SOCAP 13 (Social Capital Markets, at the intersection of money and meaning) conference took place last week. I could not attend this year but it is great that the videos have already been made available on their website. A platform launched during this conference is ImpactSpace, an open data and resources platform. Their mission is to accelerate impact investing by making information available about the impact market (companies, investors, deals, people) to everyone and maintainable by anyone. It looks already a very helpful and promising resource.
Regarding recent articles and reports in this field that are highly recommended to read are;
1) "When can impact investing create real impact?" by Paul Brest and Kelly Born that appeared in the Stanford Social Innovation Review. The article and the responses by industry experts give a great insight on this topic.
2) "Making Impact Investible" by Max Martin of Impact Economy is a solid and rich working paper that provides a clear framework to understand the industry, all actors and also provides recommendations on how to scale up the industry.
Just back from the "Partnering for Global Impact" a two day forum by EBD Group in Lugano. Key areas covered were agriculture, education, healthcare housing, financial services and water.This forum facilitates outcomes in impact investing and philanthropy through one to one meetings alongside great keynote addresses (such as Sir Ronald Cohen) and panel discussions. It was a well organized event with very good content and great for networking.
Having attended numerous events on impact investment and philanthropy and having been fortunate to learn from outstanding social enterprises over the past 10 years I believe that one new topic should be added to these events.
These great forums such as Skoll World Forum, SOCAP, TBLI and PGI are playing a critical role in helping to solve the most serious problems we face through bringing together ideas, people, capital and promoting the more efficient use of resources. Find sustainable solutions which are working in emerging economies and scaling it. Funding and capacity building to be provided by impact investors, philanthropists and development finance institutions. It's great but maybe we could do even better.
One different angle should be added. What could WE in the developed world learn and import from the emerging market innovative models that have been successful? Who has developed or is developing low cost high quality services in education, financial services and healthcare? There are successful education models developed in Latin America that could be used for low income communities in the USA. Perhaps vocational school systems or microfranchising business models that could be useful in reducing youth unemployment in The European Union? The increasing applications of mobile technology for payment systems in Kenya? There is so much innovation happening in emerging economies and we should be pragmatic and maybe a bit humble and change our mindsets to search and learn from the best available solution.
I talked about this idea to some veterans in this field, Suzanne Biegel from Catalyst at Large and ClearlySo, Jed Emerson of ImpactAssets and Blended Value and to Hans Wahl of INSEAD and they all thought it made sense! This topic is worthwhile to dig in further and much more research is needed I hope it will be included in future forums.
Crowdfunding platforms are continuing to be launched and according to industry sources there are more than 500 platforms. Of the 4 types of crowdfunding sites (donation-based, reward-based, loan based and equity based) this year we are likely to see a surge of equity based crowdfunding sites (in particular in the USA) that would allow for investment in startups. This is due to the passage of the JOBS Act last year that includes the Crowdfund Act. A recent article titled Crowdfunding Clean Energy by David Bornstein gives an excellent insight on the recent trends in this area. In addition to Solar Mosaic described in this article there are several new green crowdfunding sites that look appealing. Impact Crowd, Abundance Generation, OnGreen
We (Socential Ltd.) are happy to announce the launch of sosense.org. Our new platform sosense.org is dedicated to support high impact social enterprises operating both on a global scale, mainly in developing countries, as well as those operating in Switzerland. We strive to make it simple for social investors and donors to search, select and support these enterprises. Our aim is to facilitate collective impact.
We feature outstanding social enterprises that are working efficiently and effectively in solving some of the major social and environmental issues that we face today. Take a look at VisionSpring, Tostan, International Bridges to Justice, Riders for Health, Gram Vikas, Landesa to name a few. You can see the short video on their pages to get an overview of these inspiring organizations.
We realized during our pilot phase that supporting the social enterprises makes much more sense and creates a larger and long lasting impact than trying to dedicate to funding independent projects. www.sosense.org is a brand and it is owned and managed by Socential Ltd.
