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(blissful music) - [Announcer] And now, "Crosscut Festival Main Stage" featuring a selection of curated sessions from this year's Crosscut Festival.

Thank you for joining us for "Turning on the Faucet" with Matt Damon and Gary White, moderated by Leah Stokes.

Before we begin, we'd like to thank our social justice track sponsor, Waldron.

We'd also like to thank our founding sponsor, the Kerry & Linda Killinger Foundation.

- Hello, and welcome to the Crosscut Festival.

I'm Dr. Leah Stokes, an Associate Professor at UC Santa Barbara, where I focus on environmental politics.

And I'm also the co-host of the climate podcast, "A Matter of Degrees", where we tell stories from the front lines of the climate movement.

Today, I have the honor of speaking with two pioneers in water philanthropy, Gary White and Matt Damon.

Gary White is an engineer by training and the CEO and co-founder of the organization, Water.org, which is a global nonprofit dedicated to bringing water and sanitation to the world.

The other co-founder of Water.org is Matt Damon.

He is perhaps slightly better known.

Although he calls himself an aging suburban dad, you probably know him as an actor from movies such as, "The Bourne Franchise," and "Goodwill Hunting".

What you may not know is that Matt is equally passionate about water and sanitation issues.

So Matt Damon, Gary White, welcome to the Crosscut Festival.

- Thank you, thanks for having us.

- Thanks Leah.

- Well, we're here today to talk about your new book, "The Worth of Water: Our Story of Chasing Solutions "to the World's Greatest Challenges."

The book Chronicles your work together on Water.org, your nonprofit which has brought water and sanitation access to millions of people around the world.

And I had the chance to read the book and I must say I enjoyed it.

It reminded me of another book by Tracy Kidder called, "Mountains Beyond Mountains," which profiled the late Dr. Paul Farmer's work with Partners In Health.

But your book, "The Worth of Water," is not just a serious story, it's also quite inspiring and funny.

So Matt, let's start with you.

Becoming an advocate for clean water and a good place to poop is as you put it an unlikely outcome for a movie star.

So can you share the story of how you became passionate about water access, including the role that your mother played in exposing you to the broader world?

- Sure, thanks.

And thanks for putting us in the same category as Tracy Kidder's- - Yeah.

- Pulitzer Prize winning book which we love, and Paul was a friend of ours too, so.

- [Leah] It's a good one, yes.

- Yeah.

But yeah, my mom had a huge impact on me and I was really fortunate that she took me as a teenager to places in Mexico and Guatemala and where I got to see a different way of life.

But as I got into my 30s and I really started wanting to reengage with some of these issues and was lucky enough to have Bono's organization, DATA, would curate these trips that were almost like college mini courses.

And so I went on one of those trips with my brother, actually to Zambia and spent, I don't know, it was a week or 10 days kind of traveling around, and each day had a different learning focus, everything from microfinance to urban AIDS, rural AIDS.

And one day was dedicated to water and I became fascinated with it and that's what I decided to kind of put my time and energy into, and very quickly realized that I would need to partner with... That the issue was so vastly complex and interesting that I'd need to partner with an expert.

And I looked for the expert, and the name that kept coming up was Gary.

And I always like making the joke, the person wouldn't take my call so then I went to Gary, but that's not true.

Gary was the first person that everybody talked about that I ran into.

And so in 2008 we met and in 2009 we co-founded Water.org.

- Yes, but Gary, you'd actually been working on this issue for decades by the time you met Matt.

And so I'd like to know too about how you decided to dedicate your life's work to this issue of water and sanitation, and what is keeping you passionate about it, even as you write it goes in and out of Vogue, in and out fashion over the course of your long career?

- Happy to dive into that a little bit, a little bit of history, because I've been doing this for so long, it's just like I can't imagine doing anything else.

But trying to conjure the early part of this was really I was drawn toward engineering, but I was also drawn to social justice.

And like Matt, my mom, Kathy White had a lot of influence on me and service to others as well.

Once I discovered how massive this problem was, and it seemed like a good thing for an engineer to tackle if you're focused on social justice.

So that really drew me in.

And I think, and that kind of leads into kind of the second part of your question, what kind of keeps me motivated or keeps the energy up?

And I think it is because of that constant search for the next part of the solution, right?

The ultimate solution is everybody getting water and sanitation, but when you start to break it down, there's like multiple roadblocks along the way, multiple hurdles to clear, and you don't necessarily see the subsequent one until you clear the one in front of you.

So that's kind of what the journey in the book is about is like running into these roadblocks and hurdles and getting over them.

And I think that's what as an engineer and kind of a social entrepreneur that's if the crisis itself and the senseless death and disease, isn't enough for you, then certainly the challenge of trying to solve for the puzzle, if you will, for how do you get the steps to that ultimate solution?

So that's what keeps me engaged at two levels (indistinct).

