Influencers with Andy Serwer: Matt Damon & Gary White
On an all new episode of Influencers, Andy Serwer sits down with Water.org co-founder and actor Matt Damon as well as Water.org co-founder Gary White to discuss World Water Day and the ongoing global water crisis.
ANDY SERWER: Matt Damon has played many roles over the course of his career, from super spy to genius math whiz. He's even been an astronaut stranded on Mars. But now he's on a new mission to save the Earth and the fight to fix the world's drinking water. To do this, Damon has teamed up with environmental engineer Gary White, who over the past three decades has been working to get clean water to the most impoverished communities on the planet, work that has by now improved the lives of millions of people around the world. In this episode of Influencers, I'm joined by Oscar-winning actor Matt Damon, along with his partner and Water Equity co-founder, Gary White, as we discuss their efforts to combat a global water crisis and why access to clean water has never been more crucial than it is today.
Hello, everyone, and welcome to "Influencers." I'm Andy Serwer. And welcome to our guests, Matt Damon and Gary White, co-founders of Water.org and Water Equity. Nice to see you both. Welcome.
MATT DAMON: Thank you.
GARY WHITE: Thanks, Andy.
ANDY SERWER: Gary, let me start with you. The United Nations recently announced that over a year into the pandemic, more than a third of the world lacks access to safe drinking water. What's happened during COVID-19? And where does the water crisis stand right now?
GARY WHITE: Well, unfortunately, it still doesn't stand in a very good place. I think that the water resources themselves haven't changed that much in the last year. But people's ability to access those resources has changed dramatically. And the value of water has gone up dramatically in that time, because as we all know, one of the first things we were told when we hit COVID was wash your hands a lot and vigorously and stay at home.
And what we realized for people around the world who have to walk every day to get their water, they don't have the option to stay at home. And if they don't have access to water readily, they can't wash their hands. And so it just is like this-- it is almost an insult to injury in terms of the populations that we try to help, because it wasn't great before, with billions of people not having water and sanitation. And it just got incredibly more complex for them.
ANDY SERWER: Matt, I know you've been asked this question before, but I have to ask you, why water? You've been involved in this issue for a long time. You guys started this, what, I think 12 years ago, in 2009. You were involved even before that. So off all the issues to pick, why are you focus on this?
MATT DAMON: Well, thanks. Yeah, because it undergirds everything every issue of extreme poverty, it is conn-- water is connected to all of it. It's kind of a baseline issue. And when I first started learning about this stuff a little more vigorously and getting involved and going on these trips and going and exploring this stuff, I was shocked at how important water was and how in the West, we just-- we don't talk about it, because it's an issue that we don't-- if you talk about AIDS or cancer or any, it's like we can all relate. We all have family members or friends. We've all been touched by those things.
But we solved this issue of clean water for ourselves 100 years ago in the West. And so we don't know anybody who this affects if our friends are here at home. And yet it is the-- it is the issue for the people who are struggling with it. So if you do not have access to clean water, not only are you-- you're running the risk of dying from entirely preventable things, like diarrhea, for instance. We're losing a million kids a year still to totally preventable diseases.
But also, it's about your potential. It just crushes the potential of human beings. Girls are not in school because they're charged with collecting water for their families, right? So they're spending every day in this kind of up at dawn siege to just make it to the next day. And you can imagine what that does to your health outcomes, to your life outcome, right, and what you can expect of your life. You're not going to get anywhere near to living to your potential if you don't have this issue solved.
ANDY SERWER: And how would you assess how things have changed over the past decade plus that you've been involved in this organization or since you co-founded it?
MATT DAMON: Well, because we're doing this for Yahoo Finance, Andy, I'm glad you asked that. So when I first got involved in this, just to talk about the work of Water.org, I went OK, this is a big-- what do I do? Why don't I start raising money for direct impact work which is kind of well building, which is what most people think of. Oh, let's go drill a well.
I pretty quickly realized that that was not going to get us there. And so I looked to partner with the preeminent expert in this space. And when that person wouldn't take my call, I ended up with Gary.
So Gary actually pioneered this really incredible idea, which was basically he repurposed these-- the ideas-- Muhammad Yunus' idea of microfinancing, he applied it to the water space. Because of his time living in and being in a lot of these communities, he realized that the poorest people on the planet were actually paying for water, sometimes up to 25% of their income to water vendors, to sometimes they were taking time away from jobs to go stand in line and fill their jerrycan up. And so if you could actually give them a loan, they were quite capable of paying it off and actually would have a much better outcome after that, because they could spend more time at their job.
