Can non profits likeKiva,Unitus, or theGrameen Foundationbe cloned in other cities? Can microlending non profits be franchised? Can the model be shared for an accelerated global solution? In this instance the problem being a solution to poverty? Many hands make the task light, so I have heard.
Yes, and some have been. There are many offshoots of the Grameen Foundation around the world. Cloned is not quite the right word - replicated in a way that meets local conditions. For a great condensed lesson doing this, see Michael Gerber's book, "The E-Myth". It goes through the "how" ofreplicationand tells why some don't work and how to fix them.
Franchisingis also possible, although it has to be thought through carefully. In a franchise, the franchising company is selling something of value - name, formula, business model, etc. It has equity and it requires an investment. NPO's can also sell something of value and transfer equity, but it has to be carefully valued. The trick is to realize that what is being franchised is the business model, the brand, knowledge. Those must be protected in the franchise agreement or they lose their value. That being said, I would question if franchising is the best model for replicating an NGO/NPO. Training and education programs to transfer the working knowledge, rather than selling it and setting up an agreement, may work better. Again, also look to Gerber's books for strong how to's.
The challenges of the gray areas between the space occupied by our terminology.
Without naming names, it is clear that many corporates, MNCs and more recently MFIs and banks have made millionsdoing businessat the BOP more because if the potential to profit than out of any social commitment or with any social conscience. We must be careful to not allow ill-intentioned loan-shark or other exploitative models masquerade as social enterprises solely through the appropriation of the term BOP. The BOP is a purely descriptive term about the target audience (suppliers or consumers) of a business and if at all, it carries the baggage of social hierarchy.
With more and moreMBA students going down the social entrepreneurship path, one is forced to wonder why its taken so long to get the mainstream involved in creating a better world; and take note of the conspicuous overlap of this occurrence with the global realization that profit and social impact may not be mutually inclusive. In other words, it is no surprise that scores of people the world over are delighted that they can continue to rake in millions while also being able to sleep well at night (not directed at the cases in the article from the WSJ linked above).
Going one step further, we also need to be very careful about when and how we use the term social enterprise: many enterprises have a significantly greater commitment to investors or share-holders than to their so-called beneficiaries and may not have any kind of long-term social impact. A final thought Most economists and businessmen today would argue that we live in times of wealth creation: economics is not a zero-sum game and businesses and fiscal policy will solve poverty through a trickle-down effect even though the middle and top of the pyramid will grow first and faster. Unfortunately, politics, power, voice and inequality are zero-sum and widening monetary gaps are bound to affect all of these. Finally,hereis an inspiring Ted talk I saw the other day calledNavigating our Global Future.
Perhaps one of the catchiest concepts and terms in the field of social entrepreneurship today is Bottom (or Base) of the Pyramid (BOP). For some time now, this has been a topic of personal and professional interest and this week I share some initial thoughts and reflections on the subject.
What is the BOP? The BOP refers simply to the lowest-income group of people around the world. Bottom, because its the lowest-income group, and pyramid because with grossly unequal income distribution, this is the largest group and the top of the pyramid the smallest. About 3.7 billion people constitute the BOP, often defined by the income limit of $2 a day, with 60% of them living in India and China.
Why BOP? The term Bottom of the Pyramid has come under some criticism for being overly hierarchic and causes a lot of people to immediately have a negative reaction. Some prefer the term "Base of the Pyramid" because it connotes the idea of being the foundation that supports the middle and the top of the pyramid. Either way, the term has currency today because of its use in the private sector and the approximation of the same with social enterprise. In addition, there seems to be a lack of a less problematic and functional term (as far as political correctness goes) given that some of our other choices are marginalized, impoverished, poor, excluded etc.
Why is it important? CK Prahalad and Stuart Hart first wrote about theFortune at the Bottom of the Pyramidfocusing heavily on the unexplored spending capacity of the BOP and how it is a huge potential market for multinational companies (annual income of US$ 2.3 trillion a year as per Figure 1). While this is definitely true, what I find even more interesting is the inherent synergy of the potential business opportunity and the potential social impact of certain market based solutions at the BOP. As Figure 2 shows, people earning up to $1 day do not have enough money for discretionary spending and the income group that earns between $1 and $2 a day can only spend 16% of its income on non-essential products and services.
In other words, for the most part, the products and services that have the best chances of performing well in these income groups will be life-enhancing and essential products and services! Commercial and market forces have been slow to adapt to this need and potential owing to higher risks and lower margins among other reasons but it seems to be an excellent opportunity to innovate and scale.
Global lessons for the ghettoes and barrios of America.
If you want to see me annoyed at a public event, watch my reaction when an audience member asks, “Why don’t you bring microfinance to the United States?” In a tone implying that my patriotism is enfeebled, the speaker blurts out, “After all, there are lots of poor people in this country, so shouldn’t charity begin at home?”