We still have a lot to improve on a number of fronts. It is work in progress which shall improve and we look forward to your collaboration and feedback!
Bunker Roy, founder and Director of Barefoot College visited Zanzibar from July 31 to Aug 3 to select the women (young grandmothers) in rural villages who would be trained to become solar engineers. I have been a fan and supporter of Barefoot College for some time especially after I visited them in Tilonia, India in early 2009. (visit report) Also as part of Socential, we have been promoting and funding solar electrification projects in Africa and Central America. I was very happy to be able to join Bunker in Zanzibar thanks to the invitation from my friend Meagan Carnahan who is a member of Giving Women, a Swiss based philanthropic organization and the leader of their Zanzibar Barefoot women solar engineers project. It was facinating to see Bunker at work. At the end of his short stay we had achieved to 1) select 2 women from the village of Kandwi which was approved in a meeting with the entire village and in the presence of the Indian Consul General H.E. D.S. Singal (top foto second from right). These 2 women will be travelling in September to Tilonia for the 6 month training program. 2) Meagan wrote a press release of this event which was published in the section of Zanzibar in The Guardian, a major newspaper in Tanzania. 3)The selection of one woman in the village of Matemwe was also made in a village meeting and the second candidate will be approved by the village chief (These 2 ladies will be attending the 6 month training in March 2012)
Barefoot College has solar electrified over 1000 villages in 37 countires (28 countries in Africa) saving 4.6 million kerosene a year, reducing carbon emission of 7 million kg a year, lighting over 34,000 house and training 683 solar engineers.
A belated report on the Skoll Forum 2011. This year's main theme was "Large Scale Change" . Lots of content. I recommend the selection of superb blogs, and in highlights you can find all the sessions and plenaries as video or podcasts. It was nice to have been able to attend Skoll forum for the 5th time in a row as initially I planned to be in Japan teaching social entrepreneurship for the YES Japan Creating Drivers for Sustainability program (which was understandably cancelled due to the triple disaster). My takeaways: of course the optimistic, positive energy that always flows at Skoll Forums, networking, the interactive meetings at Oxford Jam and last but not least connecting with Shino (Japan Research Center), Ichi (Social Media) and Patrik Meier (Crisis Mapping, Ushahidi) to discuss and share information on how to support Japan in the wake of the recent triple disaster.
We (at Socential) have launched an initiative to help rebuild the lives of the Japanese people impacted by the triple catastrophe (earthquake, tsunami and nuclear power plant damage) that hit northeastern Japan on March 11. The fund aims to mobilize youth and social entrepreneurs to create initiatives/projects for the rebuilding of the infrastructure and to help the families and children impacted in northeastern Japan to rebuild their lives. The fund also aims to unleash the entrepreneurial spirit in Japan and to provide much needed hope by encouraging them to work and engage for their future. Socential is teaming up with trusted partners in Japan in the area of social entrepreneurship (Ashoka Japan) and sustainable development to select the initiatives. Please join us in our efforts by spreading the word, donating for this project and/or praying for Japan.
For more information go to Rebuild Japan! Social Entrepreneurship Fund.
Looks like 2011 will be a breakthrough year for impact investments. A recent report by J.P. Morgan/Rockefeller Foundation and Global Impact Investing Network (GIIN) defines impact investment as "investments intended to create positive impact beyond financial return". In other words, investments intended to; improve or provide access to energy, water, education, health, housing, and financial services for the poor, create jobs or mitigate climate change while also providing a financial return.
