Stanford Social Innovation Review

Stanford Social Innovation Review

Lessons in Forging Global Change

By Josh Karliner, Gary Cohen, & Peter Orris

The Paradox of Fair Trade

By Manel Modelo

Social Innovation From the Inside Out

By Warren Nilsson & Tana Paddock

Winter 2014 Volume 12, Number 1

Inside the Buy-One Give-One Model / Lessons in Forging Global Change / The Paradox of Fair Trade / Social Innovation From the Inside Out

Inside the

Buy One Give One Model

By Christopher Marquis & Andrew Park

Winter 2014 / Vol. 12, No. 1

$12.95 U.S. and Canada

THE FUTURE OF YOUR ORGANIZ ATION STARTS HERE

Stanford Social Innovation Programs Social entrepreneurs and nonprofit organizations are developing innovative new approaches to business, education, the environment and health care.

To sustain success in an ultra-competitive environment, they must prepare the next generation of leaders to navigate tomorrow’s challenges. Stanford’s social innovation programs provide highly interactive environments where you will learn to harness your drive and ingenuity in new and compelling ways and create a more dynamic and prosperous future for yourself and your organization.

Offered jointly by the Center for Social Innovation and Global Innovation Programs

Executive Program in Social Entrepreneurship (EPSE) March 2 – 7, 2014 www.stanfordepse.com to learn more.

Executive Program for Nonprofit Leaders (EPNL) August 3 – 13, 2014 www.stanfordepnl.com to learn more.

Stanford Social Innovation Review / Winter 2014

Published by the Stanford Center on Philanthropy and Civil Society Winter 2014 / Volume 12, Number 1

F e at u r e s

28

Inside the Buy-One Give-One Model

34

Lessons in Forging Global Change

By Christopher Marquis & Andrew Park

By Josh Karliner, Gary Cohen, & Peter Orris

The buy-one give-one model— epitomized by TOMS Shoes and Warby Parker—is not only a viable way to create both commercial and social value, but a model of social entrepreneurship that is likely to increase in prevalence and power in the coming years.

A campaign to eliminate mercury thermometers and blood pressure devices that began 15 years ago at one Boston hospital blossomed into a worldwide movement that led to an international treaty restricting the use of mercury.

In this article three leaders of that movement discuss the campaign and the lessons they learned about how to create large-scale social change.

40 46 The Paradox of Fair Trade

By Manel Modelo

In 2011, a rift opened within the fair trade movement. On one side is a group that emphasizes the interests of commodity producers in developing-world countries. On the other side is a group that targets the needs and aspirations of consumers in the developed world. In this article a longtime leader in the movement reflects on the tensions that have driven otherwise like-minded activists to form rival camps.

Social Innovation From the Inside Out

By Warren Nilsson & Tana Paddock

What enables a socialpurpose organization to excel at developing new ideas and practices? In many cases, the answer lies not in how people connect with the external social landscape, but in how they connect with each other.

O n t h e c o v e r : Illustration by Mark McGinnis

1

2

Stanford Social Innovation Review / Winter 2014

, The power of civil society organizations lies in their

ability to support the indigenization of the peace-making process by building long-term social capacity within conflict-prone nations. From Beyond Diplomacy, P.55

D e pa r t m e n t s

10

4

EDITOR’S NOTE SSIR ONLINE

5

Giving That Gets Results n More Harm Than Good? n Inside-Out Innovation n The Impact Debate n To Sponsor or Not to Sponsor n Beyond “Good Enough” n Embracing Your Inner Punk Rocker W H AT ’ S N E X T

8

Libraries as Laboratories n Blurred Images, Better Futures n Helping Cities Remain Strong n The Science of Donor Connection

17 Filling Out the Middle

The Aspen Network of Development Entrepreneurs targets a “missing” segment in emerging economies.

By Brandon Keim

19 Under One Roof

By bringing people together and by pooling resources, the Housing Partnership Network expands the range of affordable places to live.

By Phuong Ly

13 Dressed to Thrive

Fitted for Work gives women what they need— from a new look to a new skill set—to advance in their careers.

By Corey Binns

15 An Rx for

Surplus Meds

The Dispensary of Hope is distributing unused pharmaceuticals to patients who need them.

By Greg Beato

VIEWPOINT

55 Beyond Diplomacy Civil society organizations are dramatically changing how countries bring an end to violent political conflict.

By Derek Brown

57 CHANGE

Takes Time

The long, hard struggle to alter US policy on HIV/AIDS assistance shows that advocacy can deliver a real payoff.

By Serra Sippel

CASE STUDY

22 How the Hub

Found Its Center

FIELD REPORT

61

22

After a period of crisis and transition, Impact Hub has emerged as a global structure that is partly a movement, partly a business, and partly a network. Along the way, its leaders—a group of people devoted to social innovation— had to master the art of organizational innovation.

59 Subsidizing Impact The right formula for creating a socially beneficial enterprise often includes a strong dose of up-front philanthropic support.

By Tomohiro Hamakawa, Toshihiro Nakamura, & Ewa Wojkowska

61 A Field of Its Own

After many years of operating on others’ academic turf, nonprofit studies is ready to claim new ground.

By Stuart Mendel

64 RESEARCH

64 The Call of Violence

The Power of Being Seen Off-the-Shelf or Do-ItYourself? n Mapping Word of Mouth

n n

BOOKS

68 A Get-Rich Way

to Help the Poor Paul Polak and Mal Warwick’s The Business Solution to Poverty

Review by Tina Sciabica

69 Saviors at City Hall?

Benjamin Barber’s If Mayors Ruled the World Review by Milton Friesen

70 A Man of His Time Lester Brown’s Breaking New Ground Review by Teresa Odendahl

71 Stories out of School

Diane Ravitch’s Reign of Error Review by Mara Sapon-Shevin

By Michel Bachmann

72 L A S T

LOOK

131033 TTA SSIR Full Page v4 | 10x13.5 | October 2, 2013 12:27 PM

The Tech Awards 2014 Applications Open January – May 1, 2014

Presenting Sponsor

Category Sponsors

Technology Benefiting Humanity— A signature program of The Tech Museum of Innovation

In Association With

Global Communications Sponsor

Sponsor Reception Underwriter

Laureate Showcase Sponsor Ann and John Doerr

General Reception Sponsor

Interactive Program Sponsors

Supporting Program Sponsors

Applied Materials presents

In 2014, The Tech Awards™, a signature program of The Tech Museum of Innovation™, will honor 10 international innovators who are applying technology to confront humanity’s most urgent challenges.

In-Kind Sponsors Advocate Creative Aramark Bain & Company Radha Basu; Frugal innovation Lab BK Publishers Blackbird Tavern Ryan Campbell; PureMatter

Each year, the laureates are invited to Silicon Valley where they are recognized and given access to resources and mentoring to aid them in scaling their organization’s impact.

Unrestricted cash prizes of $75,000 and $25,000 are also awarded in each category.

A signature program of The Tech Museum of Innovation

Dazian Creative Fabric Environments Forbes Brienne Ghafourifar; entefy Gerry Hansen Coaching & Consulting Elizabeth Hausler; Build Change Hayward Quartz Technology, Inc. Jamieson Ranch Kay Kleinerman; Voice Matters Marriott San Jose McCune

Know a worthy project? Applications are accepted January 1 through May 1, 2014. For more information and to apply, please go to thetechawards.thetech.org

Karen Mullarkey NBC Bay Area Ruder Finn Tom Serres; Rally.org Signature Wines Silicon Valley Business Journal Stanford Social Innovation Review

® is a registered trademark of The Tech Museum of Innovation, all rights reserved.

TM is a trademark of The Tech Museum of Innovation, all rights reserved.

Sun Edison TIME Susie Wise; d.school: Institute of Design at Stanford

4

Stanford Social Innovation Review / Winter 2014

A New Look little more than 10 years ago we launched Stanford Social Innovation Review. Five years ago we updated the design and changed some of the departments. With this issue we have tweaked the magazine once again. Our new look is bolder, more energetic, and more contemporary, better reflecting the tenor of today’s social change movement.

We have also rearranged the order of the departments and renamed some.

What’s Next, Field Report (née What Works), and Case Study—our most popular departments—were moved from the back of the magazine to the front. And Viewpoint (née First Person), Research, and Books (née Reviews) were moved from the front to the back. Features, our most important department, remains at the center of the magazine.

But this redesign is more than just a new look and a new ordering of departments. It also involves one small, but important, change to the content. We have replaced Letters with the new SSIR Online (starting on the page to the right). Online content is becoming a more important part of the mix of the overall content that SSIR provides, and we want to make sure that our magazine readers know about it.

Dropping Letters does not mean that we are no longer interested in reader feedback. Far from it. It’s just that the way that readers provide feedback has changed radically, and we are adjusting to those changes. Before the World Wide Web, readers provided feedback about articles primarily by writing letters to the editor.

Today almost no one writes letters.

Feedback now happens online, which is

A

as it should be. Online we have unlimited space to run comments, allowing everyone’s opinion to be heard. The change in medium also allows readers and authors to respond to one another’s comments, a more immediate, productive, and democratic process. The Community section in SSIR Online brings some of those online comments about magazine articles back into the magazine.

SSIR Online also features several other sections. Digital Highlights draws attention to some of the numerous onlineonly articles we publish. In this issue, they include an excerpt from a provocative blog post by Mulago Foundation Managing Director Kevin Starr, titled “Dump the Prizes,” along with several reader responses. The section also alerts readers to two in-depth series we ran exclusively online, one on gun control and the other on philanthropy.

The Magazine Extras section provides a list of content appearing online that supplements an article in the current issue of the magazine, in this case “Social Innovation From the Inside Out.” The Books section draws attention to an excerpt that we ran online from a new book titled Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia. And Podcasts highlights one of the hundreds of podcasts that we offer free online.

The content highlighted in SSIR Online is only a taste of the content that SSIR publishes online. We encourage you to explore our website (and, we hope, bookmark it) and read some of the thousands of original articles that you can find only at ssireview.org.

—ERIC NEE

Academic Editor

Johanna Mair

Managing Editor

Eric Nee

Senior Editor

Michael Slind

Digital Editor

Jenifer Morgan

Publishing Director

Regina Starr Ridley

Publishing Associate

Carrie Pogorelc

Art Direction and Design

David Herbick Design

Contributing Writers

Suzie Boss, Jessica Ruvinsky

Copy Editors

Madeleine Adams Kathleen Much

Interns

Alexa Andaya, Sunli Kim, Soo Ji Lee, Caroline Lu, Gianni Sun

Website Designer

Hop Studios

SSIR ACADEMIC ADVISORY COUNCIL

Paola Perez-Aleman, McGill University; Josh Cohen, Stanford University; Alnoor Ebrahim, Harvard University; Marshall Ganz, Harvard University; Chip Heath, Stanford University; Andrew Hoffman, University of Michigan; Dean Karlan, Yale University; Anita McGahan, University of Toronto; Lynn Meskell, Stanford University; Len Ortolano, Stanford University; Francie Ostrower, University of Texas; Anne Claire Pache, ESSEC Business School; Woody Powell, Stanford University; Rob Reich, Stanford University STANFORD CENTER ON PHILANTHROPY AND CIVIL SOCIETY

Faculty Co-Directors

Paul Brest, Woody Powell, Rob Reich

Executive Director

Kim Meredith

Associate Director

Karen Lindblom

Program Manager

Sam Spiewak

HR, Financial & Grants Manager

Noelle Rudolph

STANFORD CENTER ON PHILANTHROPY AND CIVIL SOCIETY ADVISORY BOARD

Chairman

Laura Arrillaga-Andreessen

Members:

Darren Bechtel, Somesh Dash, Susan Ford Dorsey, Laura Fisher, John Goldman, Burt McMurtry, William Meehan, Regina Kulik Scully, Cari Tuna

Stanford Social Innovation Review (ISSN 1542-7099) is published quarterly by the Stanford Center on Philanthropy and Civil Society, a program of the Institute for Research in the Social Sciences at Stanford University’s School of Humanities and Sciences: 340 Panama St., Stanford, CA 94305-6042.

Phone: (650) 724-3309, Fax: (650) 736-3454.

Letters Send letters to the editor to editor@ssireview.org.

Subscription Prices (One Year) Personal, $54.95 U.S./Canada and $74.95 international for print and digital, $44.95 for digital only. Libraries, $240 U.S./Canada and $260 international.

Subscriber Services Call 267-557-3890, or mail Stanford Social Innovation Review, Subscriber Services, P.O. Box 3099, Langhorne, PA 19047-9199 Article proposals, advertising, and reprints go to www.ssireview.org Postmaster Send address changes to Stanford Social Innovation Review, Member Services, P.O. Box 3099, Langhorne, PA 19047-9199. Volume 12, Number 1. Winter 2014. Stanford Social Innovation Review and the Stanford Center on Philanthropy and Civil Society are part of Stanford University’s tax-exempt status as a Section 501(c)(3) “public charity.” Confirming documentation is available upon request.

Stanford Social Innovation Review was established in 2003 by the Center for Social Innovation at the Stanford Graduate School of Business. The founding publisher is Perla Ni. The former academic editors are Stephen R. Barley, James A. Phills Jr., Robert Scott, David Brady, and Chip Heath.

Stanford Social Innovation Review / Winter 2014

ssireview.org DIGITAL HIGHLIGHTS

In his provocative August 22 op-ed, “Dump the Prizes,” Mulago Foundation Managing Director Kevin Starr laid out four reasons why we need to rethink social entrepreneurship contests and awards, including:

READERS RESPONDED:

I do not think the more ‘sensible sources of funding’ are any better to navigate if you are [a] smaller organization and entrepreneur.

These funding sources have their favorites too. ... Where competitions and contests are useful is that they allow the social entrepreneur with big ideas and the gusto to follow through a fighting chance to get their name out there and some hope that it will be funded.”

—Katalina Mayorga, independent consultant

Gun Control: In-Depth Series Authored by the CEO and founder of Catchafire, Rachael Chong, this special series of interviews explores the issue of gun violence in the United States and highlights some of the most innovative entrepreneurs and cross-sector initiatives tackling the problem. ssireview.org/gun_control

Prizes are seldom large and always uncertain, feedback is sketchy, and the winners aren’t always the most talented participants. But by and large [prizes work] to generate wealth and value, so rather than throw the baby out with the bathwater, the sensible thing to do is tinker just with what could be better.”

—Daniel Goldberg, District Management Council

By Peter Murray

The FuTure oF healTh care acceSS

By John A. MacDonald, Anita M. McGahan, & Will Mitchell

When Good IS noT Good enouGh

By Bill Shore, Darell Hammond, & Amy Celep

WInTer 2014 Volume 12, number 1

Inside the

Buy One Give One Model

By Christopher Marquis & andrew park

Fall 2013 | Vol. 11, No. 4

It wastes huge amounts of time. …

And it’s exploitive. For social sector organizations, money is the oxygen they need to stay alive, so leaders have to chase prizes just like they do other, more sensible sources of funding. Some in the industry justify this as a useful learning process. It’s not. Few competitions (with some notable exceptions) provide even the most rudimentary feedback.

Too many of these contests and prizes seem like they are more about the givers than the getters anyway.”

The SecreT oF Scale

When Can Impact Investing Create Real Impact? | When Good Is Not Good Enough | The Secret of Scale | The Future of Health Care Access

The giving season is upon us, and Stanford Social Innovation Review, in partnership with The Bridgespan Group, has created an eightweek series of voices from the vanguard of giving. Leading philanthropists and foundation executives—Jean Case, Mario Marino, Marc Benioff, Helen and Swanee Hunt, and many others—share how they are adapting their strategies, aiming for results, and measuring their impact to learn and improve. We hope you’ll join the conversation. ssireview.org/effective_philanthropy

More Harm Than Good?

Stanford Social Innovation Review

SSIR x Bridgespan: Giving That Gets Results

MAGAZINE EXTRAS

Inside-Out Innovation Visit SSIR Online to learn more about “inscaping,” the organizational practice that Warren Nilsson and Tana Paddock describe in their article, “Social Innovation From the Inside Out,” on p. 46 of this issue.

■ Watch highlights from a video presentation

by Nilsson ■ Explore the details of inscaping by engaging in a self-guided practice session ■ Read an account of one group’s experience using the self-guided exercise ■ Discover Zenith Cleaners, a Montreal-based social enterprise that uses inscaping to drive organizational innovation Access these extras online. ssireview.org/inscaping

Most [contests] do not meet the test of a net benefit to society. ... The contests that work best are the ones that are clear that their goal is educational (the business plan competition), investment (the Skoll Award) or encouragement (focused on encouraging promising leaders).”

—Jim Fructerman, Benetech

Follow SSIR

Read more comments online, as well as responses from One Acre Fund’s Andrew Youn, Knight Foundation’s Mayur Patel, USAID’s Alex Dehgan, and the World Bank’s Aleem Walji. ssireview.org/dump_the_prizes

View an eBook of this issue online or download a complete PDF.

5

6

Stanford Social Innovation Review / Winter 2014

SSIR ONLINE

Paul Brest and Kelly Born’s “outright rejection of public market equities as lacking any impact potentiality seems harsh, if not specious.”

—David Wolf in his comment to “When Can Impact Investing Create Real Impact?”

COMMUNITY

The Impact Debate The inaugural edition of our Up for Debate feature sparked just the sort of spirited discussion we’d hoped for (“When Can Impact Investing Create Real Impact?” SSIR, vol. 11, no. 4, p. 22). In their article, Paul Brest and Kelly Born attempt to clarify the nature and purpose of impact investing. At SSIR Online, Kevin Jones takes issue with how the authors frame the matter. “I don’t believe impact investors fall into two categories,” writes Jones, a cofounder of Good Capital. The authors’ “binary focus” will lead people “to misperceive both risk and opportunity.” Brest and Born reply that they agree with Jones, at least in part: “Any individual investor can have a mixed portfolio of

concessionary and non-concessionary investments. … The distinction we are hoping to make is at the level of the individual investment, not the investor.” Another point of contention is the kinds of investment vehicles presented by Brest and Born.

The authors’ “outright rejection of public market equities as lacking any impact potentiality seems harsh, if not specious,” writes David Wolf, managing principal of Baydush Simon Weaver, an independent wealth advisory firm. “[They] ignore or dismiss the potential of shareholder activism.”

Brest and Born respond by noting that shareholder activism lies outside the scope of the article. “We were focusing on the operation of markets, pure and simple.” But they also thank Wolf for his comment: “You’ve given us an idea for the sequel.”

To Sponsor or Not to Sponsor In a recent article, we asked whether child sponsorship programs do much good (“Sponsoring Hope,” SSIR, vol. 11, no. 4, p. 5). According to one study, the answer is yes—least in some cases. But at SSIR Online, Jennifer Lentfer, a senior writer at Oxfam America, raises the idea that these

programs might do harm. She cites several “ethical issues that can occur within child sponsoship schemes,” including the “potential to disrupt community cohesion and create local inequalities” and “the psychological effects of being an aid recipient.” Tania DoCarmo, operations director at Chab Dai International, is also concerned about “the long-term impact of singling out children in this way and the potential for exploitation.” One reader offers a more approving view of the model.

“I can attest to the effectiveness of a sponsorship program,” writes Wayne F. Hess, founder of La Pedrera School Project. He reports that when he launched that project in a Guatemalan village in 2004, “no child made it past the fourth grade.”

Today, the school in that village has produced 22 high school graduates, and “one young lady graduated from university as a nurse.”

BOOKS

In his new book, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, urban planner and technology forecaster Anthony Townsend investigates the historic collision of two global trends: rapid urbanization and the spread of ubiquitous computing.

Read an excerpt from this book and other recent titles, and browse book reviews. ssireview.org/books

Beyond “Good Enough” What happens when you add thinking big to doing good? Bill Shore, Darell Hammond, and Amy Celep posed that question in a feature story that generated a flurry of social media activity (“When Good Is Not Good Enough,” SSIR, vol. 11, no. 4, p. 40). Ned Breslin, CEO of Water for People, writes in a post on his Tumblr site that he “immediately tweeted that this was the best article I had read all year.” Breslin explains: “Organizations that have the courage to shoot for big outcomes … are the ones to watch.” Some readers mention particular challenges that organizations will face as they try to go big. “So many things are beyond your control,” writes Dan Owens, reference librarian at the Foundation Center, at SSIR Online. Directing his comment to co-author Bill Shore, whose group Share Our Strength aims to end childhood hunger by 2015, Owens brings up the risk that the US Congress will cut funding for food assistance programs: “How do you deal with that?” To which Shore replies, “You are absolutely right. … On the other hand, one of the pathologies we observed is the temptation to always point the finger elsewhere.”

PODCASTS

Embracing Your Inner Punk Rocker Ned Breslin, CEO of Water for People, talks about how punk rock has inspired him and shaped his perspective on social change. Breslin argues that the story arc of punk and its relentless push for change offers important insights into how social entrepreneurs operate everywhere, regardless of their own musical taste.

Listen in and browse SSIR’s archive of more than 1,000 podcasts on topics ranging from environment to corporate social responsibility. ssireview.org/podcasts

4 1 0 IO 2 .

O 5 N B 2 O A 3 NT 2 K .

N NS 03 I A H N IO T A S U ES S O Y LS T A RA H W NE GE UT

N IO SS SE .

AY N 4 GE .25.1 TTR RG A .O 3 R 0 N E BE ANG CH

N IO SS SE .

N 4 GE .25.1 N Z 03 RIA GUE N O A I RI N D S D S RO YMA L SE N. 4 MA HE CIA FOR TS GE .25.1 HAR SO DIA OFI 03 U S L N T ME NPR O I R I R CIA FO TS S S I NO E S SO IA D ROF .S 4 LE I E N M NP GE .25.1 YN M NO 03 ROL HE N CA VE T EN SIO S R SA ILD SE R N. 4 TE CH GE .25.1 AN D E K 3 0 TH RK T N BE TWO OFI SIO ES NE NPR .S 4 N NO GE .24.1 Y SK GE 03 N N N I N IO JO SCH HA SS R DU HEC SE T HE N. 14 C BE E G .24. LIS E 3 0 NY G N IO TO INK LTIN SS S U H SE IAK T ONS TION .

N N 4 Z C LU GE .23.1 WO O , S 03 EVE -IO ST SION FU PLE AP

Take part in the largest conference devoted to charitable fundraising, the AFP International Conference on Fundraising.

We’ve got everything your fundraising soul needs: • • • • • •

interactive presentations and engaging educational sessions; hands-on “how to” demonstrations on increasing annual fund revenue; insights from legends in the field on building (and keeping) donor relationships; case studies for annual giving and major donor solicitations (take notes!); latest innovations and techniques in social media, online fundraising, and more; Plus... ...hot topic of yes, you guessed it, next generation of donors and fundraisers!

Advanced Registration ends January 17, 2014 Register today at afpnet.org/shiftSSIR presented by:

Association of Fundraising Professionals 4300 Wilson Blvd, Suite 300, Arlington, VA 22203 703-684-0410 | 800-666-3863

Stanford Social Innovation Review / Winter 2014

! CHECK IT OUT: The first Librii branch, set to open in 2014, will serve residents of Accra, Ghana.

New approaches to social change / By Suzie Boss

studies at the Rice University School of Architecture. “I asked myself: What would it mean to undertake another Carnegiescale project? Where would those libraries go? Who would they benefit? What would they look like?” he recalls.

Dewane, an American who lives in Washington, DC, had the chance to think through those questions when he participated in an online game called

their napkin-sketch concept— a plan to build revenue-generating, Internet-enabled libraries across Africa—to the prototype stage. The World Bank Institute selected Librii as one of a handful of Evoke-inspired ideas that would receive seed funding and mentoring support. “This is a fantastic example of what we hoped would emerge from the game,” says Robert Hawkins, senior education specialist for the World Bank.

Supporters, including Librarians Without Borders and Architecture for Humanity,

are you going to do with it?”

Dewane explains.

People in the development sector are watching for lessons to emerge from Librii. “When this concept hits the ground, it will adapt and change,” says Hawkins. “There’s a lot to learn here. Librii is going to be not just a source of information, but a space to gather people who will create new things together.”

The first Librii branch will serve residents of the Osu area in Accra. Once that facility is operational, the next step will be to open branches in other parts

Evoke. Developed by the World Bank Institute, the game immersed players from around the world in solving serious challenges from the not-so-distant future—a water shortage, say, or a pandemic. (See “Game Changers of the World, Unite,” in the summer 2010 issue of SSIR.) The digital divide was exactly the kind of problem that Evoke was intended to tackle.

In Africa, for instance, only 3 percent of the population has broadband Internet access. By the time Evoke ended its run in late 2010, Dewane and a team of colleagues were ready to move

have rallied around the Librii concept. Gensler, the architectural firm where Dewane works, contributed schematic drawings for the shipping container prototype.

Equally important are the 650 backers who provided $52,000 in funding through a Kickstarter campaign. To send a message to Librii patrons, the design of each facility will feature a display of donors’ names. “It’s a way to say: This building is here because all these people around the world want you to participate in the global conversation. Now what

of that city. “We want these branches to function at the level of neighborhoods,” Dewane says. Each branch will likely have “different tools of production” that reflect local preferences, he says. One might have a music recording system, another a green screen for making videos, another a 3-D printer.

In that way, Librii branches will not only embody the public library ideal, but also go a step further. “They’re really laboratories,” Dewane says. “We want to provide the best tools and then just get out of the way and see what happens.” n

Technology & Design

Libraries as Laboratories y the time Andrew Carnegie completed his signature philanthropic effort in the early 20th century, more than 2,500 libraries had been built in the distinctive Carnegie style—graceful architecture outside, open stacks (where patrons could easily browse book collections) inside.

A century later, a library designed for the digital age is about to open in Accra, Ghana. And Carnegie wouldn’t recognize it.

Called Librii, it challenges nearly every aspect of the traditional library. The first Librii branch, scheduled to be ready in early 2014, will use repurposed shipping containers in its construction. It won’t even have books on its shelves; indeed, it won’t have many shelves. Instead, users will generate content on their own using printon-demand technology and multimedia tools.

Librii will charge for some services, such as Internet access and skills training, while providing other resources for free. Generating a revenue stream means that each Librii franchise will operate more like a social enterprise than like a traditional public library.

Locally hired staff members will include both an entrepreneur to run the business and a professional librarian to curate content. (The umbrella organization for Librii has applied for nonprofit status.)

David Dewane, founder and CEO of Librii, came up with the idea as he was finishing graduate

B

artist’s rendering courtesy of Librii

8

Stanford Social Innovation Review / Winter 2014

suzie boss is a Portland, Ore.-based journalist who writes about social change and education. She is the author of Bringing Innovation to School (2012) and contributes frequently to Edutopia.

Human Rights

Blurred Images, Better Futures he problem of “missing girls” persists in parts of the world where families prize sons over daughters. Technology, in many cases, worsens the problem. Widely available ultrasound equipment, which makes it easy to detect the sex of a fetus, allows people to circumvent legal bans on sex-selective abortion.

“Doctors or technicians can make hints without saying a word,” says Sonya Davey, CEO of Ultrasafe Ultrasound.

Her organization—a startup founded by an international team of college students—offers a technical solution to a problem that technology has exacerbated. Software developed by Ultrasafe Ultrasound blurs the part of a live ultrasound image that would otherwise show the genitalia of a fetus. In that way, the product prevents users from offering even a hint about ­fetal sex. Judges for the 2013 Dell Social Innovation Challenge named it a Top 10 Outstanding Innovation Project.

Field-testing is the next step for Ultrasafe Ultrasound. Davey is seeking an NGO partner to test the software in rural areas of India. She aims to complete that process in 2014 and then to bring the product to market by 2015. Potential customers include doctors, hospital chains, and manufacturers of ultrasound equipment. Each of those groups, Davey believes, has an incentive to buy and install the

artist’s rendering courtesy of Librii

T

software in order to limit the risk of criminal prosecution.

In some countries, including India, it’s illegal to disclose the sex of a fetus.

Davey is careful not to blame equipment makers for the missing-girls phenomenon. The chief purpose of ultrasound technology, after all, is to enable a wide range of beneficial health screenings.

“This is not the manufacturers’ fault,” Davey says. In fact, she sees an opportunity for companies that sell ultrasound equipment to become part of a solution to the problem of sexselective abortion.

General Electric took steps in that direction in 2008, when it launched a campaign that aimed (in its words) to champion “the rights of the girl child.” The company now labels each ultrasound machine sold in India with a warning sticker that explains the law against fetal sex determination.

What if manufacturers decide to develop software solutions that compete with Ultrasafe Ultrasound? Davey would see that move as a win for her project. “We want to show that it’s viable and that this kind of product will decrease the rate of feticide,” she says. “We want manufacturers to move quickly.”

Davey, a senior at the University of Pennsylvania, acknowledges that software alone won’t change entrenched attitudes about the value of

girls. “If we sit around waiting for society to change, it may take another hundred years,” she says. Meanwhile, gender imbalance is worsening. The law that bars sex-selective abortion in India has been in place since 1994. Even so, census figures show little progress.

In 2011, for every 1,000 male births in that country, there were 914 female births—down from 962 in 1981. (The data for China are similarly skewed.)

“We need to think seriously about what the world will be 20 or 30 years from now if vigorous steps are not taken to stop selective elimination of females from Indian society,” says Manisha Sharma, a visiting assistant professor of gender and women’s studies at Virginia Polytechnic Institute and State University.

Sex-selective abortion remains a taboo subject. One day, a woman will be visibly pregnant; then, suddenly, she’s not. “People aren’t comfortable talking about it,” Sharma says.

“It’s a mute conversation.”

That kind of silence makes it hard to sort through the cultural complexities of the issue.

To understand the issue better, Sharma and Davey teamed up to interview a cross-section of Indians, ranging from government officials and health activists to village women and street sweepers.

Sharma, to her surprise, found that few interview subjects seemed to appreciate the role that misuse of ultrasound equipment plays in the missing-girls phenomenon.

Outside India, meanwhile, other challenges loom. “As soon as you mention the word ‘abortion’ in the West, it becomes a classic abortion debate,” Sharma says. So she tries to avoid that word, and instead refers to “selective elimination of female fetuses” or “sex selection,” for example. “We can’t alienate any part of the population that might be important in coming to a solution,” she says. n

Ur b a n D e v e l o p m e n t

Helping Cities Remain Strong n the wake of a natural disaster like Hurricane Sandy or a terrorist incident like the Boston Marathon bombing, news reports invariably feature brave citizens who pull together to face adversity.

Heartwarming though they are, such tales don’t tell the full story of what it takes for a city to recover from a major disruption.

Resilience on a citywide

I

scale requires “complex systems to be able to quickly return to normal and to build back,” says Neill Coleman, vice president of global communication at the Rockefeller Foundation.

“You need more than a sense of ‘We’re going to overcome this.’”

What helps some cities bounce back while others struggle for years after disaster strikes? That’s one

9

Stanford Social Innovation Review / Winter 2014

% GATHER HERE: question that the Rockefeller Foundation aims to answer over the course of a three-year initiative called the 100 Resilient Cities Centennial Challenge. The foundation will invest $100 million to sponsor resilience-enhancing efforts by selected cities. (It will name the first round of award cities in December 2013.) Each city, for example, will receive support to create a new position: chief resilience officer (CRO).

Resilient cities, Coleman says, are able to look forward “rather than trying to prevent the last disaster.” Early lessons about urban resilience—drawn from fields as diverse as disaster preparedness, public health, and social psychology—point to the importance of factors such as flexibility and resourcefulness.

Even in cities with a detailed disaster-preparedness plan,

“there will be failure,” says Craig Applegath, a Toronto-based architect and a pioneer in this emerging discipline. A truly resilient city, he suggests, will have a ready response to this crucial question: What kinds of operational strategies are in place to help a city prepare for that failure and recover quickly?

Bouncing back isn’t always possible. Resilience, in many cases, “is actually about adapting to a new situation—a new normal,” says Douglas Ahlers, director of the Harvard Kennedy School Broadmoor Project, a redevelopment effort that focuses on a New Orleans neighborhood that was devastated

An EvacuSpot sculpture marks an emergency pickup point in New Orleans.

by Hurricane Katrina.

Ahlers suggests thinking of resilience in terms of “layers of protection or strength.”

Like slices in a block of Swiss cheese, “each layer has holes

in it,” he explains.

“If the disturbance to the system hits a solid part of the resilience layer, it stops. But if it hits a hole, it advances to the next slice.” If the prevention layer fails, for example, then the crisis mitigation layer and the emergency response layer become critical.

“Resilience is about closing the holes,” Ahlers says.

The CRO role will require a generalist who can navigate all the layers and mobilize all the players. “Whoever gets the job will need to be, first, a

insight + foresight Philanthropy and the Social Economy:

BLUEPRINT 2014 The Annual Industry Forecast

by Lucy Bernholz

Philanthropy and the Social Economy:

BLUEPRINT 2014 The “must read” annual forecast written specifically for donors, impact investors, philanthropy advisors and social enterprise managers.

This report is a perfect end-of-year reflection that does double-duty as a planning tool for the year ahead.

Philanthropy and the Social Economy: Blueprint 2014 © Lucy Bernholz, 2013. All rights reserved.

To download your free copy: www.grantcraft.org/blueprint14 Available December 2013

#blueprint14

Lucy Bernholz is a Visiting Scholar at the Stanford University Center on Philanthropy and Civil Society. She was named a “philanthropy game changer“ by The Huffington Post. Fast Company Magazine chose her blog philanthropy2173.com as Best-in-Class.

Partners in publishing the Blueprint include Grantcraft, a joint project of the Foundation Center and the European Foundation Centre; Stanford University; and the Stanford Social Innovation Review.

PRACTICAL WISDOM FOR FUNDERS

Photograph by James shaw, courtesy of evacuteer.org

10

Photograph by James shaw, courtesy of evacuteer.org

Stanford Social Innovation Review / Winter 2014

diplomat,” says Applegath. In addition, he notes, the job involves the “responsibility of tying together many different silos of expertise”—from engineering to economics.

Each city’s CRO will serve as point person for resilience planning and as a coordinator of cross-sector activity. “We know this person will need to be a networker, a connector,” Coleman says. “We also expect them to play the role of an evangelist for resilience thinking.”

