Archive for March, 2010

On December 3, 2009, the Philadelphia City Council voted unanimously to pass a bill that creates a new sustainable business tax credit of US$4,000 for B Corporations—certified socially responsible companies (1). The decision could be a sign of what’s to come: new legislation that provides incentives for businesses to operate in a socially beneficial manner.  However, most other countries are still far from creating any such legislation. As a result, entrepreneurs around the world are innovating—creating combinations of non-profits and for-profits to suit their needs. Editor Lindsay Clinton writes about the choices an entrepreneur can make when structuring a social enterprise, and poses tough questions about the impetus for creating dual structures, and the role of subsidies in encouraging social business.

The desire to combine values with business has led to creative ways to structure social ventures.  In the last several years, we’ve seen more and more entrepreneurs tinkering with business models—loosening, and tightening commercial and social lug nuts—to find the right combination to fit the bill. In the nomenclature created by Pamela Hartigan and John Elkington in their book, The Power of Unreasonable People, there are three categories of social enterprise: leveraged nonprofits, hybrid nonprofits, and social business ventures.  As these categories indicate, when there is no single legal form that meets the need of an entrepreneur, they create their own: engaging in profit-making activities within a nonprofit, yoking a nonprofit with a for-profit, or creating a profit-making subsidiary within a non-profit.  These forms are sometimes called dual or twin structures.

In addition to these categories, there are legally recognized hybrid business forms which some governments have started to create and provide incentives for.  In the UK, the “Community Interest Company” (CIC), of which there are more than 3,500 in number, enables a proprietor to run a business for the benefit of the community rather than for the benefit of the owners of the company (2). In the US, the latest innovation is the low-profit, limited liability company or L3C, which is simplifies compliance with IRS rules for “Program Related Investments” (PRIs) (3). The “B Corp” movement is also picking up momentum in the US. Although the certification has no legal ramifications (except in Philadelphia as referenced above), it serves as a “trust mark” and signifies social responsibility to customers (4). » Continue reading “Blended Value: Weaving Profit into Social Mission through Hybrid Models”

For several years, there has been more dialogue about using microfinance institution networks for water and sanitation loans. “WaterCredit,” as it is called, has been pioneered by Water.org (formerly Water Partners). On Friday, in Chennai, WaterCredit experts, users, and facilitators came together to discuss where the WaterCredit space stands, the progress made to date, and the scope for WaterCredit provision in the future.

The Need
There is no doubt about the need. Around the world, 900 million people lack access to clean water; 2.6 billion lack access to sanitation. In India, 130 million people are without clean water and 840 million people lack access to proper sanitation.  Of the total, 90% of the Watsan burden is borne by women. Not to mention, the poor pay an unbelievable 12 times what the rich pay for a single liter of water. Why? The poor often don’t see the benefits of infrastructure improvements, which is where most of the subsidies go.

Piloting the Concept
Several MFIs have been trying out a new product in the hopes of meeting their clients water and sanitation needs. BASIX entered into a partnership with Water Partners several years ago in an effort to gain insight into the technical and financial feasibility of microcredit products to » Continue reading “WaterCredit: Pilot Results Revealed”

Beyond Profit On the Spot with Kavita Mukhi from Beyond Profit on Vimeo.

Kavita Mukhi is an entrepreneur and eco-nutritionist who founded the organic brand Concious Foods. Now, Mukhi has created a new opportunity for Indians to put healthy, organic food on their tables through the Farmers’ Market, the first organic market in Mumbai. Featuring a macrobiotic cafe, film screenings, organic products like paint, paper, and furniture, and the farmers themselves (!), the market will raise awareness of a new way of life. In this Beyond Profit “On the Spot” interview, Mukhi shares her motivation for starting the market.

Monday, March 22, 2010 – Friday, March 26, 2010

In early March ALINe – a partnership between the Institute of Development Studies and Keystone Accountability – gave out its Farmer Voice Awards to the nine organizations it felt best represented ALINe’s goal of advocating for ‘people-centred performance’ metrics in agricultural development. Last week on “Twitter Social Enterprise of the Day” we featured five ALINe award winners dedicated to giving small-scale farmers a vocal platform in the aid community.