The term "impact investments" only surfaced less than 3 years ago and now thanks to the impressive efforts of the Rockefeller Foundation and GIIN it is emerging as an asset class. It is capturing the attention of investors in all segments from philanthropic foundations, high net worth individuals, financial institutions and governments as they all seek to make more efficient use of their capital, achieve better returns (social, environmental and financial) and help solve the world's social problems. Estimates on potential market size (investment capital) over the next 5 to 10 years range from USD 400bn to USD 1 trillion. Major efforts have been made also in developing standardized metrics with Impact Reporting and Investment Standards (IRIS) and more recently on ratings the Global Impact Investment Reporting Standards (GIIRS) is testing its rating methodology with 25 pioneer funds. Impact investments has been featured in conferences such as Skoll World Forum, Clinton Global Initiative and SOCAP last year and certainly this year it will take center stage.
Impact Investments- An emerging asset class (J.P.Morgan, The Rockefeller Foundation, GIIN)
Impact Investing: A Framework for Policy Design and Analysis (Pacific Community Ventures, Harvard University)
Money for Good (Hope Consulting)
Investing for Social and Environmental Impact (Monitor Institute)
related blog What is impact investment?
My favourite books this year may seem a bit biased geographically as all authors are living in California.
-Switch-How to change things when change is hard- by Chip Heath and Dan Heath
-The Dragonfly Effect -quick, effective and powerful ways to use social media to drive social change by Jennifer Aaker and Andy Smith
-the Mesh -why the future of business is sharing- by Lisa Gansky
I was very fortunate to have been able to attend the lectures of Chip Heath and Jennifer Aaker when I participated this summer in the Stanford GBS Executive Program in Social Entrepreneurship (EPSE). Both are remarkable lecturers and their books are fun, effective, full of amazing examples and inspiring. Switch is about how we can effect transformative changes by understanding the two competing systems; the rational mind and the emotional mind. The Dragonfly Effect is a how to guide on driving social change (by using social media). I picked up Lisa Gansky's book, the Mesh, while attending SOCAP10 in autumn. The Mesh explains one of the "big ideas" or one of the most important trends that is shaping new businesses logic providing products and services through sharing.
SOCAP 2010 took place in San Francisco on Oct 4-6. Over 1200 participants. Energetic, lively, sharing, innovative. Impact investments took center stage.Watch these amazing videos of Jacqueline Novogratz (Acumen Fund) Matt Flannery (Kiva) and many more http://video.socialcapitalmarkets.net/live-video-stream/ The first SOCAP Europe will take place in Amsterdam May 31-June 2, 2011.
Kiva.org, the world's first microlending website announced today its entry into the education field by offering a pilot for student microloans in 3 countries. So beginning today anyone can make a loan starting at USD 25 to students that are selected by Kiva's first 3 education field partners; Fundacion Paraguaya (Paraguay) IMPRO (Bolivia) and Ameen s.a.l. (Lebanon). Kiva.org an innovative social enterprise created a movement to connect people around the world through lending to alleviate poverty. In only 5 years, Kiva.org has provided over USD 160 mn in loans to 415,000 microentrepreneurs around the world and these loans (which are as little as USD 25) have come from close to half a million lenders spread in 206 countries!
"The pilot was born as a natural extension of Kiva's mission to connect people, through lending, to alleviate poverty. Kiva Student Microloans give recipients the opportunity to gain new knowledge and skills through higher education or vocational training. As a result, these individuals will be better positioned to find jobs, support their families and grow their communities -- and ultimately make a real difference in the relief of global poverty." (source: Kivablog)
This year's title (theme) of the Skoll World Forum was "Catalysing Collaboration" and I believe it fully lived up to it. The program reflected and encouraged much more interaction than in previous years. No doubt the OxfordJam programmes running parallel to the forum and the fact that many of us got stranded due to the volcano eruption resulted in further discussions and collaboration. There are many videos and podcasts for anyone who would like to see or hear some sessions. One of the most inspiring speeches was from Caroline Casey delivered at the closing plenary. Blog discussions after the Forum (see socialedge ) are also very interesting to follow. There seems to be an amazing energy and momentum which is expanding the sphere of social entrepreneurship from a "small club of unreasonable people" to mainstream. Perhaps the definition of "social entrepreneur" might not be enough to accomodate the many people that are joining the movement. Call them changemakers (as Bill Drayton refers to them) or maybe a new word like social interpreneurship (see Peter Deitz's blog): what matters is that with more people trying to make a difference and with more interaction and collaboration there is renewed hope to tackle the enormous problems that society faces today.