- So the book presents a really big idea, which is microfinance loans for water and sanitation access.

And people have probably heard of microfinance essentially it involves giving small loans to people typically in developing countries at relatively low interest rates.

Can you explain what that idea is and how you came up with the idea of applying microfinance to water and sanitation access?

- Sure.

If you're in an urban slum and you have to buy water from one of these tanker trucks that sells it, basically you're already paying huge amounts of your income, sometimes 25% of your income to get water each day.

And you have to get it, right?

But what you don't have is enough savings to secure a long term solution that might cost a few hundred dollars.

So you can afford a dollar or two a day, but you can't afford that ultimate solution for you.

For many people, that's just a water connection to the public utility or buying a water filter or a pump and a rainwater harvesting system.

And so the concept is that people really want these solutions and they add value because they give them cost savings and they give them time savings, which can be converted into income.

A story of one woman I met that really illustrates this.

Her name was Linereeza in the Philippines.

She was paying $60 every month to one of these water vendors.

She took out a loan, got a water connection.

Her loan payments now are about $5 a month, and her water bill is about $5 a month.

So right away overnight it created $50 worth of value for her every month that she could then invest in her future.

And then, so you fast forward now, we have 150 of these partners around the world that are doing this, and they've now loaned about $3.5 billion in capital to the household-level borrowers to secure water and sanitation.

- And so that's what a bank understands.

I loan you $200.

You buy a sewing machine.

Now you can generate income with your sewing machine.

That makes sense to a banker.

But this type of loan was an income enhancing loan, right?

It wasn't quite the same thing.

And to them that was a big leap.

And so it took Gary just kind of that persistence and going, knocking on a lot of doors, getting a lot of doors slammed in our faces, and eventually figuring out a way to de-risk it enough that they would all betting on this hypothesis that because he had spent his adult life in these communities talking to people and listening to people, he knew that there was money being spent in this really inefficient way.

And that if we could just nudge a market towards these people and get out of the way, then they could solve their own problems.

And the brilliance of it is that nobody's gonna take out a loan for something they don't want, right?

So it's not like that traditional charity where people kind of come rolling into your town and go, "Here, I bestow this upon you.

You're welcome."

And then they leave.

And oftentimes, for your students that half of the water projects fail within five years, right?

For really that's one of the big reasons.

And so this was a different way to think about it and do it, and kind of nudge a market towards people, and then let them claim their own agency and solve their own problems.

- This has been a critique of microfinance as you know, that we are charging poor people and making them pay rather than giving them grants.

And so, Matt, you talk a lot in the book about how your role has been a kind of communication role.

So what did you think about Gary's idea when you first heard of it, and how have you learned to sort of talk about the idea with people to help bringing them along with the logic?

- Well, first of all, it helps to have these longer conversations, right?

To help give people context.

Because it turns everybody's stomach when they first hear it.

Until you start to think about the people we've met who Gary met a woman 15 years ago or more who was paying 125% to a loan shark to put a bathroom in her home.

These borrowers, the people that are being loaned to are already paying for water, they're already paying.

And in many cases, they're paying 10 to 15 times what the middle class or people who are the tourists in the hotels are paying, right?

And so that is really the... What people need to understand.

And also that there is some, there's some dignity that comes along with being treated as a customer and a citizen rather than a charity case.

Though, there's another concept too that I'll jump on really quickly about market segmentation, which is just that people aren't equally poor, right?

And there are people for whom charity will be...

Direct philanthropy will be the only solution just because of where they are, where they live.

There's really no other way around it.

But there's a whole huge, to the tune of, I think the UN estimated 500 million people could be reached with this solution.

So (laughs) that's a big segment of the market that can be reached by just nudging this market toward them and letting them do the rest.

- The book also talks about a partner organization that you set up called WaterEquity.

It's kind of the investment branch to most of your work.

Matt, can you explain what this organization does?

- Sure.

Yeah.

It was born out of a trip we were on about eight or nine years ago in India.

And we were just kind of informally polling our partners, all these different microfinance institutions all over the country.

We were traveling around and meeting with them, and all of them came back with the same answer, which was access to affordable capital.

The demand was there.

They knew they could get these loans out.

They just needed more money in the system.

And so that started a conversation with us about, all right, well, where can we find money?

Where is... And we started to talk about social impact investors and I said, "I personally know people who want to invest, "but also want to feel like their money is doing good."

And so we had this theory that if we started this asset manager, we could try to tap into those markets.

And we've been really... We've had a lot of help from partners at Bank of America and people who know finance a lot better than we do.

And this is the best way to help us scale and the smartest thing to be doing right now.

And so that's how we ended up with the world's first water related asset manager for the purpose of access for the world's poor.

- But you also sort of talk about how relying on billionaires, right?

Very wealthy individuals to fund this work has its own challenges.