Monday, March 22, 2010

Social Enterprise of the Day – Farm Radio International

Sub-Saharan Africa; Non-profit

The difficulties of farming in sub-Saharan Africa are often exacerbated by the relative lack of up-to-date information on effective low-cost farming techniques and market movements. Since 1979 this Canadian-based non-profit has been working to utilize the power of the radio – still the most accessible means of mass communication in Africa – to fight poverty and food insecurity. Working in direct partnership with local farmers and its network of broadcasters – comprised of 330 stations in 39 countries –Farm Radio International produces weekly radio scripts that respond to the needs of small-scale agricultural workers and rural communities, while also building the communication skills of partner broadcasters. Among other successes, Farm Radio campaigns have led to a four-fold increase in farmers using improved composting methods in Mali and to collective demand among Ugandan farmers for more government advisory services.

Tuesday, March 23, 2010

Social Enterprise of the Day – ACDI/VOCA

International; Non-profit

ACDI/VOCA –an established NGO working around the globe on rural development – won the Farmer Voice award for its work with cocoa, coconut and rice farmers in the Philippines . Specifically, their Participatory Farmers Adoption and Results Monitoring (Par FARM) program measures the effectiveness of their services by quantifying feedback from farmers themselves. Through regular survey sessions, ACDI/VOCA is able to mark successes, examine weaknesses and respond to specific problems, like poor seedling quality, by listening to those closest to the issues at hand – Filipino farmers.

Wednesday, March 24, 2010

Social Enterprise of the Day – Story Workshop

Malawi; Non-profit

Story Workshop first came on the air in Malawi in 1998, with a soap opera about family health that quickly became the most popular radio program in the country. Today, the organization continues to broadcast messages for social change in a lively radio format. In its weekly radio magazine, Mwana Alirenji (roughly translated as “food self-sufficiency” in Chichewa, the local language), peer-to-peer farming solutions and new agricultural or aid issues are addressed each week. Story Workshop bases its suggestions on observed farmer successes. Field reporters regularly visit Malawian farmers and farming associations to find out which low-cost methods, like crop rotation and rainwater harvesting, are most effective in building food security and then broadcast these success stories to others in the country.

Thursday, March 25, 2010

Social Enterprise of the Day – Community Self-Reliance Centre (CSRC)

Nepal; Non-profit

About three-quarters of all Nepali citizens depend on agriculture, yet a semi-feudalistic system still exists and thousands remain landless or land-poor. The Community Self-Reliance Centre CSRC has emerged as a prominent local force in the fight for land rights reform in Nepal, where a highly centralized land management system has hampered conflict resolution in remote areas.  Through its various advocacy, education and reform campaigns the CSRC has expanded its reach throughout the country. As of 2009, more than 13,400 petitions have been settled in favour of the landless and more than 200,000 families have benefited from education programs. Meanwhile, intensive lobbying efforts by the CSRC and other groups have resulted in the inclusion of a land reform agenda in the government’s Interim Constitution (2007) and the Interim Plan (2007-10).

Friday, March 26, 2010

Social Enterprise of the Day – World Vision

International; Non-profit

World Vision, a Christian relief and development organisation focused on aiding children, which is active throughout the developing world has won the Farmer’s Voice award for its food security work and its Humanitarian Accountability Program (HAP) in Zimbabwe . In providing assistance to smallholder farmers throughout the country, World Vision continually reworks its strategy according to farmer complaints and criticisms. The HAP utilizes various techniques including mobile help desks and farmer feedback committees, which have also provided a structure for greater community organization and women’s empowerment.

Professor Muhammad Yunus, popularly known as the “father of microfinance,” is singing a different tune. It’s in harmony with his old ditty about microfinance, and empowering poor women. But, this time, Professor Yunus’ watch words are “social business.” In an hour-long speech on Monday at the First Responsibility Forum of India in Mumbai, Prof. Yunus spent nearly none of his time talking about his first love—microfinance—and spent all of his time convincing a (mainly) corporate audience of the merits of social business.