The good news is that city resilience appears to be a learnable skill. That was the message sent by Judith Rodin, president of the Rockefeller Foundation, at a forum in June that her organization cohosted with PopTech and the Brooklyn Academy of Music. She associated resilience with “what we build in those moments between catastrophe

and the next big disruption.”

Examples range from San Francisco’s adoption of tougher building codes (to ensure that new structures can withstand future earthquakes) to an initiative in New Orleans to identify and highlight “EvacuSpots”— places where people can meet to exit the city safely in the event of an oncoming storm.

Cities chosen for the Resilient Cities project will gain access to a network of people with whom they can share strategies, along with help in figuring out how to pay for improvements. “Many city leaders realize that they should be making an investment now to save millions [of dollars] in the future,” Coleman says.

“But it’s not easy to find those up-front funds. We hope to connect cities with innovative finance solutions.” n

F u n dr a i s i n g

The Science of Donor Connection ay that you’re the leader of a mission-driven organization that’s poised to scale up. You have compelling evidence to show that your program gets results and a wellrehearsed elevator pitch. All you need is a chance to get in front of the right people.

You could spend hours poring over Facebook pages or Googling potential donors. Or you could take a cue from Andrew Bernstein, major gifts director for the YMCA of Greater New York. He goes right to Relationship Science, or RelSci. It’s an online platform that launched in early 2013. RelSci, Bernstein says,

S

is “the first tool I use when I’m researching an individual.”

Designed to streamline the kind of networking that’s essential to business development, RelSci shows at a glance the shortest distance between you and the people you most want to reach. Although the tool has obvious applications for dealmakers in the for-profit world— bankers and lawyers were among its early adopters— RelSci also aims to meet the needs of the nonprofit sector.

“The nonprofit segment is important to us,” says Josh Mait, chief marketing officer of Relationship Science, the startup that operates RelSci. The

ARE YOU DRIVING MEANINGFUL CHANGE IN YOUR NONPROFIT?

From hunger relief to energy to healthcare, nonprofit organizations need confident leadership to tackle increasingly complex missions. Our programs are designed to help you develop the strategies that put you and your organization on a firm foundation for the future.

SOCIAL ENTERPRISE PROGRAMS 61986-11_HBSSEP001 PLD Social Enterprise Ad 1

HARVARD

Email sep@hbs.edu or visit www.exed.hbs.edu/pgm/seissir/

PUBLICATION SIZE: Half Page Stanford Social Innovation Review

LIVE: –

TRIM: 7.125 x 4.75

BLEED: –

7/12/11 8:18 PM

11

12

Stanford Social Innovation Review / Winter 2014

company has more than 200 clients, and among them are nonprofits such as the Nature Conservancy, World Economic Forum, and Yale University.

Fundraising for organizations like the YMCA would be easier “if we had access to those who might support our efforts,” Bernstein says. “Relationship Science helps to bridge the gap between those already in our network and those we hope will learn about our work.” Assistance with board recruitment is another common use of the platform.

Clients pay an annual fee of about $3,000. In exchange, they get access to a proprietary database that covers more than 2.5 million prominent people in the private and public sectors. A staff of 500 people scan publicly available information to build a dossier on each VIP.

“Which causes do they support?

Which boards do they sit on?

We want to help illuminate the full person, beyond the résumé,” Mait says. Individuals cannot add themselves to RelSci. Nor do they get a tip if someone is checking out their profile. Those features, among others, set this tool apart from social networks like Facebook or LinkedIn. RelSci uses a six-degreesof-separation algorithm to map relationships. The goal is to ensure that “no call is ever cold,” Mait says. “Think of this as a warmness tool.” When clients load data from their own list of contacts into the RelSci database, they find out how many handshakes removed they are from targeted VIPs. The tool also rates the likely strength of those connections. It does not, however, provide VIP contact information. Instead, users

must establish contact on their own—typically by asking a mutual acquaintance to make a personal introduction. “There’s work to be done after you’ve used this tool,” Mait notes.

That emphasis on the use of personal introductions is a selling point for RelSci, at least in some quarters. “Many of our initial investors told us that this is how they’ve been doing business throughout their careers,” Mait says. Neal Goldman, founder of Relationship Science, previously started Capital IQ, a financial database service that he sold to McGraw-Hill. He launched RelSci with $60 million from high-profile investors, including Henry Kravis of KKR & Co. and Andrew Tisch, cochairman of Loews Corp., along with corporate backers such as the Hearst Corp. A postlaunch funding round, held

Giving that Gets

last June, brought in an additional $30 million from investors such as Salesforce.com.

RelSci provides “exactly the kind of information you need to make intelligent decisions about how to reach out to someone for the first time,” says Nancy Sims, president of the Robert Toigo Foundation, an organization that promotes workforce diversity among finance professionals. Recently, while test-driving RelSci on a new initiative, she entered a wish list of new supporters into the platform. “We were amazed by how many people in our organization had first- or second-degree connections to the very people we most hoped to reach,” she says.

Sue Toigo, founder of the Toigo Foundation, was quick to appreciate the benefits of the tool, according to Sims: “She calls this her ‘magic book.’” n

Learn from voices on the vanguard of philanthropy in an online offering of blogs, Q&A’s, webinars, and videos.

Created by Stanford Social Innovation Review in partnership with The Bridgespan Group, this new online resource features leading philanthropists and foundation executives sharing how they are adapting their strategies, aiming for results, and measuring their impact to learn and improve.

The series’ contributors include innovative philanthropists such as Jean Case, Marc Benioff, and Mario Marino, as well as leaders at major funders such as the Gordon and Betty Moore Foundation, Omidyar Network, Edna McConnell Clark Foundation, and Google Giving.

Webinar topics include adaptive philanthropy and measuring for impact.

IN PARTNERSHIP WITH

www.ssireview.org/effective_philanthropy SSIR GIVING HALFPG.indd 1

10/31/13 9:32 AM

Stanford Social Innovation Review / Winter 2014

! WEARING IT WELL: Volunteer Gayle Philipp helps a Fitted for Work client to update her wardrobe.

Profiles of innovative work

Dressed to Thrive Fitted for Work gives women what they need—from a new look to a new skill set—to advance in their careers.

By Corey Binns

Photograph courtesy of fitted for work

W

hen Karen Diegan arrived at a clothing boutique in Melbourne, Australia, she was tired from her hour-long train ride. She was also a little nervous. Diegan, a single mom, had spent three years looking for work as a receptionist. She needed a new summer wardrobe to use on interviews, but she couldn’t afford to buy clothes. Two sales associates quickly put her at ease and showed her around the store. Sunlight splashed into the boutique, huge mirrors hung on its pink walls, and jewelry filled its shelves. The only thing missing was a cash register.

The boutique is operated by Fitted for Work (FFW), a career services organization for women that helps outfit its clients in more ways than one. Some of the women who come to FFW are escaping domestic violence or homelessness. Others are in poor health, or are recently widowed or divorced.

Many are single mothers. But all of them are eager to find work.

With help and encouragement from the sales associates, Diegan picked out some summer shirts, a pair of black dress pants, and a black handbag. She paid nothing. She also took advantage of the free job-training program that FFW offers, and before long she landed a job as a receptionist—at FFW. “I love working here,” she says. “I feel I have a sense of purpose now and have been able to utilize my computer skills and be part of a wonderful team.”

FFW offers an array of services to women like Diegan. In the boutique, volunteers not only provide clients with interview clothing, but also coach them on how to succeed in an interview. The organization provides more extensive employment training services

through its Transition to Work program.

To generate income, FFW also operates a retail business that sells high-quality second-hand clothing.

Founded in 2005, FFW has served more than 12,500 Australian women in its brief history. Today, 75 percent of the women who receive wardrobe support and interview coaching from FFW, and 74 percent of the women who enroll in Transition to Work, find employment within three months of completing one of those programs. In comparison, according to Job Services Australia, only about 48 percent of women who rely on Australian federal job agencies are able to find work within a three-month period.

A commitment to serving women, and only women, lies at the core of FFW’s mission. “When you know that women in Australia earn just 83 cents to the male dollar, and are two and a half times more likely to

live in poverty in their old age than men, it becomes apparent that women need support to participate, and participate equally, in the workforce,” says Amanda Carlile, national client services manager at FFW. Nationwide, 40 percent of women who are 15 years of age and older aren’t in the labor force. In contrast, 28 percent of men fall into that category.

FFW’s emphasis on equipping women for the work world has far-reaching consequences. In Australia, 22 percent of families with children have only one parent, and women head roughly 90 percent of those families, according to the Australian Bureau of Statistics. “If you assist women, you also assist the community,” says Jane Hunt, CEO of FFW. “By being gender specific, we knew we’d make a better impact.”

A Fitting Approach

FFW takes inspiration from an organization called Bottomless Closet. Based in New York City, Bottomless Closet provides women with donated business attire, both used and new, and with professional development services. Like that organization, FFW follows a model that’s tailored to fit the distinctive needs of its client base.

13

Stanford Social Innovation Review / Winter 2014

COREY BINNS is a journalist based in Northern California.

She writes about science, health, and social change for NBCNews.com, NPR’s Science Friday, and Popular Science.

Preparing women to enter the workforce requires care and sophistication. It’s not enough just to offer them interviewing tips or to help them spruce up their résumé.

It’s also important to help build their selfesteem. “Women will struggle if they don’t feel good about themselves,” Hunt says. For women who attend an FFW fitting service, the significance of the clothing and makeup that they receive is far from superficial.

According to FFW, 98 percent of clients feel a boost in confidence after their fitting.

When an FFW client puts on a suit and looks in the mirror, she sees a new image of who she wants to be. “We have had clients who express a wish to wear the clothes home from a fitting,” says Carlile. These women want “to stand at the [train] station with other women who are dressed for work and feel connected,” she explains. “For many of the women we help, this is the first time that they have taken time out for themselves.”

FFW’s programs have evolved over the years. The basic dressing and interview coaching service was popular from the start. But FFW leaders discovered that many women needed a higher level of assistance than that service could give them.

In response, Hunt and her team developed Transition to Work, a program that pairs clients with mentors who work with them to hone skills such as résumé writing and money management. Clients in that program also meet with human resources professionals and gain experience by spending up to six months in a workplace. In some cases, FFW adapts the program to serve particular groups, including Aboriginal women, women with disabilities, and single mothers.

Further research revealed that many clients find it difficult to maintain employment for more than two years. To serve those clients better, FFW has developed a new program called Staying Employed. Launched this past August, Staying Employed focuses on providing long-term career development.

Over the course of a year, 50 clients will consult with volunteer mentors, attend workshops on topics that range from building vocational skills to working in teams,

and develop career plans in conjunction with their employers.

There’s no shortage of demand for these services. More than 300 organizations routinely refer women to FFW. What’s more, 33 percent of clients who come to FFW have already been job-hunting for a year or longer.

“Obviously, there’s a big need,” says Lisa Waldron, senior advisor at the Westpac Foundation, a primary funder of FFW. (Westpac is one of the largest banks in Australia.) Waldron argues that FFW is especially well suited to serve this need. “A similar program run through the government would be a more expensive model and wouldn’t be able to galvanize volunteers,” she says. “It certainly wouldn’t have a social enterprise to fund itself.”

That enterprise is Dear Gladys, FFW’s high-end retail store. Dear Gladys sells vintage and modern clothing, accessories, and home goods, both through a storefront in Melbourne and through its website. Over the past three years, the boutique has brought in $280,000, and today it accounts for 20 percent of FFW’s total income. The remainder comes from foundation grants and private donations. In addition, FFW receives about $600,000 worth of clothing annually from individual donors, and it receives in-kind donations from companies as well. Recently, for instance, the Heat Group gave FFW $60,000 worth of beauty products. (All currency figures here refer to Australian dollars.)

A Network of Support

FFW aims to help 5,000 women find work annually by 2015. To help the organization reach that size, Hunt and her colleagues rely on a network of 120 corporations that support FFW financially and with volunteer labor. Frequently, FFW’s relationship with a company starts when a few women who work there decide to run a clothing drive.

The experience of contributing to a drive then inspires coworkers to learn more about FFW and its volunteer opportunities. “It just builds,” says Hunt. “Once a company sees that their business won’t be disrupted, they

see the value in supporting us.”

Take the example of Westpac. A women’s banking group at Westpac raised $100,000 for FFW. The bank has also run clothing drives and held black-tie events with private clients on behalf of the organization. “It’s so easy to support them on an ongoing basis, because they’ve infiltrated other aspects of Westpac,” Waldron says.

Every year, about 250 volunteers log a total of 12,000 hours at FFW. Managing those volunteers presents a sizable challenge, but Hunt has a system that works. Each new volunteer sits down with a staff member to discuss his or her skills and interests. Staff members then match the volunteer to a specific organizational need. “If you find out what motivates a volunteer first, you can set expectations,” says Hunt. “Volunteers have a psychological contract—some want a lot of recognition for their work—and you can get in a lot of hot water if you don’t give them what they expect.”

Leigh Powell went through the organization’s four-week mentor training program, and since then he has mentored two clients.

He notes that the organization puts a great deal of faith in its volunteers’ ability to manage the mentoring process. “As demand grows, Fitted for Work will be challenged to monitor the progress of many more mentor and mentee assignments,” he says.

For now, the organization runs smoothly with support from its network of volunteers.

“Every Wednesday, I come into work, and it’s the highlight of my week,” says Gayle Philipp, a volunteer who has been outfitting women at the FFW boutique for three years. “We love what we do, helping women on their journey to get back to work. This is about them, not us.”

To do their job well, volunteers like Philipp need to display both skill and compassion. They must take into account not only each client’s body shape and color preferences, but also her career field and her professional aspirations. Above all, they must treat clients with respect. “We want them to walk out feeling like the most important people in the world,” Hunt says. n

Photograph courtesy of the dispensary of hope

14

Stanford Social Innovation Review / Winter 2014

! SAMPLE CASE: A nurse’s assistant in a North Carolina medical office prepares a Hope box for shipment.

An Rx for Surplus Meds The Dispensary of Hope is building a system for distributing unused pharmaceuticals to patients who need them.

By Greg Beato

Photograph courtesy of the dispensary of hope

P

icture a bright red plastic box. It hardly looks like a piece of lifechanging health-care equipment. And yet this humblelooking container, roughly the size of a banker’s box, is the core component of an ingenious operation that enables a growing number of people to treat or manage a wide range of conditions and diseases.

The architect of the system is the Dispensary of Hope, a 10-year-old social enterprise based in Nashville. It functions much like a food bank, except that the bounty it collects and distributes consists of unopened packages of prescription medication. Every month, the organization sends out “Hope boxes” to physician practices that participate in the system. Each box comes with a pre-paid UPS shipping label and a set of zip ties to close it securely. “We have volunteers who call up the physicians and remind them that it’s time

to donate,” says Julie Granillo, director of donor outreach for the Dispensary of Hope.

“All their staff has to do is go into the sample closet, pull any medications that have reached the six-month mark, throw the samples in the box, and sign a shipping manifest.”

The pharmaceutical industry distributes an immense quantity of sample drugs to US doctors. (As of 2004, according to one study, the total annual value of pharmaceutical samples came to $16.4 billion.) Many of those products simply expire as they sit on shelves in physicians’ offices. A big part of the Dispensary of Hope model, therefore, involves encouraging physicians to donate samples that are six months away from hitting their expiration date. (The industry term for such drugs is “short-dated.”)

After filling a Hope box with samples, staff members in a physician’s office send it on to the Dispensary of Hope’s 10,000-square-foot warehouse in Nashville. Along with short-dated products that come in from physician practices, the

Dispensary of Hope receives donations from makers of generic drugs. And it all adds up.

In 2013, according to Granillo, the organization was on track to receive $14 million in donated samples from physicians and $49 million in surplus pharmaceuticals from generic manufacturers. Measured by volume, those donations are the equivalent of nearly 1.5 million 30-day prescriptions.

At the warehouse, interns from a local pharmacy school sort the incoming medications, and people from the Dispensary of Hope log data about each medication into the organization’s online inventory system.

“When a physician sends us short-dated samples, it takes two days to get them to us via UPS,” says Chris Palombo, CEO of the Dispensary of Hope. “We process them in five days at our facility, and it takes another two days to get them out to one of our access sites. So in less than ten days, we can get that medication back out there, where it will be used to treat patients.”

But the goal here isn’t just to allocate surplus products on an ad hoc or one-off basis.

What distinguishes the Dispensary of Hope from most other organizations of its kind is that it has created a system—a comprehensive, scalable, and sustainable way to collect and redistribute soon-to-expire pharmaceuticals. Because it aggregates medications from a continuously expanding network of donors, the Dispensary of Hope can predictably offer a wide range of medications. The organization also pursues an earned-income model that results in other advantages. Nonprofit clinics and pharmacies pay a fee to join the Dispensary of Hope system, and that revenue gives the organization the resources that it needs to provide a reliable service—week after week, year after year. “A lot of nonprofits live and die by the grant,” says Granillo. “We really focus on being a sustainable supplier of medications for the clinics we work with.”

Logistics of Hope

The Dispensary of Hope grew out of the efforts of Bruce Wolf, a Nashville-based physician who organized people to collect pharmaceutical samples from local doctors

15

Stanford Social Innovation Review / Winter 2014

GREG BEATO is a contributing editor and columnist for Reason magazine. His work has appeared in The New York Times, The Washington Post, The Week, and more than 100 other publications worldwide.

for use at a free clinic where he volunteered.

Despite its humanitarian origins, though, the organization is first and foremost a “logistics company,” Granillo says. Palombo elaborates on that theme: “It’s not enough to expect people to donate because it’s the right thing to do. People are thrilled to donate, but we still have to create a system that makes it easier, less risky, and cheaper to work with us than to destroy the unused medicine.”

Each year, Palombo notes, an estimated $10 billion worth of surplus medication goes to waste. And that waste, he adds, represents an important opportunity: “Across the street from where it’s going into the garbage, you may have a free clinic where a patient’s quality of life is decreasing because he can’t get the right chemicals and dosages.”

For health care providers, meanwhile, expired medications create procedural headaches. Once it was standard practice to dump unused pharmaceuticals in the trash or to flush them down the toilet. Now, because of the environmental hazards associated with those methods of disposal, state and federal regulations require physician practices to incinerate many types of unused medication.

That works in the Dispensary of Hope’s favor: It isn’t cheap or easy to cremate a case of aging antibiotics. “Physician practice managers are telling us they destroy between $40,000 and $70,000 of medicine in a year,” says Palombo. “Between the staff time it takes for the inventory and de-logging process, and the destruction process itself, it can end up costing $10,000”—per year, per practice. The Dispensary of Hope offers a more economical way to deal with soon-to-expire medications.

It covers the cost of shipping medication to its warehouse, and it assumes responsibility for most of the paperwork.

To an increasing degree, the Dispensary of Hope obtains medications not only via Hope boxes, but also directly from pharmaceutical companies. “We have several generic manufacturers that are opening up their entire inventory to us, not just surplus,” says Granillo. Take the example of Mylan, a company that distributes generic medications in more than 140 countries. In

the past year, Mylan has contributed products to the Dispensary of Hope that have a total wholesale value of about $30 million.

Leaders at Mylan see the organization as a strategic ally. “Our mission is aligned with the Dispensary of Hope’s ongoing efforts to expand access to medicine through distribution to underserved communities,” says Tony Mauro, president of North American operations at Mylan.

The Dispensary of Hope offers the same kind of predictability and value to the distribution side of the equation as it does to the supply side. For decades, entities known as medical surplus recovery organizations (MSROs) have procured and distributed unused medical equipment and pharmaceuticals. Many MSROs essentially operate in an opportunistic fashion: When a hospital or a manufacturer has devices or drugs that it no longer wants, an MSRO will redirect that material to an appropriate recipient. Typically, MSROs allocate surplus material to organizations in countries where basic medical supplies are scarce. The Dispensary of Hope, by contrast, works with US-based health-care organizations and serves as a steady, comprehensive source for specific medications.

In short, it resembles a commercial pharmaceutical distributor.

A Network of Access

The Hope Dispensary of Greater Bridgeport is a joint project of two hospitals and several community health clinics located in and around Bridgeport, Conn. And, as its name suggests, its existence owes a great deal to the Dispensary of Hope. (The two organizations are separate, however.) The Hope Dispensary fills about 375 prescriptions per month, and it depends on the Dispensary of Hope to do so. Today, it gets up to 75 percent of its pharmaceutical inventory from that organization. “More and more medications are becoming available through the Dispensary of Hope,” says Christine Toni, dispensary coordinator for the Bridgeport organization.

In the United States, there are thousands of safety-net health care organizations— free clinics, community health centers,

nonprofit pharmacies, and the like. The Dispensary of Hope has built its distribution network around facilities of this kind, and it has done so very selectively. The network includes about 80 “access sites” in 16 states. “We do a lot of work to qualify the sites we work with, making sure they have the right processes and controls in place,” says Granillo. Each access site pays a flat fee of $7,500 per year to join the network.

In return, it receives unlimited access to the Dispensary of Hope’s inventory, which typically includes about 1,100 varieties and strengths of medication. Using the organization’s Web-based system, pharmacists at each access site place weekly orders to obtain the products that their patients need.

To finance its work, the Dispensary of Hope relies partly on grants and donor contributions. But it covers about 50 percent of its operating expenses through the fees that it collects from access sites. And as the organization adds more sites to its network—it recruits about three new ones per month—those fees will reach a level where they cover the bulk of its costs.

Increasing scale on the supply side is no less important for the Dispensary of Hope.

As the organization expands its donor network, it will be able to increase the quality of service that it provides to its access sites.

The potential for growth in this area is high.

Today, for example, the organization works with about 1,000 physician practices—yet there are more than 98,000 such practices in the United States.

Another growth opportunity for the organization may come with the rollout of the Affordable Care Act. Because the number of people with insurance will increase, pharmaceutical companies are likely to boost their production levels—and the volume of surplus medication will go up as a result.

Palombo, moreover, anticipates that between 20 million and 35 million people will remain uncovered by insurance, even after the new law goes fully into effect. “We know the surplus will be there. We know the need will be there. And at the end of the day, we’re going to be there, too,” he says. n

Photograph by jonathan kalan, courtesy of honey care africa

16

Stanford Social Innovation Review / Winter 2014

! KEEPING BUSY: Employees of Honey Care Africa tend to a beehive on a farm in Kenya.

Filling Out the Middle The Aspen Network of Development Entrepreneurs targets a “missing” segment in emerging economies.

By Brandon Keim

Photograph by jonathan kalan, courtesy of honey care africa

H

oney Care Africa, founded in 2000, was a classic earlymillennium story of social enterprise success. Its business plan—sell cost-subsidized beehives to farmers in Kenya, buy honey from them at fairtrade prices, and market the honey to upscale retailers—helped thousands of rural households. It gave farmers much-needed income and an alternative to practices that result in poaching and deforestation. The organization received an Equator Prize from the United Nations, plaudits from the World Bank, and funding from high-profile development agencies and foundations.

There was just one problem: Honey Care Africa couldn’t make ends meet. Without nonprofit support, it couldn’t stay in business. In 2010, the organization regrouped.

It brought on a new CEO and enlisted the services of Open Capital Advisors, a financial intermediary based in Nairobi. Open Capital, part of a new generation of impact investors, helped Honey Care Africa revise its model. Under its new plan, Honey Care reduced its reliance on farmers—most of whom didn’t actually like working with bees—and hired local technicians to manage the hives. Farmers would still receive income for keeping hives on their property, but the new division of labor would enable yields and revenues to rise.

Next, Honey Care needed to acquire working capital. Open Capital brought in the Grameen Foundation, the Lundin Foundation, and Root Capital, and it created an investment structure that minimized risk for those investors while allowing Honey Care to grow. Two critical factors united Open Capital and its investment partners: a belief that market-based

tools can promote social good—and membership in the Aspen Network of Development Entrepreneurs (ANDE).

ANDE, headquartered in Washington, DC, has chapters in six regions: Brazil, Central America and Mexico, East Africa, India, South Africa, and West Africa. It’s a hybrid entity that combines elements of a think tank with elements of a trade association. ANDE is not itself an impact investor. Rather, it helps people who work in that sector, and it puts particular emphasis on fostering the growth

of small and growing businesses, or SGBs. In development circles, SGBs are known as “the missing middle.” They tend to be overlooked by grassroots microfinance organizations and corporate lenders alike, and as a result they have limited access to both financial and social capital.

Many people in the development community believe that SGBs are critical to prosperity. They’re arguably more efficient at alleviating poverty than very small or very large businesses, they create high-wage jobs, and they promote innovation. Nourishing

the sector that finances SGBs is ANDE’s core mandate. “We’re not about impact investing per se,” says Randall Kempner, executive director of ANDE. “Our vision is, we work with the full scope of players relevant to building a vibrant ecosystem in an emerging market.” defining a sector

ANDE traces its roots to informal discussions that took place among people at several organizations—including Acumen, Root Capital, and the Grassroots Business Fund—that would become founding members of the network. For each of those organizations, SGBs represent one part of a broader portfolio; ANDE, by contrast, brings dedicated focus to that segment of the developing-world economy.

The network launched in 2009, with startup support from the Bill & Melinda Gates Foundation, the Rockefeller Foundation, and six other prominent funding institutions. ANDE had 32 founding members.

From that base, the network has swelled to encompass 170 member organizations that work in a total of roughly 150 countries. To date, according to ANDE’s 2013 impact report, member-managed funds have directly invested $1.7 billion in SGBs. In addition, member organizations have spent $400 million on services such as training and research.

17

Stanford Social Innovation Review / Winter 2014

BRANDON KEIM is a freelance science, environment, and technology journalist. In previous SSIR articles, he has written about green building, disaster relief, the global coffee trade, and government accountability.

Cumulatively, ANDE members have worked with about 60,000 SGBs. It’s an impressive trajectory. And although ANDE is able to leverage the reputation and the resources of its parent organization—the Aspen Institute, a high-profile think tank— its operations remain fairly lean. (It started with just 2 employees, and now has only 11.)

The network, in fact, owes much of its success to its core strategy: From the start, Kempner decided not to finance beneficiary companies directly.

Instead, ANDE focuses on helping member organizations in nonfinancial ways.

“We’re trying to support the intermediaries,” says Kempner. “I trust that they’re going to have impact.” Much of that support consists of bringing people together through conference calls, network conferences, and the like—simple but important activities that strengthen the social fabric of the SGB sector. Membership in ANDE, says Annie Roberts, a cofounder and partner at Open Capital, “helps us connect with people we might not have met otherwise and gives us a lot of credibility in the market.”

Events hosted by ANDE give leaders of SGBs a chance to expand their network.

Fernando Assad, founder of Vivenda, a Brazil-based startup that helps poor families improve their homes, notes that ANDE facilitated an introduction to Itaú, the country’s second-largest bank. And an invitation to participate in an upcoming social housing event organized by ANDE’s Brazil chapter, he says, is potentially even more valuable. It will give him a chance to meet government officials and leaders from a variety of companies in the housing industry.

For ANDE leaders, meanwhile, hosting events offers an opportunity to help shape what people are talking about. The network runs working groups on six issue areas— capacity development, legal affairs, metrics, policy, women’s entrepreneurship, and youth entrepreneurship—and regularly holds discussions around each of them. In a similar initiative, ANDE has undertaken sector-mapping projects in Brazil, Central America, East Africa, and Mexico. By compiling descriptive

lists of companies, foundations, and businesses in each region, the network provides SGBs and other players in this nascent field with a basic tool for finding each other. “It’s a very interesting time,” says Rebeca Rocha, coordinator of ANDE’s Brazil chapter. “We are in a moment when the whole sector is defining itself.”

Making a Big Tent Bigger

In the impact investing field, a debate has unfolded over the proper balance between creating social impact and pursuing financial gain. To put it another way: Should impact investors accept below-market returns as a cost of doing good? Is doing good the central purpose of impact investment, or is it merely a sideline to a standard investment strategy?

ANDE leaders have declined to take sides in that debate, preferring instead to create common ground where all parties can come together. It’s a strategy that meets with approval among ANDE members. Steve Wright, vice president of poverty insights at the Grameen Bank, generally opposes the profit-maximizing, just-another-asset-class approach to impact investment. Yet he appreciates the chance to interact with investors who have different views. “One of the tremendous values of ANDE is that JP Morgan, Citi, and others are in the tent,” says Wright.

To Paul Basil, who leads another ANDE member organization, the conflict between social value and financial profit matters less than the friction between newcomers and veterans. “The tension comes from a lack of knowledge,” says Basil, founder of Villgro, an innovation incubator based in Chennai, India. “The more you talk, the more lines of communication are open, the more you understand each other.” He cites the value of ANDE-supported investor training programs, which help newly established investment managers adjust to common developing-world challenges—the lack of reliable market data, for example.

Another sector-wide conversation involves developing metrics. ANDE has put its weight behind the Impact Reporting and Investment Standards, or IRIS, a catalogue

of measurements developed by the Global Impact Investing Network. As a condition of membership, ANDE now requires its members to collect IRIS data on five core metrics for each company that they fund: earned revenue, number of full-time employees, level of full-time wages, new investment capital, and greenhouse-gas emissions. IRIS contains hundreds of other metrics, but ANDE considers these five to be the most useful for gauging bottom-line performance.

Officials at ANDE are careful neither to overstate nor to understate the value of the IRIS approach. “It’s just a language,” says Genevieve Edens, impact assessment manager for the network. “It’s not a reporting tool. It’s a way to standardize what we’re counting. By speaking the same language, we can start to compare one company to another, create benchmarks for performance, and create market intelligence. That’s the power of a big network.”

The use of IRIS is still evolving. But already those five core metrics have yielded enough data to help ANDE back up its assertions about the vital role played by SGBs. By the most recent count, 277 companies have reported on their performance via ANDE member organizations, and those companies are growing by an average of 10 percent annually. What’s more, they pay their employees an average annual salary of $11,500— an amount that is much larger than the minimum wage (and often the median wage) in the countries where those companies operate. “The most important challenge that ANDE helps to address is demonstrating the development and business case for SGBs,” says Willy Foote, CEO of Root Capital.

Today, the aim of ANDE leaders is to make that case to a broad audience of potential investors. During its first half-decade, the network concentrated on supporting its member organizations. Now it’s time to grow beyond that base. “As a first step, our goal was helping people understand the importance of helping SGBs,” says Kempner.

“But it’s one thing to build a sector, and another thing to drive more capital to it.

Now we need to help others to believe.” n

Photograph courtesy of the housing partnership network

18

Stanford Social Innovation Review / Winter 2014

! SAFE AT HOME: The Housing Partnership Network helped acquire a complex in Fairfield, Calif.

Under One Roof By bringing people together and by pooling resources, the Housing Partnership Network expands the range of affordable places to live.

By Phoung Ly

Photograph courtesy of the housing partnership network

Y

ear after year, officials at Mercy Housing Lakefront watched as apartment complexes in suburban Chicago that were home to working-class families went up for sale. They would try to buy each building so that they could preserve that segment of the area’s affordable housing stock. Again and again, they lost bids to private investors that had more money and could close deals faster. Too often, successful buyers would turn these properties into luxury condominiums. In other cases, apartment buildings would go into decline as landlords stopped investing in repairs.

In early 2013, leaders at Mercy Housing Lakefront were able to break that cycle— thanks to support from the Housing Partnership Network (HPN), a nationwide collaborative that brings together about 100 affordable housing organizations. HPN created a real estate investment trust (REIT) using money raised from several member groups, along with other financial partners.

Through the REIT, Mercy Housing (the parent organization of Mercy Housing Lakefront) was able to acquire a property called 2000 Illinois, an apartment complex in Aurora, Ill. “Before, we were just chasing pipe dreams,” says Cindy Holler, president of Mercy Housing Lakefront. “With the REIT, we were in a good position to negotiate. We got a good price that allowed us to make some improvements without maximizing rents to get there.”

Most community development takes place at a local level.

But some challenges require the use of collective power at a national level. That’s why, in 1990, a number of housing nonprofits convened in Boston to form HPN. In part, the network functions like a trade association.

It gathers developers of affordable housing, lenders, investors, and member organizations to exchange information, share best practices, and find solutions. Over the years, HPN has evolved into a sophisticated business collaborative that manages ambitious ventures such as the REIT. HPN, with about $25 million in assets, is now an important player in the affordable housing field. In 2013, the network received the MacArthur Award for Creative and Effective Institutions. Along with the award came a $1.5 million grant to research and develop new ventures—the largest grant bestowed on any of the 13 organizations that shared the award. In honoring HPN, the John D. and Catherine T. MacArthur Foundation praised the network for “marshaling the expertise and resources needed to launch innovative, scalable solutions.”

By combining collaborative working arrangements with rigorous business practices,

HPN has developed a model that helps its members advance their mission. And by leveraging its size and its ability to share resources, HPN helps members to overcome large obstacles—and, where necessary, to take on large, well-financed private investors. Some issues are “so big and require so much innovation that they can’t do it by themselves,” says Tom Bledsoe, president and CEO of HPN. “By joining forces, you come up with a better solution.”

The Business of Affordability

The problem of affordable housing is ultimately very simple: In many communities, the dynamics of supply and demand make it almost impossible for people with low or modest incomes to rent or buy a home. For HPN and its members, the goal is to make the numbers work. And in many cases, making the numbers work means going into business—a practice that runs counter to the mindset that prevails at many traditional housing nonprofits.

HPN and its member organizations have scored notable successes in the marketplace.

After the 9/11 terrorist attacks, insurance premiums skyrocketed for many affordable housing properties. Member groups reported rate increases of 40 percent to 50 percent. But HPN discovered that the losses for this kind of real estate were half as large as the industry norm. Instead of buying products from insurers that didn’t treat them competitively, HPN members created their own insurance company. Last year, according to HPN, that company made a profit of $3 million.

In recent years, HPN has responded in an equally businesslike way to other critical housing issues. After Hurricane Katrina devastated the Gulf Coast, HPN members launched a wellfinanced community development corporation to help rebuild affected areas in the region. “If you don’t bring cash into the building, you can’t be a going concern,” says Kathy LaBorde,

19

Stanford Social Innovation Review / Winter 2014

Phuong Ly, a former Knight Fellow at Stanford University, is executive director of the Institute for Justice and Journalism.

president of the Gulf Coast Housing Partnership, an HPN initiative based in New Orleans.

