Archive for the ‘Social Enterprise’ Category

What’s Next for Me is What’s Next for Philanthropy

January 2, 2012

I’ve been advising people about their philanthropy for over a decade. In person and through this blog I’ve always encouraged them to go beyond giving money to charity and think about all the assets they can bring to the table, and how they can especially use their power as investors and consumers to bring about the changes they want to see in the world.

Philanthropy as we have known it for the past few decades has been about giving money. But as we progress in the 21st century, I believe it will be about spending money: people are becoming more aware every day that we are shaping ourselves and the world around us by voting with our pocketbooks everyday.

The evidence is everywhere:

  • The exploding local food and “slow food” movements, rejecting the agro-industrial complex in favor of healing the economic, environmental and social health of our communities;
  • The growing fair trade movement, which provides fair wages and working conditions for workers and prevents the exploitation that often accompanies the production of cheap goods for consumption in the US;
  • The call echoing out from Occupy Wall Street for conscientious citizens to move their money from big commercial banks to local community banks, personified in the Move Your Money campaign;
  • The surveys that show that consumers want to purchase from socially responsible companies;
  • The growing voices of Millennials looking to work for socially responsible companies, or better yet, that want to start their own;
  • The expanding corps of investment advisers who specialize in “socially responsible investing” or “impact investing” a market estimated to grow to over $500 Billion in invested assets in the next 5 to 10 years;
  • The rise of services like Moxy Vote, which help you vote your values on any shareholder resolutions that come before companies whose stocks are in your investment portfolio

In addition to these trends, maybe you have heard the term “collaborative consumption,” which is being used to describe an emerging approach to people and their stuff–an approach based on borrowing, renting, sharing and accessing rather than owning outright. Early examples include Netflix for DVDs, car sharing services such as ZipCar or iGo, and more recently the peer to peer travel booking site Airbnb, and for designer gowns, Rent the Runway.

I’m so drawn to the concept of collaborative consumption, I am excited to tell you that I have launched my own social enterprise, one that applies the concept of collaborative consumption to an industry out of control: parenting.

Good Karma Clothing for Kids is a subscription baby clothing service that provides busy, socially conscious parents with like-new baby clothes in sizes newborn through 24 months so they don’t have to spend a fortune keeping up with fast growing little bodies.

We send a bundle in the size the baby is now, they wear, wash, enjoy, then send them back in the prepaid, reusable shipping bag when they need to exchange them for the next size up. We only use environmentally- and baby-friendly Selestial Soap to further reduce the environmental impact of the clothing, and we turn stained, ripped or worn out clothes into “upcycled” hand-made bibs, baby quilts or stuffed animals.

Our web site is live and we are now in our public beta. Check it out at www.goodkarma.co

Social Innovators in Chicago find learning and fellowship

June 2, 2011

Chicago is a happening place for social innovation these days.

First, there is an impact investing summit organized by the Booth and Kellogg b-schools on June 13th. If you are interested in learning more about impact investing, this is a one-day crash course. Click here to learn more.

Second, there will be a “social entrepreneurship” track as part of the upcoming Chicago ideas Week in October. As part of that track, the Bluhm/Helfand Social Innovation Fellowship has just been announced:

The Bluhm/Helfand Social Innovation Fellowship will select and bring five dynamic young social entrepreneurs from across the country—with a focus on Midwest-based applicants—to Chicago Ideas Week (October 10-16, 2011), an annual seven-day celebration of ideas, innovation and community, with a focus on bringing the world’s best speakers together with the Midwest’s best thinkers.

The Fellowship will reward these young leaders, who have demonstrated a measurable impact in their field, with the following access and opportunities:

  • $10,000 in financial support to advance each fellows’ mission
  • Select fellows will be chosen to speak at the Social Entrepreneur session at Chicago Ideas Week alongside key influencers in the field
  • Meetings with local leaders who are committed to advancing fellows’ goals, including Mayor Richard M. Daley, Chairman of Equity Group Investments Sam Zell, Groupon Executive Chairman and Co-Founder Eric Lefkofsky, GrubHub Co-Founder and CEO Matthew Maloney, and others, will provide Fellows with unparalleled guidance and opportunities
  •  $10,000 in financial support to advance each fellows’ mission
  • VIP access to CIW and TEDxMidwest programming, speakers, dinners, and concerts
  • Exclusive media visibility from partners including Fast CompanyChicago Tribune, NBC Chicago, Crain’s Chicago Business and WBEZ

We welcome social entrepreneurs from across the globe working in for-profit or not-for-profit sectors and 35 years of age or less to apply for this unique opportunity. I ask that you please promote this opportunity amongst your network. If you have any recommendations of social entrepreneurs to receive a personal invitation to Chicago Ideas Week, please follow to: http://www.chicagoideas.com/bhsi. The application deadline is July 5, 2011.