Lest you get confused, “social business” should not be mistaken for “social enterprise.” In a private lunch with Prof Yunus the next day, he explained that social enterprise can be interpreted as something that is for-profit or non-profit or somewhere in between, and is actually quite unclear. Social business, on the other hand, is clearly a for-profit business that is owned by the employees, and all profit made is given back to them. The owner or investor can be repaid their initial investment, but should receive no dividend.

At this, there was some grumbling in our audience. Corporate players just aren’t comfortable with the idea just there, although the very fact that they had given up their day to learn about the concept showed that Indian business leaders are seeking a third way.

Professor Yunus  elaborated: “Looking at humans as beings that are only supposed to make money is too one dimensional. If you put on your social business glasses, the world is such an exciting and creative place.  We must believe that we can be a different kind of human when we take off the profit-maximizing glasses.”

Indeed, he made an interesting suggestion that young graduates think harder about their post-school search for a job. Why think only about finding a job for oneself? Instead, why not see oneself as a creator of jobs.

An interesting thought, no doubt, that truly inverts the pyramid. Indeed, more and more people I speak with are interested in going out on their own…and working as a free agent.  If we took that urge just one step further, and thought of ourselves as creators of opportunity for others, it could be world changing.  Somehow, without using the loaded, and often intimidating word “entrepreneur,” Yunus has suggested a new and dynamic path for new entrants to the job market.  If you ask us, this is a great angle.

Prof Yunus also used the platform at the First Responsibility Forum to talk tough about charity. “Charity is not a solution,” he said, “it happens once, then not again.” The goal of his speech, delivered in a casual, informal way, seemed to be to jar us out of the for-profit or non-profit mindset, and initiate businesses to consider a third way that is neither charity nor CSR. “Charity is an interesting thing,” he said. “If I want to give a million dollars, I write a check, but in a social business, I get involved, I give all my experience.”

In our “broken system,” Yunus said, it’s tempting to say, “Let government take care of that. But how can government be expected to clean up all of our selfishness?” Social business is a new direction. It requires selflessness, but has the potential to create jobs in a sustainable way.  How? In a future article in Beyond Profit magazine, we’ll share with you a few of the ideas that are percolating at the Grameen Creative Lab.

The event was organized and hosted by Nishith Desai Associates, Circ Responsibility, Grameen Creative Lab, and LAVASA.

Cross-posted at our sister site, www.microfinanceinsights.com.

This February, I participated in the StartingBloc Boston Institute for Social Innovation at The Fletcher School at Tufts University. StartingBloc Fellows are young, emerging leaders from around the world, ranging from undergraduate students to experienced young professionals.  Our class hailed from no less than 25 countries, including the US, India, Ukraine, Rwanda, the U.K., and Mexico.  For five days we listened to lectures by more than 20 industry leaders and learned how to be more effective in driving social change by participating in the Social Innovation Competition and experiencing Tranformative Action firsthand.

Before attending the Institute, I reviewed the bios of the other 130 StartingBloc Fellows and felt privileged to be a part of such an esteemed group of young people.  At least half of the Fellows are social entrepreneurs – they have started, or are in the process of starting, a social venture of some kind.  What really blew me away was the Ideas Marketplace, where Fellows had the opportunity to pitch their ideas or ventures and the entire class voted for the best pitches.  The Finalists were:

• Maria Springer : Kito International – creating entrepreneurial opportunities for street youth in Kenya
• Karim Bishay : Better Means – encouraging collaboration and creating access to life-affirming work
• Letecia Jauregui : Crea – creating entrepreneurial and employment opportunities for migrant Mexican women
• Aparna Kothary : Karma Kitchen – encouraging generosity and human kindness through food
• Varvn Aryacetas : Sassy Cab – making transportation safer for women worldwide

In addition to the Ideas Marketplace, the Institute sought to develop leadership and presentation skills through the Social Innovation Competition, an intensive case competition, where Fellows unite to solve a real challenge facing a socially responsible business. We were divided up into 17 teams to develop a communications strategy for a multinational company’s sustainability initiatives.  I was delighted when my team, Team 17, developed the winning solution, “The Ripple Effect” campaign! We’ll be working with the company’s executives in the coming months to implement our recommendations – stay tuned as I report on the experience.