Later, in the wake of the recent recession, HPN created a fund to purchase bundles of delinquent mortgage notes directly from the companies that serviced them. The network then worked with homeowners to modify their loans or to help them relocate.

The REIT emerged when leaders at Mercy Housing and other HPN member groups realized that they needed to band together to compete against private investors. To fund the REIT, the network raised $100 million from institutional investors, foundations, and HPN member groups. Now, instead of spending up to two years to raise financing, a REIT-supported organization can close on a deal in three months. The 2000 Illinois complex was the first property acquired by the REIT. Later in 2013, HPN added two more properties to its REIT portfolio—one in Fairfield, Calif., and another in Norfolk, Va. The REIT that HPN operates has the same level of efficiency and the same access to capital as any other investment trust.

But it’s also able to leverage certain benefits that derive from its nonprofit status. With the Chicago-area apartment complex, for instance, the REIT took advantage of a local property-tax exemption that is available only to nonprofits. Ommeed Sathe, vice president of social investments at Prudential Financial Inc., says that his company will pour $17 million into the REIT. Doing so, he explains, is a sound, long-term business proposition: “Because there’s such an unmet need for affordable housing, there’s very little risk that rents in this property type will collapse. You have an asset that has a very stable profile.”

HPN has shown the benefits that come when a housing-focused nonprofit adopts an entrepreneurial approach. In addition to lobbying for policy changes on housing issues, the network has made its own opportunities.

“They’ve harnessed all this incredibly effective leadership,” says Eric Belsky, managing director of the Center for Joint Housing Studies at Harvard University. “They find out where the gaps are and see how they can be a conduit. They’ve raised the bar.”

! BOUGHT TO LAST: The 2000 Illinois complex in Aurora, Ill., offers residents a stable living environment.

Building Relationships

Even as it develops new business-oriented practices, HPN continues to conduct its operations in the spirit of nonprofit community organizing. To generate ideas, network members sit together in loosely structured gatherings and talk. HPN staff members and outside consultants provide research for these sessions, but they don’t lead the conversation.

The organization even bans the use of PowerPoint presentations. “You impart knowledge that way, but you don’t really get a group to work together that way,” Bledsoe says.

Once HPN leaders decide to tackle a particular challenge, 10 to 12 people from member organizations come together to work on the issue. In a complex housing project that involves multiple decisions, the risk that a collaborative effort will collapse is high.

When HPN partners worked on launching the REIT, for example, they had to decide which complex to buy, how to structure the financing, and how they would invest in repairs. But Holler, of Mercy Housing Lakefront, notes that relationships cultivated by HPN members have built a strong foundation of mutual respect. “You don’t fund a REIT just by putting people together with money,” she says. “There has to be trust there. Don’t do this unless you’re working with people you know well.”

HPN is highly selective in admitting new members to the organization. There are hundreds of housing nonprofits in the United States, but the network limits its membership to those with a track record of putting together successful housing projects that require partnerships between public and private entities. Many projects also involve working with partners that are not HPN members, such as financial investors or other nonprofits. In one case, says Bledsoe, the network refused to include an organization in a project even though an HPN founder had nominated that would-be partner. He says partners need to show commitment, work well with others, and add something of value to a project.

HPN leaders are equally rigorous when it comes to making business decisions, and they’re quick to cut their losses when an enterprise fails. A venture to provide taxexempt bond financing for multi-family properties, for example, foundered because large housing organizations could get better deals from private companies. Even though smaller organizations were interested in the project, HPN decided that it wasn’t worth the cost and shut it down, losing $2 million in the process. Network leaders say that they can’t afford to have a sentimental attachment to a project. “We’re dealing with the markets, and we have a lot of external factors that can influence whether something can work or not,” Bledsoe says.

The REIT is a fledgling venture; it may or may not end up making a profit. For the time being, though, its purchase of the 2000 Illinois complex in Aurora means that residents there won’t face a huge rent increase.

Pamela Thompson, a warehouse clerk, and her nephew live in a $900-per-month, twobedroom unit at the complex. They moved there after a developer bought the Chicago apartment building where they previously lived, renovated it, and then increased rents.

If the REIT succeeds in keeping the Aurora property affordable, she might never move again. “Moving is expensive,” Thompson says. “I’m trying to save money. I just want to live in a nice, safe place.” n

Photograph courtesy of the housing partnership network

20

“The challenges we face today are increasingly complex, interconnected and dynamic. They require more innovative and integrated solutions across all sectors…”

Zia Khan The Rockefeller Foundation at SOCAP13

SOCAP is an event series dedicated to the flow of capital towards social good.

Since 2008, we've convened more than 10,000 individuals − entrepreneurs, investors, business leaders, policy makers, brands, artists & more − from 60+ countries who are working together to address our world's most complex problems.

If you're an organization who wants

Past Partners Include: The Rockefeller Foundation, Halloran Philanthropies,

to grow this movement with us,

Omidyar Network, Impact Hub, B Corps, Herman Miller, Stanford Social Innovation

we want to talk to you. Email us at

Review, Vodafone Americas Foundation, Impact Assets, Liquidnet, Kiva.org, Robert

partnerships@socialcapitalmarkets.net.

Wood Johnson Foundation, Impact Base, Eventbrite, Wells Fargo Bank, David and Lucile Packard Foundation, Exygy, Microsoft, Toniic, Indiegogo, Elefint Designs, The

Learn More: www.socialcapitalmarkets.net

AS SEEN IN:

Case Foundation, Knight Foundation, Fair Trade U.S.A. and dozens more.

Stanford Social Innovation Review / Winter 2014

, INNOVATION STATION: At the first Hub in London, members gather to work, learn, and collaborate.

An Inside Look at One Organization

How the Hub Found Its Center After a period of crisis and transition, Impact Hub has emerged as a global structure that is partly a movement, partly a business, and partly a network. Along the way, its leaders—a group of people devoted to social innovation—had to master the art of organizational innovation.

By Michel Bachmann

n early 2010, leaders from the Hub network gathered near Amsterdam for what amounted to an emergency meeting. Efforts to create a reliable structure for sustaining growth at the global level had led to a series of conflicts among those who had founded Hub sites in cities such as London, Melbourne, and San Francisco. “At that point, there was a collapse of trust,” says Alberto Masetti-Zannini, founder of Hub Milan. “We realized we needed to get together and face our demons to redesign the dysfunctional system that we had created. It was quite painful, but one thing came across very clearly: When a system begins to change, there is no stopping it.”

The system in question—now called Impact Hub, after a major rebranding effort that concluded in early 2013—today includes nearly 50 active sites. Each site gives social innovators flexible access to places where they can work, learn, and collaborate. In the language of the new branding, Impact Hub is a “global network of people, places, and programs” that enables users to “catalyze impact.” Leaders of the organization expect more than 100 sites to be in operation by 2015.

But in 2010, five years after the opening of the first Hub, the organization had reached a turning point. The Hub system had become dysfunctional because its leaders had failed to create a structure that would effectively blend the interests and aspirations of its stakeholders. The decisive question was this: What kind of an organization would the Hub become as it expanded globally? Or, to be more specific, how would it navigate the tension between serving a movement, building a business, and sustaining a network?

I had a front-row seat as Hub leaders from around the world

I

wrestled with those questions. In 2010, I had recently cofounded Hub Zürich. Partly because I was new to the Hub Network and partly because I have a background in organizational change, my fellow Hub founders elected me to the global leadership team. In that role, I helped guide the transition process that unfolded after that pivotal meeting in Amsterdam. But this isn’t my story. In fact, the evolution of the Hub has never been about any one person. If there’s one thread that runs through the history of the Hub, it’s the fundamentally collaborative nature of the organization.

The story of the Hub—its rise, near-fall, and rebirth—reveals much about the struggle that any group of diverse, passionate people will face when they seek to drive a social change effort that can achieve global scale.

Social Innovators Find a Home

The idea of the Hub emerged in the wake of the anti-globalization movement that arose at the turn of the millennium. “There was a huge amount of criticism of the current economic models but almost no attention to different modes of progress,” says Jonathan Robinson, cofounder of the Hub organization and a leading figure in its early development. “We asked ourselves, What if half of that energy went into imagining and demonstrating some real alternatives?” The problem, as Robinson saw it, was not a lack of aspiration or inspiration.

“Everyone has ideas for making the world a better place,” he says. “But where does one go to make them happen? We felt there was a crisis of access to the experience, infrastructure, and networks needed to turn ideas into reality. We discovered a whole set of people trying to realize good ideas from their bedrooms—lonely, cut off from the world. So it dawned on us: What if these people could come together in the same physical space and have a place to connect?”

Robinson and a team of colleagues opened the first Hub in central London in early 2005. Located on the top floor of an old warehouse, Hub London embodied the spirit of grassroots entrepreneurship.

Everything was built from scratch, and the space was designed to provide a collaborative environment in which people could work, meet, and learn within a modular structure. It featured leaf-shaped tables that allowed for flexible co-working, a semi-open meeting room where users could hold workshops, a secluded library for quiet thinking, and a community kitchen where people could hold small

Photograph courtesy of impact hub

22

Photograph courtesy of impact hub

Stanford Social Innovation Review / Winter 2014

meetings over lunch or coffee. There were no assigned work stations, so users would sit next to a different fellow user every time they visited the Hub. The main idea was to create a place where unlikely allies would meet by serendipity.

To catalyze that kind of interaction, Hub founders introduced the concept of hosting. “We didn’t want any traditional receptionists. We wanted to host people in the same way that you would host someone in your house or at a party—making guests feel at home and introducing them to people they should meet,” says Maria Glauser, who served as the first host of Hub London and later led the development of the hosting practice for the entire network. “So we looked at how we could develop a practice of creating collaborative environments and connecting people from different worlds into meaningful relationships.” As part of its hosting effort, the Hub began organizing various community-oriented events, including weekly lunches, business clinics, and skill-sharing sessions.

In short, the Hub emerged as a cross between a business incubator, a learning lab, and a professional membership community. To make the operation financially sustainable, the Hub team adopted a membership model: People would pay for the space as they used

it. Drawing on an analogy to mobile-phone subscription plans, the team developed a series of monthly rates that ranged from £20 (about $30 in US currency) for one day of use to £400 (about $600) for 24/7 access. Each plan allowed people to participate in Hub events and thus to connect with a broader community of social innovators.

A Movement Grows—and Undergoes Growing Pains

Before long, the nascent Hub community in London grew to include more than 200 members. It also began to attract attention from people who wanted to build similar sites in their own cities. Within a year, Robinson and his colleagues had received hundreds of such inquiries. “It didn’t feel like we were building a London community,” he recalls. “It felt like we were grounding a global community with its first manifestation in London. So it didn’t surprise us when we got visitors from all around the world seeking to do something similar. What surprised us was the volume. Initially, we were flattered by the huge amount of interest. But practically, it became a bit of a nightmare.” Robinson and his team, after all, were still working to develop a business model for their London operation.

23

Stanford Social Innovation Review / Winter 2014

MICHEL BACHMANN, a cofounder of Impact Hub Zürich, was part of the global transition council that helped to develop a new organizational structure for Impact Hub. Currently,

he is finishing a doctoral dissertation on organizing social entrepreneurship at the University of St. Gallen, Switzerland.

Even so, the Hub team decided to hold a meeting for people with an interest in hosting spaces devoted to social innovation. In early 2007, more than 30 aspiring hosts showed up in London; they came from as far away as Bombay (Mumbai) and São Paulo. Although the initial purpose of the meeting was merely to share lessons related to the hosting practice, it quickly became clear that most attendees had come to learn how they could replicate the entire Hub model.

“It was frustrating, because everyone had questions about the global model and we had no answers,” Glauser recalls. “But there was no way back at that point. The good thing was that, as a result of this gathering, we built a very strong and trusting international network of friends and peers.” Indeed, many who attended the London meeting would soon found Hub sites in their home countries.

Over the next couple of years, the Hub started to expand as a movement of like-minded people who were building roughly similar Hub communities. There was no global structure to guide or limit them. That lack of clear rules was appealing to many Hub founders; it gave them the freedom to develop their own version of the Hub model. “The main philosophy at that time was ‘just do it,’ which activated a lot of entrepreneurial energy,” says Pablo Handl, a cofounder of Hub São Paulo.

To be sure, the absence of a clear governing structure raised questions for Hub founders. What could they expect from each other, and how would they make decisions? Would they follow an open model that would allow anyone to open a Hub site? How much control would exist at the center of the organization? Should there be a center at all?

For the time being, however, there was enough trust among Hub leaders for them to continue on that basis alone. “The general message was ‘We’re sorting things out together, so no worries,’” says Glauser.

The Hub Becomes Hub World

By 2008, there were nine Hubs in operation—in cities ranging from Amsterdam to Johannesburg. (A second Hub had opened in London as well.) Hub founders had not yet arrived at a formal agreement on how to structure the organization globally. But that issue had become ever more pressing. So Hub leaders set up an interim board to map out the foundations of a global governance and financial model.

On the board, there were two main currents of thought: Some members preferred a very light structure that would allow local Hubs to work together in a loose fashion. Others leaned toward creating a more centralized organization that could attract investment and implement an active growth strategy. “Essentially, we were caught up in a tension: Do we foster a movement of Hublike spaces? Or do we franchise?” Robinson says. “We wanted to borrow a little from the corporate franchise culture of codifying best practices and expectations around a shared intent. But we also wanted to borrow from the energy that movements develop as they spread around the world. So we were trying to pick the best bits of both operating models and to create something of a hybrid—a model that could serve the huge potential that we saw.”

To discuss what such a model could look like, members of the interim board and other Hub stakeholders gathered for a meeting in rural Belgium. From that meeting emerged a commitment to pursue a “social franchise” model. Under the model, new Hubs would pay a substantial joining fee and a share of their ongoing revenue to the global Hub organization. In exchange, they would receive a license to use the Hub brand, along with dedicated support from a central team that would help them launch operations and increase their impact.

(Existing Hubs would be able to join the franchise system under a special set of terms.) To enable the organization to expand globally, Jonathan Robinson founded Hub World, a limited company headquartered in London. The new company would provide central services— technology support, knowledge codification, quality control—to local Hubs. The core Hub team also began to develop a “suitcase” of best practices that would help Hub founders to meet challenges related to space design, community building, and business planning.

In keeping with the idea of a social franchise, Hub leaders intended to sign an agreement that would distribute ownership of Hub World among its main stakeholders, including investors, founders, users, and staff members. But those parties never got around to finalizing an agreement. As a result, Robinson remained the sole shareholder of the new entity.

Robinson, for his part, took on the task of attracting investors to finance the newly incorporated Hub organization. (Investors included people such as Gordon Roddick, cofounder of the Body Shop, who had become a major Hub supporter.) Along with raising capital, Robinson traveled around the world “to spread the gospel globally,” in the words of Tonya Surman, founder of the Centre for Social Innovation (an organization with a mission similar to that of the Hub), who met Robinson during this period. “This whole social franchising thing wasn’t an instant, out-of-the-box solution. It was just a permission to struggle. But he had an incredible brand promise—the allure of a global network of social innovators.”

Many Hub founders shared that sentiment. “I think all the Hubs fell in love with the dream that Jonathan created,” recalls Danny Gal, a cofounder of Hub Tel Aviv. “He was an amazing storyteller, and many of us fell for this dream of creating a global network.” Tim Freundlich, a managing partner of Good Capital, not only admired the Hub World vision but also considered investing in the new global structure. That opportunity was “the best impact investment we never made,” he says. “We looked at it and looked at it, but we couldn’t get on top of the idea of a global franchise company. And yet the more we talked about it, the more I fell in love with it personally. So I told myself: If you can’t invest in them, join them. Get in there, and we’ll figure it out somehow.” Freundlich cofounded Hub Bay Area in 2008.

A Crisis Erupts—and a Turning Point Arrives

As the new organization got under way, signs of trouble began to appear. A growing number of local Hubs refused to pay their franchise fees. As a result, Hub World underwent a severe cash-flow crisis. “It

Map by David Herbick; data provided by impact hub (impacthub.net)

24

Seattle Boulder Salt Lake City

Halifax Ottawa Boston Washington, DC Grand Rapids Peoria

Berkeley Oakland San Francisco Los Angeles

Helsinki Stockholm Bergen Copenhagen Berlin Amsterdam Rotterdam London (3) Munich Zürich Milan Donostia Madrid Rovereto Florence Rome Trieste Bari Syracuse

Moscow Prague Vienna Zagreb Odessa Bucharest Belgrade Athens Tokyo Kyoto Seoul Singapore

Mexico City Oaxaca Bogotá Dubai Tel Aviv Johannesburg

The Worldwide Hub: A Network Goes Global

Recife Belo Horizonte São Paulo Curitiba

Map by David Herbick; data provided by impact hub (impacthub.net)

From the opening of its first site in 2005, the Hub—now Impact Hub— has grown to encompass more than 50 member sites across six continents.

(Some sites shown here were still in development in late 2013.)

was an increasingly contested landscape,” Robinson recalls. “There was tension in the network over whether we should pursue nonprofit or for-profit. There were big questions around how much to invest in the core, on what terms, and for what services. And there was tension around the speed of delivery. The momentum of interest from around the world was simply faster than our capacity to deliver. Last but not least, there was growing tension around ownership. The fact that one person owned the brand was not aligned with what we had collectively created.”

What followed was a year of turmoil. “It was like a car roaring down a really steep hill. But the engine wasn’t running and there was no one in control,” says Brad Krauskopf, founder of Hub Melbourne. “If you ask me, the organization should have folded at that time. I have no practical understanding of why it didn’t, except for the power of a distributed network: Even if you take out some of the major nodes, it still manages to keep on working because of all the interconnected relationships. What you got was one of the most complex ecosystems that I’ve ever seen anywhere. And I’m still amazed that we managed to keep it all together.”

The Hub network, in fact, continued to grow: By the end of 2009, more than a dozen Hub sites were up and running, and many others were in development. Yet only a few local Hub founders had signed the formal franchise contract. Instead, many Hub founders—especially those based in emerging economies—were trying to negotiate special terms for their franchises. “The conversation shifted from being part of a movement to a kind of bargaining,” says Pooja Warier, a cofounder of Hub Bombay. (That operation later separated from the Hub network and is now called Bombay Connect.) “It felt like we were lost between the economics of being a movement, a business, and a network.”

For many local Hub founders, the tension between those organizational forms was becoming impossible to ignore. “Hub World tried

Adelaide Melbourne Sydney

to create a hybrid,” says Masetti-Zannini of Hub Milan. It aimed simultaneously to build a franchise business and to support a loose, movement-like network, and it “didn’t really serve either purpose,” Masetti-Zannini argues. “Franchises need to be much more controlled, and the offering needs to be entirely clear—what you’re buying into and what you’re receiving. This was clearly not the case in the first phase of the Hub, because all the services of Hub World were still being developed at that time. So I asked myself: What exactly am I paying for? And if I’m paying, where is my voice? Where is my vote?”

By 2010, Hub leaders recognized that they had to shift course in order to rebuild trust. Early that year, they convened at a site near Amsterdam for a crisis meeting. The main outcome of the meeting was that attendees formed a working group to develop and propose a new governance model. The mandate of that group focused less on a change of leadership than on charting a way forward for the global Hub organization. “I never interpreted it as a coup. It wasn’t about that,” says Masetti-Zannini, who led the working group. “It was more about stopping a train that was about to crash—because all of us small trains that were attached to this train would have crashed as well.” In any event, it proved to be a pivotal moment for the Hub network.

An Alternative Model Takes Shape

After studying various innovative organizational forms, the working group put forth its proposal. The main idea behind the proposal was to follow a co-ownership model in which all Hubs would share responsibility for the global assets of the organization. “It was kind of an inverted model,” says Pablo Handl of Hub São Paulo. “Instead of the global owning the local, we would become a system where the local owns the global. We would all be equal to each other and delegate the management of the network to a central company. We would own the company. We would own the brand and everything.” Next, a transition council took charge of working out the practicalities of the new model. I served on the council, along with other Hub founders.

“It was really about getting all the facts and figures together—understanding what are facts and what is just noise,” says Hinnerk Hansen,

Stanford Social Innovation Review / Winter 2014

! NETWORK EFFECT: Hub leaders convene at Hub Madrid in 2011 to finalize a new organizational structure.

a cofounder of Hub Vienna, who served on the council as well. By the end of 2010, we had created a detailed transition plan.

The core of the plan involved the creation of a new entity called the Hub Association. Each local Hub had to commit formally to joining the association, and each Hub would sign up on equal terms—one Hub, one vote—as a co-owner of the new organization. The association would own a limited company called Hub GmbH, which would have a mandate to facilitate collaboration across the Hub network, to provide local support, and to grant licenses to new Hub sites.

(Hub leaders would eventually register both the Hub Association and Hub GmbH in Vienna, in part because they had secured crucial financing from Austria-based Erste Bank.) One principle of the association was to keep the center as lean as possible and to delegate much of the necessary work to people based in local Hubs. Toward that end, Hub leaders introduced a Sister Hub system and other peer-based structures to guide new initiatives.

Essentially, the Hub Association inverted the centralized structure of Hub World. In place of that structure, it adopted a distributed model in which every Hub would be accountable for the whole. “It was really an invitation to a new kind of Hub network,” Hansen says. In the new structure, as in the earlier structure, member Hubs would pay a joining fee and an ongoing revenue share.

Significantly, however, both the joining fee and the revenue share would be about two-thirds less than they had been under the Hub

World model. In addition, the joining fee would be adjusted to the projected revenue of each Hub. One by one, local Hub leaders signed on to join the newly created entity. In early 2011, exactly one year after the Amsterdam meeting, people from all across the network came together at Hub Madrid to celebrate the transition and to make plans for moving forward.

“It was amazing to be there and see how something new was born,” says Maria Glauser. “It may not have been perfect, but it felt like the network was in really good hands.”

New Challenges Emerge

Now that a new governance structure was in place, Hub leaders turned their attention to redesigning the processes that would enable the network to grow. A large backlog of requests to launch new Hubs had accumulated during the transition. To deal with those requests, Hub leaders introduced a peer-review mechanism. In that way, they would be able to leverage the power of the distributed network that they were building. “The whole process seeded a conversation around what ‘distributed’ really means,” says Simon Ulvund, a member of the transition council who today serves as a director on the global management team of Impact Hub. Previously, a central team in London had been responsible for approving applications to join the Hub organization. Under the revised process, applicants must first obtain a referral from an existing Hub

Photograph courtesy of impact hub

26

Photograph courtesy of impact hub

Stanford Social Innovation Review / Winter 2014

to gain candidate status. Next they must submit a feasibility study and receive the backing of a second Hub. Then existing Hubs vote as a group on whether to accept applicants into the Hub Association. This approach not only ensures that the quality of applicants will be high, but also helps build a strong relationship between each new Hub and other local Hub sites. “The main challenge in this process is how to maintain quality standards without getting standardized,” Ulvund explains. “There are important lessons that we have learned along the way on how to build a successful Hub. Yet we also believe in the power of letting Hubs innovate with the model in their local context. So we focus on picking the right teams and sharing best practices.”

Indeed, one important lesson to emerge from the transition process was that the Hub needed to re-invent not only its global operating model, but also its local business model. In the original model, local sites derived their main revenue stream from offering flexible access to work, meeting, and learning spaces. (Call it Hub 1.0.) Most Hub founders, however, quickly realized that they could not build a sustainable business on that basis alone. So in recent years, they started to offer value-added services—incubation, education, and consulting, for example. (Call that model Hub 2.0.) “Essentially, we’re becoming a platform that connects people to meaningful content, both locally and globally,” says Hansen, who is now a director of the global Impact Hub management team. Hansen likens the Hub platform to a computing platform: “It’s about building an operating system within the growing impact sector, with all kinds of ‘apps.’

The question is, What do we do in-house and where do we partner?”

As Hub leaders emerged from a period of crisis and transition, they started to look outward again. “We’re slowly becoming a global player and are exploring how to collaborate effectively with others in the broader impact ecosystem,” Hansen says. “The magic of the potential,” Surman says, is “to get practical around creating value for our members, rather than being consumed with ourselves.” Many Hub founders, meanwhile, believe that the network is still in transition—that it is about to enter the next stage of its development as a collaborative learning organization. In fact, the ability to reinvent itself continuously may be the quality that has most enabled the organization to expand around the world. Cliff Prior, an early Hub supporter who is also the CEO of UnLtd, a group that fosters social entrepreneurship, puts it this way: “The striking thing about the Hub is that it always manages to pivot somehow.”

Hub Founders Look Back—and Look Ahead

When the Hub first started to expand around the globe, it did so in the spirit of an open movement. It offered a powerful narrative of change, and it sparked an enormous response in people who wanted to replicate the model elsewhere. To sustain momentum and to cope with the demand for replication, Hub leaders then adopted the idea of a social franchise. In other words, they decided to develop the Hub as a business.

What ensued was a clash of expectations. Movements are built

around a shared vision and thrive on the voluntary engagement of their participants. One can’t control a movement—much less own it. A business, by contrast, has a clear ownership structure, and a franchise system in particular depends on a rule-based transactional relationship between local franchisees and a parent company. Each mode of organizing creates different expectations and different power relationships: Who owns what? How do decisions get made?

How does everyone work together? Among Hub stakeholders, not surprisingly, significant tensions emerged when one model conflicted with the other.

The effort to resolve such tensions led Hub leaders to a crucial insight: Along with being a movement, along with being a business, the organization that they had created over the years was fundamentally a network—a community of like-minded peers who have a common purpose and a commitment to collaborate with each other. The network model differs from the other two organizational models in important ways. Whereas a movement is open to anyone who will follow its core vision, a network has boundaries that reflect more or less explicit principles regarding how people will work together.

Unlike a business, meanwhile, a network involves relationships that are collaborative rather than transactional. Simply put: A movement attracts passion-fueled activists, a franchise attracts transaction-oriented managers, and a network attracts peer-driven entrepreneurs.

Which model is most effective when it comes to scaling up an organization for global impact? The case of the Hub suggests that a hybrid model may be most workable. But which sort of hybrid? For Hub leaders, the answer was to combine the spirit of a movement and the mechanics of a business within a co-owned network that allows for entrepreneurial freedom. The result is a distributed power structure that thrives on the self-organizing capacity of its members.

Whatever model people choose, they need to make sure that relationships within their organization are transparent. Otherwise they won’t be able to build trust. “My biggest learning? We needed to have much smarter expectation-setting upfront,” says Robinson, who now serves in an advisory role for the Hub Association. “The downside of our rather emergent process has always been that we did not do enough to define our relationship with each other.”

Yet the Hub organization had, and still has, core strengths that kept it together. “Ultimately, it’s all about cultivating personal relationships around a shared intent,” Hansen says. “There are hundreds of Hub makers around the world who hold the network ethos very dearly and are ready to fight for it. It’s this strong personal connection—our having built something together—that unites us.”

Freundlich, who now serves on the Hub Association board, echoes that view: “We’re a mix of crazy people who have a shared vision and want to collaborate to enhance our impact in this world. But we have yet to figure out how to unleash our full potential. I think everybody should take responsibility here. It’s not the company’s problem. It’s not the board’s problem. It’s not the members’ problem.

It’s our shared problem. We are it. The answer is in the network.” n

27

28

Stanford Social Innovation Review / Winter 2014

, commercial and social| value, but a model of social entrepreneurship that is likely to increase in The buy-one give-one model is not only a viable way to create both

prevalence and power in the coming years.

By Christopher Marquis & Andrew Park

Inside the

S

Buy-One Give-One Model

able to use it as a differentiator, and the benefits ince the inception of TOMS Shoes of the model will likely diminish. in 2006, the buy-one give-one Questions have also been raised about the acbusiness model has been widely Illustration by Mark McGinnis tual social impact of this type of giving, saying embraced (and criticized) by conthat it only alleviates the symptoms of a problem sumers and businesses alike as an (lack of shoes or eyeglasses) and does not address the roots of the effective model for creating both commercial and problem (poverty or lack of health care). Even though this issue is social value. Blake Mycoskie founded the for-profit TOMS after a visit important, we don’t address the question of social impact in this to Argentina, where he met children who were so poor that they had article. Instead, we focus on understanding the model itself and no shoes. Inspired to help, Mycoskie designed a shoe after the comassessing its long-term financial sustainability to understand mon Argentinian alpargata, and pledged that for each pair sold, TOMS whether it is simply a fad or an effective new way for businesses would donate a pair to a child in a developing country. Donations were and consumers to jointly create commercial and social value. channeled through a nonprofit entity, Friends of TOMS, and were also coordinated through Shoe Drops, trips that took volunteers abroad In our research we interviewed more than 30 entrepreneurs and to participate in giving. Since its founding, TOMS has donated more leaders at both established and start-up buy-one give-one compathan two million pairs of shoes, with approximately one million of nies, conducted secondary research on the model and companies, those pairs donated in the past two years alone. and explored similar initiatives undertaken by larger corporations.

We have also written a Harvard Business School case study on one The success of TOMS has encouraged other entrepreneurs, both of the models’ pioneers, Warby Parker.1 social and otherwise, to adopt similar business models. Eyewear retailer Warby Parker, for example, has been tremendously sucBased on our research and analysis, we believe that the buy-one cessful, donating more than 100,000 pairs of eyeglasses to people give-one model is not only a viable way to create both commercial in need. Younger enterprises, such as Soapbox Soaps and Two and social value but also a model of social entrepreneurship that is likely to increase in prevalence and power. Trends in consumer beDegrees Food, are promoting buy-one give-one models as solutions havior, particularly in the millennial generation, which puts a high to poor hygiene and childhood hunger. Online marketplaces, such value on social issues, along with the model’s simple yet effective as Roozt and Given Goods, host hundreds of brands that use a buymarketing message, provide a way for companies to leverage their one give-one or similar model. core competencies for a social cause.

The buy-one give-one model has become widely popular, but seriAs more companies adopt this model, however, there are some ous questions have been raised about its long-term viability. Much of risks. Having multiple companies in a market segment, such as the success of these pioneers stems from their novelty. But as more shoes or eyeglasses, will make it more difficult for consumers to and more businesses adopt the model, companies will no longer be

Stanford Social Innovation Review / Winter 2014

29

30

Stanford Social Innovation Review / Winter 2014

differentiate among competing buy-one give-one companies. And as larger companies adopt these models to take advantage of the business opportunity, consumers may become suspicious about the authenticity of the overall concept. Despite these concerns, we are optimistic about the overall prospects.

Christopher Marquis is an associate professor in the organizational behavior unit at Harvard Business School. He is also affiliated with the school’s Social Enterprise Initiative and Harvard University Hauser Center for Non-Profit Organizations.

Andrew Park is a management consultant in McKinsey & Company’s Atlanta office and a graduate of Harvard Business School.

The authors thank Matthew Lee, Maggie Setler, and Zoe Yang for their comments and suggestions on prior versions of this article.

Understanding the Model

To understand the future of the buy-one give-one approach, it is important to understand the business model itself. We’ll do that by examining four important characteristics of the model: the typical companies and products, the pricing and cost considerations, the marketing and economic benefits, and the different types of donations.

Typical companies and products | The buy-one give-one model has been most widely adopted in the consumer products industry, particularly apparel. According to Brent Freeman, founder and CEO of Roozt, an online marketplace for buy-one give-one products, most companies find success selling consumer products, more specifically accessories and jewelry, because these types of products provide a way for people to publicly express their unique style and personality while also provoking conversations that allow them to share the buy-one give-one story with other people.

Two Degrees Food and Nouri are applying the buy-one give-one model to selling snack bars. One of the challenges they face is that because they are selling food, a product that is consumed rather than worn, they are less able to garner the free marketing and story sharing that has proven so beneficial for apparel companies. For this reason, Two Degrees and Nouri are focusing on communicating a simple message—and creating a superior product that consumers want to purchase repeatedly—in addition to promoting its cause.

Roozt has shown that the buy-one give-one model can be applied by an online marketplace company. In addition to promoting many of the companies mentioned in this article, the company operates its own buy-one give-one model by donating a meal to Feeding America for every member who signs up on its website. Members are then given access to deals promoted by the more than 200 different social enterprises on its website.

Although the buy-one give-one model has worked best with consumer products companies, it has been gaining traction in other industries. For example, CommonBond has committed to funding one year of education for a student abroad for every domestic student loan it makes. Along with its innovative method of connecting alumni and students to provide loans at less than market rate, the model developed by CommonBond has provided a new example of creating shared value in financial services, suggesting that there are many other potential applications yet to be explored.

Pricing and cost considerations | Most buy-one give-one companies are in the fashion and apparel business, with product prices rarely exceeding $100. Though the model is not incompatible with higher prices, the cost of donations increases as the price of the product increases, so it becomes more difficult to operate a true buy-one giveone model. That’s why Bamboo Skateboards, which sells skateboard decks priced as high as $177.99, offers a variation of the model by donating one skateboard for every 100 purchased.

Funds for donations are typically taken out of profits. Buy-one give-one companies have addressed this cost in three ways: by charging a premium price for their product, finding ways to reduce

costs, or accepting a lower profit margin with the hope of selling more units because of their social cause. (See “Buy-One Give-One Business Models” on opposite page.)

Smile Squared is an example of a company that sells its products for a premium price. It sells bamboo toothbrushes on its website for $5.95, a higher price point than the average toothbrush. The premium allows the company to cover not only the cost of the more expensive bamboo material, but also the cost of the slightly cheaper donated toothbrush. In the case of Everything Happy, the company’s core product, a baby blanket, is priced higher than that of competitors because the company is positioning itself in the luxury gift market.

Their premium price pays not only for the cost of donated blankets, but also for the additional packaging, customer service, and other features expected of a luxury good.

Warby Parker supports its donations by reducing its operating costs. The company mainly sells directly to consumers online and until recently has avoided the added costs of storefronts, brand licensing, and optical labs. Removing these costs allows Warby Parker to sell eyeglasses for as low as $95, a significant discount from the typical eyewear retailer, but a high enough price to pay for a pair of glasses distributed by VisionSpring, its nonprofit partner, which provides eyeglasses to needy people in developing countries.