For additional questions: info@bluhmhelfand.com

Help for Families Facing Medical Crisis: For-Profit or Non-Profit?

March 17, 2011

I’ve spent most of the last week in the hospital with my five-year old son, Charlie. He’s going to be okay, he had a relatively rare complication from Strep throat that moved into a lymph node at the base of his skull, killing it and creating a major infection in the soft tissue. The treatment is 14 days of intensive antibiotics. First that was delivered at the hospital so they could keep an eye on him and make sure he was improving, and now he’s got a PICC line (a long-term IV inserted under his upper arm) to allow me to deliver doses of antibiotics every eight hours at home. I’m writing this at 10:30 at night while I wait for 11pm, when his next 30-minute infusion of antibiotics needs to start.

This caused me to reflect on my own good fortune, and to finally get around to telling you about a resource for folks without the same good fortune.

In short, I feel extremely grateful to have good health insurance. That means that when the ER doc ordered a spinal tap to check for meningitis, an X-ray to check for pneumonia, and then two CT scans–first for the sinuses and then for the neck–I was only thinking of Charlie’s health and not the incredible expense of all these tests. When they checked him in to the hospital for a few days, I was likewise only thinking of what Charlie needed to get better. And now, our family finances will not be ruined by ongoing sky-high medical bills.

The Burden of Medical Bills

According to Harvard researchers, 62% of all bankruptcies were caused by health problems and associated medical bills. The majority of those folks had health insurance, and yet their average costs are over $20,000. According to the researchers quoted in this article, most middle class families–even those with health insurance–are “just one serious illness away from bankruptcy.”

GiveForward Helps Families Facing Medical Crises

There is a relatively young start-up company that has already helped individuals facing medical crises to raise over $3.8 million for medical bills and other causes. This Chicago-based social enterprise, called GiveForward, is not a non-profit. It is a sustainable for-profit business with a social mission baked into every aspect of its operations.

Here’s how it works: individuals set up a fundraising page at GiveForward. Then they start publicizing it to their friends through the integrated social networking tools like Facebook and Twitter. Their friends can donate via credit card to their campaign. When the campaign reaches its pre-determined end date, GiveForward sends them a check, minus the 7% fee (that would be the sustainable part–see below for what the fee covers).

I should be clear here that these “donations” are not tax-deductible to the donors. It’s not a nonprofit collecting donations on behalf of individuals. It’s a for-profit intermediary that has simplified the process for anyone to establish a fundraising page for any cause.

One potential concern is that GiveForward does not actively verify any of the fundraisers using its platform, however “any suspect or questionable projects are asked to provide more information and will be removed and funds returned if an investigation brings us to question the legitimacy of any fundraiser.” So probably best to give only to causes and people you know in real life.

Comparing the For-Profit and Nonprofit Versions of This Idea

I wrote a few years about The Lighthouse Community, a nonprofit that actively verifies the medical issue the beneficiary is facing. TLC similarly sets up web page for all of their “clients” which allow individuals to share their stories and allows supporters to make a donation to help cover the medical costs in question. TLC obviously has a higher standard of due diligence, and it has the advantage that contributions are in fact donations to a non-profit and therefore tax-deductible to the donor.

In 2009 TLC passed through $100,000 in donations and spent about $54,000 on its own administration. It seemed to have an operating deficit of $20,000 (meaning it spent $20,000 more than it raised). Clearly, they are operating on a shoestring and doing an amazing thing with very limited resources. (Note that TLC raises funds separately to cover its operating expenses, so donations for individual beneficiaries are also passed through minus about 7%, per their page on Guidestar.)

But GiveForward has a much lower barrier to entry for individuals and families already facing an avalanche of paperwork. And most donors are not motivated by the tax deduction available for helping a friend or family member with medical bills. So one might argue GiveForward has streamlined and simplified the process while removing as much risk as possible. And while TLC raised $38,000 for its own operations in 2009, GiveForward recently received a $500K investment and is expanding rapidly. It has already facilitated almost $4 million in transactions, which would mean it also earned revenue of $267,000 if it collected 7% of that amount.

