Funding

Too Small to Fail: Debt Relief for Social Entrepreneurs

Social Edge — Fri, 22 Jan 2010 12:00:00 -0500

In the business world, it’s par for the course to move on when a project has proven financially unviable. Those of us who identify as social entrepreneurs can be more stubborn, at our own expense. We don’t necessarily move on when our projects have proven financially unviable.

We keep going, at first turning to philanthropic capital (where available, and it seldom is) and then, too often, to our credit cards. Some of us move on only when the money’s gone, our passion muted, and our monthly minimum payment so high that we have no choice but to abandon the work we love.

I fear that cash-strapped social entrepreneurs are becoming too dependent on the only reliable source of funding for social innovation, Mastercard and Visa. We have few alternatives. Large-scale funds created to advance the sector are bureaucratic and risk-averse by design. One-off funding sources for socially innovative organizations are too few in number and rarely come with deep enough pockets to stabilize a social venture.

A perfect storm has formed around the failure of philanthropic capital to address the needs of social entrepreneurs, the ease with which personal debt can be accessed, and the stubborn enthusiasm that social innovators often bring to their projects.

The damage this storm can cause is tremendous. The cost is nothing short of social entrepreneurship losing its brightest and most passionate to more stable if less socially-minded careers.

We would all be well-served to think of cash-strapped social entrepreneurs as too small to fail. Despite their small size today, many carry the blueprint for a program that could significantly advance a social issue or improve society in 5, 10, or 20 years. The field of social entrepreneurship shouldn’t be putting social innovators in situations where they need to choose between selling equity in themselves, paying the credit card companies’ exuberant fees, or leaving the work they love.

How do we build debt relief into the social entrepreneurship eco-system to ensure the growth and development of world-changing innovations, and the innovators behind them?

Here are some related questions to kick-off the discussion:

· Are social entrepreneurs assuming too much personal debt? What’s your experience?

· Who’s to blame for mounting personal debt, the field or the social entrepreneur?

· Is funding for social innovation in fact broken? And if so, how do we fix it?

Join Peter Deitz, founder of Social Actions, in the conversation.

Invest in Me, Take my Equity

Social Edge — Mon, 11 Jan 2010 16:55:00 -0500

If we loved perpetual hand-to-mouth fundraising for our social enterprises, we’d never make this announcement. If the market were up to speed on the scalable potential of social entrepreneurship with engaged funders like the more advanced VC community that the exclusively for-profit sector looks to for scale, this discussion would be lame. But it’s not and we are raising money hand-to-mouth when we know for sure that a modest infusion of capital would scale our social enterprises.

Kjerstin Erickson, Jon Gosier and I (Saul Garlick) are announcing that we are ready to do something we had never heard of one month ago. We are going to offer equity in our life’s earnings for an unrestricted infusion of cash today. We are launching the Thrust Fund where these investments can take place.

In a recent discussion among a select group of social investors and entrepreneurs a funny question was presented. If an investor offered you a large infusion of unrestricted capital, say $300,000, with the only condition being that you would give them 3% of your income for the rest of your life, would you take the deal? To the host’s delight, the conversation struck a controversial chord leading to 100 unique email responses about the idea.

If we use the money to catalyze our careers or enterprises, is it worth it?

Warren Buffet has enjoyed a 25% annualized return on his investments over his working life. Venture Capitalists can break 30% with some wise decisions. What if investing in people could return over 40%?

For the model of investing in individuals to work, the investor will need to have strong faith in the integrity and future prospects of the individual entrepreneur. The entrepreneur should look to the investor for wisdom and guidance. We believe that makes for an ideal model of learning, growth and success.

The notion of unrestricted funding is music to our ears because a vast majority of philanthropic funding goes directly to annual operations and as of yet the market for true growth and sustainability capital is under developed. We find ourselves operating at the brink too often despite the knowledge that a large upfront investment could catalyze our organizations to sustainability and scale.

What do we want to take to scale? ThinkImpact, FORGE and Appfrica.

As young social entrepreneurs, our greatest burden is a sense of unrealized potential because the philanthropic and social innovation markets are not yet evolved to catalyze high-potential nonprofits and social businesses in the same way that the traditional venture markets have learned to do.

If we are given some freedom in the form of an upfront investment, who knows what we may go on to do. We may be working in non-profit space now, but a true entrepreneur never stops at his/her first enterprise. There will be others and it’s likely some will be for-profit.