(Disclosure: the author is in the management team and in charge of social investment management at Socential)
Socential, a Swiss start-up has launched an online platform to connect social investors to social entrepreneurs projects aiming to empower system changing solutions to the world's social problems. The platform was launched as a pilot in January this year featuring Swiss social entrepreneur's projects and the latest release this April has featured projects from the internationally acclaimed social entrepreneur Bunker Roy from Barefoot College.
Room to Read (RtR), a social enterprise that has been providing educational opportunities in a sustainable way in the developing world has been selected as the Financial Times seasonal appeal for 2009-2010. This is not about microfinance but RtR is an amazing organization that I have followed and featured in January 2007. Last year thanks to the sponsorship of many of my friends we supported RtR to build a school in Laos. We were impressed by the management lead by John Wood who designed a scalable and sustainable model (by partnering with the local communities) to provide education to the world's poor children by building schools and libraries, girls' education programs (10 year scholarships) and local language publishing programs. In less than a decade since inception RtR has built 832 schools, 7526 libraries, awarded 8786 girls scholarships, published 334 local language books and distributed 6 million books, benefitting 3.1 miliion children. John initiated RtR with a vision to provide educational access and opportunity to 10 million children in the developing world. Looks like he will reach his goal earlier than he thought. FT carried a full page article in today's edition describing the achievements and goals of RtR. Congratulations to John and the whole team of RtR !
Today's NY Times article on Kiva describes the recent online debate started a month ago by David Roodman's blog titled "Kiva Is Not Quite What It Seems" which criticized Kiva's misleading marketing on person-to-person microlending. Matt Flannery, Co-Founder of Kiva responded and reacted (by updating and improving on how Kiva explains itself to its user) to David's blog and to the NY Times article in an admirable way. As a supporter, promoter and lender to Kiva I believe that these online debates are healthy as it promotes transparency and makes innovative enterprises like Kiva an even stronger organization. Kiva has been a poster child for social entrepreneurship and in only 4 years have been able to create a platform that facilitates individuals (over 580,000) of all ages to participate in alleviating poverty with USD 25 (just recently crossed the USD 100 million mark). The phenomenal growth and its success also attracts attention. Constructive criticism is healthy, bad PR is harmful. I believe and trust that Kiva will emerge stronger from these controversies.
On Oct 31st, Kiva lender loans surpassed the USD 100 million mark! Congratulations to the Kiva team especially Matt and Premal for achieving this milestone. That is a lot of 25 dollar bits. I went back to check my first entry on Kiva when I congratulated them on getting their 501(c) status which was in Sept 2006 . Kiva has achieved so much in 4 years inspiring more than half a miilion people in the world to get engaged to empower people in developing countries.
Jacqueline Novogratz is founder and CEO of Acumen Fund a very successful and fast growing nonprofit venture capital firm for the poor that invests in sustainable enterprises bringing healthcare, safe water, alternative energy, and housing to low income people in the developing world. She founded Acumen Fund in 2001 and by the end of 2008 this firm had approved more than $40 million on investments in 40 enterprises serving the poor, creating through these enterprises 23,000 jobs providing basic services like water and life saving malaria bed nets to millions of low income people around the world. Her book The Blue Sweater -Bridging the Gap between Rich and Poor in an Interconnected World-is an inspiring memoir of a woman who left a career in international banking to spend her life on a quest to understand global poverty and find powerful new ways of tackling it. Many important lessons can be learned just by following her heartbreaking and hilarious stories of starting a microfinance institution and a bakery in Rwanda. Also the book is packed with examples that teach us humility and that good intentions alone are not enough as described through some failed programs of traditional charity that have left the poor people in the same or worse conditions. One also learns about the Rwandan genocide through the stories of the survivors that Novogratz had worked with. The book is inspiring, educational, entertaining and a must read for everyone and especially for those who aspire to make a difference.