From the Birmingham City Jail, Martin Luther King lamented, “Shallow understanding from people of goodwill is more frustrating than absolute misunderstanding from people of ill will.” Yes, there are poor Americans, but it is shallow understanding indeed to ignore the excruciating level of pain for people struggling, and dying, on less than $1.00 a day in remote parts of the world.
Perhaps the most reasonable, rejoinder comes from the Dr. Ananya Roy, Education Director,Blum Center for Developing Economies, UC Berkeley, who calmly retorts, “I wouldn’t necessarily argue that U.S. citizens have to spend their money or other energy on problems elsewhere rather than here. What I would call into question is that distinction betweenhereandelsewhere. We live in a world where those distinctions do not make sense anymore.” Bravo, Dr. Roy!
A crying, hungry child in Malawi or Malaysia matters as much as a crying, hungry child in Mississippi, and the reverse. The accident of birthplace should not determine one’s birthright to a healthy, productive life. Whatever your religious or philosophical bearings, there is no creed or faith which makes a pencil mark on a map more important than a child’s right to life.
As global warming, international health epidemics, human migration, global crime syndicates, Wal-Mart economics and terrorism remind us, national borders (or what the geo-political wonks call “national interests”) are organizational relics. In one upside byproduct of globalization, agents of economic opportunity are importing global microfinance lessons into the ghettoes, barrios and capital-starved communities of America.
I do declare, on this here virtual soapbox, that the environmental progress made in the last few years is in danger. That danger, despite intense and positive environmental activity, is stagnancy. The biggest barrier to progress can be success.
It is not uncommon for leaders in a field to make strides ahead of the competition, whether it be technology, consumer products, social impact, environmentalism, etc., get recognition for their efforts, and then rest on their proverbial laurels.
After decades of struggle trying to make an easy case, environmentalists found a much needed beacon of hope--an easy to measure and communicate metric of progress: tons of carbon equivalent (CO2e). Carbon reductions are critical and the fact that there is an easy to evaluate metric of success in CO2e has been hugely beneficial in helping companies, governments and other organizations manage carbon and provide a focal point for addressing climate change. But... it should not stop there.
The risk, which may already be becoming a reality, is that environmental activity is managed to simply lower CO2e. Yes, it’s the old ‘what gets measured gets managed’ axiom. What mainstream environmentalism lacks, ironically, is anecosystem approachthat a) considers effects of climate-related activities in multiple areas ranging from biodiversity to environment-based economic development for communities and b) allows for the development and emphasis of non carbon-related projects in critical areas including water, biodiversity and agriculture, among others.
A holistic approach to environmental thinking will open the doors to a new generation of work that not only addresses critical climate change concerns, but that also put environmental protection and restoration into the context. To do this requires an easy means of managing progress and communicating results. While it may not be possible that all of these areas can be boiled down to an easy to use metric, we can work to do a better job of measuring and managing environmental programs that meet the multiple needs of the planet and its people together, cohesively, in a way that is dynamic and mutually beneficial. Organizations such as Ciudad Saludable and Grupo Ecologico Sierra Gorda have excelled in this. The answer is not yet clear, but CO2e has given us a model to follow, both positive and negative.
It is imperative, now more than ever with pending legislation in the US, global climate action and general momentum, that CO2e be the first step on the road, not the last. For the first time in decades, environmental activity is at risk of being a victim of its own success. CO2e provides a great starting point. Now, to move from minimizing damage to maximizing benefit.
"I’m assembling my first Board of Directors. What traits should I be looking for?"
This is a huge, and often neglected topic for new changemakers. As such, I’m going to break my answer up into two columns.
Today, I’ll address some non-negotiable traits that should apply to ever board member. Next time, I’ll cover three basic traits that should collectively be present on your board as a whole.
Here are some traits that should be present in every member, especially at the startup phase.
1. Demonstrated commitment: A board member has to havealreadydemonstrated that she cares about your cause in some tangible way, either by a significant donation and/or volunteer involvement. Sometimes this isn’t possible with a total startup, but still look for ways to gauge their commitment level before an invitation to the board.
A board position is giving someone who is already on board a hand at the tiller; it is not a first step on the gangway.
2. Alignment with you: Given this is your first board, each member should already be on board with your fundamental vision and values. You’re not looking for “yes” men/women, but you don’t want to spend valuable time at this stage hashing out the basics. Spend a lot of time in the board interview process on this one because differences at this early stage can really derail the organization.
3. Plays well with others: At the startup phase, you just don’t want to spend extra energy overly managing conflicts with or between board members. A board member should be someone with whom you and others on the board will look forward to spending a couple of hours.