Through its innovative crowd-funding model, where funds are raised and pooled together from alumni for student loans, CommonBond is able to provide loans to students at a lower rate than that offered by traditional financial firms.

Other companies have decided to accept lower profit margins to support their donations. Two Degrees Food and Soapbox Soaps, for example, offer products at similar price points as their competitors, and so are likely selling their goods at a lower margin. Although this is certainly a noble endeavor, we anticipate that these companies will need to make some changes to achieve long-term sustainability.

Marketing and economic benefits | Putting aside the social value that buy-one give-one offers, it’s an attractive business model because it offers companies several marketing and economic benefits.

One of the chief benefits is that consumers are enticed to buy the products because of the simplicity and tangibility of the proposition: for every product purchased, one is given away to a person in need. The social impact is clearer, easier to understand, and more personal than that of a traditional cause marketing company, such as Product Red, that donates a percentage of sales.

Buy-one give-one companies also benefit from the free publicity they receive in the popular press. It is not uncommon to find a dozen or more articles or other media appearances highlighted on any given company website. The press is attracted to a story of a company doing good, and the simplicity of the message, the emergence of more and more buy-one give-one companies, and the growing consumer trends around social responsibility make these companies great candidates for media attention.

Stanford Social Innovation Review / Winter 2014

Consumers are typically attracted to a brand by either the funcEven the more literal buy-one give-one companies, such as Soaptional appeal of the product or the image associated with the brand. box Soaps, donate a product that is slightly different from the one sold to consumers. Manufactured at approximately 50 percent of By also offering a social cause that consumers can become a part of, the cost of retail soaps, the donated soaps are less costly because buy-one give-one companies attract a broader segment of potential expensive scents and oils are removed. Other companies combine consumers. Warby Parker, for example, attracts customers who are the two models, donating a product and a percentage of profits or primarily fashion-focused along with those who are also socially conscious. Similarly, KNO Clothing, an online fashion retailer, has sales for every product purchased. For example, KNO Clothing dofound that shoppers who normally would not consider KNO to be nates 50 percent of profits in addition to a pair of socks to partner “their style” have bought products because of their commitment organizations that are combating homelessness in the United States. to help end homelessness.

(See “Buy-One Give-One Donation Models” below.)

Companies also vary in their approach to marketing the social Studies have long shown the importance of customer loyalty for sustained sales and profitability. Loyal customers are more likely to mission. Although Soapbox Soaps and TOMS communicate the givrepurchase products, pay more for products they are aware of and ing model clearly on or with their product, others, such as Out of trust, and recommend the brand to other potential customers. 2 Print and Warby Parker, practically eliminate explicit messaging of Because buy-one give-one companies tap into consumers’ personal the social mission altogether because they want to be known foremost as fashion brands. passions, they are more likely to create lasting and deep relationships with their customers. Jeff LeBlanc confirms that this has been the case at the company he cofounded, Out of Print, which sells shirts, Creating Successful Companies accessories, and stationery. Not only has his company’s social misIn our research on buy-one give-one companies, we found several sion driven repeat purchases, he recounts instances of consumers characteristics that many companies shared that enabled them to asking how they can further involve themselves in the cause. be successful. Most striking are having an authentic story, choosing The buy-one give-one model also provides intangible benefits to the right market, and creating effective messaging. the organization’s culture, primarily by helping companies recruit Having an authentic story | In our discussions with social entreand retain high-quality employees who are aligned with the social preneurs from leading buy-one give-one companies, we found that mission. Neil Blumenthal, co-CEO of Warby Parker, often cites this many had unique stories that led to the genesis of their enterprises. as a primary benefit of the model. David Klein, CEO of student loan In nearly every case, the founders’ personal experience or passion was the impetus behind the company’s pursuit of shared value. platform CommonBond, cites similar benefits: “We’re finding that our Eric Cope is the founder of Smile Squared, a company that dosocial mission makes our brand unique. And investors want to invest nates one toothbrush to a child in a developing country for every in brands that are unique. It also attracts incredible talent to the firm. toothbrush sold. He describes a trip he took to Guatemala to pick Finally, it welcomes and appeals to the customer you want to bring in up his adopted child in May 2010 that motivated him to create the door. Financial community, employees, and end consumers—this Smile Squared. “My wife and I were is a win, win, win.” asked to help out at dental clinics, Differing types of donations | In Buy-One Give-One Business Models and I realized that the children who addition to having varying business models, buy-one give-one companies did have toothbrushes were probably Description Examples often differ in the manner in which sharing them with their family. They n Premium price over Smile Squared they donate the products. Most have had a lot of preventable diseases. … I Premium competitors or comparable n Everything Happy Price traditionally followed the same basic realized donating toothbrushes was n products Baby Teresa just a short-term fix, but I knew of format, either producing the donated n Warby Parker Lower Costs Lower costs, allowing for the TOMS model.” item themselves and relying on a n reduced prices or similar TOMS n CommonBond profit margin nonprofit partner to distribute the These personal narratives are critiproduct (as Soapbox Soaps does), or cal not only because they help create n Two Degrees Food Lower profit margin than Lower competitors or comparable n Soapbox Soaps an authentic and compelling brand, donating matching funds for a single Margins n Out of Print products item to their partner organization but because these stories help get cuswhich then sources and distributes tomers personally engaged with the Buy-One Give-One Donation Models the product (as Warby Parker does). company. Most of the buy-one giveAlthough the name of the busione companies that we studied are Description Examples very active in social media, inviting ness model might imply a literal onen Smile Squared One-for-One Donates same or for-one donation, some businesses customers to engage in open commun Warby Parker similar product for donate cash or a different product nication with them in the hope that n each one sold Two Degrees Food n Soapbox Soaps altogether. Out of Print, an online they will continue to share stories and n Out of Print Donates percentage t-shirt and accessories company, become brand ambassadors.

Percentage n 1 For 1 Water of sales or profits for of Sales or donates a fee to its partner, Books Although there is a clear advantage n The Naked Hippie each one sold Profit for Africa, to cover the cost of doin having the company founder be n CommonBond Combination Mix of product n KNO Clothing nating one book for every product able to talk about her personal pasand percentage of the Two n Roma Boots donation that is sold. sions and experiences and how that

31

32

Stanford Social Innovation Review / Winter 2014

led her to adopt the buy-one give-one model, it may not be essential.

Skechers USA Inc., a large mainstream shoe retailer, recently launched a brand of shoes called BOBS, or Benefiting Others by Buying Shoes, which some consider to be simply an imitation of TOMS. A BusinessWeek article3 said that Skechers’ efforts at introducing a charitable brand “seem like a naked marketing ploy to spur sales and could backfire.” Yet in Skechers’ Q3 2012 earnings call, CFO David Weinberg reported triple-digit growth in the BOBS line, with two million pairs of shoes donated to children around the world (matching the number that TOMS has donated, in much less time). So even though this approach may open the firm up to criticism, clearly there is a segment of consumers who still find the model appealing.

Choosing the right market | Since the inception of TOMS, companies have tried to implement the buy-one give-one model in all sorts

of markets, ranging from baby apparel to snack bars to backpacks. It’s become clear, however, that the model works far more effectively with certain products than with others. As noted, the greatest success has been with products, such as eyewear and shoes, that allow consumers to make a personal statement. In addition to making a statement, these highly visible products promote the sharing of stories, providing invaluable word-of-mouth advertising for the enterprises.

With showrooms in its New York City headquarters and on Newbury Street in Boston, Warby Parker has become a brand equally known for its fashionable yet affordable alternative to designer eyewear and for its social mission. Some customers admit to being unaware of its buy-one give-one model altogether.

Out of Print cofounder Jeff LeBlanc believes that to be successful the product must have a unique value proposition in addition

Buy-One Give-One Companies Company

Industry Category

Type of org.

Founder(s)

Year founded

Partner organizations

Structure of Donations

KNO Clothing

Apparel

Private, for-profit

Anthony Thomas & Stephen Caldwell

2010

Bethesda Mission, 100,000 Homes Campaign

Donate 50 percent of profits, part of which includes an article of clothing

Out of Print

Apparel

Private, for-profit

Jeff LeBlanc & Todd Lawton

2009

Books for Africa

Pay fee to Books for Africa, which in turn connects publisher to destination in Africa

Roma Boots

Apparel

Private, for-profit

Samuel Bistrian

2010

Roma for All Foundation

Donate a pair of boots and school supplies for every pair purchased, as well as 10 percent of all sales to the Roma for All Foundation

The Naked Hippie

Apparel

Private, for-profit

Adrien Edwards

2009

Various microfinance organizations

Invest 100 percent of profits into microloans

Baby Teresa

Baby apparel

Private, for-profit

Kirsty Dunphey & Sammie Appleyard

2009

Individual donors, Rotary

Donate a baby outfit for each one purchased

Everything Happy

Baby apparel

Private, for-profit

Emily Holdridge

2010

Christian Life Ministries, Trinity Dream Center, The Pregnancy Center of Greater Toledo, Let’s Make a Difference, Ronald McDonald House, and other hospitals and organizations

Donate a product for every Everything Happy product purchased

1 for 1 Water

Food & beverage

Private, for-profit

Matt Keller & Brent Trapp

2010

Clean Water for Haiti

Donate funds for bio-sand filters in Haiti for every bottle of water purchased

Nouri Bar

Food & beverage

Private, for-profit

Veneka Chagweder & Jared Crooks

2011

Stepping Stones International

Donate one school meal for every snack bar purchased

Two Degrees Food

Food & beverage

Private, for-profit

Will Hauser & Lauren Walters

2011

Action Against Hunger, Akshaya Patra, IMA World Health, Partners in Health, Relief International, Shining Hope, Valid Nutrition, and World Food Program USA

Donate funds to purchase a meal for every snack bar sold.

Smile Squared

Dental hygiene

Private, for-profit

Eric Cope

2011

International Justice Mission, Buckner International, Hands of Hope, Feed the Children, Save Their Smile, Give Kids a Smile, etc.

Donate a toothbrush for every toothbrush purchased

Warby Parker

Eyewear

Private, for-profit

Neil Blumenthal, Andrew Hunt, Jeffrey Raider, & David Gilboa

2009

VisionSpring

Donate funds to VisionSpring

Ark Collective

School supplies

Private, for-profit

Kevin Moshayedi

2009

Various nonprofits to help facilitate donations

Donate backpack for each one purchased.

CommonBond

Financial services

Private, for-profit

David Klein, Michael Taormina, & Jessup Shean

2011

African School for Excellence, KIPP Charter Schools

For every degree fully funded, CommonBond will fund the education of a student abroad for a full year. Will additionally fund the financial literacy programming for a child and his or her family through partnership with KIPP

One Million Lights

Lighting

501(c)(3)

Anna Sidana

2008

Agame, Inc., CARE, Elephant Energy, Jordan International, One Acre Fund, Peace Corps Volunteers, etc.

Sell rechargeable lamps to consumers to raise money to fund its charitable operations

Roozt

Online platform

Private, for-profit

Brent Freeman, Nick Reder, & Norma LaRosa

2009

Feeding America

Provide a meal to an American in need for every member who signs up

Soapbox Soaps

Household goods

Private, for-profit

David Simnick & Eric Vong

2010

Various partnership programs to facilitate aid drops and donations (e.g., visitingorphans.com)

Donate bar of soap for each one purchased.

Stanford Social Innovation Review / Winter 2014

to its social cause. To achieve this, LeBlanc always seeks to “nail the product first,” which means delivering fun and novel apparel.

The response to these products has been positive. The company’s statement tees and accessories, such as ebook covers, have received glowing reviews from consumers and publishers alike.

Creating effective messaging | Even if a company has a compelling story and high-quality products, it will have difficulty succeeding if it can’t communicate these attributes to consumers. It is possible to have a great product with terrible messaging, and vice versa. On Roozt’s website, companies are limited to a 140-character description of their brand and purpose. “The simpler, the better,” says Roozt’s director of operations, Nick Nomann. “A simple message gives customers the opportunity to share your story.”

The factors behind TOMS’s success are undoubtedly varied and complicated, but their founding message was not—“With every pair you purchase, TOMS will give a pair of new shoes to a child in need.

One for One” (a total of 77 characters). The statement has since been even further simplified to just “One for One.” In addition to its simplicity, the delivery of the message is vital to its being understood and adopted by consumers. Many companies keep counts of the number of donations that have been given to date (Two Degrees Food’s website counter currently boasts a 928,000 donation mark). In an effort not only to deliver its buy-one give-one message, but also to engage customers, Baby Teresa has customers and volunteers aid in the actual donations by taking onesies on their trips abroad. The company then asks the volunteers to take pictures and write back, sharing the story with others through their website.

Coupled with a simple message, effective delivery moves customers from awareness to preference with regards to these brands.

Challenges for the Model

The buy-one give-one model continues to gain traction among entrepreneurs and consumers. And although we are optimistic about its future, the model does come with challenges having to do with scalability, competition, and applicability in traditional companies.

One of the challenges companies confront is scaling up the donation side of the business to keep pace with the growth of consumer sales. VisionSpring, for example, recently ran into challenges expanding its Vision Entrepreneur model from Kenya to India even though its partner, Warby Parker, continued to enjoy tremendous sales growth. Baby Teresa faces a similar problem. The company relies on volunteers to take donations of baby clothes to underserved families and report back on their experiences, but Baby Teresa’s sales are outpacing its ability to recruit volunteers.

As companies grow and expand their reach, they also face an increasing responsibility to ensure that the recipients are good stewards of the donations. A misuse of funds could cause irreparable harm to an organization’s reputation, even if the donor is not to blame. To prevent this, companies are putting auditing practices and transparency standards in place to track exactly how the donated funds or products are being used.

As the number of buy-one give-one companies grows, both existing and new companies will lose some of the inherent benefits of the model. Opportunities for free publicity will become scarcer as the model loses its novelty, and companies will find themselves unable to rely on such avenues in place of traditional advertising

and marketing. Additionally, companies may be susceptible to reputational damage simply by being associated with other poorly run buy-one give-one companies. It is plausible to think that consumers who have bad experiences with one company may come to associate that experience with other brands as well.

Though introduced and popularized by social enterprises such as TOMS, the buy-one give-one model is quite flexible, and traditional companies have adopted it for some of their products. In the beauty category, Sephora, Kiehl’s, and Aveda have introduced buyone give-one items. Whole Foods Market and Neiman Marcus are increasingly stocking their shelves with buy-one give-one products.

Last fall Specialized Bicycles came out with a limited-edition bike, announcing that for every sale the company would donate one bike to World Bicycle Relief, an organization that gives bikes to those in need in Sub-Saharan Africa. General Mills’ brand Betty Crocker launched a campaign at the end of 2011 called “Win One, Give One,” in which for every 100 UPC codes from fruit snacks entered into its website, it donated a laptop to a child in Africa (up to a total of 1,725 laptops). Using a slightly different model, the IKEA Group takes part in a campaign every year called “One euro is a fortune,” in which for every soft toy purchased it donates one euro to organizations such as UNICEF and Save the Children. Since 2003, the campaign has raised $24 million.

The Model’s Future

Although few companies have achieved the level of success of TOMS or Warby Parker, the increased adoption—especially in larger, traditional companies—and the overall success of the buy-one give-one model indicates that it is here to stay. As these types of programs become more commonplace, however, companies won’t be able to depend on benefits such as free publicity to sustain their sales. Our analysis suggests that the authenticity of the mission and the quality of the product will become absolutely paramount.

Although we have put forward a number of risks and challenges that companies must consider as they implement the model, we continue to be optimistic about its prospects. As this generation of consumers becomes increasingly drawn to companies with a social cause, social entrepreneurs and corporate executives alike will need to “do more by doing good.” The buy-one give-one model offers not only a simple message but also a personal connection that can be easily conveyed to and understood by consumers—a critical component of success.

Just as cause marketing programs began as uncertain novelties when they were introduced 25 years ago and have since become ubiquitous, we believe that buy-one give-one models will come to dominate the cause marketing space in the years ahead. By creating a direct connection between a company’s core business and the social value it brings through its donations, the model exemplifies the shared value approach that is becoming more and more popular in the business world. n N ote s

1 Christopher Marquis and Laura Velez Villa, “Warby Parker: Vision of a ‘Good’ Fashion Brand,” HBS No. 413-051, Harvard Business School Publishing, 2012.

2 Frederick F. Reichheld & W. Earl Sasser Jr., “Zero Defections: Quality Comes to Services,” Harvard Business Review, September-October 1990.

3 Cotten Timberlake, “Skechers Chases Toms Seeking to Woo Do-Good Millennials: Retail,” Bloomberg BusinessWeek, August 2, 2012.

33

34

Stanford Social Innovation Review / Winter 2014

Stanford Social Innovation Review / Winter 2014

to eliminate mercury thermometers and blood pressure devices that began 15 years ago , Aatcampaign one Boston hospital blossomed into a worldwide movement that eventually led to an international

treaty restricting the use of mercury. In this article three leaders of that movement discuss the campaign and the lessons they learned about how to create large-scale social change.

Lessons in Forging

Global Change

E

By Josh Karliner, Gary Cohen, & Peter Orris

arly in the morning of January 19, 2013, after a marathon all-night session in a United Nations conference hall in Geneva, the gavel came down on the fifth and final round of negotiations for a global, legally binding treaty to restrict the use of mercury and its emission into the environment.

Hammered out over three years, the Minamata Convention was signed in southern Japan on October 11, named after the city where the most infamous case of mercury poisoning in history took place.

The treaty responds to a global consensus that the release of mercury into the environment presents a worldwide threat to human health and natural ecosystems.

In an era when consensus on global environmental governance is elusive at best, the Minamata Convention is in many ways a triumph.

Although the treaty is not as strong as many advocates would like (particularly because of its weak regulation of mercury emissions during fossil fuel energy generation and artisanal and small-scale gold mining), it does end the export, import, and manufacturing of a number of products that use mercury, including thermometers and blood pressure devices (sphygmomanometers), by 2020.

The agreement to phase out these mercury-based medical devices was largely the result of a 15-year global campaign led by the international NGO Health Care Without Harm, in collaboration with a broad group of allies from around the globe. The campaign began modestly, with a few health advocates working with one hospital in Boston, and

Illustration by Walter Vasconcelos

eventually spread to thousands of hospitals and health ministries around the world. Myriad actors took part in the campaign, ranging from individual nurses and doctors in local hospitals, to hospital and health system administrators in dozens of countries, to ministries of health and the environment on every continent, to global health federations, international NGO networks, and UN agencies.

The success of this global campaign for mercury-free health care provides important lessons about how to solve pressing social and environmental problems at a global scale, lessons that can be used by other organizations working in health, education, the environment, and other fields. What we learned after examining the campaign is that five elements were essential to its success: creating localized models before scaling up; making the scientific, technical, and business cases for change; building broad coalitions and partnerships; using market forces and instituting policy changes; and leveraging success in one arena for broader transformation.

In many respects these five elements are similar to those found in other international organizing initiatives, such as the global movement to reduce the use of tobacco. In fact, a paper written by two University of California, San Francisco, researchers for the World Bank on the global lessons of the US anti-tobacco movement identified five strikingly similar elements that were central to achieving comprehensive tobacco control: “science to inform policy, information strategies to educate consumers, advocacy to stimulate interventions, legal actions to develop regulations, and international collaboration.” The paper concludes that these efforts can “be most effective when supported by civil society.” 1 Before we take a closer look at the mercury-free health care campaign and the five elements of its success, it is important to understand why man-made mercury emissions are so harmful to people and the environment.

35

36

Stanford Social Innovation Review / Winter 2014

Mad as a Hatter

Mercury is a naturally occurring heavy metal that has been used by people since ancient times. Mercury was found in a ceremonial cup in a 15th century BCE Egyptian tomb. The ancient Greeks used what Aristotle called “quicksilver” for ceremonial purposes and to treat skin disorders. And the Romans mined it in Spain, used it as a pigment in their paint, and gave it the name of a god.

By 1,000 CE mercury was being used to extract gold by amalgamation—a process still used by impoverished miners around the world. In 1643 Evangelista Torricelli invented the mercury barometer, and in 1720 Daniel Gabriel Fahrenheit invented the mercury thermometer. During the industrial revolution mercury was used as a detonator in explosives, as a catalyst to produce polyvinyl chloride, in the chlor-alkali process to produce chlorine and caustic soda, and

by Thomas Edison to create the incandescent lamp. (Mercury is still used in most of these processes, including fluorescent lamps.) Mercury was also used in felt making. People who made felt hats—who were constantly exposed to mercury vapors and often showed signs of dementia—were referred to as “mad hatters” and were immortalized by Lewis Carroll in his classic Alice in Wonderland.2 Mercury vapor, such as that inhaled by the mad hatters, can impair cognition and may be fatal. Mercury is also harmful if absorbed through cuts and abrasions in the skin. Of even more concern is the toxicity produced when mercury emitted into the environment accumulates in lake, river, stream, and ocean sediments. There, anaerobic organisms digest and transform it into methyl mercury, which accumulates up the food chain in fish tissue. Methyl mercury is of special concern for fetuses, infants, and children because even at extraordinarily low doses it impairs neurological development. When a woman eats seafood that contains methyl mercury, it accumulates in her body, requiring months to excrete. If she becomes pregnant during this time, her fetus is exposed to methyl mercury in the womb, which can adversely affect the baby’s growing brain and nervous system. Impacts on cognitive thinking, memory, attention, language, and fine motor and visual spatial skills have been seen in children who were exposed to low levels of methyl mercury in the womb.3 The most notorious case of mercury poisoning took place in Minamata, Japan, where Chisso Chemical dumped mercury into Minamata Bay from the 1930s to the late 1960s, poisoning multiple generations of residents. The Minamata disaster alerted the world to the hazards of mercury pollution.

Since the start of the industrial era, the total amount of mercury circulating in the world’s atmosphere, soils, lakes, streams, and oceans has increased by a factor of between two and four. 4 Methyl mercury is now widely present in oceans and lakes around the world, building up in predator fish (such as tuna, swordfish, and sharks), concentrating several hundred thousand times as it moves up the aquatic food chain.5 At the beginning of this century, the United Nations Environment Programme (UNEP) and World Health Organization (WHO) identified the adverse effects of mercury pollution as a serious global environmental and human health problem.6 The UNEP Governing Council targeted reducing methyl mercury accumulation in the environment as a major global priority. Just after President Barack Obama was sworn in for his first term, the United States joined the world’s governments and agreed to negotiate a treaty to address the problem.

Josh Karliner is director of Global Projects and International Team Coordinator for Health Care Without Harm.

Gary Cohen is president and cofounder of Health Care Without Harm.

Peter Orris is professor and chief of Service Occupational and Environmental Medicine, University of Illinois Hospital and Health Science System.

The Minamata Treaty is symbolically named for the environmental disaster that took place in Japan (much to the chagrin of many of the disaster’s victims who are still battling the Japanese government for adequate restitution). It aims to reduce both unintentional emissions—mercury released from coal-fired power plants, factories, and artisanal and small-scale gold mining—as well as mercury used in products such as batteries, thermometers, and other measuring devices. Although the health care sector is not the greatest source of mercury pollution, it is still a significant source. Given its ethical mandate, “First, do no harm,” it makes sense that health care should help lead the global effort to eliminate mercury exposures and prevent serious health impacts related to its contamination of our food supply.

Removing Mercury From Health Care

In 1996, a new nonprofit coalition, Health Care Without Harm (HCWH), was created to educate and mobilize the health care sector around the links between a healthy environment and healthy people.

The coalition comprised hospitals and health care systems, medical professionals, community groups, labor unions, environmental organizations, and religious groups.

At the same time, the US Environmental Protection Agency found that medical waste incinerators were the fourth largest source of man-made mercury emissions in the United States, as well as the leading source of dioxin emissions.7 Because of the fortunate timing of this research, HCWH decided to focus its efforts on alerting the health care industry to the dangers of mercury-based thermometers and sphygmomanometers while promoting the substitution of safer alternatives.

One of the first steps that HCWH took was to organize a Mercury Awareness Day and thermometer swap with Beth Israel Deaconess Medical Center in Boston, collecting more than 1,000 mercury thermometers and substituting them with digital alternatives.

In 1998, HCWH helped launch a voluntary nationwide initiative called Hospitals for a Healthy Environment (H2E) together with the American Nurses Association, the American Hospital Association, and the US Environmental Protection Agency. Today known as Practice Greenhealth, H2E made mercury substitution a priority.

The substitution effort quickly went viral, spreading to many leading hospitals in Boston and then to the rest of the country.

To remove mercury medical devices from the consumer market, HCWH, along with socially responsible investors and community allies, pressed pharmacies to abandon mercury thermometers, eventually getting every major US pharmacy chain to remove them from their shelves. Many of these gains were consolidated and institutionalized by state legislation prohibiting the sale of these devices.

By 2005, seven years after the campaign began, an American Hospital Association survey of more than 500 hospitals found that 97 percent were taking steps to remove mercury medical devices, 80 percent had eliminated mercury thermometers completely, and another 73 percent had removed all mercury sphygmomanometers.

Stanford Social Innovation Review / Winter 2014

HCWH and H2E were able to declare that “the market for mercurycontaining medical products has been all but eliminated [in the United States].” 8 Getting the health care sector to switch to non-mercury devices required overcoming four challenges: health professionals’ skepticism of the accuracy of the alternative devices; concerns about the affordability of the devices; initial lack of availability of these alternatives; and the mercury waste disposal concerns of health care professionals and managers who were suddenly and acutely aware that they were, in essence, managing toxic waste in their facilities.

An early and continuing partnership with the University of Illinois School of Public Health provided important academic research and analysis of the available information on mercury medical devices and their alternatives. Providing accurate and accepted evidence from peer-reviewed medical literature, together with scrupulous attention to conclusions and recommendations based on it, became a hallmark of HCWH’s approach.

With regard to the business challenge, in almost every case HCWH was able to demonstrate that the alternatives were affordable. Although a digital thermometer could cost five times as much as a mercury device, the latter broke 10 times more often than the former. So in addition to avoiding the release of literally kilos of mercury every year on the hospital floor (one hospital in Mexico City documented breaking 4,600 thermometers annually, each with 1 gram of mercury) and endangering both patients and health care employees, there was a business case to be made for substitution.9 The availability of the alternative devices grew as medical device companies around the world moved to meet increasing demand, which also brought down the price of the devices.

Although the waste issue has been more difficult to overcome, it too has been addressed. A collaboration with the United Nations Development Programme-Global Environment Facility Global Healthcare Waste Project resulted in a guidance document that health care providers around the world are now using to manage their mercury waste.10 Taking the Campaign Global

With the US experience under its belt, in 2005 HCWH was ready to shift its attention to the rest of the world. Although the technical and business challenges were similar, differing political, economic, and cultural conditions required adaptation and variations on the organization’s basic approach.

An important initial success came in Europe. There, the dominance of national public health systems and the legislative clout of the European Union necessitated a more top-down strategy than the one employed in the United States. In July 2007, after considerable pressure from HCWH and several other European NGOs, the European Union agreed to ban the sale of mercury thermometers for use in health care.11 In 2012 the European Union also decided to phase out mercury blood pressure devices.12 While progress was being made in the United States and Europe, much of the rest of the world continued to use mercury thermometers and sphygmomanometers. In many of these countries, hospitals and health care systems were so cash-strapped that they couldn’t afford basic medicines—let alone think about switching medical devices.

The question then arose: Was going mercury free just a firstworld luxury? As HCWH began to explore the issue, several signs indicated that this was not the case. In 2005 the WHO issued a policy paper saying that a shift to mercury-free health care throughout the world was both necessary and possible.13 This paper, together with HCWH’s work around the world, formed the basis of the Global Initiative for Mercury Free Healthcare, co-led by WHO and HCWH, and endorsed by UNEP—the umbrella under which most of the global effort has been carried out in recent years.14 Concurrent with these developments, HCWH quickly found that many health professionals and hospitals around the world were receptive to this change. HCWH Asia, for example, organized a regional event in Manila in 2006 in conjunction with UNEP, WHO, and the Philippines Department of Health. The event was hosted by the Philippine Heart Center, a leading hospital where mercury medical devices were ubiquitous. Two years later, the Heart Center and a handful of other facilities had successfully removed their mercury devices, and the Department of Health had issued an administrative order phasing out mercury thermometers and sphygmomanometers nationally—an order implemented thanks largely to HCWH Asia’s dedicated, hands-on, province-by-province work with hospitals, local communities, and government.

In other parts of Asia and Latin America, the effort made progress similarly. Particularly important were successful efforts led

by HCWH and its partners in Argentina, Brazil, Chile, Costa Rica, India, and Mexico. In Africa progress has been slower. Leading the way is South Africa, where dozens of hospitals have made the switch thanks to the work of HCWH partner organization groundWork.

In little more than a decade the practice of mercury-free health care had spread across the globe. When governments came together in Stockholm in June 2010 for the first round of treaty negotiations to regulate mercury use and emissions, large segments of the health care system worldwide had already made the switch to non-mercury devices, not only demonstrating that a move away from the toxic heavy metal was possible but also advocating for stronger steps to control mercury’s impact on children’s health worldwide. As HCWH declared at the outset of the negotiations, “momentum is growing and mercury-free health care is increasingly becoming the status quo in many countries. The health sector is modeling change for society as a whole.”

Five Elements of a Successful Global Campaign

HCWH has waged a fifteen-year campaign for mercury-free health care. Its success in one country after another, and ultimately at the global level, was based on the following five elements. In many respects these five elements echo other successful campaigns—such as the global tobacco control movement and the worldwide effort to phase out ozone-depleting substances—and are transferable to other large-scale campaigns for social or environmental change.

Create localized models before scaling up | Thinking globally while acting locally can help to create worldwide change, particularly if the local action can demonstrate the feasibility of more thoroughgoing transformation. Developing a proof of concept by creating local models can be particularly powerful if the institution, community, or geographic space hosting those models is strategically chosen for its capacity to engender replication.

37

38

Stanford Social Innovation Review / Winter 2014

In almost every country and region of the world, the effort to phase out mercury medical devices started locally in one hospital, or even on one hospital ward. Once the impacts of mercury were understood and the feasibility of switching to alternative devices was established, the effort spread to other hospitals and parts of the health care system. In many countries this led to new government policies that institutionalized mercury-free health care.

HCWH’s Buenos Aires office, for example, began work in earnest in 2005, holding small workshops for health care professionals on environmental health, including mercury. As in Boston, the effort began on one ward in one public facility—Rivadavia Hospital—an influential member of a 30-hospital public health system in Buenos Aires. Soon the entire system, and subsequently the national government of Argentina, had adopted policies phasing out mercury medical devices. HCWH brought health care leaders from across Latin America to see what was happening in Argentina. This helped catalyze pilots and then policy initiatives, scaling up the effort in Mexico, Chile, Brazil, Costa Rica, and Nicaragua.15 Make the scientific, technical, and business cases for change | Advocates for social and environmental causes can make a passionate case for change, but without reputable science and sound economics to back up the argument they are not likely to win the day. This is particularly the case when mainstream institutions or governments are being asked to embrace the change.

Although the scientific case for stopping global mercury pollution was well established by UNEP many years ago, the scientific case for moving to alternatives in the medical field took longer. HCWH’s reputation for accurate research based in the realities of providing health care services allowed it to make the evidence-based case for the feasibility and necessity of such a transformation. It took time for US hospitals and European authorities to agree that the mercuryfree alternatives were medically safe and sound; once they did, they took action.

The fact that the United States and Europe mandated a shift away from mercury medical devices, however, did not necessarily cause health systems in other parts of the world to change. For this to happen, it was important that a United Nations organization, in this instance WHO, take the lead. When WHO issued a technical guidance document for selecting alternative devices, it created a global technical framework that legitimated the alternative devices and assured health authorities around the world of the feasibility of switching.16 Making the business case is also central to achieving this kind of transformation. This is especially true in under-resourced settings facing myriad health crises, where the mercury problem may appear comparatively trivial. Being able to prove the economic benefit of transformation made the shift to alternatives both desirable and doable.

Build broad coalitions, networks, and partnerships | No single organization can leverage and institutionalize large-scale change on its own. In an increasingly networked world, creating a strategy that mobilizes and leverages a diverse array of organizations is essential.

Although HCWH played an essential role as the backbone organization in this campaign—providing vision, leadership, and much of the strategic direction—it was its ability to build a broad and diverse group of participants that ultimately led to success. HCWH’s joint initiative with the well-respected international organization WHO, for example, was essential. WHO’s leadership on the issue proved

crucial to the campaign’s success, lending the effort legitimacy and technical authority that flowed down WHO’s organizational chain to the various regions of the world and from there to national health ministries and thousands of hospitals.

Similarly, large global health professional federations—such as the World Medical Association, the International Council of Nurses, and the World Federation of Public Health Associations—played a major role in legitimizing the issue for many of their national health associations. Funding from the US Environmental Protection Agency and the Swedish Chemicals Agency for specific implementation projects in Latin America and Asia provided further legitimacy along with crucial support. International NGO networks lobbying for the treaty, such as International POPs Elimination Network (IPEN) and Zero Mercury Working Group, provided both context and continual pressure to move the issue forward.

Just as fundamental were the local partnerships and relationships built in individual countries. These collaborations—involving nurses on a hospital ward, hospital directors, health and environmental ministry officials, environmental health NGOs, and others—were essential. The implementation of the Minamata Convention’s phasing out of thermometers and blood pressure devices will also depend to some degree on the ongoing strength of these partnerships.

Finally, the campaign would not have been possible without philanthropic partnerships. HCWH was able to lead this effort because of general support funding from several sources, including the Skoll, Oak, and Marisla foundations. Without these partnerships, which entrusted HCWH with financial resources to achieve broad goals (the phasing out of mercury from health care globally) rather than to deliver narrow, measurable deliverables (eliminating X kilos of mercury in Y country by Z date), this effort would not have achieved the success that it has.

Use market forces and institute policy changes | Policy drives the marketplace, and vice versa. To create lasting social change, one must find ways to integrate changes in policy with changes in the marketplace.