If I did need to raise money for medical bills, I think I would set up a page on GiveForward rather than TLC. And GiveForward is poised to expand awareness of its services with this huge investment that will allow them to improve their technology and to reach many more potential fundraisers by advertising and partnering with referral sources including cancer charities, major hospitals and, of course, successful fundraisers who tell their friends.

In all, the for-profit structure has brought great benefits to GiveForward, which has allowed it to ultimately accomplish the social mission–getting money to families who need it to pay for major medical bills.

However, families will have to evaluate the two different organizations and decide for themselves which is right for them. I would welcome the comments of anyone who evaluated both organizations and made a decision one way or the other to help guide other families as to the pros and cons of each. What have I missed? What else you would like to know?

About That Fee

Fee details from GiveForward: “This fee covers all credit card and bank processing fees (usually around 2.6% depending on your credit card) as well as GiveForward fees.  The GiveForward fees cover basic overhead; from maintenance of the site so we have the most up-to-date security software to protect the privacy of our users to the cost of sending out the final payment to the beneficiary.”

Job Description for the Next Mayor of Chicago

January 25, 2011

The Chicago Tribune is partnering with the City Club Chicago to sponsor a debate between the four most prominent candidates for mayor in the upcoming election. The online community TribNation put out a call for readers to submit job descriptions–15 winners would be selected to attend the debate.

Drawing on conversations with my social innovation colleagues in Chicago (including Ryan Blackburn, Linda Darragh, Jamie Jones and others), I wrote up a job description for the mayor I want to see, and submitted it to TribNation. Since I apparently passed the security screen with flying colors (I feel so boring…) I’ll be taking my husband to the debate Thursday night. Here’s what I submitted, below.

Let me know what you think. How would you like to see the next mayor work to make Chicago a hub for social innovation? What has worked in other cities?

Position Objective: Turn Chicago into a well-known hub for social innovation, proving that innovators need not head for the coasts to find support for their ideas and that investors need not look any further for worthy investment opportunities.

Major Responsibilities:

  • Develop policies and programs to support social entrepreneurs in Chicago, such as loan forgiveness programs similar to those available to graduates entering public service or mentorship programs that pair existing Chicago business leaders with up and coming social entrepreneurs.
  • Develop incentives for investors to direct more funding toward social benefit organizations, and for businesses of all kinds to use their business assets to solve social problems in Chicago.
  • Attract major social innovation conferences, publications, thinkers and speakers to feature the increasingly vibrant social entrepreneurship community in Chicago.
  • Connect the many players and organizations already working on this area.
  • Solicit ideas and input from a great range of people who live and work in Chicago, a la the Denver “Change Your City” campaign
  • Work with Chicago-based foundations and corporations, large and small, to generate support and funding for initiatives that make Chicago a hub for social innovation.

Measures of success:

  • Increased awareness among opinion leaders and those in the media (first in Chicago and then beyond) of Chicago as a home for social innovation, as measured by press mentions and occasional surveys.
  • Increasing number of national conferences or programs around social innovation hosted in Chicago and featuring Chicago-based projects (e.g., those of the Council on Foundations, Social Capital Markets, Social Venture Partners).
  • Percentage of college grads (and especially business school grads) who choose to stay in Chicago should rise.
  • Identifiable angel and mezzanine funding sources, especially for sustainable, equitable businesses, should increase to levels near those of secondary cities in California, if not San Francisco; more “social impact funds” invest more dollars in Chicago-based social enterprises
  • Several well-regarded social enterprises should emerge that start in Chicago and stay headquartered in Chicago
  • Projects that demonstrate results in education gains, reducing homelessness, increasing employment rates among difficult-to employ populations, etc. from Chicago are studied and picked up by other cities.

Requirements:

  • Must be a true believer—cynics need not apply
  • Must be able to engage in reasonable discourse without demonizing those who disagree, even if they ARE stupid and evil.
  • Must favor practical and applied wisdom over ideological and theoretical knowledge.
  • Must inspire people to want to get engaged; be someone we can look up to more than someone we can relate to.
  • Must be smart, experienced in government, and on good terms with the business community.
  • Must be able to keep his or her private life private.

