Nicaragua -- Rebuilding After Hurricane Mitch -- First-Hand Experience Of Third World Changed His Attitude

From his office, Bill Clapp has a panoramic view of Seattle's waterfront. It's a fitting vista for Clapp, whose great-grandfather helped found Weyerhaeuser, the timber giant.

A down-to-earth 57-year-old Republican businessman, Clapp believes welfare isn't the answer to poverty.

But microcredit, he believes, just might be.

Clapp, chairman of the Matthew G. Norton Co. property-management firm, became interested in poverty issues a decade ago. "I didn't know what I wanted to be doing, because I hadn't done anything socially redeeming, I guess you'd say, for most of my career, other than trying to do a good job at my work."

He and his wife, Paula, visited a microlending program in El Salvador. They attended "village bank" meetings in people's houses, where, as chickens ran slalom races through his legs, he videotaped conversations with women who had received loans. When he returned, he played back the tape and was suddenly hit by two flashes of insight.

The first was that he knew squat about recording sound. "All I could hear was chickens."

His second realization was more profound. He was stunned to find that something so simple as a tiny loan - some as small as $50 - could make such a difference. He'd never realized before how lack of access to capital can stunt a life.

He asked the women about their lives. He discovered that their dreams were like his, give or take some details. Their spirit was willing, their business acumen was there, but their access to capital was nil.

"The women in the bank are amazing. They're strong, they're determined. They're saying, `Somebody's given me a chance, I am going to make something out of my life.' "

He and his wife returned home, excited but skeptical. For the next year, they studied microcredit programs around the world, traveling from Washington, D.C., to Bangladesh and back to El Salvador.

What he learned changed his attitude about the poor.

"I used to believe that people were poor because they don't work hard enough, because they were lazy. Then you go to a place like Bangladesh, and I saw people working harder than anybody I've ever seen in my life, just to put a meager little meal on the table, just to survive that day. You can't say they're lazy, you can't say they're not smart."

Handouts aren't a long-range solution, he believes. But what if there were a self-sustaining industry that could do good and make money?

He and his wife founded Global Partnerships, a nonprofit company, in 1994. To find time for his new interest, Clapp resigned as CEO of the Matthew G. Norton Co., and cut back his outside board commitments.

They raised $1.1 million, all from private business, for a microcredit program in Guatemala. For Pro Mujer, they provided valuable financial training.

Wait, aren't those handouts? What about making money?

In Clapp's vision, such donations are investments in a structure that eventually, ideally, will eliminate the need for welfare by becoming profitable. Call them capital investments, like those a venture capitalist might make in a promising new biotechnical invention - or a timber baron might make in a mill.

To become profitable, though, microlending organizations such as Pro Mujer must learn a lot about financial management.

Global Partnerships sent its senior financial analyst to spend four weeks with Pro Mujer last year. It also paid for financial training for Kathleen O'Sullivan, the program's country director.

In the end, Global Partnerships decided not to make more investments in Pro Mujer. Not because he didn't think the program was good, Clapp says, but because he wanted more say in shaping its direction.

Clapp would like to run a sort of a test-lab for microlending, trying different approaches, analyzing data, and discovering the formula that fosters growth and profits.

Clapp believes in a simple principle: "The bottom line is: To run a successful business, and to stay in business, you have to make money." The few microlending institutions that did that, such as Bangladesh's giant Grameen Bank, which has 2.2 million borrowers, benefited from unique circumstances and won't be easily replicated, he says.

"Microlending is like a small business - it's a lot different than delivering health care or food or medicine, because it's a two-way street. You lend the capital, it comes back; you're responsible for the security, for the lifeblood and the management of that capital."

Global Partnerships' goal is to teach microlending programs how to become profitable, and thus, attractive to business. He's now underwriting low-cost Spanish-language financial-training seminars.

He's driven to do this work by the poor people he's met in his travels, the people who have never had access to capital, not even to $50.

"They were good, hardworking people with hopes and dreams and damn little chance of realizing them," he says. "It just seems like in a world of money, we can figure out ways to spread the opportunity around. I'm not saying spread the bounty around. I'm saying `spread the opportunity.' They can create the bounty."