The strategic focus of HCWH’s work has been to transform the marketplace and move it away from unsustainable production and consumption toward greater environmental health—in this case by adopting alternatives to mercury medical devices. A parallel strategy has been to focus on institutionalizing change through policy development and implementation at the local, national, and global levels.

By persuading entire health systems and governments to mandate and purchase safer alternatives, HCWH was able to dry up the market for mercury medical devices and stimulate the market for alternatives in a number of important countries and regions. This in turn contributed to greater demand for the alternatives, increasing economies of scale in their production, and ultimately bringing the price down, making them more affordable and therefore accessible.

By shifting the market to digital medical devices in many countries and regions, HCWH made policy measures—including national phase-outs of mercury medical devices and ultimately the treaty’s 2020 phase-out date—all the more achievable.

Leverage success in one arena for broader transformation | Movements for social change are dynamic and always evolving. There is no true beginning or end. A victory in one realm opens the door for the next

Stanford Social Innovation Review / Winter 2014

cycle of organizing. To leverage success for broader transformation, one needs to think ahead about how one step may lead to another, and also how to opportunistically capitalize on unanticipated events.

When HCWH began working to phase out mercury in health care, a global treaty was not yet on the horizon. Yet its work in the health care sector helped create a worldwide sense that phasing out mercury was possible, contributing to momentum for a treaty that is much broader in its scope than health care. Reciprocally, the signing of the treaty has now created the inevitability of the total elimination of mercury in health care.

For HCWH, whose mission it is to embed sustainability principles into the health care sector, mercury has also served as a platform for educating health professionals and institutions about the broad connection between the environment and public health. Mercury has become an ambassador issue, broaching the need to broadly interpret the Hippocratic oath, “First, do no harm,” to encompass preventing pollution from hospitals and health care systems. It has led to a broad array of initiatives around which health care is mobilizing to promote environmental health.

In Boston, where the mercury work first began, this early collaboration created the conditions for HCWH and the Boston hospitals to become leaders in a broad range of sustainability programs, including being the first US city to require the use of the Green Guide for Healthcare, a sustainable building framework focused on environmental health, for all future health care construction projects.

Today HCWH and its partner organizations—Practice Greenhealth and Center for Health Design—are working with health care organizations across the United States through the Healthier Hospitals Initiative to take on other issues, including unsafe chemicals, waste, energy inefficiency, unhealthy and unsustainable food, and climate change.

On a global level, hospitals and health care systems around the world that began their sustainability journey with mercury are now tackling a broader set of issues, such as reducing their carbon footprint, using water sustainably, and substituting hazardous chemicals with safer alternatives. Many are doing so through a new HCWH-led initiative called Global Green and Healthy Hospitals, which provides a comprehensive environmental health framework.17 Mercury as Messenger

Although many governments are already beginning to implement the Minamata Convention, much work remains to be done to support the health sector in this transition—particularly in China, the world’s largest producer of both mercury medical devices and their alternatives.

Mercury medical devices, however, are a relatively minor threat to public health. Of greatest concern from a public health perspective is the expansion of coal combustion as a major source of power generation, particularly in China and India—something that the mercury treaty does little to combat. Coal-fired power generation is slated to increase significantly in both countries in coming years.

With it, deadly air pollution, along with mercury and greenhouse gas emissions, will continue to increase.

This growth in coal-based energy threatens not only to overwhelm the gains from the mercury treaty but also to undermine public health by exacerbating already serious local air pollution

problems and accelerating climate change. The health sector has a tremendous challenge before it.

HCWH is now beginning to parlay the lessons learned on mercury and global environmental health into research, coalition building, education, and policy advocacy to protect public health from the local and global consequences of fossil fuel combustion and climate change.

Mercury is but one of hundreds of chemicals poisonous to the developing child that are regularly found in our food, air, water, consumer products, and ultimately our bodies. Having learned about the dangers of mercury exposure, the health sector is now better equipped to further detoxify its supply chain from other chemicals linked to cancer, birth defects, infertility, and other negative health impacts.

In ancient Rome, Mercury was a god, the patron of commerce, eloquence, messages, and communication. Mercury the element— whose liquid metal, sometimes known as quicksilver, comes together and disperses in seeming flights of fancy—was named for this Roman deity. Today mercury, increasingly pervasive in the global environment, is sending us an important message regarding the simultaneously intimate and globalized connection between pollution, public health, and the environment. Indeed, mercury is a messenger for a larger global environmental health crisis that requires thinking and acting at a historically unprecedented scale. n N ote s

1 Thomas E. Novotny and Hadii M. Mamudu, “Progression of Tobacco Control Policies: Lessons from the United States and Implications for Global Action,” Health, Nutrition and Population (HNP) Discussion Paper, World Bank, 2008, http://siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/ Resources/281627-1095698140167/NovotnyPoliticalEconomy.pdf 2 Ellen Czaika and Bethanie Edwards, “History of Mercury Use in Products and Processes,” http://mercurypolicy.scripts.mit.edu/blog/?p=367; S. Norn, H. Permin, E. Kruse, and P.R. Kruse, “Mercury—A Major Agent in the History of Medicine and Alchemy,” Abstract in PubMed, http://www.ncbi.nlm.nih.gov/pubmed/19831290 3 United States Environmental Protection Agency, http://www.epa.gov/mercury/ effects.htm 4 Health Canada: http://www.hc-sc.gc.ca/ewh-semt/pubs/contaminants/mercur/ q1-q6_e.html 5 Health Canada: http://www.hc-sc.gc.ca/ewh-semt/pubs/contaminants/mercur/ q47-q56_e.html 6 UNEP, Global Mercury Assessment, UNEP Chemicals, Geneva, December 2002.

7 “Mercury Study Report to Congress, Volume II: An Inventory of Anthropogenic Mercury Emissions in the United States,” United States Environmental Protection Agency - 452/R-97-004, December 1997.

8 “Making Medicine Mercury Free: A 2005 Report on the Status of Virtual Mercury Elimination in the Health Care Sector,” Hospitals for a Healthy Environment, 2005.

9 Joshua Karliner and Jamie Harvie, “The Global Movement for Mercury-Free Health Care: How Health Care Leaders Around the World Are Substituting Mercury-based Medical Devices with Safer, Environmentally Sound Alternatives,” Health Care Without Harm, October 2007.

10 http://www.gefmedwaste.org/downloads/Guidance%20on%20Cleanup%20 Storage%20and%20Transport%20of%20Mercury%20from%20Health%20 Care%20July%202010.pdf 11 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:257:0013:01: EN:HTML 12 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:253:0001:0004 :EN:PDF 13 http://www.who.int/water_sanitation_health/medicalwaste/mercurypolpap 230506.pdf 14 www.mercuryfreehealthcare.org 15 To access various policies, see http://www.mercuryfreehealthcare.org/success.htm 16 http://www.who.int/water_sanitation_health/publications/2011/mercury_ thermometers/en/index.html 17 See www.greenhospitals.net

39

Stanford Social Innovation Review / Winter 2014

a rift opened within the fair trade movement. On one side is a group that emphasizes the interests , Inof 2011, commodity producers in developing-world countries. On the other side is a group that targets the

needs and aspirations of consumers in the developed world. In this article a longtime leader in the movement reflects on the tensions that have driven otherwise like-minded activists to form rival camps.

The Paradox of Fair Trade

By Manel Modelo

Photographs by Janet Jarman/Corbis (left) and richard levine/alamy (above)

40

Photographs by Janet Jarman/Corbis (left) and richard levine/alamy (above)

Stanford Social Innovation Review / Winter 2014

I

TRADING FAIR: The owner of a small farm near Matalgapa, Nicaragua, picks coffee (left). A coffee buyer makes a selection at a grocery store on the Upper East Side of New York City (above).

n 2012, I joined Fair Trade USA as a consultant. Soon after I began my work for the organization, I held a series of workshops with members of its coffee supply chain and producer services team.

Among the topics I covered were producer cooperatives, the cofin the workshop. Then I presented them with a comparable set fee market, and knowledge management. In these workshops, of data that reflected the perspective of producing countries.

I often used a version of the Cultural Orientations Framework This list indicated the scale of Fair Trade exports to the US developed by the executive coaching expert Philippe Rosinski.1 My goal market in relation to the total production of each country. From was to explore how culture—the framework in which we view and one list to the other, the ranking of countries changed. Nicaragua interpret what surrounds us—affects how we think, feel, and act.

(6.4 percent), for example, moved from fourth place up to first In one exercise, I sought to help workshop participants underplace. More important, the array of countries that appeared on the list changed. Costa Rica placed third (5 percent) and Mexico placed stand how their position as observers within a particular cultural fifth (2.4 percent), whereas Colombia (1.6 percent) and Indonesia framework skews the way they perceive and value “impact”— (1.4 percent) vanished from the top-five tier.3 for example, the impact that the practice of fair trade has on parties that engage in it.

Suddenly, our impact assessment had changed. Which country, Peru According to Fair Trade USA’s 2011 Almanac, the five counor Nicaragua, benefited more from its fair trade relationship with the United States? What about Colombia, which had gone from second place tries from which the United States imported most of its Fair to sixth-place also-ran status? People in the workshop began to see that Trade coffee were, in order, Peru (25 percent), Colombia (12 percent), Honduras (11 percent), Nicaragua (10 percent), “the impact of fair trade” can vary according to how they look at it. Viewing and Indonesia (9 percent).2 I shared those data with people the data from an import- or consumer-based perspective yields one result,

41

42

Stanford Social Innovation Review / Winter 2014

and viewing that information from an export- or producer-based perspective yields a different result. Both perspectives are valid, but only by viewing them together can we arrive at a comprehensive perception of reality.

That simple workshop exercise helps to illuminate what I have come to call the paradox of fair trade. The fair trade movement was founded to benefit small producers of coffee and other commodities— most of them located in developing countries of the Global South—by integrating them advantageously into a global export market. Yet as the movement has evolved, it has come to place a considerable emphasis on tailoring its efforts to the needs and aspirations of consumers in the Global North. In theory, fair trade can flourish on the basis of a win-win relationship between producers and consumers. In practice, however, tensions can emerge between those in the movement who emphasize the “fair” part of fair trade (for them, the interests of the producers are paramount) and those who emphasize the “trade” part (they prioritize the need to reach consumers).

Late in 2011, two of the most important organizations in the fair trade movement—Fairtrade International (Fairtrade) and Fair Trade USA—announced that they would be going their separate ways. That split marks a critical turning point in the history of fair trade, and people in the movement are still trying to make sense of it.

My goal in this article is to explore how a conflict between two opposing worldviews—two cultural frameworks—led to this internal division within the fair trade community. I will also explore how engaging with the paradox of fair trade allows us to see the interconnectedness of those cultural frameworks. In the end, I believe, the people of Fairtrade and Fair Trade USA can overcome their differences and achieve a real, transformative impact on the lives of producers and consumers alike.

The Theory and Practice of Fair Trade

In the early 1980s, Father Francisco Vanderhoff Boersma returned from the Oaxacan mountains in Mexico to his native Netherlands to talk with anyone who would listen about the inability of Mexican coffee producers to receive a price that would ensure them a dignified standard of living. Father Boersma, cofounder of the fair trade movement, hardly imagined that 30 years later the movement would include 1.3 million producers in 70 countries across four regions (Africa, Asia, Latin America and the Caribbean, and Oceania). Today, Fair Trade commerce takes place in 125 countries, and total annual sales of Fair Trade products exceed $6 billion. Since 2011, sales have increased by more than 16 percent.4 (I will use the lowercase term “fair trade” to refer to the broad movement to improve the lives of commodity producers through trade. I’ll use the uppercase term “Fair Trade” to refer to the activity of organizations that formally certify Fair Trade products.)

The idea of fair trade is simple. Ultimately, it involves a mutually beneficial exchange between two parties: producers and consumers. Its purpose is to improve the living and working conditions of small farmers and workers, and it depends on solidarity with people who are willing to pay more for a product to ensure that their purchase has a positive impact on producers. The goal is to empower producers and their organizations so that they can not only earn a fair price for their goods, but also take control of their businesses and reinvest in their communities.

Manel Modelo is a consultant who specializes in organizational development.

Currently, he is an advisor to Fair Trade USA’s coffee supply chain and producer services department. He also serves as a consultant in global coffee research for the World Bank.

The author wishes to dedicate this article to the memory of Raúl del Águila, a leader and ambassador of the fair trade movement.

Seen from one perspective, fair trade is a partnership between producers and consumers to rectify unequal trade relations by fortifying the trade chain’s weakest link—small-scale producers—and by weakening the power of intermediaries (commonly known as “coyotes” in Latin America) who add little or no value while claiming a large part of the revenue from sales. These middlemen, whether they are independent operators or employees of transnational companies, take advantage of the producers’ isolation and lack of market knowledge. By eliminating them and thereby shortening the supply chain, Fair Trade organizations have had a direct, positive impact both on producers’ income and on product quality.

In the late 1980s, leaders in the fair trade movement began launching country-specific Fair Trade labels. Then, in 1997, a number of organizations merged to form the Fairtrade Labelling Organizations International, which consolidated the global strategy of the movement and brought order to a crucial element of the Fair Trade system: certification. The role of certification is to make sure that all stakeholders in each supply chain meet an established set of trade, labor, and environmental standards. An independent certifier is responsible for checking compliance with these standards, and the Fair Trade label on a product guarantees to consumers that they have been met.

From the beginning, the flagship Fair Trade product has been coffee, and coffee still represents the product with the highest sales volume. But the list of Fair Trade goods has expanded to include other agricultural products: cocoa, honey, rice, cotton, sugar, fresh fruits and vegetables, nuts, and so forth. Although the consumption of Fair Trade products is increasing, they represent a small fraction of the overall market for coffee and other commodities. An estimated 25 million small producers make up 70 percent of worldwide coffee production, but sales of Fair Trade coffee account for only 2 percent of total production. Those figures clearly indicate the challenge—as well as the opportunity—that lies ahead for Fair Trade organizations.

A Movement Divided Against Itself

On September 15, 2011, Fairtrade International and Fair Trade USA published a joint statement that read in part: “[W]e have different perspectives on how best to achieve [our] common vision … of empowering producers and workers around the world to improve their lives through better terms of trade.” With that statement, a 14-year-old organizational alliance came to an end. The disagreement between the two groups stemmed from a long debate over whether to include large coffee plantations and non-organized small coffee producers in the Fair Trade system. Leaders of Fair Trade USA, eager to take that step, decided to break away from Fairtrade, and they launched a new strategy called Fair Trade for All. When Paul Rice, founder and CEO of Fair Trade USA, was asked about the split, he said: “It’s not personal. It’s business.” 5 He and

Stanford Social Innovation Review / Winter 2014

other leaders in the US group pointed out that other Fair Tradecertified products, such as tea and bananas, came from plantations.

Why, they asked, should the core Fair Trade products (coffee, sugar, and cocoa) be available only from producers’ cooperatives? Rice signaled that Fair Trade USA would focus primarily on growth— growth in sales and, Rice hoped, growth in impact. “Fair Trade of the past was amazing. And absolutely not scalable,” he said. 6 By allowing a wider range of producer entities to participate in the Fair Trade system, Rice argued, the movement would create efficiencies that would encourage large corporate buyers to obtain more products from that system. As a result, he believed, sales of Fair Trade products would increase, and the financial and social returns to all types of producers would increase as well.

Opponents of the Fair Trade USA decision charged that the Fair Trade for All strategy moved too far away from the movement’s original commitment to the empowerment of small-producer organizations. Rob Cameron, then CEO of Fairtrade, made that case in an open letter issued immediately following the split: “The FAIRTRADE Mark is the world’s most widely recognized ethical certification mark and we believe that our producer-focused approach is [the] key to that success. Producers worldwide not only [are] valued for their opinion, but are co-owners in the Fairtrade system.” 7 A model built around small producers’ organizations, Fairtrade leaders argued, is the only one that can guarantee the true empowerment of producers. Other models (such as the plantation model and the production-by-contract model) perpetuate dependence either on an employer or on intermediaries.

The World Fair Trade Organization, a global network of Fair Trade organizations, emphasized the risk that Fair Trade would end up falling under the control of big multinational corporations: “The WFTO believes the interests of producers, especially small farmers and artisans, should be the main focus in all the policies, governance, structures and decision making within the Fair Trade movement. … It is not unthinkable under this scenario to have a multinational operation own the entire supply chain and be able to label it as Fair Trade. This is completely unacceptable to the WFTO.” 8 Alongside these reactions from leading institutions, a myriad of activists, academics, buyers, brokers, concerned consumers, and producers around the world voiced their opinions for or against this decision. On the ground, all of us who had been part of the fair trade movement now found ourselves looking at each other differently.

We laughed to release tension, but our uneasiness was real. After working together for years, we had suddenly turned into adversaries.

Getting Personal

The night I first heard of fair trade, I could barely sleep. It was in 1994, and I was participating in an event hosted by Setem, a Spanish NGO where I was a volunteer. At that time, I was working at a bank.

But I also found time to work as a social activist and as an informal educator of young people. Setem, I learned that night, placed the concept of fair trade at the center of its strategy to raise public and consumer awareness about the inequities in North-South trade relations. For the next several years, I promoted the fair trade concept in churches and in schools, in social organizations and in government institutions. Then I decided to meet with fair trade coffee producers firsthand. I wanted to see with my own eyes the impact that fair

trade was having in the field. So in 1998 I grabbed my backpack and flew to Mexico. What was meant to be a two-year trip has become a calling that has occupied me for more than 15 years.

For my first field experience, I landed in the state of Chiapas.

There I volunteered to work with one of the most successful cooperatives within the Fair Trade system—an organization that had sent the first shipping container with Fair Trade coffee ever to reach the UK market. Since then, I have worked with organizations of small farmers to improve their production systems. I have assisted them in their organizational development, helped them build management capacities, and supported their efforts to obtain loans and seek new markets. I have witnessed how these organizations have leveraged the benefits of fair trade to become more competitive and to defend the interests of their members. From 2006 to 2011, I worked for Root Capital, where I led an initiative aimed at improving access to credit for small rural businesses, the vast majority of which sell their products under a Fair Trade label. I also served as an advisor for Setem on a project designed to help fair trade producer organizations gain access to the Spanish market.

Over the years, the Fair Trade system has grown considerably.

But the fair trade family remains relatively small. It’s a very young movement whose founders are still active and whose success is based on an almost utopian sense of marching together in pursuit of shared values.

That is why many personal relationships suffered following the split between Fairtrade and Fair Trade USA. In some cases, feelings of resentment are very real. In general, there is the sense of disappointment that often comes after a failure. Right now, we are hurt and at odds with each other, and it’s difficult to separate rational arguments from emotional reactions. It’s easy to look for culprits and to point fingers. For many of us, at this point, the safe thing to do is to surround ourselves with those who think as we do, and then to go out and prove that our way is the right way. Which means that our focus now is on competing with each other.

Outside the Market and Inside the Market

Let’s take a step back and look at the underlying reasons for the split between Fairtrade and Fair Trade USA. In particular, let’s use a variation of the cultural orientation analysis that I discussed earlier. By working to understand the cultural dynamics that have resulted in a conflict between two visions of the fair trade movement, we will be able to imagine options for the movement that take us beyond a purely competitive stance.

The fair trade movement takes certain things for granted. First, it assumes the pre-eminence of the current system of economic relationships. Second, it recognizes that some people participate in that system at a disadvantage. The question that stems from these premises is this: What makes “fair” trade necessary? There are two ways to answer that question, and each way reflects a specific cultural orientation.

One answer says that the current economic system is socially unjust, as well as inefficient in its distribution of resources, and that it depletes natural resources. To people who hold this view, fair trade is a powerful way to highlight the contradictions of the current system. This position has both a philosophical basis (What is “justice”?) and a political basis (How do we achieve it?). Linked to

43

44

Stanford Social Innovation Review / Winter 2014

this position is a commitment to standing outTwo Organizations, Two Cultures side the system—outside the market. From the perspective of this cultural orientation, the goal Fairtrade Fair Trade USA is to confront the market system with a more huInternational mane model. Adherents of this veiw accept that State Market Primary system system and work within its rules, but they seek to “contaminate” it with a potentially revolutionFrom outside: The market can From inside: The market serves Stance toward current be unjust, inefficient, and individual needs and desires ary idea: Fair trade puts people before profits. economic system environmentally destructive The other answer says that the current ecoSocial harmony: People achieve Individual control: Each person nomic system properly reflects a belief in free Sense of power and progress through collective action creates his or her own future responsibility will: An individual who acts on self-interest will end up benefiting other actors within that Abundant: Time has a “value without Limited: “Time is money” Perspective on time a price” system. Fair trade is thus one way that the system attends to the priorities of consumers. The Collectivism (cooperative) Individualism (competitive) Identity and purpose system, in other words, responds to every type Synthetic (aiming to integrate Analytic (focusing on concrete Mode of thinking of demand, including the “demand” of consummultiple factors) solutions) ers who have a desire for social justice. People To change the current economic To use the current economic model who subscribe to this position stand inside the Organizational Goal system and alter its power dynamics to develop a truly global solution system—inside the market. Their goal is to parTo enable consumers to buy with a To provide consumers with access ticipate fully in the market. They don’t deny Purpose of Fair Trade sense of social responsibility to Fair Trade products that there might be ways to improve the current system, but they believe that the market is the Based in part on the Cultural Orientation Framework proposed in Philippe Rosinski, Coaching Across Cultures, Nicholas Brealey Publishing, 2003. most efficient way to allocate resources. From the perspective of this cultural orientation, the and new governments and new policies if we’re going to change the first priority of fair trade is to expand the market for Fair Trade structures of power, but one of the ways we are going to get there is products as broadly as possible. through changing relationships.” Rice, by contrast, focuses on the When the fair trade movement split in 2011, it did so precisely along this fault line. Fairtrade represents an outside-the-market need to adapt to the current system. “The new version of globalperspective. Its cultural orientation aligns with a European cultural ization that’s emerging and growing very rapidly,” he says, reflects the idea “that you can actually be profitable and sustainable at the framework, in which the principles of social democracy and the welsame time.” In another forum, Rice made the point more bluntly: fare state remain strong. Fair Trade USA, by contrast, represents an “The solution is the market.” inside-the-market perspective. Its cultural orientation aligns with an Anglo-American cultural framework, in which the principles of Evaluation of impact | The two leaders also speak in contrasting individualism and competition tend to be dominant. terms when they discuss the impact of fair trade. Lamb argues that To speak of “cultural orientations” is to step into a tricky area. gauging the impact of fair trade is a more complex task than simply Unavoidably, we find ourselves using simplifications or stereotypes reading a sales-growth chart. “Fair trade is about enabling consumers to guide us. Individual and cultural reality is, of course, much richer to buy responsibly, enabling producers to farm responsibly, pushing companies to trade responsibly,” she says. “But it’s also more than and more complex than the schematic overview that I have provided that. It’s about being a change agent.” Rice, although he emphasizes here. Still, a broad overview of this kind can be useful as a tool for analyzing different beliefs, motivations, and attitudes toward change. the benefits that his organization delivers to producers, uses lan(See “Two Organizations, Two Cultures” above.) guage that is more bottom-line-oriented than Lamb’s. “Over the last 10 years, we’ve been able to deliver over $220 million in additional Cultures in Conflict market value back to those farming communities,” Rice says. “At The culture of Fairtrade and the culture of Fair Trade USA have the end of the day, it is the best metric for success that we have.” evolved in sharply different ways. And those differences find expresStrategy | How organizations operate is necessarily a result of the sion in the voices of the top leaders at those organizations—in the strategic objectives that drive them. At Fairtrade, the focus is on voice of Harriet Lamb, the current CEO of Fairtrade, and in that supporting frontline producers. “We need above all else to be really world-class in our work with small holders. That’s what fair trade of Paul Rice, CEO of Fair Trade USA. What follows is a survey of is famous for,” Lamb says. “Nobody [else] is helping small holders comments that these two leaders have made in public forums over to get organized and get a better deal from trade. Nobody [else] is the past couple of years.9 helping small holders build their businesses and become stronger Attitude toward the market system | In discussing how the fair trade exporters empowered within the value chain.” Fair Trade USA has movement should interact with the current economic system, Lamb emphasizes the importance of transforming that system. “How can adopted a strategy that pivots on the needs of corporate buyers we change the world from the bottom up? How can we change the and consumers. “Companies are finding that this model, and similar models, are helping them stabilize their supply chain, improve economy through changing people?” she asks. “Change,” indeed, their reputation, and also tap into this growing consumer segment is the main word on her mind when she says, “We need new laws

Stanford Social Innovation Review / Winter 2014

that we call the ‘conscious consumer segment.’ They are looking for great products that also are kind of consistent with their values,” Rice says. “Great products make us also feel good.”

Partnerships | Similarly, Fairtrade and Fair Trade USA give priority to their connections to different kinds of partners. “Farmers know best what would enable them to make change in their communities, and we have to make sure that in fair trade the farmers and workers are in the driving seat,” says Lamb. Rice, for his part, sets his sights on allying with parties that drive demand for the products that his organization certifies. “Partnerships with companies and market-based approaches,” he says, “are often needed in order to solve social or environmental problems.”

And here is a pair of quotations that succinctly convey the difference in outlook between Lamb and Rice—and the difference in culture between the Fair Trade groups that they lead. Lamb points to the importance of producers: “We work to really unlock the power of the many in the interest of the farmers and workers.” Rice, meanwhile, points by implication to the centrality of consumers: “Every purchase matters. Every purchase is an opportunity to change the world.”

What would happen if people on each side of this culture clash could truly talk with each other? The challenge of cross-cultural communication is for people to recognize that they—just like those with a different outlook, a different sense of identity—are ensconced in their own cultural orientation. Being open to understanding other cultural frameworks is a skill that requires us to move our own identity off-center and to experience that identity from a different vantage point. My hope is that people in the fair trade movement can take that step.

Working Through the Paradox

Under the umbrella of the fair trade concept, two perspectives—two cultural orientations—coexist in tension. There is the outside-themarket perspective of Fairtrade, and there is the inside-the-market perspective of Fair Trade USA. Within each perspective, the basic definition of fair trade is the same: the use of trade as a means to achieve social justice. But there is no agreement on the exact meaning of “social justice,” or on the best strategy for achieving it, or on which side of the producer-consumer equation should receive greater emphasis. The current split within the movement puts this tension into clear view.

But are these two perspectives, in fact, mutually exclusive? Or are they, perhaps, complementary? Even though they each regard producers and consumers in a different light, they agree that the essence of fair trade lies in engagement between those groups. They agree, moreover, on the need to increase the participation of consumers in fair trade—whether that participation takes the form of promoting responsible consumption (Fairtrade) or the form of increasing sales (Fair Trade USA). Not all consumers are the same. Their beliefs and aspirations, and how they see their role in society, differ. So why not consider each perspective to be a different method for reaching a different set of consumers? For some consumers, a fair trade transaction is a chance to participate in meaningful, long-term change. For others, it’s a one-time chance to “do good.” Fairtrade is clearly in the best position to reach the first kind of consumer, whereas Fair Trade USA is probably best suited to reach the second kind.

What I propose, in sum, is that these two groups pursue their

competing yet complementary approaches. Each group will spread the fair trade ideal while approaching consumers in its own way. In other words, each organization will act in accord with its cultural orientation. Fairtrade, with its outside-the-market perspective, will deepen the sense that the Fair Trade system operates by and for organized small producers. Fair Trade USA, with its inside-themarket perspective, will extend fair trade to more potential consumers. One organization will focus on quality (enrich the concept), and the other will focus on quantity (grow to scale).

Again, it is a paradox: The fair trade movement aims to empower producers, yet it does so largely by serving consumers. That paradox, that tension at the root of the fair trade concept, has led to an institutional split within the movement. But the effort to work through the paradox can also lead us to be innovative in our search for a way forward. I envision the possibility of building a new model that respects both cultural frameworks: We can compete and work together at the same time. We can appeal to consumers using different methods, even as we could join forces to empower producers.

What if members of each group could recognize that they are only partially right? What if they could say, in effect, “We all are fair trade”? What if, together yet separately, they could rebuild the global Fair Trade system in a way that serves as an example for other organizations? We have an opportunity to put in place a new model in which we harness the benefits of market competition while using the power of solidarity to distribute those benefits.

Fair trade in this new era should be not only a matter of good business, not only a compelling way of unlocking the power of social justice, but also a transformative movement for all stakeholders. If we can remain aware of our own cultural orientation and also remain respectful of others’ orientation—if we can use that knowledge to help us work together—then we will have an opportunity to make a real difference. n N OTE S

1 Philippe Rosinski, Coaching Across Cultures, Nicholas Brealey Publishing, 2003.

2 Fair Trade USA, “2011 Almanac,” http://fairtradeusa.org/sites/default/files/ Almanac%202011.pdf 3 Data from the International Coffee Organization, http://www.ico.org 4 Data from Fairtrade International, “Unlocking the Power: Annual Report: 2012-13,” http://www.fairtrade.net/fileadmin/user_upload/content/2009/resources/2012-13_ AnnualReport_FairtradeIntl_web.pdf 5 Michael Sheridan, “Paul Rice makes the case for Fair Trade for All,” CRS Coffeelands Blog, October 6, 2011, http://coffeelands.crs.org/2011/10/ paul-rice-weighs-in-on-fair-for-all 6 Ibid.

7 Rob Cameron, “An Open Letter from CEO on Changes to the Fairtrade System,” September 16, 2011, http://www.fairtrade.net/single-view+M572040838dd.html 8 “WFTO Response to Fair Trade USA-FLO Split,” World Fair Trade Organization, October 2011, http://www.wfto.com/index.php?option=com_content&task=view& id=1574&Itemid=314 9 Quotations of Harriet Lamb come from her presentation at the Fairtrade Supporter Conference, October 16, 2012, http://www.youtube.com/watch?v=PyA0XpYJfw8.

Quotations of Paul Rice come from “Interview with Paul Rice, CEO Fair Trade USA” (online video), The Badger Herald, February 2, 2012, http://www.youtube. com/watch?v=3GwE-1FhlqU; “Insight: Paul Rice—President & CEO, Fair Trade USA” (online video), mOppenheim Associates, December 8, 2011, http://www.you tube.com/watch?v=pIi7IUd0u0c; Ellen Lee, “Q&A With Fair Trade USA Founder Paul Rice,” SFGate, April 15, 2012, http://www.sfgate.com/business/article/Q-Awith-Fair-Trade-USA-founder-Paul-Rice-3482390.php; Paul Rice, “Awakening a Sleeping Giant: Fair Trade on Campus” (online video), TEDxAshokaU, May 9, 2011, http://www.youtube.com/watch?v=a7X5eEimFD8

45

46

Stanford Social Innovation Review / Winter 2014

What enables a social-purpose organization to excel at developing new ideas and practices?

, In many cases, the answer lies not in how people connect with the external social landscape,

but in how they connect with each other.

Social Innovation From the Inside Out

By Warren Nilsson & Tana Paddock Illustration by Luc Melanson

T

he teacher clears her throat and stares at the floor. She starts to cry. She is sitting awkwardly on an undersized chair in an empty classroom.

The neighborhood outside offers a familiar urban scene: lines of weathered row houses, many of them boarded up; a few struggling stores and bars; streets that are strewn with broken glass; here and there, a drug dealer on a corner. Inside, in the school where she works, the teacher is crying because she is trying to explain how happy she is.

We have asked her a simple question: “How is this place different from other schools you’ve been around?” She thinks for a moment.

Then she tells us a story about two very different people: the person she was last year, when she was working at another school, and the person she is now.

That first person came home each night in a depressive stupor, suffocating from a fear of failure. She was hesitant to share her concerns with colleagues. She found it hard to like the kids she was teaching, and she found it hard to like the jaded teacher she was becoming. The second person is joyful. She is in love with her students and excited by the kinds of challenges that used to confound her. She is eager to explore new ideas with her colleagues. She is delighted by how much she herself is learning.

All over Southwest Baltimore Charter School (SBCS), we hear similar stories. “This is a special, special thing that’s happening here,” one teacher tells us. “You’re welcomed through these doors.

You always just feel the love,” a classroom aide says. “It’s like no other experience I’ve had in any job,” an administrator says. “I’m finally learning how to teach,” says a teacher who’s in his first year at the school. “This is my ninth year teaching, and I’m finally learning how to teach.” SBCS isn’t just warm and welcoming. It’s generative. It

produces a continual flow of new instructional approaches, new ways of relating to students, and new modes of community engagement.

Meanwhile, 500 miles to the north, in Montreal, Tim is hunting bees. A swarm from a rooftop garden has decided to relocate, as swarms do, and after a brief interlude in a nearby tree, the bees have disappeared. Tim is the director of sustainability and urban agriculture at Santropol Roulant, an organization that cooks meals and delivers them to people with reduced autonomy. Mealson-wheels programs are hardly novel. They have been around since World War II, and there are thousands of them in North America. But the Roulant, as it’s called, might be the only meals-on-wheels organization with bees on the roof— and worms in the basement. (The Roulant has an active composting program.)

The Roulant is a small organization, and it runs a seemingly traditional social program. Yet it has a way of continuously reinventing the social fabric of its community. It does so by threading together experiments in intergenerational connection, food system design, agricultural technology, urban transport, art, and much more. These experiments often seem modest in their initial conception, but they grow to be astonishingly vibrant in practice. Since

Stanford Social Innovation Review / Winter 2014

47

48

Stanford Social Innovation Review / Winter 2014

its founding almost 20 years ago, the organization has gained national recognition and won a number of awards for its innovative approach. But what strikes people most strongly when they come in contact with the Roulant is the baffling ease with which it attracts hundreds of volunteers.

Ask people what draws them to the Roulant, and they begin to sound much like the teachers at SBCS. They talk about a spirit of invitation. They talk about a sense of connection. One staff member recalls encountering the organization when he arrived there for a job interview: “I can’t say it any other way but that it touched my heart.

It’s an organization that focuses on the individual, on the human at the center.” A board member puts it this way: “The belonging is there first, and we work out the details. There is something about really respecting what people can bring.” And a Roulant volunteer sums it up: “This place grows goodness.”

