From issue: Health Care (Summer 2010)

Innovators/Innovations

Some of our hemisphere’s emerging leaders in politics, business, civil society, and the arts.

In this issue:

Business Innovator: Lumni, Inc., Chile and Colombia

Would you invest in the education of a college student if you were able to earn a tidy return from his or her success? Felipe Vergara and Miguel Palacios are betting that a lot of people would. Since 2006, the investment model created by their Miami-based company, Lumni, Inc., has financed the college educations of nearly 1,300 low-income students in Chile, Colombia, Mexico, and the United States.

The arrangement is simple. By purchasing shares in a Lumni fund, buyers can earn an average return of 7.5 percent, according to Vergara, as students start to earn a salary and repay their loans.

Lumni started in 2002 with a seed project in Chile and later expanded to Colombia. The idea was to establish a “human capital investment fund” to make traditional college loans to qualified students. Vergara and Palacios soon discovered that it could reduce both the risk to investors and the burden to borrowers by allowing students to pay back their loans as a fixed percentage of their post-graduate salaries; the amount students are required to pay never exceeds 15 percent, and the term of the loan varies with the borrower’s capacity to pay. The so-called “portion-of-earnings” arrangement helps ensure that repayment does not become a financial burden to graduates starting their careers.

According to the company, three out of four qualified students in Latin America will not earn a college degree. Vergara, a graduate of the Wharton School, and Palacios, a graduate of the University of Virginia’s Darden School of Business, are both Colombian. Lumni, they believe, will give needy students a chance for the same top-grade higher education that they enjoyed.

So far, Lumni has attracted more than 100 private investors. They include high net-worth individuals, foundations and non-profit organizations, as well as international financial institutions such as the Inter-American Development Bank. Large international businesses, sensing an opportunity to demonstrate good corporate citizenship, are also attracted to the idea. In Colombia, Lumni has partnered with SAB Miller to increase access to college programs for young people in rural areas and to rehabilitate former combatants through education. In Mexico, the company has teamed up with Office Depot to finance education for the disabled.

The structure of the program is also innovative. Lumni has created several funds of diversified pools of students matched to investors’ financial and social goals.  Lumni allows some students to repay less than their original investment if they enter the workforce in a low-wage industry. For now the company relies on a mix of investors and charitable donors to replenish and increase its loan pool, allowing it to fund a diverse group of students. Eventually, say Lumni’s founders, the fund will be self-sustaining.

Lumni improves the odds by being highly selective in its choice of students. Fewer than 13 percent of applicants are approved, and recipients are selected based on “integrity, educational achievement and future potential in their chosen field of study,” says Vergara. And like any good investor, Lumni takes care to protect its investment: the company provides each student in its program with a mentor—often a Lumni graduate. This stay-in-school approach has been successful so far. Two percent of students drop out of school, and the default on repayments is only 1.5 percent.

The market seems to be on Lumni’s side. In May 2009, Endeavor recognized Vergara’s work and committed to help Lumni expand its reach in the Americas. Recently, it expanded operations to the San Francisco Bay area and Miami, FL. “Our goal is to invest in one million students in the next ten years,” Vergara says.


Political Innovator: Yolande James, Canada

Yolande James has been Québec’s Minister of Immigration and Cultural Communities for three years. In the often-turbulent politics of Canada’s French-speaking province, few immigration ministers last that long. But James, 32, stands out for more than her survival skills: as the youngest woman, and first black woman, to serve in a high-ranking cabinet post in the province, she has helped transform Québec into a model for integrating immigrants into mainstream society.

James, a lawyer and the daughter of immigrants from the Caribbean islands of St. Lucia and St. Vincent, has spearheaded a series of reforms to streamline the often lengthy and complicated process of applying for Québec citizenship. The reforms include fast-tracking the application process for foreign university students and certifying the foreign licenses of professionals, such as lawyers and doctors, to enable them to work in the province. James explains that such programs convey both a warmer welcome to would-be immigrants and greater acceptance by Québecois themselves.

That represents a significant step forward in Québec, where immigration is closely linked to the province’s long-standing determination to protect its French culture and language. The Canadian government has recognized Québec’s special status and has allowed the province to oversee its own immigration process.

For decades, this made Québec a key destination for French-speaking immigrants. Now, increasing applications by francophones from the Caribbean and Africa add racial tension—which is why James has become a key player as Québecois grapple with new visions of their society.

In 2009, she unveiled the Valorisation Jeunesse (Youth Empowerment) program, an initiative involving Québec teens to combat negative media images of young minorities. “I don’t think [such images] are reflective of the Québec of today,” she says.  As part of this program, James worked with businesses in Montreal, where she grew up and has served as an elected member of the provincial assembly since 2004, to place 600 youths in summer jobs. She also created a program to improve relations between young people and police officers, developed a theater workshop designed to raise self esteem in the 3,000 young girls it targets, and spearheaded a ‘role models’ mentorship campaign with accomplished first- and second-generation immigrants.

More recently, she sparked controversy by supporting a bill to ban the burqa from being worn in government-sponsored French classes and bar women who wear the traditional full-body covering from receiving government services like education. The policy follows similar proposals in France. She bases her decision on respect for women’s rights.

All of James’ programs are aimed at making Québec a more equitable society, but she also has a broader vision. Her goal is to foment a new consensus that everyone benefits when new immigrants and Québec citizens share a vision for the future. “We all must start at the same place,” she says.


Civic Innovator: ViaEducation, Mexico

To address educational gaps among marginalized populations in the Americas, a group of Latin American students attending Harvard University’s Graduate School of Education and the Massachusetts Institute of Technology launched in 2004 an education assistance network. Drawing from the knowledge and expertise in the United States, their goal was to expand access to secondary and higher education for underprivileged urban, rural and indigenous communities.

