Case Study: Gumball Capital

(answering 3)

In the UK they have had a "make money from 10 UK pounds" challenge for youth which is very successful:

http://www.starttalkingideas.org/mym_with_a_tenner http://news.bbc.co.uk/2/hi/programmes/newsnight/6320541.stm

They might share their experience with you.

tom (www.barnraiser.net - Collaborative webspace for social innovators and entrepreneurs) / tom@barnraiser.org

Tom,

Thank you for that information. It looks very similar to our proposed model, and I think it we could definately learn alot from their experiences. We adopted the Gumball Challenge concept from the Entrepreneurship Week Innovation Challenge here at Stanford where we got Post-It notes to create value. However, that challenge didn't involve any money so right now we are trying to figure out alot of the logistical information regarding how much to give each person/team, and how to judge the competition (social value/ money/ ??), and what to do if students don't pay it back. I like the idea the UK challenge had by which they wouldn't allow the school to participate in the challenge the following year if they didn't return at least 60% of the loan, so we might consider that. I you have any other thoughts or comments, we'd love to hear them.

Looking forward to a lively discussion.

Ilana

Hi Ilana and friends - congratulations! What a great job you're doing - raising both money and awareness! Whatever the organizations approached, you essentially need kindred souls - people as motivated and enthusiastic as you - to get the Gumball rolling elsewhere. I recommend you target individuals via word of mouth as well as target particular schools, community and corporations. Let those people who respond and take up the idea then do the work to generate activity within their own networks. Since like tends to attract like, between you all, you and your faculty teachers probably already know many equivalent shakers and movers in other schools. If you'd like to send me an email at freeplayfoundation@mac.com I'll be happy to suggest a few people you might approach. All the best! Midi Berry. www.freeplayfoundation.com and freeplayenergy.com

Hi Midi, Thanks for your help! I will send you an email separately.

I definately agree with you about finding a solid team of individuals who are dedicated and can drive the efforts at their schools. Right now we are using our own networks, social networking websites, professor networks, and related student organization contacts but if anyone has any other ideas on how best to contact individuals at other schools please let us know. We really think effective outreach is the key to making the venture work so if you have any particular contacts in mind, please let us know: info@gumballcapital.org.

Hello, this is Meng Zhao, phd at Said Business School, oxford U., visiting student at Stanford. Some of my friends work on social enterprise competition for college students in China, some work in the area of microcredit. Just not a combination like yours. I translated your project into Chinese (sorry without your permit) and put on my blog: http://mengzhaoblog.blogspot.com/, hoping to give insights for Chinese practitioners.

Hi Meng, thanks so much for that. The more publicity we can get, the better. For now we are concentrating on active outreach only in the US because of our lack of contacts abroad but if people abroad greatly express interest we would definately be open to launching a few Gumball Challenges abroad as well.

Dear Ilana Seid, Greetings from India. I am a resource person for a self help group organization in India. Community Services Guild is the name of the organization and in Tamilnadu there are seven thousand five hundred groups. It is in existence from 1980 with initial help coming from Ford Foundation. I have been associated with these groups for the past eighteen months and providing them Marketing, Operations and other needed inputs. Each two students are assigned to one SHG(Self Help Group)as consultants. The self help groups have only women as members. ( They can employ men, however, only women can be members). They pool their savings( each member contributes twenty rupees approximately half a dollar)and become members. They obtain training in different trades and other related areas that are relevant in work in their context. About their operations i will send you a separate report. I will attempt to answer your questions in this context my experience. 1) Volitional Trait is one of the most important trait that need to be inculcated among students. It volunteering combined with passion. In fact Gumball Captial has to have a structure similar to Wikipedia. Driven by volunteering for social cause and passion to make this world a great place to live for everyone. Therefore, contribution of students in the form of small donations is good. However, that in my opinion will be insufficient. We need to include both the students and the people who are going to be benefited together, then only you will be able to distinguish Gumball from Charity.A small donation of 10$+ providing sweat capital on the part of students ( we may call it as contribution to social capital) sweat capital is the knowledge of students will go in a long way to sustain this movement.

2)Please keep it as a student run unit so that the organization will have vibrant charatcter. I do not know the American Laws therefore kindly excuse me. 3) The experience of students that they can make a difference is one of the most important outcomes. More than money it is this experience sharing will help people to work together. 4) You can use the web.2.0 tools to develop connectivity with these groups and provide help to them directly. Many a times you will find organizations that are not in sync with Gumball Capital may waste all your efforts. Therefore, my suggestion is keep the students and the beneficiaries together. You may face initial problems of interface. However, the learning is worth its efforts. Some of the activities we do at KSR College of Technology are 1) Conduct Shandy for the products of Self Help Groups.They use frugal methods of advertising and sell the products to students with the help of MBA students. The passion there small enterprises carry is seen to be believed. They make small margin and it is great to share with them the joy of wealth creation.If you need any further information i will be too glad to provide you the same.