Also, fix streets, balance the budget, root out corruption and cronyism, keep the trains running on time, yadda yadda yadda.

Is Groupon the Most Successful Social Enterprise Ever?

December 15, 2010

My girlfriend Kim in Connecticut was unfamiliar with Groupon, a fact which left me practically speechless. Here in Chicago, Groupon is being hailed as the company that is “transforming the culture of Chicago,” providing the right environment to cultivate a new boom in start-ups by proving to entrepreneurs that you don’t have to leave Chicago to get funding and support, and proving to investors that you can find great ideas right here in Chicago. Think that’s too much hype? Maybe it’s not enough.

What is Groupon?

It’s a daily deal (not a lame “coupon thing,” geez Kim…) at half-price or better for some awesome thing to do in your city (yes I mean your city, whether that is  San Francisco, Seattle, one of three different neighborhoods in Los Angeles or Albuquerque or my hometown of Dayton, OH or dozens of other smaller cities). The deal only goes into effect if enough people buy it. The number of people who have to buy it is presumably set in cooperation with the company offering the deal, but I’ve never seen a deal NOT reach the minimum.

So consumers get something new at a great price, businesses get a shot at a new customer, and Groupon gets 10-50% of the revenue, depending on whether they promote it or just let people find you. If you are not already getting the daily deal via email, sign up here (seriously, do it here, because I get $10 for every person I referred who subsequently buys a Groupon).

And in case you, like Kim, are unfortunate enough to live someplace other than Chicago, I will also tell you now that Groupon apparently turned down a reported $6 billion offer from Google. That’s a pretty big deal, and signals that they think even bigger things are on the horizon. I believe it. Why? Because I not only buy Groupons, I proselytize about Groupon (see above) and I try to get my friends to buy Groupons with me so we can do things together. Sticky, loyal, repeat customers like me translate to huge revenues and an incredibly valuable business.

What Does Groupon Have to Do With Social Enterprise?

Social enterprise, by my definition, is something that harnesses the power of the markets to bring a new solution to a social problem. In other words, a revenue-generating business that makes the world better. You don’t have to be a for-profit business, as many non-profits have revenue-generating enterprises that support their social mission, but you do have to be making money to meet my definition. So how is Groupon a social enterprise? Well, they clearly have harnessed the power of the markets.

Groupon stats on 12.15.10

According to their web site, over 20,000,000 Groupons have been sold already, over $850,000,000 saved. If the amount saved is conservatively estimated to be 50% on each deal, then the amount saved is roughly equal to the amount spent. So if I’m thinking about this correctly that makes Groupon’s  cut in the range of $85-$450,000,000. Roughly speaking, of course.

And what about the social part? To demonstrate the power of Groupon, let me share with you a few of the Groupons I have purchased:

$40 for a year-long membership to a new museum which I otherwise wouldn't have visited



$30 to take the whole family to this amazing holiday event I would have otherwise dismissed as too expensive

And here are a few others I’ve seen go by but haven’t purchased:

That's 18,790 visits, many of which are likely new patrons

almost 3,000 potential new customers

That last deal, for Irv & Shelly’s Fresh Picks, is particularly interesting to me because they were one of three social enterprises selected to present at the first Chicago Social Venture Forum, organized by Foundation Source and the Chicago Booth School of Business. Here’s the description from Groupon:

“Fresh Picks works closely with local crop producers and purchasers, filling each of its delivery boxes with the highest-quality organic produce it can snatch from the harvest’s catwalks.”

Through Groupon, this small but growing social enterprise that supports and promotes organic farming and seeks to provide healthy produce to Chicago’s urban food deserts, had the opportunity to get almost 3,000 people to try their service. If it’s good, those people become long-term customers.

Like any small business, social enterprises selling consumer goods and services can benefit from the foot traffic that Groupon provides.

Innovation in Friendraising

For nonprofits like art museums, planetariums, ballet companies, orchestras and other performers, Groupon may be more appropriately viewed as a “friendraising” vehicle, rather than a direct fundraising mechanism.  Nonprofits have (theoretically…hopefully?) set their ticket prices with some idea of what revenue they need to support their operations. But for many of these organizations, ticket revenue will never cover their costs, and they will always rely on charitable donations to make up the difference. So selling half-price tickets for seats that would otherwise have been empty (because, let’s face it, the ballet in Des Moines might not be sold out for every performance) is a better way to accomplish your mission than letting those full-price seats go empty.