So it was a little bit of a thought leap for the microfinance institutions, because it wasn't an income-generating loan. It was an income-enhancing loan, right? You're buying somebody's time back a lot of the time. So you're giving somebody a loan for a water connection, right, in, say, a slum in India.
You're in Hyderabad and you're in a slum and the municipality is piping water right under your feet but you're not connected to it, right? So we'd facilitate a loan where somebody could connect to that tap. They just didn't have the money to front for the $200 to pay the connection. But if you gave them the loan, they were quite capable of paying that back in two years because they were working at a job and oftentimes losing time to go stand in these lines. It's a really inefficient use of their time.
And so it was this-- it was-- it seems simple on the face of it. But it was a brilliant insight. And now we've being able to scale it. We've reached 33 million people with this solution. So we're hitting 2 million people a quarter now.
And there are as many as-- I mean, the UN, I think, has identified 500 million people who could be reached just with this innovation. So it's a success story, really, for us. And it's a success story about these women, right, who are taking these loans and paying them back at over 99%. And it's just about them. If we can just nudge the markets toward them, right, just a little bit, they can totally take over and take control of their own lives and solve their own problem. And what we're seeing.
ANDY SERWER: Great. Hey, Gary, has COVID in this past year made your work more difficult, just in terms of maybe it being a big distraction from this particular issue?
GARY WHITE: It hasn't really, because I think the descrip-- this COVID crisis is a water crisis for so many people. So in many ways, it's focused the attention on the importance of water. But it's also made our work more challenging in terms of getting access to communities, having our staff be able to work with our partners, because so much of these water connections that Matt's talking about and the loans that need to happen to do that are happening face-to-face in countries around the world and in communities. So from that perspective, we definitely saw a slowdown in the early phases of this.
But we really bounced back now. And we're going to exceed the projections that we had for the year in terms of the number of people reached. So it has impacted. But we're beginning to see ways that our staff and our partners are able to cope with it better to keep the water flowing.
ANDY SERWER: OK, Gary, March 22, let's see if this registers, March 22 is a big day, World Water Day, has been since 1993. So what does that mean?
GARY WHITE: Well, I think it's that one day a year, and we'd like to try to stretch it into a week, that draws the world's attention to this. And, I mean, look, we're talking right now. Would we have been having this conversation if there wasn't a World Water Day coming up? Maybe not. And so it does for that one day help focus the world's attention on this, this year particularly through the lens of COVID.
But it also helps to focus the hope that we have. When we see the crisis out there, it's easy to give up when you hear numbers in the billions. But Matt was talking about this as a solvable problem. And I think that's what we're trying to drive home, that in many ways this problem contains its own solution if we can draw in the finance.
I come at this, Matt mentioned, the direct impact and trying to get wells drilled. Well, I'm an engineer. So I came at it from that perspective 30 years ago, but now recognizing it's much more about finance. And how do we then harness the capital markets to be able to fuel these loans that Matt was talking about to repay at a 99% rate?
And so what we see are individuals, like one that I met in Kenya recently. She was going to collect water to grow her crops, to water her animals. And she during the dry season couldn't get that water. So she would have to pay a water vendor $60 a month.
So she took out one of our loans from our partner. And now she's paying $20 a month for her loan to build a water tank that she has and a well. So now she can pocket $40 a month.
And if you look at that multiplied by millions, this actually becomes an investment opportunity, right? So if we can connect the capital markets to people like Alice, they still get immense value. But then we're also able to generate financial returns for investors through our sister organization, Water Equity.
ANDY SERWER: Great. Matt, so do you have to work with bankers, heaven forbid? I mean, how do you actually-- this sounds like a lot of money, a lot of financing, a lot of high finance in terms of making this happen. How are the mechanics of this work? And how do you guys facilitate that?
MATT DAMON: It's so funny, because we both started trying to raise money to drill wells. And now we're talking about like capital stacks and different tranches. And it's been a--
ANDY SERWER: Whoa.
MATT DAMON: --very different-- right? But we never thought we would end up here. But that's where the work led us. And that is really the most effective way to deal with this. So yeah, we spend a lot of time talking to bankers.
And all of our partners in microfinance-- years ago, Gary and I were in India. This was seven or eight years ago. And we asked independently, we surveyed a bunch of our partners. And on this one trip, they all identified access to affordable capital as their biggest bottleneck, right, which was a real eye opener for us.
And that was the birth of Water Equity, which is our attempt to tap the social impact markets, right? We go look, we've got investment that pays back 99%. We've got a sure thing. If you have some income that you want to put towards-- towards-- towards doing some good in the world, right, we can tell you exactly what it's doing.