The 6th Skoll Forum, a gathering of leading social entrepreneurs took place in Oxford on March 25-27th. Prominent figures of the social, corporate, policy, academic area engaged for 3 days in discussions and debates to accelerate, innovate and scale solutions for the world most pressing issues. This year the mood was slightly less euphoric due to the current crisis but one could feel an even stronger and powerful level of energy in the air as social entrepreneurs are becoming even more important players, in Jeff Skoll words, they are likely to come out of this crisis not as survivors but as leaders. He pointed out that social entrepreneurs are masters in leveraging; in producing results with limited resources, they have the abilitiy to do more with less, in choosing which assets can be most efficiently used to meet the objectives, also they maximize resources by collaborating. He could not have expressed it better. Many sessions can be watched in videos and also many blogs are available of the event. This year there were 9 Skoll Awardees. I was especially delighted to see Jordan Kassalow of VisionSpring, formerly Scojo who we have covered in this journal and in my recent book being one of them.
Barefoot College (registered as the Social Work and Research Center) was founded by Bunker Roy in 1971 in Tilonia, a small village 350km southwest of Dehli, India. The college follows the lifestyle of Ghandi and it is built by the poor, for the poor and managed by the poor. The college empowers the rural poor by assisting them to develop their capacities and skills so they can serve their own communities better which enhance their self confidence and self reliance. The college trains rural people who are illiterate or semiliterate to become barefoot educators, doctors, teachers, water engineers, solar engineers, architects, designers, hand pump mechanics and accountants to serve their communities while generating income. The college runs pre-schools and night schools that are taught by barefoot teachers. They have also been replicating its approach not only throughout India where 20 colleges have been established in 13 states but also around the world! Pictures of the visit.
Mr. Laxman Singh who has been working with the college for 20 years showed us around. In the older part of the campus where the activities were initiated in 1972, we visited the ladies assembling solar cooker stoves, children and women practicing in the internet learning room, the crafts center, and the living and training facilities for barefoot solar engineers. There is a 6-month training program for overseas rural women. Although it was Sunday morning we saw ladies from Malawi, Uganda, Ethiopia assembling solar lamps. These ladies go back to their respective countries after 6 months to electrify their villages. The new large campus that incorporates a hospital, administrative offices, meeting facilities, and the crafts shop was designed and built entirely by barefoot architects from 1986 and it was completed in 1989. We met Bhanwar Jat an illiterate farmer from Tilonia who was overseeing this whole project. Barefoot College is fully solar-electrified and all the roofs of the buildings in the campus are connected to collect rainwater in a huge 400,000- liter underground tank. This roof top rainwater harvesting system is a representative case of applying the traditional knowhow (as rural people have been harvesting rain water for centuries) and developing it as a viable and low cost way to provide drinking water and sanitation to rural communities.
Happy New Year!
Hot, Flat and Crowded-Why the world needs a green revolution-and how we can renew our global future- by Thomas L. Friedman is an extremely educational and simultaneously an entertaining and engaging book. He takes a provocative look at two of the most serious challenges we face today: global environmental crisis and America's loss of focus and purpose since 9/11. He explains where we stand now, how these two challenges are linked and proposes how we can restore the world and revive America at the same time. Friedman explains in relatively simple language the crisis we face due to the convergence of global warming (HOT), the explosive growth of the middle-class and the leveling playing field thanks to technology (FLAT) and the rapidly increasing population-forecasted by the UN to grow from the current 6.7bn to 9.2bn in 2050- (CROWDED). He advocates that it will soon be too late to fix things unless there is a global effort to replace our inefficient energy practices with a strategy for clean energy, energy efficiency and conservation- i.e. Green Revolution. A timely contribution that raises the awareness on the critical environmental issues and the urgency to act. Highly recommended.