- You wanna ask me or Gary?

I feel like I've been talking the whole time.

I'm happy to answer that.

I mean, in fact (indistinct).

- Garry gets the next question I promise.

- Well, it is.

It is frustrating to be at the whims and kind of at the mercy of people who might get kind of attracted to something else and move off.

And we've had those shortfalls in our budgets over the years that have no relation to how well we're doing, because we've just been going from strength to strength.

And so it feels like budgeting shouldn't be a problem.

But I remember being on a plane with Paul Farmer 15 years ago, and he was going over his budget.

He was $10 million short, and this was... And he was the guy.

And it was like and I was sitting next to him on a plane, and he's just doing the numbers.

And he just turned to me and goes, "We'll get it.

"We'll get there, we'll get it."

He's like no choice, but kind of optimism, and to kind of keep pushing.

- For me, one of the realizations after kind of learning from people at the base of the pyramid what their demand is for water and their willingness and ability to pay for that, at the same time recognizing that there is never gonna be enough charity in the world to solve this trillion dollar problem is really what it is.

And so those two things together kind of led to the water credit approach that we talked about, because you can when you have an audacious goal like water and sanitation for everyone, and you compare that to your efforts right now if you're drilling wells one at a time, it just is never gonna happen.

So you can bury your head in the sand and keep drilling wells or you can try to get the next breakthrough.

The need for funding is growing and the wealth is growing, but the gap is not closing at all.

So I think it's that said, I will also say it's better to light a candle than to curse the darkness, right?

And I think that's what we're trying to do to show that there are ways to think creatively, that you can create the financial plumbing that can connect the global capital markets with WaterEquity investors, connecting that to people making a few dollars a day, and everyone can win, right?

And once you can make those connections then that pool of capital is less dependent upon pure philanthropy and more on investment.

And what we're doing with WaterEquity is creating an asset.

We have created an asset manager whose management fees on those assets is growing to the point that we can start to cover our own costs, and we can take some of those management fees and reinvest them back into Water.org so that we are less dependent on philanthropy.

So we have tried to kind of negotiate this really complex system of money and finance and capital and philanthropy in a way that's going to allow us and position us to be able to solve for the crisis.

- Near the end of the book you tell a brief story, for example, of New York City I believe passing a law that required water and sanitation access, and what a difference that made.

So Gary, if you were gonna critique your own model, of course your model doesn't do everything in the universe, it does one thing very well.

But if you were gonna critique it, which your model largely relies on the market, it largely relies on wealthy individuals to solve this problem.

And so what would you say are some of the shortcomings of this approach or some of the more complimentary things we also need to change?

Where does the government and governmental policy fit into your story?

- Well, we self-critique, right?

And our self-critique right now is that we need the government to engage more.

As we work to kind of stimulate this demand from the bottom up on the part of households that want to get connections to utilities and they have the money through loans, it's like what if the infrastructure isn't there for them to connect to?

And so we do see, we work closely with government in India, for instance, in Indonesia, and these small utilities to get the capital that they need to invest in that infrastructure.

It's water supply through utilities is a natural monopoly, right?

So you have to work with government if you are really gonna solve for this problem.

So to your point, we're asking ourselves what could we be doing more in order to ensure that we have a top down approach to compliment the bottom up?

That's why the next fund that we launch with WaterEquity will be an infrastructure fund, and that will look at not just lending capital to microfinance institutions through the bottom up, but it'll mean going out and searching and building a deal pipeline for utilities to be able to have the access to capital that they need to push the pipes into the more marginal neighborhoods.

And as an asset manager, the covenants that we require on that debt that we place or that equity that we place we can make sure that the poor neighborhoods are not overlooked as that infrastructure gets pushed out.

So we see ourselves as partners with government in that aim.

They wanna get water to their people too, but they know that they're not getting the capital invested at rates that they need in order to make it work.

- So, your book really did convince me that water and sanitation is right up there as one of the world's greatest challenges and it's particularly critical for women and girls.

And one thing I really admire about the work is that you've set yourself a task of solving this issue in your lifetime, which is a really big and bold goal and I just love that.

I have set myself that own challenge in my lifetime, which is to try to solve climate change.

That's what I do with my work.

And so I love what you're doing, I think it's fantastic.

And so I couldn't help thinking in reading your book that climate change is going to make your goal even harder to reach, and you write about that in the book.

So maybe to start with you, Matt, as you know climate change is happening now and I wonder what have you seen in the field when you're going on these trips in terms of how climate change is exacerbating water challenges right now?

- We kind of look often into the future and talk about what climate change might someday do to us, but this is something that people are feeling the effects of right now.

And so, and there's a very real crisis for 770 million people today who woke up without access to clean water and their day will be dominated by figuring out how to gain access to it.

So, I mean, water is the heaviest commodity, right?