Invest in us; we’ll give you some of our equity for life.

What is Wrong with the Investment Industry?

Social Edge — Thu, 18 Jun 2009 18:00:00 -0400

A recent post which appeared on Social Edge and ClearlySo infuriated my friends and colleagues from the Socially Responsible Investment (SRI) sector.

I suggested that they might actually be responsible for stifling the growth of impact investment. By vacuuming up most ethically-motivated investment and building portfolios of
the same old big-cap listed stocks, they hardly assist the impact investment cause —despite their name, how “social” are they?

Dutch bank Robeco and Booz Allen estimated this pool will be EU5 trillion by 2015 worldwide, as the responsible investment sector continues to grow at twice the rate of the industry, illustrating investor preferences for more than just financial return.

Why is there a shortage of products which provide genuine social impact as well as financial returns?

Charities and foundations have billions in their coffers; endowments which fund their good works. In the USA they are obliged to spend at least 5% per annum of these annually on their mission, of which “mission-related investment” is included. Elsewhere there
are no such restrictions and, with limited exceptions, the money is invested in all the conventional financial assets, in pursuit of return-maximisation (a crash or two notwithstanding). This is absurd; name another sector where at most 5% of assets go to the organisations’ chief objective. If this were the corporate sector, heads would have rolled long ago.

Pension funds are similarly “conservative”, or traditional. Even those with sympathetic constituencies put themselves into a similar “straitjacket”. They argue their fiduciary responsibilities give them no choice. This is hogwash.

Many of the bolder and more genuinely responsive and responsible organisations (such as TIAA-CREF in the USA or the Esmee Fairbairn Foundation in the UK and others) find they can undertake steps to address this absurdity by allocating assets to impact investment —it is time for others to follow. Not only is the conservatism of today’s trustees probably contrary to their beneficiaries’ desires (who would, in many cases, trade off some financial return for social impact, if the question were properly put) but really rankle staff, who also have social motivations.

Shall we require investment firms to survey staff regarding these tradeoffs, the same way mandatory surveys check risk tolerances? Should Government mandate a minimum impact investment threshold, well above the current 5% level?

Should consumer-protection agencies require that investment products marketed as “ethical” or “responsible” or “social” meet certain minimum standards, in the same way we require say chocolate manufacturers use a certain amount of cocoa?

Join Rod Schwartz, CEO of ClearlySo, in the conversation.

Do we really need more money?

Social Edge — Thu, 18 Jun 2009 17:55:00 -0400

Do we really need more money?

Ask any entrepreneur, social or otherwise, and the answer is always an emphatic “yes”.

As CEO of ClearlySo, an early stage social business, I am among those lining up with my hand eternally outstretched—in search of funding. We are all keen to get our hands on more capital, convinced this will solve all our problems.

We seek it everywhere and demand governments to “do more” for the sector. When Barack Obama recently requested $50 million for a Social Innovation Fund, I queried the amount, suggesting it was trivial. After all, in Britain the government has invested hundreds of millions of pounds into social enterprise and is currently considering at least another £300 million to support a Social Investment Wholesale Bank.

But the question arises—is all this government money a good thing? In a recent blog post, I challenged that notion and pointed out that the social business sector, especially in the UK, was in danger of being flooded by too much government funding. Does this not crowd out private investment? Are the criteria for decision-making apolitical, or are they heavily influenced by partisan calculations or “cronyism”? In such times of burgeoning fiscal debt and individual hardship, is such government largesse appropriate?

There is a more fundamental question. Are we focusing too much attention on the supply of investment to the sector? Funds for investment can be organised quickly—overnight if you're Bill Gates. But to build a successful social venture can take at least 5 to 10 years. By focusing excessively on the investment side, are we not missing an opportunity to invest more into building great businesses? Won’t this imbalance harm the earliest investors, who will realise poor financial returns as too much capital will be chasing too few good deals? Won’t the longer-term future of Impact Investment suffer as a consequence?

I understand the importance of bringing more capital into the sector. But we must ask ourselves what is the best use of incremental funding at this time—more investment or building more great social ventures? The companies need professional non-executives, sound financial control, well-conceived marketing and sales strategies, etc.

Demands for more funding have become an act of faith for practitioners in the sector. Is this serving our long-term interests? Join Rod Schwartz, CEO of ClearlySo,in the conversation.