With warm regards Yours sincerely, Prof.K.Prabhakar kprksr@gmail.com

Prof. K. Prabhakar,

Thank you for your input. We do plan on keeping Gumball Capital as a student focused group, but are hoping that the community, as well as corporations can help with sponsorships, prizes, and matching grants. With respect to developing "Volitional Trait," we are hoping that this experience of "making good and doing good" will stay with the challenge participants long after they graduate from college. There is a poweful feeling about being a college student and being able to help someone jump-start their life, and we are hoping to incubate that feeling in college students so that they may take it with them into the work force and teach their children about it in the future as well.

We also agree with your comment "we need to include both the students and the people who are going to be benefited together." In fact the reason we chose to lend through Kiva.org is that it connects the college student donors with real entrepreneurs in the developing world. We felt that this transparency is important because it is engaging and keeps people interested. It is great to donate money and know where exactly the money went and to whom it is helping. We also felt that it was important to recognize the students that did contribute and that is why we have the post-it pledges on the website. Ideally, we would want to be able to tag the donor's dollar and all the entrepreneurs it goes to help but we simply do not have the resources to do that at the moment but it will definately be kept in mind for the future.

Could you please clarify what you meant by "Conduct Shandy for the products of Self Help Groups. They use frugal methods of advertising and sell the products to students with the help of MBA students" ? I am not sure if I have the right idea but it sounds interesting.

Thank you, Ilana

I think corporates being approached for sponsorship may not be a good idea. They may have money left in their CSR Account. However, I have my own doubts about their efforts and intentions. Our objective of promoting social enterprise is to reduce dependence on these corporations, I suppose.

I think corporations sponsor events for students as a means of advertising to recruit future employees, so while their intentions might be self-serving, I think it really helps to have them on our side, as we are extremely resource constrained. Their money goes a long way in helping us scale our efforts. I also have an optimistic outlook on corporations. Many here in silicon valley are doing alot of good. I feel that the trend is moving in the direction of corporate social responsibility so I hope Gumball can capitalize on that end.

Good Ilanseid, If you can make corporates with real interest it will be fine.

Good Morning Ilana,

I am interested in your venture. I run a program that is a partnership between Mount Wachusett Community College, United Way of North Central Massachusetts,USA and Ashoka: Innovators for the Public called Community Builders. Our mission is to educate, inform and inspire greater community involvement through new and innovative strategies. We choose to achieve this by inspiring volunteerism as a portal to community needs and citizen awareness and social entrepreneurism as a long term sustainable way to create positive change and social capital.

In regards to your questions, I reccommend your group target schools that have Civic Engagment components in their missions. Many colleges have civic engagment programs (MWCC's is called the Center for Democracy and Humanity).

When considering a 501(c)3 or fiscal sponsor, I might consider that fact that you will not be a student forever even though you intend to keep Gumball Capital in colleges. If you choose a fiscal sponsor (which may not be a bad way to start) I reccommend you have both a contract that outlines your financial arrangement and an MOU that outlines the distinct responsibilities of each party in the partnership. What is the organizational flow you will have to follow, what are your fundraising guidelines, who is responsible for marketing and who's logo's should be included in which marketing materials, etc.

A suggestion on getting the community and corporations involved: How about selling gumball machines (vending machine style) as a social entreprise?

Last, (excuse my inexperience) when you say pitch presentation, are you looking for funding for media?

I would be interested in speaking further as I am planning a conference (our 3rd) on social entrepreneurism and student engagement in creating change. you can reach me at koliveira@mwcc.mass.edu or www.community-builders.net

Best Regards, Karin Oliveira

Dear Karin, I will certainly get in touch with you and hope our programs can work on some joint collaboration to promote social entrepreneurship for sustainable social change. I think targeting schools with civic engagement programs is a great idea that we hadn't thought of. We were initially focusing on programs for social entrepreneurship, business, and finance but I would say Gumball definately falls under the civic engagement umbrella as well.

As for the 501c3 versus fiscal sponsorship, we learned from another student awareness organization that many high value donors were hesitant about giving students large donations because their executive team wasn't insured (against fraud?), and though they had an established 501c3, they were considering reverting back to a fiscal sponsor. So with regards to legal matters, we are facing the problem of cannibalizing the fund with a fiscal sponsor's transaction fee's vs. not attracting the more risk averse high end donors. It might be worthwhile to start off with a fiscal sponsor and as we strengthen and build our team to consider undertaking the 501c3 status. That said, we anticipate our donation amounts to be on the lower end given that we anticipate the majority of our donors to be students, so if anyone has any contacts with fiscal sponsors who would be open to work with us, we could definately use the help. We are also bootstrapping at the moment and could really use the help of a pro-bono lawyer to try to set up the 501c3, so if you have anyone in mind we would really appreciate the introduction.

And finally, yes, by pitch presentation I meant that we are seeking funding for media as well as the "seed-funding" ($ and gumballs) for the competition.

I really liked your gumball machine idea. It gave me the idea of having a really big gumball machine be the trophy for the rival school competition (perhaps to be displayed at the student union). For instance if Stanford won the challenge this year they would get it and if Cal won the challenge next year they would take it from Stanford. Something to keep the competitive spirit of the event alive.