The most memorable part of the Institute for me was Day One.  Houston Spencer led us in setting goals for the Institute and beyond.  One of his comments really resonated with me: “If your dreams don’t scare you, they’re not big enough.”  As individuals committed to true social change, we need to ask ourselves “Are my goals big enough?”. Monthly, weekly, daily. And it’s important to join communities, like StartingBloc and so many others, that push us to the next level.

Jerryanne Heath is the CEO and Founder of ConceptLink Consulting, a firm which helps global social-mission organizations connect with their stakeholders through special events and strategic communications.  She is a 2010 StartingBloc Fellow.

Stakeholders from across the Indian social enterprise landscape met last Friday and Saturday in Mumbai to understand each other’s work in promoting entrepreneurship, to share key learnings from our work, and to identify synergies between our organizations and how to take these forward. A lot of buzz words are encapsulated in that one sentence, I realize. But, there is a definite need in Indian social enterprise to coalesce and try to work on the same plane, or at least in complementary ways.

The meeting began from the premise that in order to work together, we need to get to know each other. Even though many of us already “know of” one another, it’s a different game to try to put your head to the task of figuring out how to work together.

So, what did we accomplish? And more importantly, what needs to be done? From the conversation, the biggest challenge to both entrepreneurship and social entrepreneurship alike is talent—in this case, finding a pipeline of social entrepreneurs. Contrary to what many believe, while India is a hive of activity, it is not doing a good job of encouraging or incentivizing students to become entrepreneurs.

Given the overtly competitive education environment in India, any student that has the opportunity to go to a passable school is also expected to become an earner for their family.  From the standpoint of risk or salary, becoming an entrepreneur is not an Indian parent’s first choice of career for their children. Indian society is structured to prize the lawyer, the doctor, and the engineer, not the entrepreneur. Entrepreneurship is a risk. Working for Bharti Airtel is not.

So what are we doing wrong? How do we incentivize entrepreneurship? How do we remove the fear of “not being able to pay the bills?” We need to inspire youth to actually follow through on their dreams of starting their own enterprise, of becoming an entrepreneur. » Continue reading “Targeting the “Right” Crowd”

Monday, March 15, 2010 – Friday, March 19, 2010

According to WHO statistics, 161 million people live with a disabling visual impairment, of whom 37 million are blind and 124 million are people with vision impairments. Every 5 seconds, a person goes blind. Every minute, a child goes blind. About 90% of these people live in developing countries – Africa, Asia, Latin America, and the Pacific. Even more startling, 9 out of 10 blind children in developing countries have no access to education.* Last week on “Social Enterprise of the Day”, we featured five organizations that are making path breaking efforts to help the print and visually impaired follow their dreams and overcome the challenges that life has served them.

Monday, March 15, 2010

Social Enterprise of the Day – AUIRE

AUIRE is a social business that develops low cost assistive devices to the visually impaired. Their main product is a low-cost, portable color and money identifier. This device reads the color of an object or the value of a bill and speaks the name aloud. Developed in Brazil by a group of engineering students, the Auire will be marketed commercially in the near future.

Tuesday, March 16, 2010

Social Enterprise of the Day – Inclusive Planet

Inclusive Planet enables people with visual and print impairment to share accessible content with each other, build conversations around the experience, and make friends in the global print impaired community. Lack of accessible materials and content is a major problem among the visually impaired, and Inclusive Planet is a community-driven solution to resolve this global problem. On Inclusive Planet, users can create geographically, culturally, and topically relevant communities around accessible content and overcome the barriers they face.

Bookbole, the flagship international initiative of Inclusive Planet, is a website that is designed for easy access for the visually impaired. While there are standard guidelines for websites to ensure that text-to-speech software can easily “read” the text out, most websites do not adhere to these guidelines. The result is a lot of clutter and subsequent loss of information for the visually impaired. Bookbole solves this by making varied content available in easily accessible form.

Wednesday, March 17, 2010

Social Enterprise of the Day – Daisy Consortium

The DAISY (Digital Accessible Information System) Consortium was formed in May 1996 by talking book libraries to lead the worldwide transition from analog to digital talking books. Members of the Consortium actively promote the DAISY Standard for Digital Talking Books because it promises to revolutionize the reading experience for people who have print disabilities. Specifically, the Consortium’s vision is that all published information is available to people with print disabilities, at the same time and at no greater cost, in an accessible, feature-rich, and navigable format.