4. Brings definable value to the missionby being a board member. I'll cover more about this in my next entry. But the key point is that it's not enough that the board candidate is already contributing something to the organization; he or she must be someone who will contributemore(and it doesn't have to be just money) by coming on to the board.
This one may seem obvious but somehow first time executive directors can forget this principle. It can be tempting to invite well meaning individuals who contribute a lot as volunteers, but whose contributions wouldn't change appreciably as a board member. Alternatively, an individual may really click with you and is well liked by everyone... but doesn't move the meter on the organization's progress.
Remember, these traits are absolutely non-negotiable for every member. Don’t try to talk yourself into anyone if it means squinting on one of these. You will almost certainly regret it.
We need to map whole systems, and not just measure individual nonprofits. And it may surprise us who the real all stars are.
“I am in the process of developing a network of artists, organizations, and corporations where the exchanges will benefit each other. How do I start creating an ecosystem along these lines?”
I like the way this questioner is thinking. Rather than just thinking about what his own nonprofit should do, he is also thinking about what the entire ecosystem should be like. Ecosystem thinking is critical: it factors in the relationships, dependencies, conflicts, and other key dynamics that affect everyone. Taken together, these relationships comprise the ocean in which everyone swims.
And you can save a lot more whales by saving the ocean – versus concentrating on just individual whales.
I also like the reader's question because it also gives me an excuse to go on about a pet topic of mine: namely,ecosystem mapping.
This is an absolutely critical step in the change process the questioner hopes to initiate.
Before you start trying to create or even change an ecosystem, the first step is always to map the existing ecosystem. And you may discover in the mapping process that the most important creature isn’t the whale.
Government’s long-standingsupport for business entrepreneurshipprovides a model for the ways government leaders might address some of the world’s biggest social challenges. In the US, the federal government has encouraged a flood ofinnovationandentrepreneurshipthat has produced some of the world’s greatest companies, in turn creating thousands of jobs and at times spawning entire new industries -- as did Ford Motors with the automobile industry and Microsoft with the software industry.
What if governments around the world now took the same approach to supporting social innovation and social entrepreneurship?ThePublic Innovatorsinitiative at Root Cause has been working closely with several state- and city-based examples launched by public innovators - government officials who open the door to greater innovation and entrepreneurship in social problem solving:
At the US federal level, President Obama has pledged to create a Social Entrepreneurship Agency and a Social Investment Fund Network. Meanwhile, the America Forward coalition is advancing a policy agenda that creates infrastructure for social entrepreneurs and government to work together.
On the global stage, the UK has a Minister for the Third Sector. TheAcumen Fundis investigating entrepreneurial ways to influence governments, corporations, and international agencies to work between the markets and philanthropy. And at the upcomingWorld Economic Forumin Davos, social entrepreneurs will gather with world political and business leaders to address the global financial crisis.
We're at a tipping point for change.
• Whatopportunities for partneringsocial innovation and government do the current crises bring us? • How can we work most productivelytogether? • Whatlessonsare we already learning from these initiatives? • Whatothereffortsare in place? • How can we ensure we don’t miss this window of opportunity forlarger scale change?
Imagine you’re someone who wants to make a difference in the world without devoting all of your time to the effort.
You want to lend yourcreativity,connections, andcapitalto effect change but you don’t have tons of time. You go to a website likeSocial Actions. You enter the keywords that describe the cause you want to serve. And immediately, you’re presented with opportunities to donate, sign petitions, join mailing lists, and attend nonprofit events. These opportunities, as impactful as they are, leave you feeling somewhat unfulfilled.
You start to think,there must be meaningful ways online to support nonprofits. But you can’t find them. The reason you can’t find them is that the technological infrastructure is devastatingly nonexistent. Why? Because the creators of websites that facilitate collective action have, for the most part, created online tools thatserve the needs of traditional nonprofits, the kinds of nonprofits that seek donations, create petitions, setup mailing lists, and run awareness-raising events.
With the exception ofKiva,MyC4,Wokai,Ideabloband a hand full of campaigns onThePoint, there are very few opportunities online to support social entrepreneurs.
What would happen if ordinary people could use the Internet to seamlessly contribute to the work of social entrepreneurs in a range of ways?
What if ordinary people could be the arbiters of which social entrepreneurs find the right combination of creativity, connections, and capital to fulfill their world-changing missions?
What kinds of online tools would need to be developed to enable this sort of mass participation in social entrepreneurship?
I’ve made a shortlist of actions people might take to support the work of social entrepreneurs:
Connectsocial entrepreneurs with the people you know who can help them do what they want to do.
Lend yourexpertisein a specific area, such as communications, management, technology, or product design.
Offer to make abusiness planmore creative, inclusive, and environmentally friendly
Present yourself as aresourcewhen and where social entrepreneurs need your help
Contribute to the start-upfunds, either as loans, grants, or investments.