And that's led us to these meetings with Bank of America, with these wonderful people who are helping us design these-- these-- these investments for people to put some real money towards, because there's so much money just sitting there. I mean, last year, you're talking about last year, I think the high-end-- and the high-net-worth people, what did they-- it was a trillion dollars, a trillion-dollar gain last year, right? I mean, to say the least, we're not seeing the commensurate philanthropic investment, right?
And this is actually a legitimate investment. This isn't donations we're talking about on the Water Equity side. This is an investment that can expect a real return. So that's where the work has led us, right into your wheelhouse, Andy.
ANDY SERWER: I know, right, these are our people, for better or for worse, right? So Gary, let me ask you about that. I mean, picking up on what Matt said, I mean, talking about the billionaires becoming that much wealthier. And, obviously, this speaks to wealth and income inequality, which has been exacerbated, as we know, during the pandemic.
But you have Jeff Bezos and MacKenzie Scott and Amazon, Sundar Pichai, Google, people at Facebook, that's just Silicon Valley all over the place. What is corporate America's role here and how do you reach out to them?
GARY WHITE: Well, that's great, some of those names that you mentioned. Right, I think you look at MacKenzie Scott and you look at Jack Dorsey, right, they have been doing big-bet philanthropy. In fact, we were fortunate to with Jack's Start Small Foundation to just have received a $4.7 million grant from him for our work in Africa.
So I think that we're on the cusp of a new type of philanthropy. The folks like MacKenzie and like Jack are just blowing up how we think about this, and trusting organizations with good ideas with more or less lightly restricted or unrestricted money to go do good stuff. And I think if we can think of organizations like Water.org and Water Equity that have this track record-- if we were in the for-profit sector, we would be a darling of private equity, right?
If we went in and we were able to snag $50 million in philanthropy like it was private equity, the multiples on invested capital that we provide with that is tremendous, right? You look at the billions of dollars that we've been able to catalyze in the market. And then all of a sudden, if you recast this not as charity but as a social enterprise, then I think we can start to reach some of the billionaires as they think and take their VC mindset and apply it to venture philanthropy.
And I think that all of us social entrepreneurs out there are trying to tap into this wealth that's stuck. We have the benefit of the Giving Pledge, where people are pledging to give that wealth away. And I know that folks there want to find models like this, if we can just close that gap and unleash this philanthropy that's stuck right now to go into the big bets for those organizations that can provide outsize impact.
ANDY SERWER: Speaking of the Giving Pledge, Matt, you cross paths with Bill Gates probably a number of times over the year, who's done a ton of work in the developing world. Do you learn things from him and apply that to your work?
MATT DAMON: Well, listen, he's absolutely brilliant. And yeah, I mean, I've certainly-- I've certainly learned from his example. I've certainly watched him carefully.
He's done incredible things. And anywhere you go in the world, when you interact with an organization that has Gates money, it's always the smartest money in the room, right? They really-- they're wonderful.
And he is, look-- I mean, if you listen to him, he's always optimistic. And I think that is a key takeaway, to look at the trajectory of humankind, right, and because it's so easy to become nihilistic and dark about this stuff. We are going in the right direction. And there are solutions available.
And I think that's what he says-- I've seen him say quite often. And that's what we say as well. There are solutions. This one we're talking about is ready to reach hundreds of millions of people, right? That's an exciting thing.
And so that's probably my biggest takeaway. Any time I'm in a room with him, he's-- that's his clarion call, is that we're moving in the right direction.
ANDY SERWER: What about Flint and what happened there? It's a little bit in the rearview mirror, but it was such a huge moment when it comes to water awareness in the United States. And maybe I could get both of you to comment on that. Gary, why don't I start with you? Did that change Americans' perceptions at least?
GARY WHITE: I think it did. And I think if we look at places like Flint, it's interesting, because we invested in good water infrastructure around this whole country back in the '70s and '80s. And what we failed to do oftentimes is maintain it and to maintain the popular regulatory environment for that. And then we see things like Flint happen because of poor decision making. And so it does help us realize and connect to others around the world how tenuous access to safe water can be. And so I think that does unite us.
I think the other thing that unites us in this pandemic where these international borders get erased is that when we look at disease outbreaks happening halfway around the world, maybe because someone wasn't able to wash their hands or a community explodes, it doesn't take long to reach the United States. And so we are connected in so many different ways, from access to water quality, but also access to water for hand washing. This is truly a global issue. And we're all in it together. And we're all dependent upon each other solving it together.
ANDY SERWER: Matt, anything to add there? Do you remember when you heard about Flint and said, wow, this is a moment that actually people pay attention to what's going on about water?
