It all started with a strange coincidence, when American Jacqueline Novogratz was only twenty-five years old. It was 1987, and Novogratz was working in the Rwandan capital, Kigali, to establish the country's first microfinance institution for women. Jogging through the streets one day, she was stopped in her tracks by the appearance of a young boy ‘wearing the sweater – my sweater’. She thought back to her childhood, growing up as the oldest of seven children in a working-class family in 1970s Virginia. Only receiving new clothing on special occasions, she came to treasure a blue wool sweater given to her by an uncle. With a pair of zebras and a snow-capped mountain on the front, she recalls, ‘the sweater made me dream of places far away’. Writing her name on the tag, Novogratz claimed it as hers forever. Her childhood fashion sense, however, later gave way to teenage tastes, and she eventually deposited the sweater at a charity donation shop, happy to be rid of it.

Figure 15.1 Cover image of Jacqueline Novogratz's The Blue Sweater.

Until Kigali, 1987. She greeted the boy wearing the blue sweater and, peering at the tag, saw her name written there. Over ten years after she had given it away in Virginia it had by chance ended up here, on her Kigali jogging route, somehow connecting these unlikely moments and places in her life. The Blue Sweater became the name and iconic cover image of her first book, the photograph of an anonymous young child restaging this implausible encounter with a material trace of her childhood halfway around the world. This chance meeting was not simply a reminder of the circumstances separating this boy's childhood from her own – the subtitle's ‘Gap between Rich and Poor’. She interpreted it as evidence that ‘we are all connected’ to ‘people we may never know and never meet across the globe’, through both our actions and our inactions. This insight seeded a new moral imperative: it became her mission to ‘understand better what stands between poverty and wealth’ (Novogratz 2009: 3). Today, Novogratz is widely known as the founder of Acumen, a non-profit fund that invests in businesses seeking to alleviate poverty across the Global South. She is a leading example of an impact investor, a broad category of financiers who prioritize a triple – social, environmental and financial – bottom line in their investments with the goal of using market-based solutions to address far-reaching social and environmental problems. Her book, and the images associated with it, are popular among aspiring social entrepreneurs and development professionals, some of whom claim that reading it changed their lives and their career paths. The book's cover provokes questions about whom we identify as possessing agency to incite social change, what global connections ‘between rich and poor’ look like and why children continue to be used in popular development discourse as a prime icon of the Global South. ¹

In this chapter I use the example of Jacqueline Novogratz and her vision (and visualization) of global interconnection to explore how moral storytelling is used across the ethical finance sector to personalize solutions to structural, historically embedded inequalities. Such storytelling serves to centre typically Western entrepreneurs or investors and their notions of innovation as uniquely positioned to solve global problems; in doing so, they generally favour individualistic entrepreneurial solutions that minimize the ongoing effects of histories of colonial inequalities built into the international economy favouring wealthy nations, and other relevant socio-economic contexts. Further, these narratives privilege the perspectives of international financial actors as authoritative, marginalizing those whose problems are being ‘solved’. To be sure, impact investors – who claim to be driven by social and environmental values as much as by financial returns – are working at the institutional level to build new markets, develop novel financial instruments and cultivate unconventional forms of entrepreneurship. However, my focus in this chapter will be on how such market-making also takes place at very intimate levels of self-fashioning and interpersonal connection to produce an ethical imaginary of poverty action. I use the notion of ethical imaginary to designate a cultural ethos produced and shared among a particular group of people, in this case financial actors like Novogratz who use emotion-laden claims to promote market-based values as the primary means to solve global poverty.

Drawing on ethnographic research with impact investors and analysis of storytelling practices within the sector, I use feminist postcolonial scholarship to argue that their performance of ethical subjectivity is integral to the reinscription of debt-based relations of global inequality. Storytelling is a tool, in these contexts, to assert moral legitimacy by positioning social entrepreneurship and impact investing as a more ethical approach to development than either existing institutions or alternative approaches, such as citizen-led strategies. This narrow ethical imaginary ² deflects from the ways that such business models expand new forms of debt across the Global South, such as through microfinance and digital financial services, and serves to frame social change as a matter for markets rather than political and civic participation.

