opportunity collaboration

8/14/2019 Opportunity Collaboration

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Blended Value: Weaving Proft into Social Missionthrough Hybrid Models

Microinsurance, Sanitation and Solarin South Asia

Social Enterprise Steals the Show at TED India

beyondproft

Social Enterprise. Ideas. People.

jan-march 2010

An Intellecap Publication

The Village Bank Fund Model

www.beyondproft.com

Issue 3


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CONTENTSWeaving Pro tinto SocialMissionthrough HybridModels

BLENDEDVALUE:

19

25 Tackling the MissingMajority and Why We MustLook Beyond AgriculturalProductivity

FINANCING

It Takes a Village: Testing the VillageCapital Hypothesis

23FINANCING


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MEASUREMENT

How Social is YourBusiness? Creating a

Standard MeasurementSystem

28

NEW IDEAS

Kissing the Tiger:Peace as a Pre-requisitefor Development

VIEWPOINT

30

SPECIALS

NEW IDEASSocial Enterprise steals theshow at TED India

37

TORCHBEARER

An Interview with RuthlessRevolutionary, Paul Polak 38

JUXTAPOSE Tall Tales on OnlinePlatforms? A Closer Look atKiva and Vittana

40

FUTUREIts Not Architecture, ItsEcotecture. Life on a Lilypad

44

PHOTO JOURNALVisual Memories from Sight-Impaired Photographers

51

Microinsurance inPakistan, Sanitation inIndia, Solar Villages inNepal

SOUTH ASIA FOCUS

45

The Space Between:Dynamic Philosophies

for Change

33

REGULARS

RADAR 10

OUTLOOK 12

PRIME NUMBERS 13

COMPANIES DOING GOOD 14

DEAL ZONE 15

MEDIA HUB 16

ON THE GRID 18

GURU 42

LIVES 54


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NEW IDEAS

The Space Between:

Dynamic Philosophies for ChangeIn October 2009, over 250 entrepeneurs, innovators, thinkers, funders and students came together in Ix- tapa, Mexico for five days to create new solutions and forge new working relationships. The event, called the Opportunity Collaboration, was the first of its kind, and served as a unique format that enabled those interested in working to alleviate poverty to come together and connect. Each delegate had the chance to present to fellow attendees. In the following pages, weve asked some of the most dynamic presenters to share their philosophy or big idea with you. Each one is playing a unique role in driving change by filling the space where no solution or model previously existed.

New Energy: Disrupting the MarketplaceIn the early days of my career, I had the opportunity to workin the US, Russia and Vietnam as a trained-architect. When Iwas living in Hanoi in 1995, I witnessed firsthand human traf-ficking: a European man bought a local girl for sex. I tried tointervene and ended up risking my life, as well as failing tochange the outcome for that girl. This event changed my lifeand my career. I decided I had to play a role in the preventionof human trafficking.

Having experienced this event up close and personal, I couldnt erase it from my mind. I wanted to understand what the mo-tivation was. I started to research human trafficking and sawit as a marketplace, where, unfortunately, the commodity is aperson. Since the sale of a person is a business transaction, Icouldnt let go of the idea of setting up a company that wouldoffer people at risk an alternative. Once this idea was in mymind, I knew I had to create a company to do just that. It wouldbe a long journeynine years of collecting information, con-necting with different people, and waiting for the right time in

the market to launch such a company.

In my research on human trafficking, I learned that preventionis key because the traumatizing effects are devastating. Also,urban migration trends play a role. When people move fromthe village to the city, they are especially vulnerable at that

juncture. I found that artisan communities are at risk since theyare without economic stability. During these years of research,I built relationships with artisans, cooperatives and then de-signed a business model that aligned with the artisans needsand created economic options for these communities. Theseartisans do not think of themselves as poor but as rich withskills.

Lulan Artisans is a for-profit social venture that designs, pro-duces and markets contemporary modern textiles. We workwith over 800 weavers, dyers, spinners and finishers in Cam-bodia, Laos, Thailand, Vietnam and India. We use natural orlow-impact dyes and source fibers locally. Our years of in-


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NEW IDEAS

depth work with our weaving partners has led us to understandthat true sustainability has four critical components: economic,cultural, environmental, and social. We hire both men andwomen artisans, pay ample wages and open new markets,and then we go further, discerning the specific needs of indi-vidual communities we work in and offering tailored benefits,such as education and housing allowances. We believe beautyis intricately interwoven with sustainability.

We are not just creating a set of designed textiles or onlya sustainable model for artisan products, but something evenlarger: an ecosystem design solution that works at the product,service and community levels across economic, ecological,social, and cultural systems. This approach makes sweeping,systemic change using design at the core.