So Groupon can help deliver “butts in seats” to charitable organizations like museums, architecture foundations, ballet companies, orchestras and the like. These kinds of organizations need to reach people, and the more people they reach the better they are generally considered to have fulfilled their mission. And they usually have excess capacity (that is, empty seats at performances they are giving anyway, or fewer people in the museum than would be allowed by the fire marshal). No excess capacity? No need for Groupon.

One of my favorite examples of creative friendraising through Groupon was a recent offer to “support the public school project of your choice with today’s deal, which lets you boost your charitable donation to DonorsChoose.org by 60% through generous funding by the Pershing Square Foundation.” (Kudos to Pershing Square Foundation for underwriting this innovative experiment to attract new donors to a well-regarded nonprofit).

By combining mainstream offers for sushi, fitness clubs, car services and other popular items with these social-benefit organizations like the Joffrey Ballet, Groupon has helped create a culture of folks for whom supporting nonprofits is just another cool thing to do in their town.

In all, Groupon has enormous influence to direct consumer power toward social enterprises, great nonprofits and small businesses of all kinds. Because of this power to amplify the work of so many other social-benefit organizations, I’d argue that Groupon itself is perhaps the largest, most successful social enterprise to date.

For the Haters

Let’s acknowledge early criticism that Groupon deals brought the wrong kind of customers, those that only wanted the deal and weren’t likely to convert. But let’s also acknowledge that Groupon has responded with a whole suite of merchant services that help small businesses structure their deal in a way that is most likely to be successful, handle the resulting traffic and even provide advice about how to convert Groupon users into long-term customers. I bet Oprah doesn’t offer that kind of support to companies she lists as her favorite things.

There is still a great deal of debate on whether Groupon is a good deal for the businesses. For example, Chicago’s Navy Pier is currently pointing fingers at Groupon for the fact that ticket sales for its Winter Wonderfest attraction are up 12% but revenue is down 8%. This shift resulted from a Groupon offering half price tickets ($9 each) which netted Navy Pier only $4.50 per ticket on 7,500 tickets sold through Groupon instead of the door price of $18 each.  In my view, if Navy Pier couldn’t have predicted this outcome based on some simple math (1/4th the revenue per ticket means we have to sell 4x as many tickets to net the same amount of revenue), they have no one but themselves to blame. It suggests that there are some businesses that are better suited to benefit from Groupon than others, and one-time events are not one of them.

In any case, small businesses with consistent, repeatable products to offer seem like a better fit. Get your Groupon discount the first time, but come back for the fantastic new place you just discovered, paying full retail price, of course.

 

Why I’m Worried About the Gates/Buffett Billionaire’s Pledge

June 25, 2010

I have great admiration for Bill and Melinda Gates and Warren Buffett and their recently announced effort to convince/cajole their fellow billionaires to follow their lead and pledge to give at least 50% of their wealth to charity. I was especially moved by Mr. Buffett’s letter explaining his reasoning. It speaks very directly to many of my own motivations and thinking around philanthropy.

And yet….and yet….

Imagine if Bill Gates used the power of Microsoft to push for an end to conflict minerals (which, like conflict diamonds, are often mined using slave labor and used to funnel “legitimate” dollars to armed  militias terrorizing local people in Eastern Congo), insisting that only “conflict-free” minerals be used in computers and other electronics featuring Microsoft Office.

Imagine if Warren Buffet insisted that every company in which he is a shareholder provided a decent paid family leave and established benchmarks for increased diversity among upper management.

Imagine if Oprah Winfrey decided that only companies who certified their supply chains as free of child labor would appear on her television show or the new OWN Network.

Imagine if…the world’s billionaires became active philanthropists. Not the kind who give money away–for me that earns you the title of “donor” but not necessarily “philanthropist.” Rather, the kind who use all of their assets–their power as consumers, investors, public figures and role models–to really bring about social change on a mass scale. The combined impact of increased social responsibility from the companies they could influence would dwarf the power of their charitable dollars funneled through nonprofits.

…Manufacturing companies seeking computer parts would be motivated to find other sources of minerals and effectively close off a critical funding stream and thereby cripple the armed militias of the Congo.