(Post)colonial intimacies

Mobilizing emotional attachments to faraway places and people is not a new strategy for either imperialism or international finance. As the chapter in this volume by Alami (Chapter 10), on racialized imaginaries and emerging markets finance, shows, mobilizing such attachments is fundamental to the operation of contemporary financial markets. Anthropologists and historians have long studied how colonialism depended on interpersonal, even intimate, encounters as much as it did on violence in the ‘contact zones’ where explorers and settlers confronted indigenous residents (Pratt 2008). ³ These ‘intimate frontiers’ of empire are spaces where hierarchies of race, gender, family, sexuality and labour are negotiated, both defining and contesting how power is distributed between colonizers and the colonized (Hurtado 1999; Stoler 2001). Laura Ann Stoler argues that to understand the intersections of race and empire, ‘intimacies must matter’, because political authority and economic power rely on strategically managing social relationships (Stoler 2001: 835). In this sense, it is important to approach intimate sites and practices as political, i.e. having to do with power relations. Lisa Lowe develops this idea further to explore how colonialism, and the modern liberal subject that developed in tandem with it, unfolds through a ‘“political economy” of intimacies’ (Lowe 2015: 18). Intimacy here is not defined narrowly in terms of sexual or familial relationships. Rather, it offers a broader framework for identifying who and what are deemed valuable, and who is included and excluded, in a dominant economic order – in this case, global capitalism.

The intimacies that governed social difference and connection in supported colonial economies continue to have an afterlife in contemporary international development finance, which uses finance and debt in ways that are haunted by imperial histories of resource extraction, exploitation and impoverishment. This is partly because, as Jacqueline Novogratz's story of the blue sweater exemplifies, many actors who benefit from the inequitable distribution of global wealth established under colonialism demonstrate their benevolence through displays of intimate connection with global poverty.

The Blue Sweater is an exploration of these intimate connections. Novogratz uses vivid storytelling to illustrate how her ideas for addressing poverty are all rooted in the encounters and relationships she personally experienced in her early career, first as an international banker in Brazil and then working in development across Africa. The solutions become visible, she argues, when one makes space for personal connection: ‘the story of the blue sweater is also my personal story: Seeing my sweater on that child renewed my sense of purpose in Africa’ (Novogratz 2009: 3). Earlier, working in Brazil, she observes, ‘The chasm between rich and poor was stunning. I'd never experienced such poverty alongside such wealth before, and I'd also never felt such a strong desire to make a difference or felt so fully alive’ (2009: 7; emphasis added). For Novogratz, these encounters trigger a deeply personal calling to lead a mission-driven life as an investor. While such storytelling professes an ethical commitment toward helping those living in poverty, it centres Novogratz (and her feelings) as the protagonist of the story while othering those she meets along the way. Indeed, even after many years had passed since she gave it away, she still identified the blue pullover as ‘my sweater’. This impulse to turn everything of value in the sector into a personal story localizes larger ethical and political questions with appeals to individual entrepreneurial passion for change and self-knowledge. It also circumscribes the very possibility of recognizing – let alone narrating – structural histories of inequality and the complex approaches needed to respond to such issues as poverty and climate change.

The overarching solution to poverty that Novogratz proposes is to expand markets – including new debt relations like microfinance – into novel areas of social life across the diverse postcolonial landscape of the Global South. When she had her chance encounter with the Rwandan boy in the blue sweater, she was trying to establish a fledgling microfinance organization in Kigali focused on women. For her, the mid-1980s introduction of this new debt mechanism in Rwanda benefited women borrowers by providing them with loans, a new source of power; much the same logic is behind the educational lending initiatives discussed in this volume by Stork (Chapter 17). ‘Money,’ Novogratz writes, ‘is freedom and confidence and choice. And choice is dignity’ (Novogratz 2009: 87). Because the practice of micro-loans was so new at the time, others challenged the legitimacy of charging interest to women with extremely limited means and no collateral. Novogratz countered that this was a necessary form of disciplining the women to enter capitalist markets: ‘Think of charging fair interest as practice for the women to interact with the formal economy’ (Novogratz 2009: 45). Further, Novogratz asked the lending organization's participants to contribute some of their own money to the organization as a way of securing their stake in it, even though the women didn't have much.