I’m hoping this list and the questions above will spark a conversation that shifts the way we think about how social entrepreneurs could and should receive the support they need.
Your project hassucceeded, it hasfailed. It has grown too large, it has not grown enough. There is another organization doing similar work in your territory - should you compete, merge you efforts, or leave the field to them?
You have done what you can,is there another task you should take on, one which will take advantage of your strengths and networks, while extending your project reach?
You have failed to have the hoped-for impact. Is that because you almost reached atipping point, but not quite - so that if you stop now, you risk "spoiling the ship for a ha'p'orth of tar" - or is it simply that you applied the wrong solution at the wrong time, so that making any further effort in the same direction would just be "throwing good money after bad"?
It takes good judgment to begin a project, and good judgment to steer it - butit may be even more demanding of good judgment to know when to stop and when to carry on.
Kjerstin Erickson has been blogging the impact of changes in both the approach of her organization,FORGE, and of thecurrent market fluctuations, in herblog.
A post by Sean Stannard-Stockton on Tactical Philanthropy recently heralded Kjerstin's blog here on The Edge as "The Most Important Nonprofit Blog," declaring: "It is a fascinating real world drama of a social media savvy, impact focused nonprofit trying to deal with the financial crisis."
We're hoping, obviously, that someone will read about Kjerstin and FORGE, see the light andsave the day. But in the meantime, Kjerstin is posing the difficult questions we all may face if circumstances -- and funding -- shift, and we ask ourselves "Is it time to quit?"
•What are our obligations to the people we serve? •And what are our obligations to the people who work for us?
In a world where the unexpected sometimes arrives just in time to make a crucial difference, but where we also have to be savvy and practical and exercise that good judgment I was talking about,how do we know when it's time to quit?
From local micro-businesses to global commercial giants, to NGOs and government agencies, the mobile phone is becoming a key tool for reaching new markets and servicing customers at the lowest possible cost. As penetration and usage increase, international development efforts around the mobile phone are also growing. Via cellular networks,Indian farmers are finding out the latest crop prices(see theThomson Reutersannouncement), South AfricanHIV Aids patients are receiving better care(see theBBC Newsannouncement) and Iraqi refuges in Syria arefinding out about food distribution programs(see theUnited Nationsannouncement).
The potential to scale and replicate development efforts via the mobile phone is enormous, though to date, most of these initiatives remain in theproof of conceptor pilot phases. For many organizations, especially smaller ones, the challenges and costs of technology development and establishing a user base are proving arduous.
While some aspects of these programs can be measured, such ashow many clients were served or the number of text messages were received,there is still little credible evidence of how mobile initiatives are impacting development. And even when those issues have been solved,there are few revenue models that make these efforts sustainable.
• Against this backdrop, what are some of the potentiallyimpactfulways that the mobile phone can be used to better serve those at the bottom of the pyramid? • What are the realbarriersto effective implementation and how have some organizations been able to overcome these? • Are there solutions that can be reused inmultiple geographiesand what can we learn from them? • Who are the majortechnology playersthat are starting to break down these barriers? • Are therebusiness modelsthat work? If yes, what are they, and how likely are they to ensuresustainability? • Finally, what are the initiatives that are having apositive impact on lives, and how are these being measured?
How do people really make a difference? What really works when people are striving for social change?
I had been intrigued by this question for years. I had seen so many good-hearted people who wanted to change the world, but who felt overwhelmed, exhausted, and burnt out.
So for nearly a decade, I studied hundreds of groups and individuals that were working for social change – people working for environmental protection, public health, civil rights, social justice, and economic development. I wanted to seewhat factors were correlated with success.
For my doctoral research, I investigated nearly 120 factors that might be linked to failure and success.The results took me by surprise!
The most successful strategies did not have a name. Communities often stumbled across them by trial and error. Butthe best practices seemed to have three principles in common:
Exposing injustice– When there was an injustice in society, successful people spoke the truth to power. They could not remain silent. They knew that it was essential to bring these problems to light. That was the first step to the solution.
“Social aikido”– The most effective agents of social change then went beyond the politics of “us versus them.” Instead of fighting against billion-dollar corporations and powerful governments, they used a similar principle to the martial art of aikido: They channeled the wealth and power of those institutions to their own advantage.
The constructive program–Finally, the most successful people offered a better alternative. Instead of just protesting what’s wrong, they put forth a better vision of the future, and invited others to join them in building it.
I've been to the village twice now. Every time i face a dilemma - I'm wearing my comfortable Nike's and all the children have nothing. Yet children like them probably made my Nike's. I feel like I'm exploiting them to their face. Its time to give back - lets give them shoes that can prevent diseases and give them a real chance at life - so they don't have to make anyone's shoes ever.