MATT DAMON: Yeah, I mean, it was certainly a moment where we-- where I think it became more relatable for Americans. It's something that's inherently not relatable to our generation, right? And so in that sense, it-- I think it helped underscore the importance of this work.
But as Gary said, it wasn't-- that was an issue of, I think, long-term decision making. And it's a slightly different issue. But it certainly underscored the importance of this work.
ANDY SERWER: Gary, what about people having to pay for water? I mean, I've heard for so many years and decades that water is going to become so scarce that it's going to become a commodity. And I'm here in New York. So people are-- tried to set up these funds where it becomes an investment. I don't know how successful it's been.
But is the price of water going up in the world? And will people increasingly have to pay for it?
GARY WHITE: So the short answer is yes. As the United States or any country, you develop the least expensive water sources the first-- the cleanest, the closest by. And as populations grow, the marginal costs are going to go up. There's no doubt about that.
But what we believe is that water-- access to affordable water is a human right, right? And I think that's the key thing to keep in mind. And we also have to recognize that those around the world that are not connected to safe water right now are not the ones that are going to cause the water stress, right? We waste so much water right now that it would easily be compensated for to get the water that we need to everybody who lacks it right now.
And I think that's the thing, this investment in infrastructure. So much of the infrastructure around the world leaks water, more water than actually would be needed to meet the needs of those without it. So we're not going to exacerbate the problem by getting more people living in poverty connected and getting safe water, because we can then recoup that saved water that is out there, the wasted water.
ANDY SERWER: What about the idea of doing movies connected to this problem and just doing movies that are-- have a little bit more of a political slant?
MATT DAMON: Yeah, it's very tough to crea-- I've thought, obviously, about it, because it would help my two great loves coincide. But it's a very, very complex issue. And to try to unpack it in a movie, it's much better suited to a conversation.
You could dramatize things that would be around this issue. You could dramatize millions of stories about lives impacted from lack of access. But I haven't found one that is-- that would be-- that would do the same thing that this conversation is doing.
ANDY SERWER: Right, maybe best to keep those things separate, or if the right opportunity arises, who knows. I want to ask Gary about a World Bank report released in October that found global extreme poverty was expected to rise shortly for the first time in 20 years. How does water impact that crisis? Or how does that impact the water crisis, I should say?
GARY WHITE: Yeah, so there's-- a lot of factors are going to contribute to that not, least of which, obviously, is COVID and the impact it's had on the economies around the world. But I also know that as we look at water stress, as we look at climate change, that a lot of those people are going to be driven into poverty because of the tenuous access that they have to water now. And if you are not able to get water because of a drought that's caused by climate change, you've got to move. You've got to move to where the water is.
Today, everyone in the world woke up and got water somehow, right? It's a matter of how contaminated it was or how much they had to pay for it or how much they had to walk for it. And when you're on the bubble like that and climate change comes along and knocks out your water hole or your water supply, you've got to move.
And so really, when we talk about climate refugees, we are talking about water refugees most of the time. And you know when you're a refugee, you're going to-- if you had an income level that had you out of extreme poverty, you're right back in it. And I think that's the thing to remember in this, is water is the root of so much that needs to happen for people to maintain their income and their lifestyle and their home.
ANDY SERWER: Matt, you talked about awareness and the fact that this is a little bit of a tough issue that way, that other things are right there smack in front of people. But climate change has becoming top of mind more and more. And is there a way to marry what Gary was just talking about, in other words, climate change and water together to get people more aware of the situation?
MATT DAMON: That's a great question, yeah. To echo what Gary said, it's about connecting the people who are going to be most affected by it, right, because those are the people that we're dealing with. Those are the people that we're trying to reach. And those are the people who are going to feel the effects of it more than anybody, right? It's always going to fall to the poorest people on Earth to bear the brunt of these things more than anybody.
And that really is our target goal. Those are the people we're trying to reach. So that's the connection for us.
ANDY SERWER: Are there any places in the world where people seem to be more aware of the problem than here? Maybe it's a place where you have to carry water around, I guess. I'm talking about in the developed world, say in Western Europe versus the United States.
MATT DAMON: Boy, I can't think of one. I think it's so hard for us to wrap our heads around it. Once it's solved, it's solved. And you don't-- you just don't think about it. I have yet to be to a developed place that was thinking about this. It's like you move on to what else is ailing your community and you try to fix that.
But for the people for whom it is an issue, it is the issue. It's the first thing. As Gary was saying, everybody woke up today and figured out how they were going to get water. It just was a much bigger part of some people's lives than most of ours.
ANDY SERWER: Great. And Gary, a few more questions. What about seawater? We made tremendous progress there and maybe it seems to have plateaued. Is that a correct assessment in terms of converting seawater to potable water?