Our bottom up approach invigorates artistic processes that have been passed from generation to generation and provideseconomic stability. Safety comes from the whole community.This approach is a way artisans participate in the global econ-omy: this is their seat at the table. We create value by honoringvalues. Our holistic approach adds purpose, meaning and vi-tality in the larger cultural context. To us it is all interwoven:thebeauty of experience, the experience of beauty.

New Breed: Social Connective TissueThere is a new breed of social change organization that shapesmarkets, builds fields, and accelerates social change, playingthe role of connective tissue. We step into the boundaries be-tween sectors, between the lines of established approaches tosocial change. We use networks of relationships to manage in-tersections across traditional boundaries. As a result of playingin the margins, we are able to find the unexpected synergies,spark innovation through unique connection, reframe issues,and advance the market.

You may know the type but you cant quite define the category.We are accelerators, facilitators, mavens, network weavers,intermediaries, connectors. It is a field that hasnt yet beendefined, but one that has a definite market role. At CriterionVentures, we want to further define and support this role andidentify the business models that best sustain it: consulting,technical assistance, brokering transactions, conferences andevents, gifts and grants. And, we consider the methods forgreatest impact given that measuring effectiveness is con-founded by outcomes not defined in near term value or out-puts of individuals served. We seek to strengthen this functionwithin the social change marketplace and accelerate the ac-celerators.

Individuals and organizations who play the role of connective

tissue enable leadership, innovation, and action to cross-pol-linate and create more effective solutions to todays complexchallenges. The diversity of focus and approach makes it dif-ficult for people to locate themselves in broader ecosystemsand to identify potential partners and innovative solutions.Working to find solutions to social problems can feel isolatingor embattled; this is particularly true in emerging markets. Bypulling together the disparate players, translating and creat-ing a common language, and helping all see the opportunitiesand challenges they have in common, the connective tissueforms bridges and accelerates market formation. People areable to identify as something larger, to share experiences, pur-sue new opportunities, and forge partnerships. Collective willand common vision are possible when seemingly disparatepeople and elements are revealed as part of a connected web,part of a whole.

Criterion launches social ventures that respond to complexsocial systems and as a result accelerate innovations. Our an-swer to the business model challenge is to play the role ofconsultant half of the time, helping organizations launch theirventures, and half the time we step out on our own to launchventure that shape markets.

In particular, we have taken on projects focused on the gen-

Eve Blossom is the Founder and CEO of Lulan Artisans, which celebrated its 5thanniversary in November.


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NEW IDEAS

New Generation: The Shift to All Things SocialThere is a groundswell beneath our feet, as the priorities andpursuits of a generation change. Millenials (those born be-tween late 1970s and late 1990s) are reinventing the pursuit of meaning, as they excitedly tackle opportunities to volunteerabroad and seek service jobs like Teach for America. The shift is not just in a style of work, but in a new definition of success.Success, for young people, is increasingly about leading anintegrated life of commitment and sharing.

These trends are shaping and being shaped by a number ofrelated factors. For simplicity, lets call them social entrepre-neurship, social media, and social capital.

For young people, social entrepreneurship matters as muchin what it stands for as it matters for particular models of so-cial change. This generation grew up with the twin influencesof the 60s generation that celebrated (and eulogized) activismand idealism and the 80s generation which sloughed off that communitarian sensibility for more individual, often financial,pursuits. For much of the past two decades, the culture warbetween the mindsets that these groups represent has domi-nated the media and political landscape of this country.

Yet at the same time, there has been an emerging commonsense common ground particularly in approaches to non-profit work that began to replace the old antagonism be-

der lens in social investing by launching Women Effect Invest-ments; we have redefined a conversation about medical debt in the United States as a poorly formed cash market in healthcare and launched a financial services company to respond;we saw the gaps in scaling social enterprises and helped formGood Capital. We, like others and with other others, step out and build the bridges. In our case, those bridges take the formof new ventures that shape markets.

Ours is but one set of practices that accelerate social change,that shape social systems and that create innovations in themargins. Other organizations that have taken on similar re-sponsibilities include Acumen Fund, Clinton Global Initiative,

and Skoll World Forum. Bridge building is powerful stuff,rife with possibility, essential for market formation, proven towork. We must continue to create the connections and conver-sation necessary to better define the practices and outcomesof this role and ensure that we have sustainable organizationsplaying this role, creating collaborations and redefining pos-

tween businesses and civil society with a sense of mutualneed. This has led to corporate social responsibility, moremanagement-minded nonprofits, and most of all, a class ofchange makers that explicitly embraces market opportunitiesfor good and supports businesses that have social and envi-ronmental bottom lines. This is the field from which Teach forAmerica, now arguably the most pursued path for top collegegraduates, emerged.