While Novogratz asserts that this increased their self-determination and dignity, it also individualized poverty as a problem to be fixed through personal risk taking in still-forming markets. Extensive studies beginning in the mid-2000s have shown that microfinance institutions and their descendants, such as mobile financial services app M-Pesa in East Africa, have not lived up to promises to lift the poorest out of poverty. Indeed, in many contexts they are associated with various negative social and economic impacts, ranging from burdening families with unsustainable financial risk and predatory loans, to increasing domestic violence and debt-related suicide and exacerbating the very gender inequalities they are supposed to fix. Novogratz thus enacted intimate bonds of tutelage and trust that recall the paternalism of older imperial hierarchies, while neglecting the relevance of structural inequalities in the global economy that continue to enrich wealthy countries while reproducing gendered poverty on a wide scale.

Performing ethics in the philanthrocapitalist economy

After working in Rwanda, Brazil and elsewhere as a young development professional, Novogratz went on to found Acumen. The organization describes itself as an anti-poverty impact investment fund that operates across the Global South to ‘solve the problems of poverty’ (Acumen.org n.d.). Acumen describes itself as a non-profit venture philanthropy fund, reinvesting returns back into the organization. It distinguishes itself from charities by not ‘giving philanthropy away’, but by investing impact capital ‘in companies and change makers’ focused on global challenges (Acumen.org n.d.). Acumen therefore enters the world of poverty alleviation by reimagining earlier modes of international development aid and loans through a financial model that shifts risk from indebted nations to risk-taking individuals and small businesses in the Global South.

The fund's financial mission is embedded in Novogratz's ethical vision of deeper connection. Acumen's Manifesto, available on their website, suggests that poverty can be fixed by philanthropic investors who develop and perform the right character traits and feelings:

Although the Manifesto never defines ‘it’, the referent is implied. ‘It’ is the work required of the change maker to solve global inequality; much of this work, the Manifesto suggests, is internal to the individual. One must cultivate humility, audacity, courage, wisdom, ambition, hopefulness and leadership. In this rendering, the subject of global poverty is a relatively wealthy, educated and mobile individual in the West who must learn the right way to connect with the targets of their work: others who live in poverty, usually in unfamiliar locations. As a transnational economy predicated on particular forms of intimacy, the refinement of these sentiments into desirable poverty action is an important dimension of the ethical investing industry.

One of the important outputs of the impact investing sector, I argue, is feeling ethical. Cultivating this feeling is seen as central to fostering better financial subjects able to infuse market-friendly solutions into global challenges with ethical justifications. Similar registers of humanitarian ethicizing are at play in the immigration bond advertisements discussed by Rossipal (Chapter 9). Such ethical performances are also seen as crucial to raising real capital: one must communicate a sense of care about social impact in order to win over investors. In this way, the impact sector reflects Sara Ahmed's (2004) notion of an affective economy: affect (or emotion), she argues, assumes value by mediating exchanges between people (as well as texts and objects). Ahmed draws on Karl Marx to argue that ‘emotions work as a form of capital’, both of which accumulate value through circulation: as social forms of communication, emotions gain in intensity the more they circulate (Ahmed 2004: 120). By circulating and intensifying the feeling that they are acting ethically, impact investors are able to attract more capital from investors and foundations that seek to engineer social change so long as it is profitable.

This is done, in part, by training ethical investors and social entrepreneurs in storytelling skills that emphasize personal transformation and emotional investment in the work – like Novogratz's story of self-discovery – which is supported by a sub-industry of consultants, trainers, conferences and programmes devoted to developing participants’ sense of morality, empathy and compassion. Following Acumen's lead, many similar programmes have emerged in the US alone, including fellowship programmes for budding social entrepreneurs by Echoing Green, Mulago Foundation, Aspen Institute, Ashoka, and Acceso. Storytelling becomes a tool for performing one's passion. As an impact communication strategist explained at an industry conference, social entrepreneurs ‘understand that the business is going to be successful because of something connected to you as the entrepreneur: my background, my emotional connection to the issues, all of that becomes a part of your authenticity’. By centring investors and entrepreneurs as the most important ethical agents enacting development, these stories reproduce a much longer history of both colonial and development narratives that erase the subjectivity and actions of those ostensibly being ‘saved’ from poverty.