WARREN NILSSON is a senior lecturer in social innovation at the University of Cape Town (UCT) Graduate School of Business and a faculty member of the UCT Bertha Centre for Social Innovation.

TANA PADDOCK coordinates Organization Unbound, a global community of practice that explores the organizational dimensions of social change.

more important source of social innovation capacity.

The organizations that we have worked with and learned from don’t resemble each other much at the level of strategy, structure, or leadership. Yet they have in common one apparently simple practice: They pay a great deal of attention to the inner experiences of the people who work in them. The key to changing the world may have less to do with understanding far-flung stakeholders than with understanding the person who sits at the desk right next to us.

THE VALUE OF INNER EXPERIENCE

THE ELUSIVE ROOTS OF SOCIAL INNOVATION

In an expansive review undertaken for the Rockefeller Foundation, Christian Seelos and Johanna Mair argue that despite voluminous research on the subject, scholars have very little practical knowledge about what makes an organization good at social innovation.1 Researchers have focused mainly on innovative ideas rather than innovative processes, and on entrepreneurs rather than established organizations. But how does an isolated idea become a stream of interlinked ideas? How do inspired entrepreneurs make way for the emergence of inspired communities? How, in short, can people develop an organizational capacity for sustained social innovation, much as they might develop an organizational capacity for technological innovation?

When it comes to innovation, social-purpose organizations face particularly daunting challenges. Social innovation isn’t just about providing new products and new services; it’s about changing the underlying beliefs and relationships that structure the world.2 It’s one thing to create a new cell phone. It’s quite another to transform an individual, a community, an institution. How do social-purpose organizations maintain an adaptive, generative orientation—the kind of orientation that will allow them to grapple consistently and creatively with the complex social reality that they face?3 We’ve been exploring that question for more than a decade. And we’ve done so by spending time with small social-purpose organizations that have cracked the code in some way—places where institutional change seems to spring from every corner, places where change takes on a creative momentum that lasts many years. We have been particularly struck by how readily these organizations disrupt the kinds of institutional patterns that elsewhere seem to be immutable.

To date, research on social innovation capacity has largely taken an external approach, emphasizing the way that crosssector networks can help an organization connect to diverse communities in novel ways. Stuart Hart and Sanjay Sharma, for example, argue that an organization’s willingness to expand its radius of action and to engage with “fringe stakeholders” is a critical factor in fostering the kind of imaginative disruption that allows social innovation to take place. 4 These kinds of external relationships, to be sure, can play a vital role in breakthrough thinking and system transformation. We have found, however, that an organization’s ability to look inward might be an even

The idea that organizations should turn inward may seem paradoxical at first. When we’re trying to wrestle with the large and complex issues “out there,” why would it help to dwell on the relatively small issues “in here”? Part of the answer may be that, in the end, there is no “out there.” The cultural, economic, technological, and moral complexities that social innovators confront don’t respect organizational boundaries. As members of an organization speak honestly with each other about their experiences of life and work, they come to understand that the social realities that they seek to change are not purely external. They are in the room.

Socially innovative organizations draw on member experiences to generate the raw material of social change. They do so not just in special retreats or workshops, but in the routine meetings and conversations that make up most of organizational life. Borrowing a term from the poet Gerard Manley Hopkins, we call this practice “inscaping.” Hopkins used the term “inscape” to capture the invisible, interior structure or essence of something—a tree, a person, a word.5 We define organizational inscaping as the practice of surfacing the inner experiences of organizational members during the normal course of everyday work. By “inner experiences,” we don’t mean just emotions. We mean everything that makes up our inner lives: ideas and intuitions, aspirations and fears, values and memories.

Inscaping might sound like a “soft” or even a utopian practice.

Yet it’s actually quite rational and hardheaded. It helps people to see their organization as it really is, not as they wish it were. The concept is disarmingly simple, but inscaping in practice turns out to be rich and complex—and much less common than one might think. Far from being an easy recipe for success, it is an anti-recipe: It challenges people continually to engage with themselves and their environment in new ways.

To understand what inscaping is, it helps to understand what it is not. Inscaping is not group therapy. Although it involves exploring submerged aspects of human experience, its purpose is not to help people “fix” themselves, but rather to inform and enrich the work at hand. Inscaping, moreover, is not a forced, obligatory endeavor.

No one should practice inscaping in a way that feels inauthentic. In fact, voicing discomfort with a particular form of inscaping is itself a form of inscaping. And, finally, inscaping is not something that a leader or a facilitator can manage. On the contrary, it requires people to take responsibility for sharing their experiences with each other.

Stanford Social Innovation Review / Winter 2014

Indeed, it requires even leaders to stop speaking for their organization and to start speaking for themselves—as human beings.

Over time, the practice of inscaping can become an ingrained part of organizational life. At SBCS, the joy, confusion, and frustration inherent in working there form a natural part of any conversation.

Staff meetings often start with a discussion of everyone’s high and low moments from the current week. In job interviews, prospective teachers are surprised to find themselves honestly—and quite happily—recounting their failures at previous schools. “The weak link isn’t necessarily the person who doesn’t do the job well,” says one SBCS teacher’s aide. “It’s the person who doesn’t do the job from within or truthfully.”

At SBCS, staff members don’t cordon off their personal lives from their professional lives. Conversations, which can cover everything from mental health problems to racial issues, are frank and engaging. They are also generative, in that they foster connection instead of separation. Cultural chasms are just as present at this school as at any other school in Baltimore, but they feel different here. “This is the first job I have ever [had where] I hang out

As members of an organization speak honestly with each other about their experiences of life and work, they come to understand that the social realities that they seek to change are not purely external. They are in the room.

with my coworkers,” an SBCS administrator says. “And trust me when I tell you that 85 percent of my coworkers are 100 percent different from me in terms of what we like, what we do, how we talk when we are out of school.”

There is a similar dynamic in play at the Roulant. “Whoever you are, [when you walk] in the door, there is someone there to greet you who is also taking an interest in you as a person and not just as someone who’s going to help the organization,” says one volunteer.

Meetings at the Roulant feature an odd mixture of program analysis and personal reflection, with one stream of conversation flowing easily and without comment into the other. This way of interacting encourages people to offer each other not only work-related insight, but also appreciation, sympathy, and support. And the setting in which people work—a physical space that is almost entirely open—further supports a commitment to experiential awareness.

The Roulant is also remarkable for its strategic dexterity. The development of roles, projects, and initiatives is a supple process, rooted in the strengths and interests of individual staff members.

One staff member explains it this way: “In a lot of other places I’ve worked, I felt that employers asked the question ‘What can I get

from you?’ And I feel that here, just by changing that question to ‘What gifts do you have to share?’ there is a big shift in the way you are thinking and in the way you are going to behave.”

HOW INSCAPING DRIVES SOCIAL INNOVATION

The kind of inscaping practiced at SBCS and the Roulant has directly contributed to social innovation capacity at each organization. To clarify the link between inscaping and social innovation, we distinguish between two dimensions of inscaping.

Work inscaping involves exploring our experience of the day-today work that we do. What are we excited about or afraid of when we undertake a particular project? What intuitions and questions do we have that diverge from the current strategic direction of our organization? How do we experience the structures and processes that define our work? And, most important, how do we experience the relationships that we have with our colleagues?

Work inscaping brings energy and creativity to an organization.

As people gain the freedom to express the hopes, fears, questions, and concerns that they have about their work, the space for divergent thinking expands around them. What’s more, because work inscaping fosters unusually frank relationships, people develop a nuanced and appreciative understanding of each other. This understanding allows them to move together through difficult new terrain in a way that accommodates their specific strengths and flaws.

Life inscaping involves sharing aspects of our lives that exist beyond our work roles. What aspirations do we harbor, and what challenges do we face? What are our values? What do we care about, and where do we find meaning? Life inscaping isn’t a matter of discussing every detail of our personal lives with each other. Rather, it’s a way to make sure that we don’t have to leave ourselves at the door when we come to work.

As people share their life experiences, they come to see each other as whole human beings and not just as roles. When members of an organization interact regularly as people with families, political interests, spiritual beliefs, artistic enthusiasms, and concerns for their neighbors and their planet, they become attuned to social possibilities that transcend immediate organizational objectives.

Work inscaping and life inscaping may reflect a similar sensibility, but they have very different effects on an organization’s social innovation capacity. And those effects, in turn, produce very different kinds of organizations.

The catalytic organization | We apply the term catalytic to organizations that enable work inscaping but not life inscaping. Organizations of this type are good at questioning the status quo within their field but are less adept at questioning the taken-for-granted social patterns and values on which their field rests. High-tech companies like those that emerge from Silicon Valley and Bangalore, for example, veer toward the catalytic model. Such organizations value individual curiosity and initiative even in cases when the strategic implications of a new idea are not immediately obvious. They foster the kind of directness and honesty that can make even the most difficult work relationships productive, if not necessarily pleasant. As a consequence, they regularly develop new products, new programs, and new ways of thinking about what’s possible in their industry.

49

50

Stanford Social Innovation Review / Winter 2013

These organizations, however, often seem to pursue innovation for its own sake. They are more technically creative than socially creative. For that reason, they may resist the challenge of exploring the deeper meaning or the social impact of their work. Because they are so bounded by the mindset and values of their own industry, they also have significant difficulty in building authentic crosssector relationships.

Work inscaping alone, in other words, does not lead to social innovation. In the absence of life inscaping, the innovation that’s enabled by work inscaping tends to be narrow. If people do not regularly draw on their life experiences, they remain stuck within the confines of their professional roles and identities. Their conversations rarely stray beyond certain institutionally defined objectives, and they find it difficult to see beyond those objectives.

The communal organization | We use a different term—communal— to describe organizations that pursue life inscaping but not work inscaping. Communal organizations are generous and connected places. Unlike their catalytic counterparts, they empower people to grapple internally with big social and moral issues. They also have an expansiveness of spirit that prevents the kind of operational

tunnel vision that catalytic organizations typically suffer from.

Frequently, however, organizations of this type have difficulty with work inscaping. The practice of holding rich conversations about social issues can degenerate into a constricting framework of political correctness, and people can become so wary of saying the wrong thing that they decline to voice alternative perspectives.

People may also become hesitant to speak honestly about their relationships with colleagues, because they’re afraid to disturb a mood of surface harmony.

Communal organizations, therefore, struggle to develop and maintain a culture of social innovation. Practical creativity requires a relational and intellectual openness that is difficult for communal organizations to sustain. They may develop various programs and projects, but few of those initiatives take root in novel ways. As a result, members of a communal organization can end up losing faith in the social change that they yearn for.

In our experience, many social-purpose organizations get stuck in a communal dynamic. Some time ago, one of us worked with a social enterprise that aimed to help low-income women enter the health care profession. The organization was vibrant and caring; the spirit

The Ins and Outs of Inscaping There is no manual for inscaping. But here is a sampling of practices—

quick “check-in”: You go around

Soliciting divergent views up

drawn from our work with socially transformative organizations—that

the room, giving people an op-

front can lead not just to alterna-

enable people in organizations to explore and share key elements of

portunity to say how they’re feel-

tive answers to a given question,

their inner experiences through their work.

ing at the moment—what their

but to new ideas for reframing

mood is, what’s on their mind.

the entire question. It can also

A less common practice is to do

help create genuine alignment

a mid-meeting check-in. Doing

around the decision that you

so can have a powerful effect

eventually reach.

Expand the Question

are we most passionate about?”

When planning a project or pro-

In addition to exploring internal

cess, focus not only on what you

weaknesses, ask: “What do we

want to achieve, but also on the

most struggle with?” In addition

kind of experience that you want

to exploring external opportuni-

to create for your team. Simi-

ties, ask: “What are we curious

larly, when evaluating a project

have all sorts of mistaken as-

about?” In addition to exploring

or process that has already taken

sumptions about what others are

external threats, ask: “What are

place, don’t just ask, “Did we

thinking and feeling. So stop the

our fears?”

discussion, and invite people to

meet our objectives?” Broaden the focus by also asking, “How

Personalize Feedback

did we experience that project?”

When giving feedback to employ-

Turn Strategy Inward

ees or co-workers, don’t merely assess their performance in the

when a meeting seems stuck. In that situation, people typically

share the feelings that underlie their statements (or their silence).

This practice, we have found, can resolve seemingly intractable situations very quickly.

Encourage Role Hacking Experimenting with role boundaries almost always opens up space for additional inscaping.

Here are just a few ways to reframe roles in your organization: Invite a colleague into a conversation or a decision-making process that normally lies outside

A common approach to devel-

abstract. Instead, try to speak di-

oping strategy is to analyze the

rectly about your own experience

Seek Divergence

pertise. Engage in activities that

characteristics of an organization

of working with them. Shift from

When deciding on a course of

are normally seen as “beneath”

as it relates to its environment.

saying “Here’s my evaluation of

action, people in organizations

your role. (If you’re an executive

your strengths and weaknesses”

often push far too quickly for

director, for instance, then spend

to saying “Here’s how I experi-

a convergence of opinion. As a

time cleaning the bathrooms at

ence my working relationship

result, they miss the chance to

your organization.) In dealing

with you.”

draw on the different intuitions

with partners, funders, clients,

and perspectives that their col-

and other outside stakeholders,

leagues undoubtedly have. In-

draw on your personal life

sion, try a variation on the SWOT

Check In—Early and Often

stead, start by listening to those

to connect with them in ways

theme. In addition to exploring

One familiar inscaping practice is

who have serious concerns about

that go beyond the work that

internal strengths, ask: “What

to begin or end a meeting with a

a proposed course of action.

you do together.

Many organizations, for example, use the familiar tool known as a SWOT (strengths, weaknesses, opportunities, threats) analysis. The next time you conduct a strategic planning ses-

his or her function or area of ex-

Stanford Social Innovation Review / Winter 2014

of life inscaping was quite high. Staff members, for instance, gamely confronted significant economic, educational, and racial divisions. But work inscaping was relatively rare. People didn’t make time to talk honestly about how they were experiencing the considerable stresses that their work entailed. The strategic thinking of the organization, meanwhile, was relatively fixed. Before it even opened its doors, the organization developed a story about what it would be, and it clung fiercely to that story. By paying scant attention to the intuitions and alternative ideas that arose from the on-the-ground experiences of its staff and partners, the organization missed numerous chances to evolve. In the end, the organization didn’t last long. Although it changed the lives of those who worked for it, it never had an innovative breakthrough at the institutional, programmatic, or market level. Without that kind of breakthrough, it was able neither to survive nor to have a broad social impact.

The transformative organization | When the innovative power of work inscaping and the social reach of life inscaping combine, something profound happens to an organization. There is a visceral shift—a change in how people feel when they spend time with the organization. We call an organization that meets this description transformative. A transformative organization is an unusually engaging place. It’s not merely an instrument for effecting social change; it’s a living expression of the change that its members seek. Consequently, it has a remarkable ability to spark institutional renewal: The submerged assumptions and beliefs that shape the takenfor-granted world rise to the surface, and they become more tangible and more malleable.

Consider the Planned Lifetime Advocacy Network (PLAN), a highly transformative organization based in Vancouver. In 2000, as a result of PLAN’s work, British Columbia became the only jurisdiction in the world to recognize the ability to develop trusting relationships as an indicator of legal competence.

Adults with developmental disabilities can now legally participate in the appointment of their own guardian if they can show a history of sustaining long-term relationships with other people. (Traditionally, guardianship law has recognized only cognitive indicators of competence.)

PLAN, like SBCS and the Roulant, is able to disrupt and re-imagine the institutional frameworks that surround it. Those who work at PLAN delight in probing the deep assumptions that structure how people understand and experience “disability.” The core of PLAN’s work involves fostering relational networks for people with developmental disabilities—not fragile networks of service providers, but robust networks based on love and friendship. Building these networks is exacting work. It can take years. But such networks are resilient and deeply fulfilling for all who participate in them.

PLAN’s approach has spread to a number of communities across Canada. In addition, the organization has led innovation in many other areas: tax law and estate planning, organizational funding, and, most profoundly, citizenship development.

From the start, the goal of PLAN members has been to enable people with developmental disabilities to lead full and meaningful lives, even after their parents are no longer present to guide and support them. Early in its evolution, the organization began to focus on fostering various elements of what its members call a “good

life”: relationships with family members and friends, a home that serves as a sanctuary, financial security, and a sense that others will respect one’s wishes and choices. At a certain point, though, they discovered that they were missing something. As they shared their experiences with each other, they came to recognize how much the people in their lives who have developmental disabilities had given to them. A good life, they now believe, isn’t only about what you have or what you need; it’s also about what you can give—what you can contribute to your family, your friends, and your community. And this principle applies to people with developmental disabilities as well.

That epiphany significantly altered PLAN’s approach to its immediate work. But it also changed how PLAN frames its broader vision. The more that PLAN members explored the theme of con-

When people integrate inscaping into their work routine, they develop a more nuanced understanding of their work and a keener ability to connect their interests and passions to the goals of their organization.

tribution, the more they realized that it applied not only to people with developmental disabilities, but to any group whose potential for contributing to society was unacknowledged. So although PLAN continued its core work around disability, it expanded its mandate by launching a new initiative: the Philia Dialogue on Caring Citizenship. The goal of the Philia project is to spark a wide-ranging inquiry into the lived experience of inclusive citizenship.

What has driven PLAN’s capacity for institutional creativity has been its deeply experiential orientation. The organization has always been committed to both work inscaping and life inscaping.

Its founders were a group of parents who wished to secure a future for their children with disabilities. Their hopes, fears, and personal histories are what gave birth to PLAN. “We cannot do any of the more abstract work, the paradigm-shifting work, if we drift away from the stories,” says Al Etmanski, a cofounder of PLAN. “It’s like cutting off our blood supply. It’s that clear to all of us.” Today, the organization continues to shape itself by drawing on the feelings and experiences of everyone who crosses its path—member families, to be sure, but also legislators, medical professionals, businesspeople, funders, and, most important, members of its own staff.

INSCAPING IN PRACTICE

People can pursue inscaping in any number of ways. What works for one group may feel awkward or alien to another group. So it’s best to experiment with practices that fit the culture and context of a particular organization.

51

52

Stanford Social Innovation Review / Winter 2014

One simple yet powerful approach to inscaping is to introduce experiential questions into workplace conversations that are otherwise purely functional. When a team is planning a project or process, for example, its members might focus not only on what they want to achieve for others, but also on the quality of experience that they want to create for themselves: “How do we want to feel during this project, this board meeting, this fundraising gala, this customer service process?” This kind of future-oriented inscaping might seem as if it could distract a team from furthering its objectives. But we’ve found that focusing on the desired experience of those who create a project enhances the end product and heightens the experience of end users as well. Team members can introduce experiential questions into any stage of any routine organizational process. Whatever approach they take, they should be sure to use a light touch in pursuing it. In most cases, it’s also best to begin an inscaping experiment with a specific project or team rather than with an organization as a whole. (See “The Ins and Outs of Inscaping” on p. 50.)

At first glance, there may appear to be a tension between inscaping and the practical demands of work. We haven’t found this to be the case. A teacher in her first year at SBCS, for instance, told us that the rich, open environment of that school actually freed her up to focus on the exacting requirements of her job. “This is the very first year in my fifteen years of teaching that I haven’t thought about the word ‘accountability,’ but I have probably taken it [a sense of accountability] on the most,” she says. When people integrate inscaping into their normal work routine, they develop a more nuanced understanding of their work and a keener ability to connect their interests and passions to the goals of their organization. The empathy fostered by inscaping also leads to a heightened sense of mutual responsibility among co-workers. People pay greater attention to the impact that their work has on others and put more energy into supporting each other’s success.

Inscaping, of course, is not without its difficulties and limitations. In a highly politicized organization, people can be hesitant to reveal themselves. Not unreasonably, they worry that any show of vulnerability or divergent thinking might become a weapon that others will use against them. In an organization of that kind, experiential sharing is fairly common—in fact, people are eager to share negative emotions—but it happens behind the scenes and in small cliques. Organizations that operate in an environment that requires rapid decision-making can find inscaping difficult as well.

People who work in such cultures have told us that they struggle to adjust to the apparently slow tempo of inscaping. Over time, however, they have found that the speed with which their organization ultimately takes action more than makes up for any slowdown in the deliberation process. Inscaping, because it promotes internal alignment, allows organizations to move rapidly and tenaciously once people have come to a decision.

Inscaping can also be challenging for organizations that face a high degree of external scrutiny, either from the general public or from powerful stakeholders—from a funder, for example. In that case, the pressure to conform to certain norms can be overwhelming. Paradoxically, however, it is in a more constrained environment of this kind that a small amount of inscaping can have an especially strong effect. Holding an authentic conversation with a funder or

an oversight body can lay the groundwork for a more co-creative and flexible relationship in the long run.

ESCAPING THE FORM TRAP

The ultimate benefit of inscaping may be that it helps social-purpose organizations avoid falling into what we call “the form trap.” We are all familiar with organizations that look egalitarian and participatory but are not genuinely collaborative. And we’ve all encountered organizations in which people emphasize innovation in the mission statement but are afraid to take risks in their day-to-day work. Conversely, most of us know of organizations with traditional structures and formal cultures that also happen to be engaging and innovative places to work. The difference between the form of a practice—the visible set of behaviors, words, and rules that define it—and our experience of that practice can be stark. The form trap exists whenever we confuse the symbol for the reality, the signal for the fact.

We smile and hug; therefore we are compassionate. We sit in circles; therefore we are democratic. We have funky chairs and chalkboard walls; therefore we are creative.

The form trap is hard to avoid because even forms that are initially helpful may eventually lose their experiential spark. We change an organizational structure to make it flatter and more democratic, and for a time that change is quite liberating. We decide to hold a check-in session before every meeting, and at first that practice makes us feel more engaged. Very often, however, there comes a time when the flat structure seems only to mask many of the same power dynamics that existed under the previous structure, or when the check-in practice starts to feel less like an authentic revelation than like a tiresome performance.

The form trap can be particularly problematic in an organization that focuses on social change. The image of what social justice, or education, or health care, or environmental sustainability, or social enterprise should look like can be very constraining. An organization of this kind can become stuck in a rigid pattern of language and action. Over time, its people lock themselves into a set of assumptions: We are legitimate because we say the right things. We are effective because we run the right programs. Inscaping helps people in a social-purpose organization to gauge the real impact of the forms that they use. It helps them become more fluid in their work and more responsive to their context. And it challenges them never to stop asking how they can best realize their purpose in this place, with these people, on this day. n NOTES

1 Christian Seelos and Johanna Mair, “What Determines the Capacity for Continuous Innovation in Social Sector Organizations?” a Rockefeller Foundation Report, Stanford Center on Philanthropy and Civil Society, 2012, http://pacscenter.stanford.edu/ files/images/capacity-for-continuous-innovation_PACS_31Jan2012-4.pdf 2 Francis Westley and Nino Antadze, “Making a Difference: Strategies for Scaling Social Innovation for Greater Impact,” The Innovation Journal, 15, no. 2, 2010, http:// www.innovation.cc/scholarly-style/westley2antadze2make_difference_final.pdf 3 Christian Seelos and Johanna Mair, “Innovation Is Not the Holy Grail,” Stanford Social Innovation Review, Fall 2012, pp. 45-49.

4 Stuart L. Hart and Sanjay Sharma, “Engaging Fringe Stakeholders for Competitive Imagination,” The Academy of Management Perspectives, 18, no. 1, 2004, http://amp. aom.org/content/18/1/7.full.pdf 5 Gerard Manley Hopkins, Poems and Prose, edited by W. H. Gardner, London: Penguin Classics, 1985.

csi.stanford.edu/podcast Listen to the voices of people on the cutting edge of social change.

S O C I A L I N N O V AT I O N C O N V E R S AT I O N S

HEAR THE LATEST ON: • corporate social responsibility

• environmental sustainability

• economic development

• philanthropy

• social entrepreneurship

• nonprofit management

and more!

your hosts: KRISS DEIGLMEIER Executive Director of Stanford Center for Social Innovation

ERIC NEE

Managing Editor of Stanford Social Innovation Review

A PRODUCTION OF:

podcast_ad_fullpage_10.17.13.indd 1

10/23/13 5:37 PM

The most prestigious universities* in the world use Stanford Social Innovation Review in their classrooms.

Shouldn’t you?

It’s easy to do, just go to www.copyright.com to purchase permission to use print or digital articles in your classroom. *Carnegie Mellon, Duke, Georgetown, Harvard, INSEAD, Indian School of Business, London Business School, MIT, Northwestern, Notre Dame, Rice, Stanford, UC Berkeley, UCLA, University of Michigan, USC, Washington University, Yale, and many more.

MUHAMMAD YUNUS

By William Landes Foster, Peter Kim, & Barbara Christiansen

For-profit executives use business models—such as “low-cost provider” or “the razor and the razor blade”— as a shorthand way to describe and understand the way companies are built and sustained. Nonprofit executives, to their detriment, are not as explicit about their funding models and have not had an equivalent lexicon—until now.

M

oney is a constant topic of conversation among nonprofit leaders: How much do we need? Where can we find it?

Why isn’t there more of it? In tough economic times, these types of questions become more frequent and pressing.

Unfortunately, the answers are not readily available.

That’s because nonprofit leaders are much more sophisticated about creating programs than they are about funding their organizations, and philanthropists often struggle to understand the impact (and limitations) of their donations.

There are consequences to this financial fuzziness.

When nonprofits and funding sources are not well matched, money doesn’t flow to the areas where it will do the greatest good. Too often, the result is that promising programs are cut, curtailed, or never launched.

32

| Illustration by Doug Ross And when dollars become tight, a chaotic fundraising scramble is all the more likely to ensue.1 In the for-profit world, by contrast, there is a much higher degree of clarity on financial issues. This is particularly true when it comes to understanding how different businesses operate, which can be encapsulated in a set of principles known as business models. Although there is no definitive list of corporate business models,2 there is enough agreement about what they mean that investors and executives alike can engage in sophisticated conversations about any given company’s strategy. When a person says that a company is a “low-cost provider” or a “fast follower,” the main outlines of how that company operates are pretty clear.

Similarly, stating that a company is using “the razor and the razor blade” model describes a type of ongoing customer relationship that applies far beyond shaving products.

The value of such shorthand is that it allows business leaders to articulate quickly and clearly how they will succeed in the marketplace, and it allows investors to quiz executives more easily about how they intend to make money. This back-and-forth increases the odds that businesses will succeed, investors will make money, and everyone will learn more from their experiences.

The nonprofit world rarely engages in equally clear and succinct conversations about an organization’s long-term funding strategy. That is because the different

b y R O G E R L . M A RT I N & S A L LY O S B E R G

So cial en tre pre neur ship: •

•

•

•

•

the case for

def • i • ni • tion

In an area outside Hyderabad, India, between the suburbs and the countryside, a young

S

ocial entrepreneurship is attracting growing

But along with its increasing popularity has come less certainty about what exactly a social entrepreneur is and does. As a result, all sorts of activities are now being called social entrepreneurship. Some say that a more inclusive term is all for the good, but the authors argue that it’s time for a more rigorous definition.

www.ssireview.org

s p r i n g 2 0 0 7 / S TA N F O R D S O C I A L I N N O VAT I O N R E V I E W

woman—we’ll call her Shanti—fetches water daily from the always-open local borehole that is about 300 feet from her home. She uses a 3-gallon plastic container that she can easily carry on her head. Shanti and her husband rely on the free water for their drinking and washing, and though they’ve heard that it’s not as safe as water from the Naandi Foundation-run community treatment plant, they still use it. Shanti’s family has been drinking the local water for generations, and although it periodically makes her and her family sick, she has no plans to stop using it.

Shanti has many reasons not to use the water from the Naandi treatment center, but they’re not the reasons one might think. The center is within easy walking distance of her home—roughly a third of a mile. It is also well known and affordable (roughly 10 rupees, or 20 cents, for 5 gallons). Being able to pay the small fee has even become a status symbol for some villagers. Habit isn’t a factor, either.

Shanti is forgoing the safer water because of a series of flaws in the overall design of the system.

Although Shanti can walk to the facility, she can’t carry the 5-gallon jerrican that the facility requires her to use. When filled with water, the plastic rectangular container is simply too heavy. The container isn’t designed to be held on the hip or the head, where she likes to carry heavy objects. Shanti’s husband can’t help carry it, either. He works in the city and DESIGNERS HAVE TRADIdoesn’t return home until after TIONALLY FOCUSED ON the water treatment center is ENHANCING THE LOOK closed. The treatment center also requires them to buy a AND FUNCTIONALITY OF monthly punch card for 5 galPRODUCTS. RECENTLY, THEY lons a day, far more than they HAVE BEGUN USING DESIGN need. “Why would I buy more than I need and waste money?”

TOOLS TO TACKLE MORE asks Shanti, adding she’d be COMPLEX PROBLEMS, SUCH more likely to purchase the AS FINDING WAYS TO Naandi water if the center alBy Tim Brown lowed her to buy less.

PROVIDE LOW-COST HEALTH & Jocelyn Wyatt The community treatment CARE THROUGHOUT THE Illustration by center was designed to proJohn Hersey duce clean and potable water, WORLD. BUSINESSES WERE and it succeeded very well at FIRST TO EMBRACE THIS doing just that. In fact, it works NEW APPROACH—CALLED well for many people living in the community, particuDESIGN THINKING—NOW larly families with husbands NONPROFITS ARE BEGINor older sons who own bikes NING TO ADOPT IT TOO. and can visit the treatment

DESIGN

amounts of talent, money, and attention.

PHOTOGRAPHS COURTESY OF (TOP LEFT AND RIGHT) FRIENDS OF GRAMEEN; (BOTTOM) THE SKOLL FOUNDATION

10 Ten Nonprofit Funding Models

Access to small loans has helped millions of people around the globe dramatically improve their lives and the economic health of their communities.

The man behind this capitalist revolution is Muhammad Yunus, founder of Grameen Bank and father of microcredit.

29

THINKING FOR SOCIAL INNOVATION

STANFORD SOCIAL INNOVATION REVIEW • Spring 2009 Winter 2010 • STANFORD SOCIAL INNOVATION REVIEW

SSIR CLASSROOM FULLPG.indd 1

31

4/22/13 3:17 PM

Stanford Social Innovation Review / Winter 2014

Insights From the Front Lines

Beyond Diplomacy Civil society organizations are dramatically changing how countries bring an end to violent political conflict.

By Derek Brown

Illustration by Mitch Blunt

T

he Save Darfur Coalition was one of the most impressive examples of global activism in the 20th century. Yet it fell tragically short of meeting its goal to end the genocide in Darfur and to bring peace to the citizens of Sudan. Despite a wealth of good intentions and some notable achievements, leaders of that movement lacked familiarity with the broader context of the Darfuris’ plight. They also lost sight of the need to pursue an indigenous Sudanese peace process. Those deficiencies undermined an otherwise extraordinary effort.

That failure to secure peace and to prevent mass atrocities in Sudan is not unique.

The many conflicts that have unfolded over the past two decades—the continuing turmoil in Eastern Congo, the traumatic end to the civil war in Sri Lanka, and the genocide in Rwanda, to name only a few—show just how difficult it is to achieve and maintain peace. Efforts by nation-states and multilateral groups (including the United Nations, the African Union, the Arab League, and others) to end violent conflict have faltered at least as often as they have succeeded. The ongoing tragedy in Syria is just the latest testament to this reality.

Yet alongside this record of failure, there are notable signs of promise. In a report published in 2012, for example, the Human Security Research Group (an independent research center affiliated with Simon Fraser University) offered this finding: “An increasing proportion of conflicts is terminated by negotiated settlements, the majority of which prevent the recurrence of violence.” Furthermore, the report notes, “[E]ven when peace deals collapse, the death toll due to

subsequent fighting is dramatically reduced.”

What has driven this trend? Since the end of the Cold War, new peacemaking institutions and new approaches to peacemaking have arisen around the globe. These institutions and these approaches exist mainly outside the scope of traditional diplomatic activity, and much of their success has hinged on a crucial development: Increasingly, civil society organizations are contributing in significant ways to the peace processes that help to end violent political conflict. In many environments, these organizations complement or support the efforts of national governments and multilateral institutions. In other environments, they fill roles that those institutions either cannot or will not fill. Although civil society organizations have no formal power to influence conflict actors, they often possess sorely needed expertise

and skills. More important, they possess a kind of moral authority that nation-states and global institutions can no longer claim.

Structures for Peace

At its core, peacemaking is the process by which parties in a violent conflict bring hostilities to an end and then begin the work of nonviolent political and social transformation. Securing peace is not simply a matter of conducting international diplomacy, or of achieving an agreement among warring parties. Indeed, the increasing diversity of approaches employed by peacemakers has contributed significantly to the increased rate at which stakeholders have been able to settle conflicts through negotiation. (The terms “peacemaking” and “peace-building” are a subject of much discussion. Here, in the interest of simplicity, I am using “peacemaking” in a way that encompasses both the act of bringing hostile parties to a negotiated agreement and the post-agreement efforts that are commonly known as “peace-building.”)

Consider the most famous peaceful political transformation of the 20th century: South Africa’s journey from apartheid to the creation of a democratic state. That process involved a multitude of peacemaking efforts.

There were the official negotiations that took place between Nelson Mandela and Frederik Willem de Klerk. There was the multi-party initiative known as CODESA (Convention for a Democratic South Africa).

And there was the less wellknown work of various regional bodies that emerged under the country’s National Peace Secretariat.

These bodies helped form local peace committees that included South Africans of every racial and ethnic background, and from every sector of society; they met regularly to prevent or address outbreaks of violence in their communities.

55

Stanford Social Innovation Review / Winter 2014

DEREK BROWN is executive director of the Peace Appeal Foundation, an organization that collaborates with national and international stakeholders to develop peacemaking and national dialogue processes. The organization was founded with support from a group of Nobel Peace Prize laureates.

The CODESA process and the system of local peace committees are examples of transitional “peace structures”—mechanisms established to support peacemaking in cases where governmental structures are unequal to the task of uniting deeply divided communities. The most famous peace structure in South Africa is the Truth and Reconciliation Commission (TRC), an institution established in 1995. The goal of the TRC was to uncover the historical truth about human rights violations and to promote national reconciliation by sharing that information.