Open Source Giving

Social Edge — Thu, 26 Feb 2009 10:48:17 -0800

Online social activism - what I call the CauseWired sector - is rapidly coming of age. Innovative web tools, online story-telling, and social media are more often than not at the center of the modern social enterprise, and not on the edges. The reason is simple and compelling: gathering people online is easier, less costly, and in many cases more effective in building support and creating real movements.

The growth of wired social causes is also generational. The group of young activists who grew up in the wired developed world is naturally adept in using social/digital platforms to pursue societal change on the global commons - whether it's through NGOs, social ventures, advocacy movements, corporate networks, or democratic politics. One of the most fascinating aspects of this trend is the rapid growth of new social ventures - online startups (both non-profit and for-profit) that build networks to change the world. Organizations like Kiva, DonorsChoose, GlobalGiving, Change.org, MyC4, Zazengo, Razoo and dozens of others tackle the world's challenges in education, poverty, intolerance, climate change and almost every issue in society.

So how does this movement, this explosion in wired social ventures, change the web?

I ask this question specifically because of a contest organized by Social Actions, itself a social venture/startup and the clearinghouse for tens of thousands of opportunities to give, organize, volunteer and get involved in wired causes. Social Actions's Change the Web contest challenges developers and entrepreneurs to use its database of more than 70,000 actions across more than 40 'CauseWired' platforms in interesting and innovative ways - to build widgets, to distribute the data to key audiences, to parse searches in ways that encourage open source giving.

But an important part of the Change the Web effort is the dialogue around just how the web is changing, and how socially-wired it will be in the future. So this conversation aims to advance that conversation.

At the Skoll World Forum, I'll be moderating a panel with three experts in online social activism: Premal Shah of Kiva, Mari Kuraishi of GlobalGiving, and Mads Kjaer of MyC4. Rather than the standard pre-forum conference call, we'd like to do our panel planning in public - in this forum, and centered around the theme of changing the web.

Here are four questions to start off the conversation - but feel free to ask your own:

• How open source philanthropy can support social entrepreneurs?

• Does linking thousands of people directly to, say, microfinance and other social ventures help those efforts - and how does it change them?

• What kinds of online tools or techniques or databases still need to be developed to make open source giving more effective?

• Does grassroots organizing and fundraising lend more credence to the causes these activities support?

My book CauseWired: Plugging In, Getting Involved, Changing the World (Wiley, 2008) asked this question in the final chapter: "Will online social activism unleash a golden age for causes - for philanthropy, for activism, for citizen engagement?" I don't know the answer - but I'm hoping that the Social Edge community can talk it over, suggest some great resources, and have a conversation right here that adds to our knowledge and understanding.

Issue Fatigue – Fighting for Attention and Funds in an Aware World

Social Edge — Tue, 10 Feb 2009 09:02:16 -0800

Are you changing your lightbulbs? Driving less? Exercising more? Are you voting for the best social entrepreneur idea? Joining a cause? Signing a petition? Are you blogging and twittering to raise awareness? Loaning money to people in emerging markets? Feeding the homeless, donating new pajamas to foster kids, and giving toys to tots? Are you saving the rainforests one candybar at time and providing clean water one bottle at a time? Are you recycling, composting, reusing? Are you bringing your own shopping bags and your own coffee cup? Are you shopping ethically? Sustainably? Organicly? Locally?

Aren't you tired?

Are you trying to raise funds from all these exhausted people who just don’t have the bandwidth to be concerned about one more issue?

It’s more than donor fatigue, where people no longer give because they are tired of fundraising solicitations. It’s bigger. It’s issue fatigue.

Why might awareness be increasing but support waning? There are four main factors.

It’s the economy. With the disappearing grants, dwindling corporate support, and declining donations, fundraising confidence is at 10 year low with more than 93 percent of fundraisers saying the economy is having a negative impact on fundraising. There is less money and more need.
It’s the number of nonprofits. With more than 1.5 million in the U.S. alone (up about half a million in the past four years), and new people starting nonprofits, appeals are up and competition for discretionary funds is greater.
It’s the awareness. With Al Gore's Inconvenient Truth and global leaders speaking out, people believe they need to change their habits to save the world. We have reached a tipping point in public understanding of climate change and many other issues.
It’s the internet. With so many more ways for people to help and ways for nonprofits to reach supporters, it is no longer just direct mail. People can help their favorite nonprofits by nominating, voting, joining, sharing, evangelizing, blogging, petitioning, auctioning, gifting, loaning, and making small changes, taking small actions.