If social entrepreneurship is emblematic of the new post-ideo-logical aspirations of a generation, social media is the mecha-nism by which theyre organizing themselves. Todays youngpeople are the first so-called digital natives who have grownup surrounded by the internet.

Particularly since the emergence of Facebook on college cam-puses in 2004, the trajectory of online life has been all about sharing sharing photos, music, movies, links, even statusupdates. The density of tools like Facebook, Twitter, and nowlocation-based services like Foursquare and Hot Potato ismaking it easier and more compelling to collaborate than everbefore. Whats more, its putting a new emphasis on authentic-ity as this generations main currency.

All of which relates to the third and most fundamental element of whats different about this cohort: social capitalthe con-

Dr. Joy Anderson is president and founder of Criterion Ventures, a national firm that identifies, examines and solves system social problems by launching social ventures.


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NEW IDEAS

New Model: Pay-It-Forward FinancingLoise Ndunge Mallei got an unbelievably good deal on herfirst small business loan. As the owner of Maridadi Hi-TecDesigners, a modest sewing shop with three employees inNairobi, Kenya, she was a textbook case of a missing mid-dle businesstoo big to receive loans from microfinance in-stitutions, and too small and informal to get manageable credit from commercial banks.

Loises pastor told her about an ad in the local paper for in-terest-free, charitable-repayment small business loans beingoffered by an American foundation in partnership with thelocal office of a regional NGO, International Child ResourcesInstitute-Africa (ICRI). Though she thought this sounded toogood to be true, she applied for a SMI loan and after subse-quent interviews and site visits was approved.

The terms were surely unique: in exchange for ICRIs pur-chase of about US$2,000 in custom sewing and embroiderymachines for Maridadi, Loise would sew and donate schooluniforms to impoverished children whose families could not otherwise afford this most basic prerequisite to attendingschool of any kind in Kenya. At a retail value of about US$17per uniform, Maridadi will satisfy the terms of their SMI loanby paying forward about 120 uniformsenabling 120 chil-dren to begin attending school for the first time. The loan alsoenabled her to expand her product line and hire two new em-ployees--a dream come true for Maridadi.

The pay-it-forward philosophy of the Social MicroenterpriseInitiative (SMI) is the brainchild of the Arthur B. Schultz Foun-

dation (ABSF), a small U.S. family foundation based in SunValley, Idaho. Since the mid-1990s, ABSF has made grantsthrough in-country NGOs to provide over US$1.1m in theseunique, interest-free loans to small businesses in Russia, Viet-nam, Palestine, and Kenya--serving 120+ businesses, creatingover 1,000 new jobs, and serving over 100,000 poor with in-kind charitable goods and services.

SMI provides capital equipment loans of up to US$10,000to the smallest of businesses often included in the missingmiddle, typically with less than 10 employees. Unlike tradi-tional microcredit models, SMI loan recipients pay back theseinterest-free loans not in profits, but by donating at least anequivalent value of in-kind products and/or services to the dis-advantaged in their communities (paying it forward, insteadof back to the lender). ABSF data shows that about 80% of allSMI loan recipients are continuing some community charityeven after their loans are fully repaid!

The ultimate objectives of SMI are 1) to enhance small busi-ness production and growth, 2) create new employment op-portunities, and 3) to foster a lasting sense of social responsi-bility and community charity in participating businesses.

The result is a shift in mindset and a shift in priorities that willhave significant impact in the years to come.

nections between people. Only a few years ago academics likeRobert Putnam lamented the death of civic life in America, yet todays generation is fundamentally about We. From the waywe like to learn and work, to the way we chose products, to just about everything else, we are group-minded and community-oriented. This doesnt mean a rejection of entrepreneurialism,individual self-reliance, or any of those other storied Americanqualities, but it does fundamentally shape the way we see and

value our pursuits and achievements.

Nathaniel Whittemore is the founder of Assetmap Strategies, which helps individuals and groups share information about their assets and needs.He edits the Social Entrepreneurship channel onChange.org and founded the Center for Global

Engagement at Northwestern University.

Erik B. Schultz is the Executive Director of the Arthur B. Schultz Foundation. The Foun- dation is currently seeking funding partners to help expand SMI programs. Contact Erik at [email protected] and learn more at www.absfoundation.org.

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