Seth Godin has a thought provoking piece on what he refers to as patient capital, an idea that itself exists on the wisdom offered by the proverbial “teach a man to fish” point of view.

Godin illustrates the cycle of poverty, pointing to the fact that its very existence is predicated on the fact that there is no savings built into it. Because it is a system of necessity and is therefore reactive, any time there is a crisis, the individual or community slips further into position of lacking things like money, food or medicine, depending on the situation. As a result, the system is almost always in a state of need. How do you create a sustainable charity around that?

However, if we look at developing thoughtful private enterprise, that is opening up markets, then productivity and surplus is often the result. Which ultimately benefits everyone by creating more opportunity. Obviously these businesses need to be of the right type. Godin points to affordable irrigation systems, mosquito nets and solar cookers as perfect examples of these kinds of businesses. The key is to help them get started and understand that until they grow, the return on investment they can offer will be small, but the eventual pay-offs will be more than just the bottom line.

He directs us to the Acumen Fund, explaining it “finds these entrepreneurs on site in the developing world, funds them, teaches them and pushes them to build really big organizations.”

[image via Robert Thomson]