public funding and charitable funding to meet the overall goal of SDG six. And so we need more capital from local, domestic and international private sources to really address the magnitude of the challenge. Bilateral and multilateral institutions like the World Bank, Regional Development Banks, bilateral agencies like the US agency for International Development, also have critical roles to play, both in terms of investment and creating the enabling conditions, and working with governments on partnerships that foster water and sanitation, service delivery and sustainability.
(16:52):
Corporations also play a role as well. Corporations are often large volume users of water. And so corporations have an opportunity and an obligation both to minimize and manage effectively their water footprint, and also provide investment and philanthropy so that others have the same access to clean water and sanitation that they do. We know that foundations and charities like Water.org have important roles to play in this space by creating new spaces for innovation, new cross stakeholder partnerships, and addressing the needs of both poorest of the poor, as well as bringing in more capital through grant funding and other concessionary capital. And then lastly, I would say people -whether people living in poverty who can participate through water and sanitation financing mechanisms- and us, you, myself, Heather and your listeners, we all have a role to play in managing water resources and being good stewards of of those resources and making sure that others throughout the world have the same access that we do.
Heather Arney (17:55):
Yeah, that’s right, Rich. You know, each of us can make a big difference. And that’s how WaterCredit was first started. We were figuring out how to help one family at a time. And there’s several ways that we and your listeners can help. There’s donating to Water.org- $25, will give a family safe water or a toilet for years to come. Get social -share the stories from where we work on Facebook, Instagram, and Twitter. Turn passion into action. There’s opportunities to start fundraisers, ask a friend or family to donate at give.water.org.
Sarah Johnson (18:31):
Thank you so much for sharing that answer and for joining us today, Richard and Heather. It’s been a pleasure to learn more about your work and about the innovative solutions Water.org is implementing to address the growing global water crisis.
To our listeners, thank you for tuning in, and don’t forget to subscribe to the Pathway Podcast to get alerts on new episodes featuring thought leaders working in housing, environmental conservation, climate change and water security.