How is the financial crisis impacting microfinance institutions (MFIs) and their clients? What can the microfinance industry do? These were the questions addressed at the virtual conference hosted by CGAP between Nov 18-20. There were 600 MFI managers, central bankers, investors, and advisers from 34 countries and the150 entries submitted by these participants provided a vivid and powerful picture of what is going on. According to the summary sent out by Elizabeth Littlefield, Director and CEO of CGAP,
"The dominos of the crisis-credit crunch, inflation, currency dislocations and global recession- are hitting microfinance in very different ways, depending on location, funding structure, financial state and the economic health of their clients. While many places seem unaffected today, there is little doubt that there will be impact: integration of microfinance into the mainstream does have costs."Other salient points from the summary report were;
-deposit taking MFIs are well-insulated from the crisis
-immediate concern is how the global liquidity contraction will affect the cost & availabilty of funding to non-deposit taking MFIs
-institutional investors in microfinance are not seeing significant redemptions but they do expect fundraising to become more difficult in the coming months
-advice to MFIs included: increase reserves, cut back on growth and focus on portfolio quality, make sure loan officers are informed and attentive to client needs and communicate early and often with lenders and investors
-concerns about overreaction by policymakers
-amid the anxiety some optimism...as some markets had become overheated so slower growth, tighter credit more conservative policies, better products and even consolidation of weaker institutions may be beneficial in the long run
I logged in during the 3 day conference and one positive impression was how the industry of microfinance (the players) continue to be willing and passionate to share and give information for the improvement of the whole industry, an attitude that the mainstream should learn from microfinance.
SoCap2008 , a conference designed to bring together the entrepreneurs who want to change the world and the capital that wants to make it happen took place this week Oct 13-15 in San Francisco. Unfortunately I could not attend this year but it is possible to follow some of the inspiring discussions through the many blogs available. Especially the team of nextbillion did a wonderful job covering the conference.
A lively debate has been sparked by Mike Edward's new book "Just Another Emperor-The Myths and Realities of Philanthrocapitalism" where he challenges the increasing use of business thinking in philanthropy and the current hype about it. It is in fact a controversial topic but certainly a healthy debate. I got to know about this topic as I follow Nextbillion where now the whole team is writing their comments on this subject.(highly recommended read). Also there is an on-line debate on this subject hosted by Global Philanthropy Forum. Here you can read comments from Matthew Bishop from the Economist who coined the word "philanthrocapitalism" and has written a book with Michael Green titled "Philanthrocapitalism: how the rich can save the world" coming out this fall.
I believe strongly that today there is a powerful movement of making the world a better place (the subject of my latest book) which has been accelerating due to the converging business (for-profit) and social (non-profit) worlds. Both worlds offer principles and methods in different areas that they ought to learn from each other. It is important to sort out what can be used most effectively from each world. I think that this is a timely debate and look forward to see the outcomes.
This book introduces the new innovative social/business models that are making the world a better place and portrays the inspiring people behind them.
Starting with an update on microfinance, it covers other innovative market-oriented models such as base of the pyramid (BOP) businesses, social enterprises and microfranchises. These models together with microfinance are improving the lives of the 4 billion people living at the BOP. The last section covers in detail a remarkable example in this area, Scojo Foundation. Scojo is developing the market for affordable reading glasses at the BOP through microfranchising.The book provides the author's insights on 1) how the business (for-profit) and social (non-profit) worlds have been converging, setting the stage for these new models to emerge, 2) how these models, the people behind them, and the advent of Web 2.0, are creating a strong and positive movement towards a more responsible, sustainable and kinder world and 3) how all of us could make a difference.The book has been published in German language by rueffer and rub with the title >Kleiner Einsatz Grosse Wirkung. (Small input, big impact - thus,the red chilis of the cover) This book illustrates a giga trend, the powerful movement of making the world a better place.