A more recent example comes from Nepal, where a national peace process helped end a bloody civil war. Both before and after the signing of the country’s Comprehensive Peace Accord in 2006, Nepalese leaders established multiple peace structures. These structures enabled contact among conflicting political parties, assisted the National Peace Secretariat of Nepal in drafting agreements, and oversaw the management of cantonments in which Maoist rebel forces had agreed to confine their militias.

Many of these peace structures drew on the assistance of another entity, Nepal Transitions to Peace (NTTP), which served as a “backbone” organization that offered services such as research, technology infrastructure, and communication support. NTTP was a collaborative endeavor that brought together civil society groups, political parties, governmental institutions, and multilateral organizations. Equally important, it provided an institutional home to several prominent Nepalese figures who acted as facilitators throughout the peace process.

Today, the use of peace structures and indigenous civil society organizations is being tested in parts of the Arab world. In the wake of the Arab Spring, many countries in that region have launched peace structures that are called “national dialogues.” These extra-constitutional bodies aim to foster a spirit of national consensus within deeply factionalized societies. The oldest of these structures is the one in Lebanon. Launched in response to a domestic political crisis that long predates the Arab Spring, the National

Dialogue in Lebanon has arguably helped keep the country from descending into a civil war—even as a civil war rages in neighboring Syria. That body, when it convenes, involves about two dozen leaders from all parts of the Lebanese political landscape.

Although the National Dialogue in Lebanon focuses largely on the security agenda of the country, it has spawned a series of parallel dialogue processes that draw in leaders from government departments, political parties, civil society groups, and even international institutions. These secondary national dialogues are subject-specific; they tackle deep-rooted social and political challenges that have persisted since a peace accord ended the Lebanese civil war in 1989.

In Lebanon, as in Nepal, there is a backbone institution that supports efforts of this kind—an entity known as the Common Space Initiative for Shared Knowledge and Consensus Building. As an independent body, it enjoys a flexibility that allows it to serve the needs of the various governmental and non-governmental organizations that seek its assistance.

Given the tumultuous political climate in Lebanon, it is too early to assess the longterm impact of these efforts. Despite sporadic outbreaks of violence across Lebanon, peace—however fragile—has held in that country. The Syrian civil war has put a huge strain on relations among parties inside Lebanon, yet those parties have sustained their commitment to dialogue. That is a modest achievement, perhaps, but it’s also a deeply important one.

Lessons for Peacemakers

When national dialogue initiatives and other peace structures function well, they generally follow a set of core principles. They are inclusive, drawing representation from all political, ethnic, and sectarian groups. They are based on a foundation of collective “buyin”—a commitment by all stakeholders both to the peacemaking process and to a shared authorship of outcomes. They have a robust supporting infrastructure that includes the services of skilled facilitators. Ideally, these

facilitators will be respected nationals who demonstrate a primary loyalty to the peace process, and not to any ideology, any party, or any other stakeholder group.

The rules that govern a national dialogue process, or any other peace structure, should not simply replicate other legislative or multi-stakeholder bodies. On the contrary, the design of such structures should lead parties to shift old patterns of interaction. It should challenge them to enter a process of exploration and knowledge sharing that will allow them to identify common interests, to work through disagreements, and to weigh policy options.

The growing use of national peace structures, along with the increasing reliance on national peace facilitators, exemplifies how civil society organizations, working in collaboration with national and international partners, are introducing new approaches to peacemaking. In many cases, these approaches complement both the official mediation efforts of international diplomats and the advocacy efforts of activist groups such as the Save Darfur Coalition. Yet the true power of civil society organizations lies in their ability to support the indigenization of the peacemaking process by building long-term social capacity within conflict-prone nations.

Despite the expanding role that civil society organizations play in peacemaking efforts, members of the general public know very little about their work. What peacemakers do remains largely invisible.

Consider Nelson Mandela. He’s the most famous peacemaker of our time—a reference point for the peacemaking field and a beacon of inspiration for all. Yet few of us could describe his specific contributions to the South African peace process.

The relative obscurity in which peacemaking occurs may have served a purpose at one time. High-level peace negotiations, for example, often work best when they take place out of the public eye. But as civil society organizations continue to develop novel approaches to peacemaking, their work—its strengths as well as its shortcomings—will merit greater public awareness. n

Illustration by Mitch Blunt

56

Stanford Social Innovation Review / Winter 2014

CHANGE Takes Time The long, hard struggle to alter US policy on HIV/AIDS assistance shows that advocacy can deliver a real payoff.

By Serra Sippel

Illustration by Mitch Blunt

I

n 2003, then-President George W. Bush signed into law a new measure to combat the global AIDS crisis. The President’s Emergency Plan for AIDS Relief, or PEPFAR, was one of the most widely recognized accomplishments of his administration. At the dedication of his presidential library this past April, Presidents Carter, Clinton, and Obama all heaped praise on Bush for saving millions of lives in Africa.

Yet from the start, PEPFAR was saddled with funding restrictions that undermined efforts to slow the spread of HIV. Among those provisions were rules that rigidly tied funding to support for premarital sexual abstinence. For all of the good that PEPFAR has done, such restrictions have compromised the health and human rights of the law’s intended beneficiaries—women and girls, in particular.

At the Center for Health and Gender Equity (CHANGE), we spent nearly a decade working to change federal law and to revise administrative policy on HIV prevention.

We partnered with a broad coalition of advocacy groups—organizations that focus on AIDS research and prevention, women’s health, and human rights—to push for policy changes in the face of fierce opposition. As a result of our joint advocacy, the US Congress in 2008 passed legislation that eliminated an earmark for abstinence-only programs, and in 2011 the Obama administration replaced the Bush-era abstinence policy with policy guidance that supports a wide range of measures to counter the AIDS epidemic. Today, thanks to these legislative and administrative achievements, PEPFAR funding supports prevention programs and interventions that

are based on proven best practices, a commitment to human rights, and a respect for scientific research.

Reaching that point was an extraordinary challenge. It required patience, persistence, and years of grindingly slow trench work. Change doesn’t happen overnight.

Flaws in PEPFAR policy that might seem self-evident on the ground in Botswana and Zambia are all too easily ignored in the power corridors of Washington, DC, where ideology often takes precedence over science and human rights. Again and again, we watched in frustration as members of Congress and other policymakers rejected science-based arguments in favor of policies that reflect narrow views of morality—views that do not accord with social reality. The struggle against such attitudes made the already Herculean effort to save lives even

more difficult. Ultimately, however, we were able to marshal evidence-based research to improve US global HIV/AIDS policy.

Good Program, Flawed Policy

By 2003, the AIDS crisis had reached a sobering level of intensity. That year, according to the United Nations’ annual AIDS report, 4.3 million people became newly infected with HIV. During that period, moreover, the patterns of infection were shifting in significant ways. In sub-Saharan Africa, AIDS was on its way to becoming a women’s disease. Today, about 60 percent of people in the region infected with HIV are women.

In many countries, the highest rates of new infections are among young married women and sexually active adolescent girls. Worldwide, unprotected sex accounts for 80 percent of new HIV infections.

Despite evidence of those realities, PEPFAR in its original form contained several elements that hampered prevention efforts. Most distressingly, the law included an “abstinence earmark”—a requirement that one-third of all funds allotted to preventing the sexual transmission of HIV be spent on providers that promote an abstinence-until-marriage policy. This policy became known as the ABC approach: Abstain until marriage. Be faithful in marriage. And if those steps fail, use Condoms.

In effect, US law promoted the erroneous assumption that sex within marriage is always safe. In fact, women from Botswana, Nigeria, Uganda, and Zambia—4 of the 15 nations designated as target countries under the PEPFAR law—have told us that they contracted HIV from their husbands.

Hard evidence supports this anecdotal information: Studies show that most HIV infections acquired during heterosexual sex occur within couples who are married or living together.

57

Stanford Social Innovation Review / Winter 2014

SERRA SIPPEL is president of the Center for Health and Gender Equity, an advocacy organization that promotes the health and human rights of women and girls by seeking to improve US policy. She writes extensively on US foreign policy and global women’s rights.

The ABC policy stigmatized the use of condoms, treating them as a last-resort option that was relevant only to those who are sexually immoral. Under the ABC model, a woman could hardly ask her husband to use a condom; doing so would be tantamount to accusing him of infidelity, or to admitting her own infidelity.

The law also included a provision that became known as “the anti-prostitution loyalty oath.” It required any organization that receives PEPFAR funds to make an explicit pledge in opposition to prostitution and sex trafficking. As a result, sex workers—a population that is at very high risk of HIV infection—often became ineligible for treatment and prevention programs.

Our best opportunity to change these policies came in 2008, when Congress was due to reauthorize the law. US Representative Tom Lantos, then chairman of the House Foreign Relations Committee, had drafted a bill that not only removed the abstinence earmark and the anti-prostitution pledge, but also added a new provision that sought to integrate family planning into HIV-prevention programs. Family planning should be an element of PEPFAR, we believe, because women who are at risk of unintended pregnancy also tend to be at risk of HIV infection. Research, moreover, shows that linking family planning to HIV interventions increases both awareness and use of HIV-prevention services.

As final debate on this bill began in early 2008, Lantos died of cancer. His death created a void that we could only partially fill. Opponents came out swinging. They accused us of “hijacking” PEPFAR to turn it into an “abortion bill.” They suggested that providing treatment for sex workers amounted to “pimping.”

Our allies in Congress became skittish, and our coalition frayed. As a result, our push to include a family planning provision in the bill fell short. We also failed to make headway against the anti-prostitution rule. Still, the reauthorization bill that passed in 2008 brought a significant change to how the US government funds global HIV-prevention programs.

With that law, which remains in effect today,

Congress jettisoned the abstinence-funding requirement. (PEPFAR administrators, however, must notify Congress if less than half of the money spent on HIV prevention goes to abstinence-based programs.)

The legislative struggle in 2008 set the stage for landmark policy changes under the Obama administration. In 2011, for example, the administration replaced the ABC policy with comprehensive prevention guidance. And although PEPFAR legislation remains silent on family planning, it no longer prohibits use of that policy option: US officials now have the flexibility to develop and implement PEPFAR-funded programs that combine HIV prevention with family planning measures.

Science-Based Strategy

Achieving these policy changes required us to mount an advocacy campaign that unfolded on multiple fronts. We used old methods (a postcard campaign, a call-in day) and new ones. Our online operation made information easily accessible to activists, policymakers, and members of the public. We recruited grassroots activists in key states, and we took our campaign to political “outsiders,” encouraging them to apply pressure on lawmakers in their home districts. We built a strong coalition that encompassed groups as disparate as Planned Parenthood and the United Methodist Church. To publicize our cause, we partnered with a celebrity group that included Ed Harris, Bonnie Raitt, and Alfre Woodard.

Our most persuasive messengers were African women on whom PEPFAR had a direct impact. These women spoke at public forums and met with lawmakers in venues where they could share their personal stories. On one occasion, for example, I took an HIV-positive women’s-health advocate from Botswana to meet with high-ranking members of the Senate Foreign Relations Committee. No one could have explained more passionately than she did the critical need for a comprehensive prevention program.

But the real game changer came in the form of science-based research. We pressed

lawmakers to authorize studies that would examine the effectiveness of PEPFAR. Members of Congress might reject our facts and figures, but it would be much harder for them to dismiss the findings of congressionally mandated reports. In one such report, the Government Accountability Office (GAO) concluded in 2006 that the abstinence-based funding requirement “presented challenges” for 17 of the 20 PEPFAR country teams that the GAO studied. A report by the Institute of Medicine (IOM), an arm of the National Academy of Sciences, went a step further.

The authors of that report, which came out in 2007, recommended eliminating the abstinence-until-marriage funding restriction.

Subsequent research has not only supported our advocacy project, but also vindicated it. A far-reaching evaluation of PEPFAR that IOM published this past February found that recent revisions to the law had improved the effectiveness of HIV-prevention programs for people who live daily at elevated risk of the disease. The report, requested

by Congress, confirmed that policy changes in Washington had substantially improved in-country programs by including more comprehensive approaches.

The elimination of the abstinence-only policy remains tenuous. That’s why the latest IOM report is so crucial. We now have clear evidence that removal of the abstinence earmark and implementation of the 2011 policy guidance have given people greater access to HIV-prevention programs that meet their needs. Thanks to a rare confluence of factors, we are thus able to demonstrate the real impact of our ongoing advocacy project.

We will continue to press for changes that will make more people (including sex workers) eligible for PEPFAR programs. We will also continue to push for increased awareness of the role that family planning can play in the prevention and treatment of HIV. Meanwhile, as PEPFAR celebrates its first decade of existence, it is better equipped to stem the AIDS epidemic. The key to that outcome, we believe, has been the marriage of science-based research and rights-based health policy. n

Illustration by Mitch Blunt

58

Stanford Social Innovation Review / Winter 2014

Subsidizing Impact The right formula for creating a socially beneficial enterprise often includes a strong dose of up-front philanthropic support.

By Tomohiro Hamakawa, Toshihiro Nakamura, & Ewa Wojkowska

Illustration by Mitch Blunt

I

t’s graduation day, but there’s not a mortarboard hat in sight.

Instead, the graduates at this celebration are wearing brightly colored headscarves and big smiles. They are all women, and many of them never had the opportunity to finish high school. But today they’re graduating from an entrepreneurship program in Bojonegoro, East Java—a rural area in Indonesia. They have completed a six-month course of study that has given them new skills in sales, marketing, and basic accounting, along with the know-how to maintain and repair the products that they have learned to sell. Now they are independent technology agents—“tech agents,” we call them.

The success of these women reflects the success of a project that our organization, Kopernik, has developed. And a critical part of this project is an approach that blends the use of philanthropic subsidies with the principles of entrepreneurship.

In the international development community, a vigorous—and often polarizing— debate has arisen over whether philanthropy or business offers the most effective way to reduce poverty. The relatively new field of impact investing, which aims to generate both financial returns and social returns, has emerged in part as an attempt to resolve this debate. Although it is too soon to draw firm conclusions about the effectiveness of impact investing, there are encouraging signs that some impact investors are achieving positive results. (For an overview of this topic, see the discussion that Paul Brest and Kelly Born launched with their article “When Can Impact Investing Create Real Impact?,” which appeared in the fall 2013 issue of SSIR.)

Kopernik is a nonprofit organization that delivers simple, affordable technology products to people in poor and often remote communities. Through an online marketplace, we connect donors, makers of innovative technologies (such as water filters and solar lanterns), and people in underserved communities who can benefit from those products.

Our approach uses philanthropic funds to subsidize the start-up costs of introducing technologies to a new community, even as it also establishes a market-driven sales mechanism that offers incentives to local sellers. When it comes to technology adoption, we have learned, offering products at subsidized, affordable prices is no less effective than selling them on a subsidy-free basis.

In fact, lowering financial barriers helps to

improve access to innovative technologies.

Our experience in that regard aligns with the findings of important research conducted by the economists Jessica Cohen and Pascaline Dupas. They examined the impact of subsidies for insecticide-treated bed nets that support malaria prevention, and found that buyers who received a subsidy used the nets with the same frequency as buyers who didn’t. The buyers of subsidized nets were also more likely than the other set of buyers to purchase a second net.

At Kopernik, we’re pursuing a “middle way” that empowers people like the women who have become tech agents in Bojonegoro.

Through trial and error, we have created a method that strikes a balance between philanthropy and business. Sequencing is crucial: We build charitable support before focusing on business sustainability. Our aim is to promote innovation not only in the form of the technologies that we deliver, but also in the financial mechanism that we use to channel products to those who need them.

Getting the Price Right

Instead of trying to enter a community as complete strangers, we typically partner with a respected local entity, drawing on its network of trust to help us deliver our products.

In the case of the women’s entrepreneurship project in Bojonegoro, we worked with a local nonprofit organization called Farabi. It’s a group that has a good reputation, strong connections in the area, and a solid operational history.

In conjunction with Farabi, we held seven “tech fairs” (as we call them) in various villages. At each event, we introduced women in the community to products such as water purifiers and fuelefficient stoves. The women could test the products and ask questions about the benefits of using them. After each tech fair, attendees formed

59

Stanford Social Innovation Review / Winter 2014

TOMOHIRO HAMAKAWA is a project manager at Kopernik. TOSHIHIRO NAKAMURA and EWA WOJKOWSKA are cofounders of Kopernik, where Nakamura serves as CEO and Wojkowska serves as COO.

groups (each with its own coordinator and treasurer) that set out to sell those products at an appropriate price to relatives, friends, and neighbors in their village.

But what counts as “an appropriate price”?

Answering that question, we have learned, requires a delicate balancing act. Consider a solar lantern project that we undertook in the Philippines. Our local partner decided to sell the products at prices that would provide for a 30 percent profit: $24 for a d.light S10 lantern and $48 for the larger d.light S250 lantern. (All currency figures are in US dollars.) The partner, aiming to make its operation sustainable, was testing the upper price limit in this market. Yet in a country such as the Philippines, where the monthly household income ranges from $20 to $2,000, that pricing tactic ended up attracting twice as many affluent customers as poor ones. Although the local partner successfully sold its entire inventory of solar lanterns and generated a sizable profit, the venture did not fulfill its social mission.

Upon learning about this outcome through an impact assessment, we worked with our local partner to adjust the pricing scheme: For families with a monthly income of less than $120 per month, we offered the products at prices that were just above their cost to us.

In that way, we ensured that our primary target market—the very poor—could access life-changing technologies. Compare this approach to an investment model that does not include grants or other philanthropic subsidies. Investors who focus only on gaining a financial return are unlikely to support a business of this kind.

In the Bojonegoro project, we made sure to set the price of water filters and fuelefficient stoves at levels that would not exclude poorer families while still enabling tech agents to earn a small commission.

What made that pricing model possible was the use of philanthropic funds provided by ExxonMobil, our chief donor for this project. Those funds covered start-up costs related to partner selection, promotion, and training. In a traditional business model, we would have needed to factor all of those costs into the final price, but philanthropic

subsidies allowed us to absorb them and to set a price per unit that would support a sustainable distribution mechanism. Over time, according to our model, economies of scale in the more mature parts of the technology adoption cycle will make those subsidies unnecessary.

From Saleswomen to Businesswomen

Subsidies were only one part of the Bojonegoro story. Farabi, for example, offered support and guidance to the women’s groups through weekly phone calls and regular house calls. And the results were inspiring: In a relatively short period, the women sold enough cookstoves and water purifiers to enable them to repay the cost of the products to Kopernik. They were also able to earn a commission without taking on risk or debt, and that income stream has increased their ability to support themselves and their families.

After that initial success, the most motivated women in the project joined the entrepreneurship program that we described earlier. The program featured workshops, monthly feedback sessions on the women’s demonstration skills and product knowledge, and presentations from guest speakers—including a representative from Nazava, maker of the water filter that the women sell, and the founder of the Association of Indonesian Women Cooperatives.

Next, a group of women from the project came together to set up a business cooperative—the first of its kind in the region.

Today, the cooperative has more than 50 members. Their core activity involves selling water filters, which they purchase for $14 and sell for $19 in cash (or $21 in three installments). The women have sold water filters to buyers in more than 20 villages throughout Bojonegoro. As a consequence, people in the region have greatly expanded their access to safe, clean drinking water.

One key factor in the success of these tech agents is that, as technology users themselves, they appreciate the need to follow up with customers by answering questions and resolving technical issues.

More recently, the cooperative has expanded its services to include microlending.

Members can access microloans through a scheme that involves a small down payment, a 10-month repayment plan, and a monthly fee that goes to the cooperative. The repayment rate has been very high, thanks in part to the strong foundation of social capital that exists among cooperative members.

Women in the cooperative, inspired by their early successes, are now seeking extra capital to expand both the microloan program and the technology offering.

The cooperative is becoming well known both locally and elsewhere in Indonesia. The government in Bojonegoro often invites members to represent the community at public events. Meanwhile, the distribution model used by the cooperative has expanded to other parts of the country, including the provinces of East and West Nusa Tenggara.

In West Nusa Tenggara, the star tech agent in the Bojonegoro cooperative came to a local training session to share her experiences and sales tips with aspiring entrepreneurs.

Participants in the session rated her contribution as the most valuable part of the training.

What has made this story possible is an emphasis on carefully blending social impact and financial sustainability. With philanthropic support, we were able to make technology products available at prices that balance affordability (for the very poor) with profitability (for our tech agents). Later, the use of subsidies becomes less and less necessary.

This approach, in contrast to other forms of investing, reduces the pressure on a fledgling business to generate an immediate financial return. Instead, it focuses on establishing a model that is sustainable in the long term.

The ultimate goal of the Kopernik approach is to create a win-win-win-win situation: People in remote communities gain access to life-changing technologies. Tech agents earn small but consistent revenues.

Kopernik reinvests the funds that it recoups from tech agents (often in the same community where the tech agents live). And donors witness the direct and enduring social impact of their grant. n

Illustration by Mitch Blunt

60

Stanford Social Innovation Review / Winter 2014

A Field of Its Own After many years of operating on others’ academic turf, nonprofit studies is ready to claim new ground.

By Stuart C. Mendel

Illustration by Mitch Blunt

I

n 1990, Peter Drucker asserted that “nonprofit institutions are central to American society and are indeed its most distinguishing feature.” Since then, as if to amplify Drucker’s point, the academic study of the nonprofit sector has grown at an impressive rate. When Drucker made his observation, there were an estimated 19 US-based programs that offered training related to the nonprofit sector. In 2012, by one count, the number of US colleges and universities that offered such training stood at 295.

A primary objective of these programs is to produce the next generation of nonprofit-sector leaders. But as the number of programs has grown and as the quality of their offerings has matured, they have also emerged as important centers of scholarship.

Over the past 20 years, I’ve come to know this field well through close involvement in academic research on the nonprofit sector— first as a student, then as a paid staff member at Case Western Reserve University, and now as the founding director of a nonprofitstudies research center at Cleveland State University. I was among the first scholars to pursue a doctoral degree in nonprofit management, and I have watched and participated in the process by which this field of inquiry has evolved and matured. Recently, I was named president-elect of the Nonprofit Academic Centers Council (NACC); my tenure in that post will begin this coming summer.

In advance of taking on this new role, I have begun thinking about the place of nonprofitsector studies in higher education.

Since its founding in 1991, NACC has expanded to include nearly 60 member institutions. The growth in the number of

nonprofit-studies programs, as I’ve noted, is an important indicator of a transformation that is well under way. Even so, I see an opportunity to advance the frontier of nonprofitsector knowledge creation still further.

Today, for instance, published scholarship on nonprofit organizations continues to cover primarily matters of interest to public management, business, social work, and other fields that each have their own research agenda. In my view, though, a leading-edge approach to nonprofit-sector scholarship should address all aspects of what is variously called the “nonprofit,” “independent,” “voluntary,” “charitable,” or “third” sector.

The academic study of the nonprofit sector began in earnest in the late 1970s. Four decades later, signs that nonprofit studies is approaching a tipping point—that it is ready to become an autonomous field of

study—are plain to see. The Lilly Family School of Philanthropy at Indiana University, the Lodestar Center for Philanthropy & Nonprofit Innovation at Arizona State University, and other academic centers of this kind offer examples of a deepening commitment to nonprofit studies as a distinct field of knowledge. At the same time, students have shown an increasing interest in pursuing field placements and internships at nonprofit organizations, and university leaders have come to believe that practiceoriented learning of that kind not only provides a valuable classroom experience for students, but also serves the public service mission of their institution.

These developments have created the conditions to support two important innovations of this field. First, there is an opportunity to advance a nonprofit studies approach to learning that broadens its focus beyond nonprofit management. Second, there is an opportunity to develop a nonprofit-first perspective on research as well as pedagogy.

Nonprofit Management— and Beyond

Typically, educators in the more mature fields of business management, public administration, and social work view nonprofit management as a derivative subfield of their discipline.

A sampling of nonprofitoriented topics in business management programs, for example, would include budgeting and finance, social enterprise, evaluation of social outcomes, cause-related marketing, business ethics, and corporate social responsibility. Programs in public administration and public management, meanwhile, often include instruction in proposal development for subcontracted services, program assessment and performance evaluation, budget accountability, and human

61

62

Stanford Social Innovation Review / Winter 2014

STUART C. MENDEL is assistant dean of the Maxine Goodman Levin College of Urban Affairs and director of the Center for Nonprofit Policy & Practice at Cleveland State University. He is also president-elect of the Nonprofit Academic Centers Council.

resources management. Social work programs also address nonprofit-oriented topics, particularly in the training that they offer for non-clinical degree specialties.

Scholars in these management-oriented fields, likewise, generally treat the study of nonprofits as a younger, dependent sibling of their particular discipline. A review of recent scholarly literature on the nonprofit sector would reflect an overwhelming emphasis on matters of narrow interest to public managers, business leaders, and the like: How can public managers modify the behavior of their nonprofit partners? What are the best strategies for holding nonprofits accountable to performance standards and operational efficiencies? What are the best models for drafting service contracts? And so forth.

This emphasis on the management of nonprofits in both education and research may have been necessary for the generation of nonprofit scholars who did pioneering work in the field during the late 1970s and 1980s. They, after all, had to invent ways to study nonprofits using the methodological tools available to them. Today, however, we can see that a management-focused model is too limiting as a means of understanding the inner workings and the defining characteristics of the modern nonprofit organization.

Those of us who closely watch this field have noted a call by experienced nonprofit and philanthropic leaders for a new approach to professional training. Recently, for a new research project, I spoke with a number of nonprofit executives. From those interviews, I took away one clear message: Leadership in the nonprofit organization of the 21st century requires a skill set that extends well beyond the management of transactional accountability.

To meet the needs of both current and future nonprofit leaders, we urgently need to develop a nonprofit studies pedagogy that encompasses a wide range of issues and challenges. Here are just a few nonmanagement topic areas that teaching about the nonprofit sector can and should cover: the study of civil society; the dynamics of advocacy, community organizing, and public

policy development; the political nature of the social sector; and the role that nonprofits play as places of employment.

Sector-First Scholarship

Developing a truly autonomous field called nonprofit studies will lead to the adoption of a nonprofit-first approach to research. A nonprofit-first perspective is one in which the unique role and nature of the nonprofit sector and its institutions rise to the center of inquiry. It takes into account the professional conventions and behavioral nuances that are common to the nonprofit sector. And it opens the way to pursuing research on understudied aspects of nonprofit life—the importance of emotional intelligence for professionals who work regularly with volunteers, the role that nonprofits play as intermediaries and facilitators in public-private partnerships, and the challenges associated with public advocacy, to name a few. Equally important, nonprofitfirst inquiry will advance our understanding of how nonprofits enable, nurture, and strengthen civil society, and how they empower people to build democratic institutions.

By way of example, consider a line of research that I am pursuing with Jeffrey L. Brudney, a professor at the University of North Carolina at Wilmington. We explore how nonprofit organizations that receive government contracts to deliver services must contend with the difficult and frequently uncompensated task of managing relationships with public-sector agencies. That’s an important perspective that is essentially absent from traditional public management studies. Other topics that I’ve covered in my own published research as a nonprofit studies scholar include the following: the relationship between philanthropy and the creation of public value, the role of cross-sector partnerships in the creation of public value, and the role of nonprofit organizations in publicprivate partnerships.

Today, a new generation of scholars is creating pressure for a shift toward nonprofitcentric research. These scholars have made a conscious decision to study nonprofit organizations as part of their doctoral-degree

research, and their methods incorporate theory drawn from the social sciences and even the humanities. That development reinforces the need to break away from a research framework that embeds the study of nonprofits within traditional managementoriented disciplines.

A nonprofit-first approach to scholarship will provide a broad context for the study and teaching of best practices in nonprofit management. As Peter Drucker and others have observed, effective nonprofit leaders possess a deep understanding of the role that nonprofit organizations play in society, and of the context in which their own organization operates. By creating and promoting a distinct theory of the nonprofit sector, scholars will be able to offer students and professionals precisely that kind of deep understanding.

Changing the way that institutions of higher education treat the nonprofit sector is no small undertaking. But the rewards for doing so are worth the effort. A nonprofitfirst perspective will have beneficial effects for multiple stakeholder groups. Educators, researchers, and thought leaders will deepen the base of knowledge that they convey to succeeding generations of scholars, policy makers, and nonprofit professionals. At a practical level, they will advance insight on how to turn a nonprofit organization into a strategic learning organization that also excels at fulfilling its mission. Leaders in philanthropy and public policy, for their part, will find new ways to form meaningful, transformative partnerships with nonprofit organizations. Rather than engaging in shallow collaborations that lead to shortterm transactional gains, they will join with nonprofits to set goals and to achieve real social impact.

The time is right to move nonprofit-sector pedagogy toward a more holistic and comprehensive framework—and to shift scholarly research in this area toward a nonprofit-first framework. This new framework will change how people throughout the nonprofit sector teach, learn, and study. It will change how they develop new best practices and how they understand this field at a deep level. n

Your Complete Resource For Social Change

■ Full year of the print edition ■ Tablet friendly edition ■ Unlimited access to subscriber-only articles ■ Weekly Enewsletter TO SUBSCRIBE ONLINE VISIT

ssireview.org/subscribe

Hot Topics And Powerful Ideas Learn from the leaders with SSIRLive! — Stanford Social Innovation Review’s series of more than 30 one-hour webinars. You can enjoy webinars from SSIRLive!’s rich library on your favorite device, at any time of day or night.

Recent webinars include:

• A Hard Look at Innovation and Scaling (Complimentary)

• Adaptive Philanthropy: Getting Results in Uncertain Environments (Complimentary)

• When Good Is Not Good Enough ($49) • When Giving Leaves Town ($49) • The Past and Future of Social Entrepreneurship

www.

ssirev

iew.or g/web

inars

(Complimentary)

www.ssireview.org/webinars SSIR WEBINAR HALFPG.indd 1

10/30/13 11:45 AM

Stanford Social Innovation Review / Winter 2014

Highlights from scholarly journals / By Jessica Ruvinsky

on violence in Iraq came directly from US-led coalition forces, for example, whereas information on violence in Africa came primarily from news reports. One of those information sources, Weidmann suggests, is likely to be more limited than the other. “You’re not going to learn about violence that happened outside the [cell-phone] coverage area [in Africa], because no reporter was there,” he says. “A lot more research is needed on this topic.” n

Technology

The Call of Violence rom texting to Twitter, modern communication technologies have garnered plenty of buzz for their potential to improve transparency and political accountability. But new research shows such technologies can be powerful tools for change in more ways than one. In Africa, at least, “the expansion of cellphone coverage goes hand in hand with more violent events,” says Florian Hollenbach, a doctoral candidate in political science at Duke University.

Cell-phone coverage spread rapidly across the continent of Africa over the past 20 years.

And political violence has often followed in its wake, according to Hollenbach and Jan Pierskalla, a postdoctoral candidate at the German Institute of Global and Area Studies, who co-authored a recent study on this subject. In 2008, for instance, organized violent conflict was more likely to unfold in areas where coverage had existed in 2007 than in areas where it hadn’t. The overlap between cell-phone coverage and conflict is especially clear in Algeria, the Democratic Republic of Congo, Kenya, Nigeria, Uganda, and Zimbabwe.

(To track the incidence of political violence, the researchers drew on the Uppsala Conflict Data Program, a widely recognized source for such information.) Data for subsequent years confirm the pattern—a pattern that is not just a by-product of (for example) income level,

F

population density, ethnic tension, or the distribution of natural resources such as diamonds, gas, and oil.

Instead, Hollenbach speculates, what explains this pattern is the removal of barriers to violent action. Good communication enables rebel networks to become more tightly integrated and to share information more quickly. It’s not that mobile technology will suddenly make a peaceful group turn violent. Instead, Hollenbach explains, “there’s already the motivation for conflict, and with the expansion of cell-phone coverage, [rebel groups] may be better able to organize. Fighting then becomes more likely.”

That finding would come as no surprise to government leaders who have tried to restrict access to mobile technology.

(Witness the Mozambique government’s attempt to block textmessage traffic during protests in 2010, or the shutdown of cell-phone service in Mubarak’s Egypt in 2011.) Still, this study offers some of the first empirical research on the question of how modern communication

Jan H. Pierskalla and Florian M. Hollenbach, “Technology and Collective Action: The Effect of Cell Phone Coverage on Political Violence in Africa,” American Political Science Review, 107, 2013.

technology helps shape political circumstances. “This is a muchneeded development,” says Nils Weidmann, a political scientist at the University of Konstanz in Germany. Too many people have declared cell phones and the like to be “liberation technologies,” he suggests. “They say, essentially, [that these tools] have unconditionally beneficial effects,” Weidmann says. “That needs some further scrutiny.”

The final word on the subject is not yet in. Although the research in Africa shows that cell-phone coverage increases political violence, Weidmann’s own work in Iraq yielded the opposite conclusion. “As you set up [cell] towers [in Iraq], the violence in a district or in the vicinity of a tower essentially goes down,” Weidmann says. The contrast between these findings may reflect the different context in each case. Or it may reflect a difference in the methods used in the two studies. Information

Civil Society

The Power of Being Seen o help stabilize the electrical grid in their area, some customers of Pacific Gas and Electric (PG&E) have agreed to give up control over their air conditioners. PG&E, through its SmartAC program, installs a radio-activated switch on the customers’ thermostats, and that device adjusts air-conditioner use at times of peak demand for electricity. This past summer, the program helped avert three potential brownout or blackout events. To attract volunteers, the utility offers a small monetary reward.

But according to new research, more people would sign up for the program if PG&E offered nothing more than a way to improve their reputation. “Tapping into everyone’s implicit desire to be seen well

T

illustrations by Jacob Stead

64

Stanford Social Innovation Review / Winter 2014

illustrations by Jacob Stead

Jessica Ruvinsky is a science writer based in Santa Monica, Calif. She was an editor at Discover magazine in New York and has contributed to The Economist, Science, and U.S. News & World Report.

by the members of their community can be a very powerful force for changing people’s behavior in a very cost-effective way,” says David Rand, a psychologist at Yale University.

Rand and his colleagues have found that the best way to entice people into signing up for the blackout prevention program is to let their neighbors know that they’re doing so.