Despite greater means of reaching potential supporters, co-host Hildy Gottlieb, author and President of the Community-Driven Institute, argues in her blog that Social Media Fundraising is
a) not sustainable
b) scarcity-based vs. strength-based
c) counterproductive if we want to create a better future for our communities

So in the face of these opportunities and challenges, how do nonprofits filter through the clutter and competition and build sustainable support ?

Join Jill Finlayson and Hildy Gottlieb as they pose the following questions:

How do you keep people from being paralyzed and overwhelmed?
Does bite-sizing social actions make people more or less likely to participate?
How do you engage people and enable them to help, without burdening them?
What role does geography play? They say people tend to give where they live. Has that changed with the internet?
How can your call for support make it through the barrage of information out there?
Who can help “triage” the need for support and ways of helping, and provide matching to help connect donors and causes?

Where is the Money?

Social Edge — Tue, 19 Aug 2008 10:52:59 -0700

AN ECONOMIST'S ANATOMY OF SOCIAL ENTERPRISE FUNDING

Three clusters can be identified in the for-profit to non-profit funding continuum:

- Business as usual
Globalization and technology increased the purchasing power of a significant amount of people at the “Base of the pyramid” making them a viable market. Return-seeking organizations and financiers acknowledged this and have poured organizational and financial resources into these markets. Economic agents (Social entrepreneurs?) access the capital markets in Wall Street with a not-so-novel pitch: returns. Funds operating in this environment are by definition, self sustainable. “Social entrepreneurs” operating in this cluster, are simply…entrepreneurs. Serving products to emerging social classes was the basis of fortunes of the Procter and Gamble, Ford and other “consumer” brands in the last century. Banco Compartamos, and Accion International are paradigmatic cases in this arena.

- Philanthropy as usual
Philanthropic organizations with no returns expectations work in environments where markets are inexistent and/or the population destitute –e.g. war or ecological crisis zones, endemic poverty, mental illness populations, child protection-. No returns can be expected and funding for these initiatives is mostly driven by multilateral organizations, governments, big donors. Paradoxically, funding for these initiatives has a positive correlation with wealth accumulation: the richer the wealthy become, the more they donate.

- Business as usual?
As philanthropic capital injections in machinery and human resources increase productivity, markets begin to operate and below-market returns can be made. Funds chartered to expect below market returns in exchange for “impact” (what is impact is something widely discussed.) operate in this area. At this point, Social Entrepreneurs might have a competitive advantage against classical NGO’s as they might offer returns (to be reinvested –multiplying the impact- or distributed as dividends.), but they cannot access Wall Street. This is NOT a self sustainable financing as it depends on being subsidized by philanthropist willing to trade profits for “impact”

The financing choices for social entrepreneurs are:
- (a) to be financed by the formal Capital Markets if they can offer competitive returns. Financing for initiatives on this arena depends on the economic development and markets existence in prior discounted areas
- (b) if they cannot offer market returns, social entrepreneurs must “hit” the philanthropic arena and compete for funding with classic philanthropy on the basis of being a more efficient (more impact and/or returns) capital allocation method.

Questions to ponder:
1.    Who are those funds looking for below market returns?
2.    Where are those funds working at the BoP, but looking for market returns?
3.    How much do they invest?
4.    Is this a growing asset-class market?

Join investment expert Hernan Pisano in the conversation.

New Model for Angel Investment

Social Edge — Thu, 26 Jun 2008 14:21:36 -0700

When entrepreneurs start a social venture, they are immediately in conflict: A social venture develops social connectedness, intellectual resources and skills, creative expression, personal health, a safer and cleaner environment.

But most equity investors measure their own success by financial returns, thus the social enterprise must also meet financial expectations. When setting course, social entrepreneurs may be immediately caught between a rock and a hard place.

Microfinance has emerged as a solution by providing debt, which changes the expectation of risk, thus of returns. Microfinance manages risk through its small scale and other methods. Yet social enterprises, particularly in developed countries, often require an investment scale that microfinance can't address.

But a hybrid is possible.

An example of such hybridizing is what Marc Dangeard is building with the Entrepreneur Commons, which is explained on his blog as follows:

"A not-for-profit social network of entrepreneurs providing financing for early stage companies through debt guaranteed by a mutual guarantee fund. The financial risk is mitigated by the mutual guarantee fund. The risk on the 'management' side is mitigated by the social network: loans are by invitation only, so you will have to be approved by your peers to get in. ..."