The 5th Skoll World Forum for Social Entrepreneurship took place last week in Oxford. This powerful, inspiring forum led by Jeff Skoll and Sally Osberg celebrates and connects social entrepreneurs to the world and is making "social entrepreneurship" known to governments as well as businesses. This year's highlights were the speeches of Lord Anthony Giddens (climate change: opening plenary) former President Jimmy Carter (keynote: Skoll Awards Ceremony) and Paul Farmer and Al Gore (both in the closing plenary). There were 11 Skoll Awards given out this year and Kiva (Matt Flannery and Permal Shah) was one of them. This was the second year in the row that I attended Skoll Forum and it is an awesome experience to be 3 days in a place where you see over 700 people trying to make a world a better place. One of the ventures that I was very impressed about is E+Co which empowers local enterprises in developing countries by providing business services and financing so that these enterprises can deliver clean and affordable energy to households, businesses and communities. There are several sessions that are covered by video and are all highly recommended.
Goldman Sachs launched last week 10,000 WOMEN, an amazing initiative that will deliver business and management education to 10,000 underserved women predominantly in developing and emerging markets. Goldman Sachs will commit $100 million over the next 5 years (in addition to the time and expertise that the GS people will be dedicating on mentoring) to this initiative supporting partnerships between universities in the U.S. and Europe and business schools in emerging and developing economies. The initial partnerships are working on pragmatic, flexible and short term programs resulting in business and management certificates. Brown,Columbia, Harvard, Stanford, Cambridge, University of Michigan, and Wharton have already initiated academic partnerships with business schools in Africa and the Middle East for this program.
The initiative has two goals: increasing the number of underserved women receiving a business/management education and improving the quality and capacity of business/management education around the world. Expanding the entrepreneurial talent and managerial pool in developing and emerging economies -especially among women- is one of the most important means to reducing enequality and ensuring more shared economic growth. (Executive Summary)It is a remarkable initiative addressing effectively one of the most difficult obstacles for sustainable economic growth. The initiative will provide many microentrepreneurs with the much needed business/management skills that would enable them to build and expand their businesses and thus, contribute significantly to the economic growth of their countries.
10,000 Women Fact Sheet
On January 24th at the WEF in Davos, Bill Gates made a call on "creative capitalism" a new system that "would have a twin mission: making profits and also improving lives for those who don't fully benefit from market forces." He pointed out that "To make the system sustainable, we need to use profit incentives whenever we can. At the same time, profits are not always possible when business tries to serve the very poor. In such cases there needs to be another market incentive- and that incentive is recognition... In markets where profits are not possible, recognition is a proxy; where profits are possible, recognition is an added incentive.The challenge is to design a system where market incentives including profits and recognition, drive the change" He cited examples like Bono's RED Campaign which has generated in 18 months $50mn for the Global Fund to Fitght AIDS TB and Malaria, a Dutch company which holds the rights to a cholera vaccine that retains the rights in the developed world but shares those rights with manufacturers in the developing world, and a new law in the USA whereby drug companies that develop a new treatment for a neglected disease like malaria or TB can get a priority review from the FDA for another product they have made. He called on businesses, governments and the non-profit world on to take up on projects that works both to generate profit and solve the world's inequities.
This is a great call on what is also referred as BOP businesses and "double or triple bottom line businesses" and the work done by many social entrepreneurs. The new name is good and easy to understand. The best part is the potential impact of this call as it comes from one of the most powerful business leaders and one of the most influential philanthropist of today. The webcast of this speech is available from the WEF site.