…Tens of thousands of women struggling to balance work and family would enjoy improved health for themselves and their babies, and their companies would save the time and expense of replacing them.

…Companies with fair supply chains would be the ones to receive the benefits of “The Oprah Effect” and others would be incentivized to clean up their labor practices if they wanted to join in. Millions of children around the world could be affected, reducing child trafficking and forced labor as these practices become increasingly unacceptable to American consumers, led by the millions who are loyal fans of Ms. Winfrey.

Don’t get me wrong, we need the nonprofit sector and the many important charities doing great work all over the world. I’m not suggesting people shouldn’t give money to charity. But for the world’s billionaires, believe it or not, money is not their greatest asset. It’s influence. That influence in part comes from their billions, and so giving away their money should not be a substitute for using their influence to bring about positive social change. (And as Phil Cubeta points out, “good” people giving away their billions leaves the “selfish, controlling, manipulative SOBs” to built dynasties and eventually rule the world.)

So let’s applaud the Gates’s, Mr. Buffett and the others who have already pledged their wealth to charitable causes. But let’s also applaud the growing class of social entrepreneurs who start or work for businesses that don’t make them billionaires but do provide sustainable livelihoods, environmentally friendly products and social justice along with financial returns.

Find a Social Entrepreneur

September 3, 2009

“What if social entrepreneurs could easily find peers in their issue area or region and unleash creativity, connections, capital, and collaboration to fulfill their world-changing missions?

“What if foundations could showcase their social entrepreneurs contextually on a variety of related websites, and help them be found by funders and media?

“Civic Ventures (sponsor of The Purpose Prize), The Draper Richards Foundation, ideablob, PopTech, TheSchwab Foundation for Social Entrepreneurship, and The Skoll Foundation have pooled their data to create an open database of information about vetted social entrepreneurs.”

What is a Social Entrepreneur?

Depending on who you ask, a social entrepreneur could be anyone from a person who starts a nonprofit to fill a need in their community to someone who starts a for-profit to fill that same need using a market-driven, sustainable business model. For example, a company that sells organic fruit juices with a commitment to sustainable farming and fair labor practices might be considered a social enterprise. Whether their legal structure is nonprofit or for-profit, a social entrepreneur puts the social benefit ahead of any profit motive.

What is the Social Entrepreneur API?

In its most basic form, it’s a searchable database of social entrepreneurs that have already been screened by a well-regarded organization and found to be outstanding. There’s a basic search function available here, right now.

For example, entering the term “Chicago” into the basic search interface returns 16 results, ranging from the highly lauded and internationally famous founders of Shorebank to the relatively unknown documentary film producerShakeela Hassan.

But what does that API part mean? In my limited technical understanding, it basically means it’s “open source” data that any developer can use to build their own interface, widget, sidebar, whatever. If you want to take the database and create your own custom interface that’s available from your own web site, go ahead. That’s what it’s there for.

Who Built It?

The group behind this new API, Social Actions, is comprised of some of the most giving, committed, collaborative people I know. They aren’t trying to “own” or “control” data, they’re just trying to get information out there, figuring the more we can share knowledge, the more everybody wins. Congratulations to Peter Dietz and Christine Egger and the whole crew for making this happen.

For more information on the Social Entrepreneur API, see the official announcement with links to other relevant documents and resources.

Hello from Kampala, Uganda

July 18, 2009

It’s after midnight  here in Uganda, where I’m co-leading the first International Family Philanthropy Institute for clients of Foundation Source. It must be the jet lag because I’m feeling wide awake, although I declined to stay out at the night club that we were taken to by a group of locals to enjoy a well-known local band. The band was wonderful, as advertised, but we are getting up in the morning to go visit Jane Goodall’s chimp sanctuary and I am trying to pace myself as we’ll be here for about two weeks.

Dwelling Place

After arriving in Entebbe and driving to Kampala late last night, we’ve had one day of site visits with local organizations. The first is called “Dwelling Place” and it’s run by a newly minted Ashoka fellow named Rita who rescues “street kids,” educates them until they can transition into the school system, gives them a place to live, rehabilitates them (if they came from a traumatic situation) and then places them in permanent homes as they age out of the system. She’s grown the program organically over the fourteen years and is hoping to expand the program nationally. The kids were gorgeous and welcoming.