The network, called ViaEducation, designs curricula, provides teacher training and facilitates youth-organized community development projects. In just six years, ViaEducation has developed programs in eight Latin American countries. The Mexico program is the fastest growing and has already reaped some tangible successes.

A pilot program in the northern states of Nuevo León and Guerrero has doubled in size over the past two years to 240 schools. According to Mariali Cárdenas Casanueva, ViaEducation’s Director of Educational Development in Mexico, the key is grassroots community involvement. “When the community leads the projects, the ideas come from their own needs and observations,” says Cárdenas, who worked for 15 years in social development of rural and indigenous communities before starting ViaEducation. “This makes the project more sustainable and the changes more lasting.”

ViaEducation’s projects in Argentina, Brazil,  Chile, Colombia, Costa Rica, El Salvador, and Guatemala foster a balance between outside expertise and local communities. ViaEducation’s network of universities, governments, foundations, and nonprofit organizations includes Harvard University, the Colombian Ministry of Education and the W.K. Kellogg Foundation. Some fund specific programs. Others provide evaluation tools and research. But it is the whole network that has allowed ViaEducation to offer multifaceted services and programs to diverse communities.

According to Cárdenas, students who come from disadvantaged backgrounds often “don’t feel like they have the capability to modify their own reality.” So the network’s curriculum emphasizes communication, negotiation and critical thinking as means of self-empowerment. These skills form the foundation of ViaEducation’s four subjects: educational quality, civic education, educational policy, and social responsibility. The civic participation program has been particularly successful in Mexico. A country-wide evaluation conducted in 2008–2009 and directed by Fernando Reimers of Harvard concluded that 65 percent of the public school students who participated in the civic participation program improved their scores on the national civic education exam.

Students are not the only beneficiaries of ViaEducation programs. Educators in the participating communities receive formal training that encourages student involvement in development projects. In Mexico, ViaEducation has facilitated more than 300 projects led by local youth aged 7 to 20 to engage in local community issues.

One of these was a recycling program designed with the help of a teacher trained by ViaEducation and led by secondary students of Emiliano Zapata high school in the Chiapas, Mexico, community of El Aguaje. The 2009 project led to the construction of a compost center that transforms biodegradable waste into fertilizer and information sessions for their peers about the importance of recycling and the benefits of compost.

Despite its comparatively short history, ViaEducation is attracting attention across Latin America—and winning supporters. The network recently received funding from the Organization of American States to expand a program designed by the Universidad de los Andes in Colombia, led by Enrique Chaux, and implemented by 30 teachers based in Mexico on how to prevent domestic and school-related violence.

What is most innovative about  ViaEducation is that it reverses the traditional brain drain. Latin America’s best and brightest are turning knowledge gained in U.S. universities into a tool of social change and mobility back home that will span generations.


Arts Innovator: Cavi Borges, Brazil

The life of Rio de Janeiro’s favelas is Cavi Borges’ passion and the subject of his cinematic art. But in a departure from classic films about Rio’s notorious slums such as Cidade de Deus (2002) or Tropa de Elite (2007), Borges portrays the human, personal experiences of growing up in the favelas. Focusing on the common experiences of youth, yearning and maturation, Borges’ movies bring audiences closer to the people who live in this environment by avoiding sensationalism and caricature.

In the most successful film of his still-short career, A Distração de Ivan (Ivan’s Diversion), produced last year, Borges portrays the Brazilian neighborhood of Brás de Pina to his audience through the eyes of Ivan, an 11-year-old boy. A polished and elegant coming-of-age story, it contains none of the brutal violence that characterizes other film depictions of favela life.

The movie went international this spring when it was selected for Critics’ Week at the Cannes Film Festival. It was the sixth film made by the 35-year-old director from Rio. “I work with poor communities,” Borges explains, “and I try to build simple and realistic stories around them.” Those relationships, as well as partnerships with other directors and filmmakers, are an important part of how Borges sees himself as a filmmaker.

In Ivan’s Diversion, we follow the title character (based on the childhood of codirector Gustavo Melo) through the loneliness of an afternoon spent behind the walls of his grandmother’s courtyard. The story builds with its award-winning original score, an honor received at the 2009 Cine PE Festival do Audiovisual in Recife, to a peak both figurative and literal, with Ivan perched on his bicycle high above the city, finding his own escape as dusk falls.

Borges’ path to a promising career in moviemaking was not direct. In the mid 1990s, he was preparing to compete in judo for Brazil at the 1996 Summer Olympics in Atlanta when he suffered a training injury. His Olympic ambitions dashed, Borges opened a video store specializing in art movies, which rapidly developed a following among Rio film-lovers. In a replay of the career of U.S. filmmaker Quentin Tarantino and French auteur directors, he transformed himself from film connoisseur to film-maker, with help along the way from local directors.

Of the more than 2,000 films considered for Critics’ Week at Cannes, Ivan was one of only seven selected for screening. Borges still does not believe the turn of fortune. “I always send my work to these kinds of festivals, but I never believed I could actually be chosen,” he says. Growing international exposure has done more than simply boost his career.  According to Borges, it has given world audiences a new way of looking at Brazil. “Even though the story takes place in Brazil, I believe people anywhere can relate to it through their own memories of childhood,” he says.

Meanwhile, Borges hasn’t forgotten his roots. His old video store, Cavídeo, has grown into a production company. In a digital era, when moviemaking is more accessible to those without deep pockets, there’s no shortage of new projects. Currently, Cavídeo has four new short films and three full-length films ready for release.