On July 18th, Nelson Mandela launched the Global Elders, a group of leaders that will contribute their wisdom, independent leadership and integrity to tackle some of the world toughest problems. The founding members of this group are Desmond Tutu, Graça Machel, Koffi Annan, Jimmy Carter, Li Zhaoxing, Mary Robinson, Muhammad Yunus, Ela Bhatt and Gro Harlem Brundtland. The Elders was an idea conceived by Richard Branson and Peter Gabriel. In a recent article of Businessweek, Richard Branson explains "Peter Gabriel and I started a journey with Nelson Mandela several years back when we felt the world was rapidly becoming a global village, yet we had no advisers who were driven by what 's best for humanity rather than what's best for the military, the economy, or a political group.We hope this group will become the elders of our global village and play a role in alleviating human suffering." Mandela in his speech said "The Elders can speak freely and boldly, working both publicly and behind the scenes on whatever actions need to be taken. Together we will work to support courage where there is fear, foster agreement where there is conflict and inspire hope where there is despair."
It is an impressive group of doers and also backed by powerful entrepreneurs. We are living in an unprecedented point in time when huge problems can be tackled and solved as there is the willingness, the funds, the ideas and the people that can do it. If you want to share your thoughts on the role of the Global Elders click here.
The business (corporate sector) and the social worlds are converging. We could call this a megatrend and it continues to gain momentum. One has seen this through microfinance where an effective development tool initially created in the social/NGO/NPO world have given birth to numerous microfinance institutions that have become sustainable and profitable. Microfinance now attracts funding/investment from both capital markets (commercial banks, asset managers, private investors) and foundations. Social entrepreneurs are also another major force behind this and no doubt that Microfranchising also links these two worlds.
One can also see it through the new partnerships between players of these two worlds especially as the multinational corporations and their executives team up with social activists and NGOs to market products to the 4 billion people at the base of the pyramid (BOP). C.K. Prahald, one of the leading advocates of BOP opportunities, has recently co-authored with Jeb Brugmann, a very interesting article in the February Harvard Business Review titled Cocreating Business’s New Social Compact. It is an excellent read (even if you have to pay for the copy to download) for those who are interested in these new partnerships. Many examples are cited including British Petroleum, Healthstore Foundation, and ICICI.
CGAP will accelerate its quest for technology solutions that can bring critical financial services to billions more of the world's poor thanks to the $24mn grant by the Bill and Melinda Gates Foundation. CGAP has been providing for the past few years an increasing range of technology services to MFIs and financial institutions. Most of this funding will support pilots to expand access to financial services with new technology approaches (using mobile phones, POS and card based technologies for deposits, payments, remittances). CGAP has selected 9 project ideas for further development together with institutions in Colombia, Kenya,Mexico, Mongolia, Pakistan, Philippines, South Africa and the Maldives. This is very good news as the majority of the unbanked live in rural and remote areas where the nearest bank is very far away.
The biggest news this week. One of the most respected investors in the world, Warren Buffet gave the bulk of his wealth ($31bn) to Bill and Melinda Gates Foundation There is a video clip on the foundation website that covers this event which is highly recommended to watch. Just 10 days earlier Bill Gates had announced that he will be handing over his role as the chief software architect of Microsoft to concentrate on the work of his foundation. Bill Gates and Warren Buffet are taking venture philanthropy to new heights and inspiring other wealthy people to follow their formidable example. Also because of who they are the coverage of this news all over the media is reaching the whole business and financial community. The impact is unmeasurable. Thanks Warren, Bill and Melinda.
We must be living in good times. There are certainly big problems in the world but there seems to be lots of good will or more good will then I could ever remember seeing/ hearing/feeling. People of all ages seem to be kinder and more giving now than before. They would like to within their limits give either time or money for something they believe is right. How could the world benefit from all this good will.? A website where people could easily search by location, area, project and find what they could help either with time or money could be handy. At least the new innovative companies and foundations such Kiva and globalgiving are making it easier for people to loan or give directly to projects around the world.
Another entity that sounds interesting is micromentor but I have not looked it in depth.