And so if you're gonna source it and move it and treat it, and then pipe it into a neighborhood.

In a lot of these countries where we are working, it's estimated that there's like 35% leakage or lost to leakage.

So just imagine what that means and from a carbon standpoint, that is absolutely wasted carbon, right?

That 35% of the energy that it took to get the water to a household has been just lost and there's zero economic value to that.

It's not like somebody drove a car to a conference and did business and so you can kind of offset the cost of that fuel use or whatever.

It's this is just completely lost carbon.

And so again, with this top down approach, hopefully, it's about helping make these infrastructure more efficient and better and save some carbon that way as well.

- So the book really concludes with a staggering statistic, which is that your work together has helped to bring water and sanitation to more than 40 million people.

And you write about how that's probably a bigger number, even when we're talking just a few weeks after the book came out.

So the scale of this work is truly impressive.

Matt, you've already mentioned a few stories, but are there other stories that come to mind?

Some of the people that you've met who have benefited from the work of Water.org?

- Yeah, sure, there's another one that I talked about in the book that always stuck with me.

It was about 10 or 11 years ago in Haiti, and it was this girl that I met.

We had just christened a new water system in her village.

And I was introduced to her as somebody who had up until that day walked three or four hours a day for water.

And she was in school.

But this issue, as you said, it disproportionately affects women and girls.

But what it means for girls, because they're often left to do the water collection is they're not in school.

So I said, "Wow, you have found three hours, "three or four hours in your day.

"what are you gonna do with all that extra time?

"You have all this time to do homework now."

And she looked at me and kind of snapped back like, "I don't need to do homework.

"I'm the smartest kid in my class."

And she said it in that way that was like, oh yeah, she's the smartest kid in her class.

Like I've met that kid.

And I go, "All right, hot shot, what are you gonna do "with your four hours a day that you found now?"

And she just looked at me dead in the eye and she goes, "I'm gonna play."

And it like it buckled me because at the time my oldest daughter was 13 as well, and I was just like, "Yeah, I mean, what else "should a 13 year old kid be doing, right?"

So it's another one of those kind of pernicious effects of this crisis, which is just it's not just the death and the disease and all of the very real, it is a life and death issue.

A million people a year are dying because they lack access to clean water and sanitation, but it's these incalculable ways in which it affects somebody's life.

- Well, while I was reading your book, I was also reading another book, which I highly recommend called "Orwell's Roses".

It's by Rebecca Solnit.

And among other things, she tells the story of George Orwell's life and goes back to a bunch of his essays.

And I don't know if you've read a bunch of his essays, but there's one called "Why I Write", which really reminded me of your book- - I know that.

- Where Orwell talks about the four big motivations for writing.

There's ego, aesthetics, history, and purpose, right?

A kind of meaning and role for doing this.

And he writes that we often write to push the world in a certain direction and alter the ideas of the kind of society we should strive for.

So when I was reading your book, I thought, "Oh, this is why they wrote this book.

"They obviously wrote this for purpose."

And so before we close, I'd like to ask both of you to make the pitch.

People can get overwhelmed, right?

They're like, "Oh, water and sanitation, "I'm convinced it's a big issue, "but what can I actually do?"

So what do you want people to know about what they can do to help with this issue?

And Gary, let's start with you.

- Matt and I are donating all of our author proceeds from the book back to Water.org.

So just a simple act of buying the book helps people get water.

And it helps people to understand both the consequences as well as the upsides of having water and how it can change lives.

And so that's a big part.

Of course, we are a nonprofit and we do raise donations.

So any donations are very helpful.

A lot of times people have matching funds at their workplace that they can actually help with this as well.

But then even moving beyond that, for corporate partners, corporations see this as an opportunity to really look at their kind of water footprint and kind of their social license to operate in some of these regions.

And so we can partner with them to ensure that they are sustainably using water resources in those areas of operation.

WaterEquity funds help millions of people get water.

So there's just a lot of ways for everyone from CEOs listening to this to think about how they can contribute all the way down to somebody who might only be able to give $5.

- If you gave just $5 to Water.org, you would be reaching one person on the other side of the world with clean water for life.

So that's where the $5 number comes from.

- So if you buy a book, I suppose you're gonna reach a decent number of people.

Well, this has really been a wonderful conversation.

I wish we could keep talking, but I'm sure you've both gotta get back to installing toilets around the world and we are sadly out of time.

So thanks for a great conversation and really for a quite funny and insightful book.

- Thanks so much, Leah.

- Thank you, Leah, take care.

- Thank you all for joining us at the Crosscut Festival.

I'm so glad to have had the chance to be part of this event, and I hope you'll check out Gary and Matt's new book, "The Worth of Water", and their organization, Water.org.

You can also find other terrific conversations from this festival at crosscut.com/festival.

Hope you have a wonderful day.

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