Best regards, Ilana (ilana@gumballcapital.org)

1. Schools to target. Try business schools with social responsibility sources. Also, try promoting at next year's Skoll Forum at Oxford.
2. Fiscal spnsor at this point to keep it simple. You can expand later.
3. and 4. Try to pitchs at the next Investors' Circle Fall conference and Venture Fair, November in Boston. www.investorscircle.net. Also try to get on the agenda at Threshold's Momentum Conference this fall. Check the Tides Foundation website.www.tides.org. Sign up with the Omidyar.net and CARE2 . And go to one of the Nameste-Direct Foundations' Last Wed. Night Suppers in SF to network (email me for contacts)

Thanks for these great ideas Patrick. We'll check out these sources and hopefully we can get some support. I will email you regarding the Namaste-Direct Foundations dinners.

Dear Ilana Seid, Greetings from Tirucheogodu. Shandy ( Santha in telugu and Santhai in Tamil)is a palce where producers and sellers meet to purchase goods( 80% of goods and services) on a particular day of a week or month.It is a place where most of the trasactions at village level is being done.Some the Shandys are so big that they generate as much as 20 to 30 millions of rupees worth of trade. This ancient mode of trade where the customers and producers meet and exchange goods, thoughts and entertainment togheter. The prices are negotiated. One important factor is the producer playing role of customer as well as supplier. The producers exchange goods and services and purchases goods and services required by him or her. We may brush aside the acitivity as primitive economic barter system. However, It is highly sophesticated social interaction takes palce in shandy. It is a place where boys meet girls ( not in the sense of dating), social relationships are strengthened to carry over to next week. However, this has disappeared in urban India. This practice is still there in villages. There is ad expenditure as the producer has to expalin the customers how his product is better than others. He may give few samples to the people to try. For example, we had a herbal dealer who distributed a small herbal medicine free to help decision making.

How it works in the college

Students have the list of the products manufactured by the Self Help Groups( as they are called in this part of Country).They also suggest the needs of the students. For example many girl students have a need for a ecofriendly bags to carry their books. They give their color preferences and size to the students. The women groups purchase jute material and make bags according to the needs. The prices are only 50% of the market price. However, the purchase experience of meeting the producer and passion they carry while marking thier products is a different experience. I have give only one example. They make jams that last for more than six months without using any kind of preservatives. I personally went to their place of manufacture and found that frugal methods such as making all the products in their own kithen with the help of other women members and packaging in glass bottles that can be recycled are some of the most important events. I hope i have anwered your questions. Yours sincerely, Prof.K.Prabhakar

Besides linking donors and recipients on the website, are there any other ways you could think about linking people in the developing world and students here in the US? For instance video could be another idea. Thoughts?

One idea that i am now working which i think will have a great success is to use zoho notebook. You can combine interviews, multimedia, replies, sharing and all the areas in one single notebook which can be accessed by any person who is interested. Please give you ideas.

This seems like a great collaboration tool. We have been using a wiki but might consider transitioning to this as it seems to have more functionality. Thanks so much for mentioning it to us. Do you have any ideas on tools to keep students engaged? We found this site www.greatturtlerace.com to be a really fun site, and if we could get that built for our site (with gumballs or something as turtles or something similar) I think that would be really great. Youtube videos also work well to keep people interested but other than that, does anyone have ideas on keeping students engaged and interested in the cause?

I think my friend told me about this a few months ago. Word of mouth seems to be spreading already!

Kudos on really thinking this through and asking all of the right questions. I think you're on the right track with getting VC for initial funding. For this, someone commented using Investors Circle, but they have a hefty membership fee. Social Enterprise Alliance (SEA) has a $50 annual student membership fee.

Once you get Gumball Capital rolling (mind the pun!), I think you should keep it a 501(c)3. Even if you get solid, truly interested corporate sponsorships, it's much harder to maintain them. Plus, by keeping autonomy from the school and corporations, this would be a solely student venture, which seems to be your mission. You also mentioned corporate sponsorships might help with recruiting, but is that really what you want out of this fund? Keep your focus on the mission, otherwise you might compromise your goals.

I'm a rising senior at Cal (go bears! :) ). Though you're campaigning in the Fall, I'm actually planning on facilitating a student-run course on microfinance in Spring 08. I'd love to coordinated to help get the word out!

Sarah,

Thanks for your support of Gumball. Do you have anyone in mind at UC Berkeley who would be willing to partner with us and host the Challenge there? It would be great if we could continue this correspondence with you.

Sincerely, Doreen Hoang, Campus Operations [doreen@gumballcapital.org]

Hello all,

My name is Jae, Special Operations Director at Gumball Capital. As Ilana is currently out of the country, I will be responding to comments from now on!

I must apologize for our absence from this thread recently; we've been spending all our time hard at work this summer on our starter kit, video, and several other projects--we even have a blog now so those interested can keep track of our progress and get the latest news on what we're up to! Please check out our newly revamped website!

Thank you all for the immense support you've shown us so far, and I hope to chat you soon, Jae