Working with PG&E, the researchers turned a routine marketing campaign for SmartAC into a multifaceted experiment.

In standard marketing mailers, PG&E tells customers to sign up for the program online or by phone. But in this campaign, residents of multi-unit buildings received a mailer that instructed them to use signup sheets posted near their building’s mailboxes. In half of these cases, the sign-up process was anonymous, requiring customers merely to enter a code printed on their mailer.

The other sign-up sheets asked residents to write in their name and unit number as well. “We expected that making it so that people’s neighbors could see what they did would make them more cooperative, but we were surprised by how big the effect was,” says Rand. The rate of participation was three times as high in cases when volunteers’ names were visible as in cases when they weren’t.

Some of the mailers distributed by the researchers offered a $25 reward; others didn’t. (PG&E

has since increased the reward to $50.) PG&E leaders believed that the financial incentive would be more powerful than the reputational incentive. But, as it turned out, giving volunteers credit for their good deed was seven times as effective as giving them money.

One theory of why people sometimes act unselfishly emphasizes the importance of reciprocity: If you help others, then they in turn may be more likely to help you in the future.

Of course, that dynamic works only if other people are aware of your behavior—and only if they believe that they’ll be interacting with you in a sustained way.

In the SmartAC experiment, the researchers tested the effectiveness of the public signup method on customers who live in various kinds of dwellings. They found that the use of

public sign-up sheets increased participation more in multiunit buildings (where neighbors can easily see the sheets) than in row houses or single-family homes (where those sheets are much less visible to neighbors).

The researchers also found that participation increased more in buildings where residents own their units than in buildings occupied by renters. (Turnover is less frequent, and thus relationships tend to be longer-term, in owner-occupied buildings than in rental-unit buildings.)

Scholars in many fields have established that people are more likely to cooperate when their reputation is at stake. “Your grandmother could have told you that,” says Daniel Fessler, an evolutionary anthropologist at UCLA whose own research shows that the mere suggestion of being watched makes people behave more generously. (In experiments, Fessler has demonstrated that briefly displaying the image of a pair of eyes will increase subjects’ inclination to be cooperative.)

But the blackout prevention study makes this finding practical by applying it to a real-world, policy-relevant setting. And that approach is spreading. “We’re working with people in the [US] Department of Energy to look at using the same sort of strategy to get people to do renovations that will make their homes more energy efficient,” Rand says.

“There’s a really wide range of applications for this.” n Erez Yoeli, Moshe Hoffman, David G. Rand, and Martin A. Nowak, “Powering Up With Indirect Reciprocity in a Large-Scale Field Experiment,” Proceedings of the National Academy of Sciences, 110, 2013.

S o c i a l ly R e s p o n s i b l e B u s i n e ss

Off-the-Shelf or Do-ItYourself? hen leaders think about adopting a corporate social responsibility (CSR) practice, where should they start? Ryan Raffaelli, an assistant professor at Harvard Business School, suggests that they should look closely at CSR practices that exist outside their organization.

CSR practices come in two basic flavors, according to Raffaelli and Mary Ann Glynn, professor of management and organization at Boston College, who co-authored a new study on CSR. Some practices—a charity walk-a-thon, say, or a weekend park cleanup—focus on “turnkey,” day-of-service projects: An organization can implement them from an off-the-shelf template. Others involve “tailored” projects that leverage the skills of an organization’s employees, as when Cisco Systems offers job training in network technology or Wells Fargo bank helps people prepare their taxes.

Raffaelli and Glynn argue that a company’s decision to adopt one kind of employee volunteering program or the other depends on its relational ties to certain kinds of external networks. They identify two kinds, in particular.

First, there are cross-industry communities of practice. And second, there are networks that consist of industry peers.

The researchers collected data from public archives,

W

65

66

Stanford Social Innovation Review / Winter 2014

interviews, and observations of corporate involvement in CSR conferences. They also conducted a survey of Fortune 500 companies. Using those data, they tabulated the rate of CSR practice adoption within each industry. In addition, they measured each company’s participation in CSR communities of practice by noting whether the company had sent representatives to one or both of two leading CSR conferences (one hosted by the Committee Encouraging Corporate Philanthropy, and the other hosted by the Boston College Center for Corporate Citizenship). Of the 161 Fortune 500 companies that responded to the survey, about half had adopted an employee volunteering program of some kind (either turnkey or tailored). These adopters of CSR programs, moreover, tended to be companies in which people had attended one of the major CSR conferences.

“Those that are engaged in these communities of practice are more likely to adopt CSR practices,” Raffaelli says.

Conference participation

alone appears to be enough to support a company’s decision to adopt an off-the-shelf, turnkey program. But taking on a do-it-yourself, tailored program seems to require the presence of an additional factor. Raffaelli and Glynn found that companies tend to adopt tailored programs only when they have ties to both kinds of external networks—to a conference-based community of practice and to a group of industry peers that also sponsor tailored projects.

Adopting a tailored program is harder and carries more uncertainty than adopting a turnkey program, Raffaelli explains.

But the ability to take cues from industry peers that have developed similar programs can reduce some of that uncertainty.

And tailored programs are worth the risk, he says: “They have a much higher reward, because they get to the heart of who you are and what you do as an organization.”

Katherine V. Smith, executive director of the Boston College Center for Corporate Citizenship, notes that the experience of organizations that she has

observed largely bears out these findings. Companies “appear to go further, especially with skillsbased volunteering programs, when they participate in these networks and, more specifically, when they seek out industry peers,” she says.

Raffaelli hopes that his and Glynn’s research will advance the cause of corporate volunteer work. “One of the biggest challenges that organizations face, particularly in a nascent space like CSR, is that they don’t have the tools to know which things are actually the next big practice, and which things are going to fade over time,” he says. An awareness of how other companies are developing CSR practices is one such tool, Raffaelli suggests. n Ryan Raffaelli and Mary Ann Glynn, “Turnkey or Tailored? Relational Pluralism, Institutional Complexity, and the Organizational Adoption of More or Less Customized Practices,” Academy of Management Journal, 2013.

Microfinance

Mapping Word of Mouth o spread the word about a new service, the Indian microfinance institution Bharatha Swamukti Samsthe (BSS) approached leaders in 43 villages—teachers, shopkeepers, savings group leaders, and the like. The goal was to publicize the program by encouraging these leaders to tell their friends about it. But in some villages, only 7 percent of households eventually took out a BSS loan, while in other villages up to 44 percent did so. What

T

accounts for the difference?

According to a team of researchers who studied the BSS initiative, the choice of whom to tell first matters a lot.

“There are very specific ways of measuring who the most influential people are in a society, in terms of spreading information,” says Matthew Jackson, an economist at Stanford University. He and his colleagues have developed a new measure of social influence that’s especially relevant in cases when word of mouth is an important medium of communication.

BSS entered the Indian state of Karnataka in 2007.

Beforehand, Jackson and others on his team mapped the social network in each village that BSS intended to target. The researchers asked members of each household about their friends—the people whom they visit, pray with, lend rice and kerosene to, get advice from, and so on. Later, they used that information, along with data from BSS on which village leaders were initially introduced to the program and which households ultimately signed up for a loan, to model how the program spread.

Certain people had a greater impact on diffusion of the program than others. “In some villages, the teacher was very central” to a village network, Jackson says. “In other villages, the teacher wasn’t.” The researchers identified the characteristics of the most central village leaders—the ones who, in effect, were able to broadcast information farthest. And, as it turns out, those leaders don’t just know people; they

Stanford Social Innovation Review / Winter 2014

know people who know people.

It doesn’t matter “whether the first person has more friends or fewer friends,” Jackson says.

“But how well connected that person’s friends are makes a big difference.”

By analyzing such diffusion patterns, the researchers were also able to tell whether any given villager’s decision to join the microlending program increased the likelihood that others would adopt it, too. In fact, it didn’t. The program did spread farther when more people took out loans—but only because those who participated in the program talked about it more than nonparticipants did.

There are problems to solve

before policy makers and program implementers can use these findings. “The issue with implementing [the researchers’ model] is that it’s very expensive and difficult to map out a social network,” says Jake Kendall, a senior program officer at the Bill & Melinda Gates Foundation whose work

focuses on financial services for the poor. By the time one has surveyed all residents of a village about their friends, Kendall notes, one may as well have marketed a program to them directly. “That sort of erases the value proposition of targeting selectively,” he says.

But knowing which villagers

to approach first could soon help new programs spread faster and reach farther.

Kendall, for instance has ideas on how he might adapt the researchers’ model to promote financial services programs in Africa. Jackson and his colleagues, meanwhile, are testing methods that would provide a shortcut around having to map an entire village network.

Getting information to people in remote villages often requires using word of mouth.

This new research, in short, may yield a way to make word of mouth louder. n Abhijit Banerjee, Arun G. Chandrasekhar, Esther Duflo, and Matthew O. Jackson, “The Diffusion of Microfinance,” Science, 341, 2013.

IF YOU MISSED....

Next Generation Evaluation: Embracing Complexity, Connectivity, and Change Did you miss the FSG and Stanford Social Innovation Review November 14th conference on evaluation in the social sector? Due to the tremendous interest in the topic, FSG has launched an event site with resources for nonprofit leaders, grantmakers, and evaluators.

• Visit www.fsg.org/nextgeneval today to view the conference keynote sessions.

• In the coming months, you’ll find conference interviews, podcasts, blog posts, and more.

www.fsg.org/nextgeneval www.fsg.org

SSIR NEXTG HALFPG.indd 1

www.ssireview.org

10/30/13 10:15 AM

67

68

Stanford Social Innovation Review / Winter 2014

TINA SCIABICA is executive director of READ Global, an organization that promotes education, enterprise, and community development in rural Asian communities. Previously, she served as deputy director of Social Venture Network.

REVIEWS OF NEW AND NOTABLE TITLES

A Get-Rich Way to Help the Poor REVIEWED BY TINA SCIABICA

T

hose of us who work in the field of poverty alleviation understand the immense challenge that we face. We have spent billions of dollars in areas such as education, health care, and microfinance, and we have improved the lives of countless people. Despite our success, however, nearly 3 billion people still live in poverty. Many nonprofits are having real impact, but few of them have the resources to do so on a truly global scale.

In The Business Solution to Poverty, Paul Polak and Mal Warwick present an alternative to relying primarily on the work of nonprofits. “Conventional approaches to end poverty have largely failed, and as Einstein taught us, to continue believing they’ll succeed would be madness,” the authors argue. The solution, they write, is to encourage businesspeople to “tap the mainstream capital markets to fund large-scale, global enterprises that address the basic needs of these 2.7 billion people.”

Polak and Warwick offer a compelling, step-by-step guide for those who want to pursue that alternative. In the book, they advocate an approach that they call “zerobased design”: Rather than adapt an existing product to make it more affordable, assume that no product currently on the market can meet the needs of the bottom 2.7 billion. “[D]etermine what poor people themselves believe will best meet their needs,” the authors write. If you haven’t talked with at least 100 customers about what they need, don’t even think about designing a solution for them.

Polak and Warwick lay out eight guidelines to follow if you want to design products that will truly alleviate poverty on a global scale. A few of them are especially noteworthy.

Design for scale from the outset | Focus from the start on bringing your product to millions—or even billions—of people. In doing

THE BUSINESS SOLUTION TO POVERTY: Designing Products and Services for Three Billion New Customers Paul Polak and Mal Warwick 264 pages, Berrett-Koehler

so, you will naturally design a production process that allows for assembly-line replication.

Plan for last-mile distribution | To get your product into the hands of the poor, develop a strategy based on radical decentralization.

Employ local people at local wages, and create a distribution network that reaches into even the most remote village.

Create aspirational branding | Recognize that the poor are discriminating buyers.

Avoid traditional marketing techniques, and instead focus on using local media—Bollywood films, telenovelas, street theater—to build brand awareness.

To illustrate these guidelines, Polak and Warwick offer concrete examples of “ruthlessly affordable” products—from low-cost drip-irrigation devices to safe drinking-water systems. Many of the featured products are ones that Polak has launched, either through his nonprofit organization, IDE, or through one of his for-profit ventures, D-Rev and Windhorse International. (Warwick has an equally relevant background. He is former chairman of Social Venture Network and a cofounder of Business for Social Responsibility.)

Early in the book, the authors issue a warning: If you want to benefit from this bonanza of bottom-of-the-pyramid consumerism, be prepared to go big. If you can’t sell

100 million of your product or service in the first 10 years, then “don’t bother,” they write.

That position seems unduly extreme. Setting the bar so high means that a product with the potential to reach, say, 10 million people in 10 years might never be developed—which would be a terrible loss. What’s more, the “don’t bother” principle means that multinational corporations might be the only entities with adequate resources to invest in product development at the required scale.

Do we really want multinationals to become the primary player in the poverty alleviation game? Polak and Warwick acknowledge the limits of such an approach.

“A brilliant rich-country executive—or even an upper-class executive from the global South—may be totally out of his or her element working with poor people,” they write.

But a company that enters this market, they argue, will have a social mission that differentiates it from most multinationals.

That’s not a convincing argument, given the authors’ overall focus on the tremendous profits that await such companies.

The authors also downplay the importance of shifting the social and cultural norms that make poverty so intractable.

Consider the norms that affect women, in particular. Because of age-old gender expectations, much of the world’s population remains illiterate and ill-equipped to earn a living or to help educate their children.

Products designed to increase the incomes of the poor will have some impact on poverty levels, but they won’t change the norms that keep girls out of school and women confined to their homes. Nonprofits, civil society organizations, and governments are making real progress in this area.

The chance to make further progress is what motivates me in my own work. The best “solution to poverty,” in my view, will involve a combination of nonprofit work and business enterprise. Perhaps in the next edition of this book, the authors will explore how people in both sectors can work together to tackle the challenge of poverty.

Polak and Warwick, to their credit, have proven that businesses can generate sizable

Stanford Social Innovation Review / Winter 2014

MILTON FRIESEN is a senior fellow and program director of the Social Cities initiative at Cardus, a think tank based in Hamilton, Ontario. Currently, he is pursuing a doctoral degree at the University of Waterloo School of Planning, and he contributes to the Waterloo Institute on Complexity and Innovation.

profits by meeting the needs of the poor. Let’s hope that this book finds its way into the hands of CEOs who will seize this opportunity—not only because it will make money, but also because it’s the right thing to do. In both of those fronts, the authors show, the opportunity “is simply too big to overlook.” ■ IF MAYORS RULED THE WORLD: Dysfunctional Nations, Rising Cities

Saviors at City Hall?

REVIEWED BY MILTON FRIESEN

C

ity residents may well shudder (or laugh) at the thought of their beleaguered mayor at the helm of a global order. The work of getting garbage picked up, taxes collected, streets cleaned, and wastewater treated is more than enough for most municipal chiefs to handle.

Yet it is precisely this “get it done” attitude that makes municipal leadership so vital.

Benjamin Barber, a senior research scholar at the City University of New York, argues that the twelve mayors featured in his book If Mayors Ruled the World are all stars of global scope. Each of them has achieved that status by confronting a deeply ingrained social problem: Leoluca Orlando of Palermo took on the Mafia and survived to see the tables turn on local organized crime. Teddy Kollek of Jerusalem successfully navigated the religious tensions that define his city. Sheila Dikshit of Delhi overcame severe infrastructure problems in her city (and longstanding gender bias in her society) to move her community from cynicism to hope.

What these dozen mayors have in common, Barber argues, is a profound sense of interdependence. The idea of collaborating to tackle real problems in a context where effectiveness trumps ideology is replacing the dysfunctional idea of national sovereignty. “Today, after a long history of regional success, the nation-state is failing us on a global scale,” Barber writes. “It was the perfect political recipe for the liberty and

Benjamin R. Barber 432 pages, Yale University Press

independence of autonomous peoples and nations. It is utterly unsuited to interdependence. The city, always the human habitat of first resort, has in today’s globalizing world once again become democracy’s best hope.”

Barber contends that supra-national bodies such as the United Nations, the G8, and the G20 are ineffective because member nations fight to remain sovereign and ideologically distinct, even as they face crises that demand collaboration and pragmatic problem-solving. Mayors around the world, by contrast, must deal with the relentless, day-to-day challenge of keeping their communities intact, often amid truly difficult conditions. Barber isn’t suggesting that one morning we will wake up and find that nation-states have disappeared. Rather, he argues that failures at the nation-state level have left gaps that coordinated city leadership is well suited to fill.

To some readers, the title of the book will seem outrageous. But Barber demonstrates that many mayors are already playing an important leadership role in world affairs.

They are, for instance, working to mitigate the problems that come in the wake of national posturing on climate change, security, and immigration. Cities don’t have the luxury of waiting for the G8 or the G20 to solve those problems. So they are forming new institutions of their own—for example, the C40, an international network of cities that collaborate to address climate change.

Similar networks are emerging to tackle crime, economic inequality, and other issues that city-dwellers face daily. “As a tactic

of the relatively powerless,” Barber notes, “mitigation gets things done, permitting progress toward networking and informal cross-border governance to continue.”

Social innovators will find that many of Barber’s ideas resonate with them. They know what it means to do more with less by discovering new combinations of existing resources. They also know how to engage with people who are different from them, and with ideas that don’t align perfectly with their own. Cities, in fact, are simply a larger instantiation of the webs of interdependence that social innovators often use to solve problems.

Barber doesn’t hold cities in an idealistic light, and he notes the contradictions that mark their economic, political, and educational systems. Many city governments focus on protecting the interests of a powerful elite.

(Think of Palermo during the period when the Mafia ran it.) Cities can also be brutally uncaring places for those at the grinding edge of the local economic engine. And yet, Barber suggests, cities are at the forefront of efforts to narrow such gaps in power and wealth.

“Formal equality,” he contends, “is unlikely to yield equal opportunity unless people can live, ride, work, learn, and play together in cities whose neighborhoods are voluntary communities rather than walled ghettos.”

Nation-states still function today, and cities aren’t going to change that. What can change, however, is the role that cities play in connecting their citizens to structures of global governance. Barber puts forth a detailed proposal for a global parliament of mayors that would complement supranational bodies and promote strategies to improve global collaboration. Some people will worry that the enormous differences between cities in size, influence, and money would slant the already deeply tilted table of world power in favor of a few megacities.

Others might note that if centralized nationstates don’t crush Barber’s envisioned parliament, then the sheer logistical complexity of representing an estimated one million local political entities probably will. Realizing Barber’s lofty vision isn’t impossible, and we ought to explore his solution as other

69

70

Stanford Social Innovation Review / Winter 2014

TERESA ODENDAHL is executive director and CEO of Global Greengrants Fund, an organization that promotes environmental activism by providing small grants to local projects and grassroots campaigns in emerging economies.

solutions fall short. But let’s not forget that the climb will be bracingly difficult.

The reality is that mayors don’t rule the world. But they do run the world—or much of it, anyway. If they continue to advance new forms of collaboration and to harness the innovative capacity in their people, they may yet reshape the landscape of global governance. ■

A Man of His Time REVIEW BY TERESA ODENDAHL

A

bout a decade ago, my youngest daughter and I went to hear Lester Brown speak. Brown, a great orator, warned a large audience about the risks of global warming and species extinction. He made a lasting impression but offered little insight into what we could do in our everyday lives to solve those problems—except, perhaps, find ways to conserve energy. Meanwhile, he was preaching to the converted at a time when public opinion polls showed that relatively few Americans took climate change seriously.

Brown is an icon of several movements: the green revolution, population control, sustainable development, and environmental conservation. He founded two think tanks, the Worldwatch Institute and the Earth Policy Institute; he is the recipient of a MacArthur “genius” award; and he has written more than two dozen books. His most recent work, Breaking New Ground, is a memoir that also includes predictions and proposals for the future. For the most part, though, that policy material reflects the author’s longheld ideas and goals. Rather than breaking new ground, Brown is tilling old fields. The book—rather like that speech—is a fascinating testament both to a life well lived and to an agenda that remains woefully unfinished.

The focus of Brown’s career has been on presenting opinion leaders and high-level policymakers with careful research and evidence-based solutions to world problems. It’s essentially a top-down approach.

In describing the work of the think tanks that he founded, for example, Brown seldom refers to collaboration with other groups. Nor does he discuss the need for a broad political strategy. Instead, he highlights the number of media hits that his groups have received.

“By the mid-1990s, … nothing we published was ignored. This is why Worldwatch became the most widely cited research institute in the world,” he writes. Brown, in short, is the product of an era when reasoned analysis and political leadership garnered wide respect.

Brown grew up on a farm during the Great Depression, and he was the first person in his family to earn a college degree. For many years, he ran a successful tomato farm in New Jersey. But in 1959, he left that business to join the US Department of Agriculture as an analyst. In 1965, Brown went to work in the New Delhi mission of the US Agency for International Development, and he credits the six months that he spent in India with broadening his perspective on global issues.

A pivotal moment came soon after he arrived in New Delhi. After reading local Indian newspapers and talking with people at cocktail receptions, Brown was able to determine that India was experiencing a countrywide drought and would not meet its public fiveyear crop projections. Famine was imminent. He sent an urgent cable on the situation that wended its way to President Lyndon B. Johnson. “I knew what India had to do,” Brown recalls. Apparently, LBJ thought so, too. The president asked Brown to draft a diplomatic agreement that tied US grain shipments to a commitment by the Indian government to intensify agricultural practices in that country. “For the United States, this was one of our finest moments,” Brown writes.

“And not just because millions of lives were saved, but because LBJ saw a rare opportunity to restructure India’s agriculture.”

Brown had no qualms about strong-arming other countries in this way. He maintained that the Western model of commercial agriculture was superior to traditional models, and he did not seem to believe that the Indians (or, later, the Chinese) could find their own solutions to the challenge of food

BREAKING NEW GROUND: A Personal History Lester R. Brown 224 pages, W. W. Norton

production. In the book, he does not discuss indigenous farming practices that feed people without harming the land. Nor does he write about the mass industrialization of agriculture, the use of harmful pesticides, and other aspects of the Western model that contribute to global warming.

Breaking New Ground does not address the core elements of environmental activism today: online organizing, global-scale efforts by groups such as 350.org, and increasing collaboration between environmental and human rights movements. And Brown refers only in passing to grassroots efforts such as the Sierra Club’s Beyond Coal Campaign.

Throughout his life, Brown has operated mainly as an expert analyst, not as an activist.

An exception to that rule occurred when he pushed the Cosmos Club in Washington, DC, to admit women. That was, he writes, “the most intense political campaign of my life.”

(Curiously, Brown never uses gender analysis in his call for population control. We know that increasing women’s access to education is the surest way to decrease birth rates.)

In 2003, Brown launched the Plan B initiative to promote population control, poverty elimination, and drastically reduced carbon emissions, among other goals. Those goals are essential to the survival of human beings and of the planet. Unfortunately, Brown—like the US environmental movement in general—no longer holds the ear of the world’s media and policy-making elite.

Brown, for his part, still believes that deploying facts, figures, and accurate analysis will lead to change. I so wish he were right. ■

Stanford Social Innovation Review / Winter 2014

MARA SAPON-SHEVIN is professor of inclusive education at Syracuse University. She is the co-author, with Nancy Schniedewind, of Educational Courage: Resisting the Ambush of Public Education (2012). Her most recent book, co-authored with Diana Lawrence-Brown, is Condition Critical: Key Principles for Equitable and Inclusive Education (2013).

Stories out of School REVIEW BY MARA SAPON-SHEVIN

C

onsider a few stories from a recent week: Friends of mine pulled their seven-year-old daughter out of public school after two weeks of constant tears (mostly the child’s, sometimes the parents’) that were a consequence of daily testing. A kindergarten teacher I know had her block corner, her dress-up corner, and all of her toys removed from her classroom because they were no longer part of her school’s prescribed curriculum. And a group of teachers in training at my university returned from field placements and described watching veteran teachers discard their elaborate, creative lesson plans because an evaluator from a standardized curriculum publisher was coming to their school.

None of these anecdotes would surprise Diane Ravitch. In her new book, Reign of Error, she brilliantly describes each of these distortions of the relationships that connect teachers, students, parents, and teacher educators. Her own history as a professional educator adds weight to her critique: She received appointments to public office from Presidents George H.W. Bush and Bill Clinton, and she was a member of the National Assessment Governing Board. She was an early and vocal supporter of the charter school movement and the legislation known as No Child Left Behind—both of which she now criticizes strongly. Her involvement with the other side of the education debate and her “turnaround” story enable her to speak with insider knowledge and from a broad perspective.

Ravitch issues a powerful and alarming message about the fate of public education in the United States. “This essential institution, responsible for producing a democratic citizenry and tasked with providing equality of educational opportunity, is at risk,” she writes. Corporate “reformers” (one might say “deformers”) who profit enormously from the

REIGN OF ERROR: The Hoax of the Privatization Movement and the Danger to America’s Public Schools Diane Ravitch 416 pages, Knopf

creation of privatized education are depriving vast numbers of students of a rich, full education. The very essence of our democracy—our understanding of who we are and how we provide for our children—is in jeopardy.

How did we get here? It’s important to examine the narratives—the stories we hear again and again, the headlines that scream at us—that have shaped our understanding and allowed us to accept policies that result in profit for a few and lost opportunity for many. If (as we’re told) our schools are failing, teachers are to blame, competition is the answer, and poverty doesn’t matter, then all we have to do is get rid of “bad teachers,” apply “market discipline” to our schools, and “raise standards.” We don’t have to think about the impact that poverty and racial segregation have on students and families.

In chapter after chapter, Ravitch skewers each of those claims about the supposed failure of public education and then describes the corresponding reality. She shows that schools aren’t failing, that the achievement gap hasn’t gotten worse, that high school graduation rates are at an all-time high, that test scores are not the best tool for identifying good teachers, and that charter schools on average are no more innovative or successful than traditional public schools.

Ravitch presents compelling evidence that the two major causes of the crisis in public education are poverty and racial segregation. Many educational policymakers and many founders of for-profit schools tell us that poverty doesn’t matter. But children

who lack access to decent food, housing, health care, and other resources come to school at a serious disadvantage. How could poverty not matter? All the other narratives of school “reform” function as distractions that disengage us from the real work—the hard work—of changing our educational system and our society. Schools must change, but they cannot fix the structural problems caused by inequality and injustice.

Ravitch proposes 11 solutions that will help to repair and restore public education.

Some of them are school-based, and many people will find them relatively uncontroversial: providing early-childhood education; ensuring a full, rich curriculum; reducing class sizes; eliminating high-stakes testing; preserving democratic control over public schools; and treating teachers, principals, and superintendents as professional educators. But these more-palatable solutions leave unchanged the core problems that Ravitch says we must address. So she proposes additional solutions: providing adequate prenatal care, offering wrap-around medical and social services, and confronting racial segregation and poverty.

A deeper, more honest conversation about this topic would focus on whether we actually want public education to work.

Reducing structural inequality would require those with power and privilege to give some of it up. And there’s the rub. Many people who espouse “quality education for all” benefit from our stratified, segregated, inequitable educational system, and they are unlikely to support real social change.

Missing from this volume but essential to our understanding of the issue are the voices of real teachers, real parents, real students. All across the country—from ongoing protests in Madison, Wis., to parent groups that opt out of standardized testing, to the creation of the Bad Ass Teachers’ Association—people are rising up and saying “No” to the destruction of all that they value about schools. Along with the important story that Ravitch tells, we need to hear the stories of those who are finding ways to push for equity-based education. ■

71

72

Stanford Social Innovation Review / Winter 2014

I mages that inspire

Photograph by Inge Kathleen

Immigrating to a New Land

E

very year more than one million people immigrate to the United States. Most immigrants join other family members already living in the country who can help them get settled. But many others, particularly refugees, have no family to ease the transition. They have to rely on churches, nonprofits, and government agencies for help. One of these nonprofits is located in the college town of Bowling Green, Ky. Every year the International Center of Bowling Green helps hundreds of immigrants find housing, apply for food stamps, enroll their children in schools, learn English, land jobs, and do all of the other

myriad things that it takes to create a new life in a new land. The young Burmese boy looking out of the school bus window (above) is one such immigrant. He arrived in the United States along with his parents and three brothers. Before coming to the United States, the family lived in the Umpiem Mai refugee camp in Thailand. Most refugees are never granted the official refugee status that allows them to immigrate to another country. Instead, millions of people are stuck in refugee camps for years. Although establishing a new life in a foreign country is not easy, this boy and his family are six of the lucky ones. —Eric Nee

Stanford Social Innovation Review

Give the Gift of Social Innovation ...and Save $10!

China’S QUeSt to adopt eleCtriC VehiCleS

aSSeSSing adVoCaCy

By Christopher Marquis, Hongyu Zhang, & Lixuan Zhou

by Ivan Barkhorn, Nathan Huttner, & Jason Blau

Special Supplement Supplement Special

innovating government on a global Stage Spring 2013 Volume 11, Number 2

10th ANNIVERSARY ISSUE | Essays by Larry Brilliant, Jane Wales, Roger Martin, Helmut Anheier, Jacqueline Novogratz, and others

200

3–2

th

013

W 16 t e cel h o u e b ra gh te e s s t- p rov w i t h ays oki n inn on so g ova c i a l tion by

ier, anhe ter, t U m hel S Kan a n t, e t h m o S o n , i l l i S y Br SaB n Ba larr aleS, ro i S t i a d otherS r h W C n Jane martin, tz, a ogra r e V g o o n r e Uelin J aCQ

Spring 2013 | Vol. 11, No. 2

ry A s ver is i n su An e

The holidays are a wonderful time to give someone you care about a Stanford Social Innovation Review gift subscription, an inspirational present that lasts all year long.

The Print + Digital subscription includes: • One year of the print magazine • A downloadable, tablet friendly digital edition • Access to all subscriber-only articles • Eleven years of archived content • Bonus! Order before December 16 and we’ll send a holiday card to your gift recipient

$12.95 U.S. and Canada

SAVE

Innovation Review

The Permanent

Disruption of Social Media

By

By John A. l n, & Will Mitchel Anita M. McGaha

Fall 2013 4 Volume 11, Number

leARning fRo m CoCA-ColA

By Prashant Yadav, orla & luk van Wasse Stapleton, nhove

Winter 2013 Volume 11, Number

1

The Permanen DisruP ion t of socialTM edia

IMPSATCINTG | Using Nationa l Networks to Tackle

Investing Create Real

Social media has forever changed the way that organizations and donors interact.

BY JUlie Dixon & DeniSe KeYeS

INCRVEEATE REAL Gap | Learning

IMPACT? Winter 2013 | Vol. 11,

of Health Care Access

from Coca-Cola

| The Future | The Secret of Scale

| Closing the Pioneer

Is Not Good Enough

Chronic Disease

Impact? | When Good

Canada $12.95 U.S. and

authors Paul Brest FOR DEBATE article, In this inaugural UP for impact investors that it’s very difficult rate returns and Kelly Born argue impact and market to achieve both social debate are the article and joining Responding to the O’Donohoe, Audrey Choi, Nick Pfund Sterling K. Speirn, l Chu, and Nancy E. Michae and i Alvaro Rodriguez Arregu No. 1

No. Fall 2013 | Vol. 11,

3. Select #3, Gift Subscription

By Peter Murray

CloSing

the PioneeR Jonathan Schorr gAP

By Sasha Dichter THE FUTU RE OFESSharvey , Koh, & Ashish Robert Katz, E ACC Karamchandan HEA LTH CAR i MacDon ald,

WHEN CAN I

When Can Impact

enter promotion code HOLIDAY13P

A RevolUtio n BeginS in teACheR PRe P

THE SECR ET OF SCA LE

Hammo nd,

By Bill Shore, Darell & Amy Celep

Innovat ion Review

$12.95 U.S. and Canada

Using national networks to tackle Chronic Disease

By taz hussei n& michaela Kerriss ey

the encore fellowships network

By Beth Benjam

in

4

Z

1. Go to www.ssireview.org/subscribe 2. At the top of the page,

Stanfor d Social

C

Follow these easy steps:

IS NOT WHE N GOO D UGH GOO D ENO

Stanfo rd Social

$10

Use the unique Holiday Gift Code HOLIDAY13P and receive a 20% discount off of the regular price!

This offer is for new subscribers and needs to be ordered as a gift subscription. It is good through January 31, 2014. Discounted Print + Digital subscription prices are $39.95 U.S./Canada, $59.95 international. For bulk gift orders contact info@ssireview.org

SSIR HOLIDAYSUB FULLPG.indd 1

10/31/13 2:37 PM

JOIN THE

GENEROSITY NETWORK

ON SALE NOW WHEREVER BOOKS ARE SOLD

“For everyone who seeks true partnership with others, The Generosity Network has lessons on the practice of relationship, dialogue, and the deep connections that energize people and communities to turn visions and passion into reality and results.”

Scott Kriens Chairman, Juniper Networks Director, 1440 Foundation THE GENEROSITY NETWORK is the essential guide to the art of activating resources of every kind behind any worthy cause. Philanthropist Jeff Walker and fund-raising expert Jennifer McCrea offer a fresh new perspective that can make the toughest challenges of nonprofit management and development less stressful, more rewarding—and even fun.

“Jennifer McCrea and Jeff Walker have written a seminal new chapter in the history of the fundraising profession. The Generosity Network exponentially broadens the dynamic range of the profession.

It will make fundraisers weep with ecstasy at being understood. It will transform the entire way those looking to hire them think about what they should be looking for. It elevates the profession from the province of begging to realms of joy and artistry. Why should tech entrepreneurs be the ones having all the fun? Is it possible that raising the funds to end malaria or cure breast cancer could be every bit as fulfilling as building the first electric car company? The possibility has never before been considered. It has now.”

Dan Pallotta

author, Uncharitable

“Three elements make The Generosity Network remarkable: the core partnership approach (we’ve all heard it, but they embody it); the importance of genuine self-reflection regarding your own attitudes about money, wealth, and giving before soliciting others (which nobody talks about and is such a fundamental and enlightenewd starting place); and the spiritual element to fundraising (which is central to all real giving). I’m not only a better fundraiser, but a far better person from having learned from them.”

Laurence Jahns Senior VP Advancement, Robin Hood Foundation

Get free tools, Learn more, and join the network at:

TheGenerosityNetwork.com