Our other site visit today was with a relatively new organization called Living Goods that is incredibly impressive for their business acumen and strategic approach. The organization was started by the founder of TravelSmith, Chuck Slaughter, so it’s no wonder they’re so savvy. Living Goods is essentially using an “Avon lady” distribution model for critical health products that protect women and children from some of the “diseases of poverty.” This group of afflictions–diarrhea, malaria, worms, for example–kill millions every year although they are easily preventable and treatable. By supplying and training a network of local “community health providers” (CHPs) to recognize the symptoms and correctly dispense the appropriate medications, they are attempting to improve the health of these communities and reduce these preventable deaths.

Unlike most government programs that use community health workers but expect them to spread information as a volunteer effort, Living Goods actually expects its CHPs to run their enterprise as a small business. Living Goods partners with highly respected microfinance institution BRAC to finance the women to purchase the medications (along with some everyday goods like sanitary napkins, condoms and even sugar fortified with Vitamin A) and then sell them at a small profit. With support and training from Living Goods, the women should become self-sustaining franchisees working their own territories. As such, one measure of their success will be the financial success of their CHPs.

The other major measure of their success will be improved health for the communities served by their CHPs. Living Goods isn’t just hoping that the health outcomes for these communities will improve: last year they completed a major baseline study of 3000 households and will go back to these folks in two years to see if their health has improved.

If this model proves effective–and their use of best practices all around suggests to me that it will, although mid-course adjustments are to be expected–they have the potential to scale the model internationally and even globally. I look forward to following their trajectory.

New “Beyond Profit” Offering Free One-Year Subscription

May 28, 2009

If you’re interested in the social enterprise sector, where businesses seek to do good and to do well at the same time, you will want to be among the first to subscribe to the new publication “Beyond Profit.”

I love the name because it nicely captures the mood of the social enterprise sector.  The need to make a profit as a business entity is a fantastic motivator, and it forces you to listen to the people, get immediate feedback from the market in terms of sales numbers, and adapt your products and services to meet real needs. The profit motive is a tool. But of course it’s about more than making a profit, it’s beyond profit.

A preview of the first issue reveals a whole lot of fantastic, relevant content. Interesting articles, like

  • Ten Ways to Get a VC’s Attention
  • Investment: Is Recession a Good Time to Invest in Social Enterprise?
  • Entrepreneurship: Ten New Ideas that Could Change the World
  • Torch Bearers: Can you Teach Social Entrepreneurship?

Plus upcoming conferences, news briefs, “companies doing good,” info on different social entrepreneurship programs  at universities and other great tidbits.

My only complaint is that, if they publish it too often, it will end up being the next Economist–too much for a working stiff to possibly get through and therefore a source of guilt instead of satisfaction.

Beyond Profit is “brought to you by Intellecap – a social investment advisory firm providing services to the for-profit development sector in areas such as microfinance, water, energy and education.” Those interested in social investing in India will find Intellecap particularly relevant.

Looking forward to receiving my first issue.

Hey Kids! Not a Masochist? Then the Nonprofit Sector “DOES NOT” need you

May 21, 2009

Many times the debate over nonprofit versus for-profit compensation focuses on the executives of the respective organizations, but the participants in this fantastic conversation on the Chronicle of Philanthropy have brought the focus down where it belongs: to the young people on the front lines.  Several commentators point out that it’s the entry level positions where the disparity is hardest to swallow.  For bright kids graduating from college with a mountain of student debt, it’s tough to ask them to choose between $30,000 and a sense of fulfillment and $50,000 with a 401K and good health insurance.  The current emphasis among donors on “low overhead” at charitable organizations is leading to a brain drain from the sector that most needs an influx of young workers.

Personally, I find it a bit self-righteous to tell those who want both financial security and the opportunity to make a difference “the nonprofit sector DOES NOT need you.”  Really?  Because we’ve solved all the world’s problems so effectively and don’t need new ideas and new talent?  Because Baby Boomers  heading up nonprofits never plan to retire so that new leadership is needed?

You know what?  Forget this debate, you’re right.  Kids, if you hope for a double bottom-line return on the investment of your own talents and intellect–both social and financial–I’ve got a sector for you. It’s called social enterprise, and they’d love to have all the passion and idealism and ambition and energy you have to offer.

Let the masochistic working poor and their aging institutions whither as talented young people seek to do good and to do well. It may be painful and pointless, but at least they’ll feel good about themselves.


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