Thursday, March 18, 2010

Social Enterprise of the Day – Braille Without Borders

Braille Without Borders aims to empower blind people so they can set up projects and schools for other blind people. What began as an initiative to create Braille in the Tibetian language, Braille Without Borders soon began a preparatory school for the primary education of blind children. To realize the idea of the blind as an independent section of society, Braille Without Borders opened a vocational training school that provided the blind employment skills and encouraged entrepreneurship. This included vocations such as cheese farming, animal husbandry, gardening, theatre, and painting. The concept soon spread across the globe so more blind and visually impaired people have access to education and a better future. As part of Braille Without Borders, the IISE (International Institute Of Social Entrepreneurship) was established in Kerala, India. The IISE aims to help visually-challenged children discover their dreams and give them the tools to function independently in society.

Friday, March 19, 2010

Social Enterprise of the Day – Mitra Jyothi

Mitra Jyothi aims to integrate people with disability into mainstream society in India. With the belief that all people with disability have the potential to become independent and self-sufficient, Mithra Jyothi assists the visually impaired through a variety of training and support programs, helping them become independent and instilling in them the confidence to achieve their goals. Some of these programs include the Talking Book Library, catering to general reading needs and educational needs of visually impaired students, and the Independent Living Skills Program, teaching visually impaired women life skills like mobility, home management skills, cooking, hygiene, etc. They also have a Braille Transcription Center that converts books required by visually impaired students into Braille, a Job Placement Cell that is open to both the visually impaired and people with other disabilities, and a Computer Training Center that provides computer training to the visually impaired and low vision students.

*Statistics via Braille Without Borders

We are excited to welcome Rachel Zedeck on board as our most recent contributor to the Beyond Profit blog. Over the next few weeks, she will explore a multitude of social development issues in East Africa.

I work with rural farmers and my point of view comes from that of a social entrepreneur, not a tree-hugger, dolphin-kisser, or Obama fanatic with a “kiss me I moved to Kenya” button. While I love granola, I view development from the perspective of a practical humanist. I won’t always have answers, but I do hope to make you question.

This week, I’ve been thinking a lot about the fundamentals of farming, especially concentrating on water. Everyday, I discuss water with someone – its collection, filtration, management, or use in rural agriculture schemes. I’m amazed how few people understand how easily East Africa’s food security could be improved with better water management. Instead, we focus a large percentage of our combined energies on emergency drought relief, putting a band-aid on an ecological issue.

In Kenya, drought is now an annual marathon, an insidious and celebrated tragedy against a backdrop of tall, beaded Maasai warriors and romantic safaris costing more than US$1bn in economic loss in 2009. We mazungus (white foreigners) complain about water shortages as we fill water tanks, an irritating but bourgeois expense. Meanwhile, in the arid regions of northeast Kenya, Somalia, Sudan (Darfur), Djibouti, and Ethiopia, drought mires communities in fear, killing livestock, livelihoods, pride, and, perhaps the greatest loss, nursing mothers and children under five already weakened by malnutrition. » Continue reading “Water, Water Everywhere – Africa, Drought, and the Continued Failure in Water Management”

By Priya Parker

Given the financial crisis of the last two years, exploring “financial innovation” for the social sector and low-income communities seems a bit ironic.  And rightfully so.  The mismanagement of financial tools like credit default swaps and sub-prime mortgages have led to one of the worst crises in the last century.  Yet, as we have been studying in our MIT Sloan business school course, financial innovation is like fire, it can burn the house down, but it can also do a lot of good.

What happens when development folks and finance folks start thinking together?

This spring, three groups of MBA students from MIT Sloan have designed courses that explore some aspect of innovation and development.  Financial Innovation in the Social Sector explores the use, application and potential innovation of different types of financial products in the social sector, particularly in Southeast Asia.  The other two teams are examining Agriculture and Innovation in Brazil and India and Access to Capital in East Africa. » Continue reading “From the Classroom to the Field: Financial Innovation in the Social Sector”