GARY WHITE: Yeah, it certainly works. But it's so energy intensive that that's a challenge. So when you look at these different ways of people thinking about water almost as a commodity, the expense of achieving water through reverse osmosis, basically, it's extremely expensive. And it has a huge carbon footprint as well.
And then when you also think about where people are who lack water that aren't close to even the ocean, then you talk about transporting that water across miles or hundreds of miles. And then it becomes both unaffordable for people to purchase it and then it also leaves this tremendous carbon footprint. So I think the challenge is that for so many people around the world, the water that's needed for them is right under their feet. And it's a matter of getting the infrastructure to tap that water and get it to people in their own communities. And that's really a lot of where this is going to be solved.
I think we tend to think of-- we tend to filter this through our own experience, which we do have a lot of desalination facilities in the United States, for instance, because we can afford to pay for that. But other places, not so much. And it just gets back to the root of the financial aspect of all of this problem.
And I think that seeing that if we break this down in terms of how finance can help some of the poorest people in the world through access to water, the value that's created for them, like the story I was telling about people pocketing another 40 bucks a month, it all of a sudden goes from seeing people as a charity problem to be solved as much more a market to be served. And I think that's what we're trying to help folks recognize. We're in the face of the sustainable development goals right now, right? And there's so many of them.
But I think there are few, very few that are like water, where really the value that's created overnight for someone by not having a water tap one day but having it the next day and the money that they save and the time that they save, it immediately allows the solution to pay for itself. And I think that's what's different about this versus other SDGs with a payoff for education, which is needed. That payoff might not come for a girl for 10 years when she's working or the agricultural support might not come till the next time that you harvest a crop. This is something that can happen instantly and create multiples on invested capital, if you think of it from a VC or a private equity perspective.
This money coming in allows us to drive millions of people towards safe water. They're able to create value and pay that back. And then we go on. It's a very elegant way to approach an SDG.
ANDY SERWER: I like elegant. Let me ask you guys a final question. I want to get both of you in here, first, Gary, starting with you-- where do you see Water.org, say, 10 years from now? What do you hope to accomplish down the road with this organization?
GARY WHITE: So what I hope to accomplish is that the philanthropic capital that's needed to nudge this a bit further-- and it's not a lot. We're talking in terms of tens of millions or hundreds of millions at the most that would then allow these market corrections to happen because of what we're doing and the example that we're setting. The fund that Water Equity is going to be closing-- it will be our third one on April 1-- is going to be about $125 million. So we'll have about $200 million of assets under management there.
But what that can do is serve as an example to the wider capital markets. It's not all going to happen because of us. It's going to happen because we're able to demonstrate that the poor are bankable in the context of water and sanitation. And that's going to be-- we would love people to copy us and put our fund out of business, right, if that capital can be churned through other bigger financial institutions that come into this with infrastructure, with microfinance and all the things that this market will reward.
ANDY SERWER: Great, and Matt, over to you for the final word. And also, are you seeing other high-profile people like yourself getting involved? Or do you see that happening for this particular issue?
MATT DAMON: We'll accept them. We'll take all comers. Anybody who wants to be involved can be involved.
ANDY SERWER: High profile and low profile?
MATT DAMON: Yes, absolutely. This is going to take-- it's an all-hands-on-deck approach for us. So we'll take all the good energy toward-- toward solving this.
And yeah, I mean, to Gary's point, Bill Clinton said to us probably over 10 years ago now, he looked at the model and he-- and he goes this is going to work, guys. And he goes just keep running the numbers up. Run the numbers up.
And he was right. At a certain point, you become undeniable. We reached our first million people in 2012. And now we hit two million people a quarter.
And so what Gary's saying is true. At a certain point, people have to take notice. These loans are paying back at over 99%. This is a very good bet.
And all we're trying to do is get-- get the attention of the heavy hitters to come into this space, because there is so much low-hanging fruit here. And this model really, really works. And so that's where-- where are we in 10 years really depends on the tipping point and when we hit that tipping point.
Absent that, just the work we're doing, I mean, we'll have hit 60 million people in a couple of years, which is nothing to sneeze at. Had we been drilling wells, we would have been doing that for a number of lifetimes to hit that number. So that's exciting. But what's really exciting is the next-- is the next step. And that's what we're aiming towards.
ANDY SERWER: Fascinating stuff, and great work. Gary White and Matt Damon from Water.org, thank you so much for joining us today.
MATT DAMON: Thanks, Andy.
GARY WHITE: Thank you, Andy.
ANDY SERWER: You've been watching "Influencers." I'm Andy Serwer. We'll see you next time.