Under Novogratz's leadership, Acumen has become a significant cultural broker in this economy of intimacies. They run leadership training programmes around the world, coordinate Acumen+, a global network of volunteers who stage local events and fundraise, and offer an online curriculum through the Acumen Academy. Through the Academy, one can take courses on moral imagination, open-mindedness, living a meaningful life, ‘Social Entrepreneurship 101: Discovering Your Passion and Path to Change the World’, and ‘Storytelling for Change’. Perhaps most significantly, in 2006 they launched an annual Acumen Fellowship programme for promising young leaders in the field that consists of three months of class study in New York City and a nine-month internship at one of Acumen's global investee companies. The programme's objective is to cultivate the ‘architects’, ‘game changers’ and ‘visionaries’ of the new social innovation sector.

During the initial workshop period in New York City, fellows are assigned Acumen's ‘Good Society Reading List’, which primarily comprises classics from the history of Western liberal thought, including Plato, Rousseau, de Tocqueville, Hobbes and the Universal Declaration of Human Rights. Fellows are guided to develop what Novogratz calls ‘moral imagination’, which she defines as a combination of humility, empathy and audacity. An applied workshop to test these values sends fellows out into New York City to attempt to survive for a full day and access social services without money or a cell phone. This lesson is intended to teach the fellows respect for the poor, but does so by suggesting that they can ‘try on’ a feeling of vulnerability for a day and thereby presume a deeper knowledge of the experience of living in poverty.

The impact imaginary

Through such activities, social entrepreneurs and the ethical investors who fund them are celebrated for their potential to shape new, more equitable futures. They do this by mobilizing hyper-individualized accounts of investor and entrepreneurial breakthroughs, typically represented by well-educated Western subjects who ‘discover’ the problems of those living in poverty and strive to fix them with grit and seemingly little outside help. For Ananya Roy (2012), this is a manifestation of ‘poverty capitalism’, through which the resources and cultural practices of the ‘bottom of the pyramid’ are mined by international capitalist interests. This takes many forms, from expanding ‘bottom billion’ consumer markets and financial services that increase indebtedness without necessarily improving livelihoods, to the expansion of value extraction from natural resources in the Global South, to new models of social value extraction such as data mining via increased digitization of banking, farming, healthcare, digital identities and other areas of previously untracked social life.

What is distinctive about our current moment of transnational capitalism is the extent to which ‘the modern [Western] self’ is increasingly ‘crafted through encounters with such poverty’, which take place in zones of intimacy between impact investors, philanthropists, social entrepreneurs, development workers and those who are identified as the global poor (Roy 2012: 148). While poverty is made more visible, individual micro-entrepreneurs are envisioned as the primary solution to complex problems, rather than structural changes to how regional and global economies are organized. The impact economy is invested in a privatizing, entrepreneurial vision but offers no compass, for instance, for fortifying the economic sovereignty of nations in the Global South against the extractivist predations of multinational corporations and inequitable international trade agreements, expanding the public sector and social services or developing alternative models to unsustainable, unlimited capitalist growth.

Novogratz opens her book by painting a vivid picture of a young boy who manifests a material trace of her personal history in an unexpected context. She wants the reader to imagine – indeed, to visualize – the importance of establishing intimate connection with others as a way of bridging inequality and misunderstanding through empathy. At the same time, her personalization of social change through encounters like this one depoliticizes poverty as an inefficient market problem, rather than a multidimensional and highly political problem rooted in older structures of colonial and postcolonial extraction. Understanding these new agents of finance, then, requires questioning how their frontier intimacies matter and how they mobilize ethical performances as a means of both cultural and economic value production.