Interestingly enough this hybrid model may also help angels and other investors improve their return on capital: Marc relays that a study of over 1,300 VC and PE firms worldwide shows that the returns they bring on average is 3% below the S&P 500 (after fees; 3% above, before fees). So market rates are actually competitive returns, and investors receive steady revenue stream of debt repayments for the lifetime of Entrepreneur Commons, instead of the feast-or-famine of funding rounds and exits.

So the Entrepreneur Commons is an insightful way to solve the problems of
•    providing seed capital for social ventures that facilitates non-financial asset building
•    providing financially competitive market returns for investors
•    providing liquidity for investors.

Questions:
• Do you know of other mechanisms that address all of these issues at once?
• If you are yourself an Entrepreneur or an angel or other type of investor, have you seen these dynamics yourself?
• Have you seen them resolved?

Join Jessica Margolin in the conversation.

Skoll Awards for Social Entrepreneurship 2008

Social Edge — Mon, 10 Sep 2007 10:58:22 -0700

The online application process for the Skoll Awards for Social Entrepreneurship is now open.

Although the Skoll Foundation is now accepting applications and granting Awards on a year-round basis, to be considered for funding in advance of the 2008 Skoll World Forum, applicants should submit an Online Application no later than September 24, 2007.

The Skoll Awards for Social Entrepreneurship are designed to support and celebrate social entrepreneurs whose work has the potential for large-scale impact on the critical challenges of our time:

Tolerance and human rights
Health
Environmental sustainability
Peace and security
Institutional responsibility
Economic and social equity.

The Award includes funding to the organization of up to U.S. $1 million paid over three years for core support and an award (non-cash) to the social entrepreneur leading the organization’s work at the Skoll World Forum on Social Entrepreneurship taking place late March at the University of Oxford.

The selection process is highly competitive, with 10-12 Awards in each twelve-month cycle.

There are three changes in how the program is now administered:
- The Skoll Foundation is now accepting applications and awarding funding on a year-round basis.
- All applicants will need to complete an Eligibility Quiz in order to proceed to the Online Application.
- Starting in August 2007 applicants who are not selected must wait 24 months (from application date) before reapplying.

Again, to be considered for funding in advance of the 2008 Skoll World Forum, applicants must submit an Online Application no later than September 24, 2007.

Bridget McNamer, Program Officer with the Skoll Foundation, is online to help you better understand the process. Feel free to ask her any questions you may have about the Skoll Awards for Social Entrepreneurship.

The Social Entrepreneur's Pitch

Social Edge — Wed, 25 Jul 2007 12:49:58 -0700

Making the Case in Five Minutes or Less.

You finally got the meeting with an investor / program officer but as you set up your carefully crafted 15 minute-long PowerPoint presentation, she tells you something has come up and she only has five minutes. What do you do?

First, plan for it.
The standard pitch is usually 15 minutes – often on a PowerPoint - plus 15 minutes of questions. Have that ready, but come equipped with the 5 minute version.

Second, don't rush.
Being cool under pressure is a quiet way of telling the investor you can handle the pressure – without using up any words or minutes to say so. So resist the urge to skip the digital projector, turn around you laptop to face the investor, and rush through the 15 minute PowerPoint in five minutes. It won't work and it will be a mess.

Third, don't rely on your computer.
If you have 15 minutes, a projector and a screen, great – use them. But for the elevator pitch, always have a paper back-up, either in a ring binder or flip book that you can pull out and flip through. That way, you don't waste time scrolling through files to find the right one, or risk to have your computer battery die on you or your software crash, or have a screen pop up with all of the emails you sent to other investors. And have the pitch memorized in case you are actually standing in an elevator and can't show her the flip book.

Writing the pitch itself
Thinking on PowerPoint works best for presentations, especially elevator pitches. Try to condense the entire pitch into a single slide with the following information presented in full short sentences:
•    A "bumper sticker" length title that sums the project up in 2 - 12 words
•    Short statement of the idea and what it does
•    Short statement of why this is unique.
•    Short statement of the market or the population served
•    Short statement of the cost and the status
•    Statement of what you need and the terms

Example (this is a hypothetical product – it does not exist!!):

Power to Pump – innovation brings water, electricity and income
Lightweight, very high power water pump, works on solar or wind power, generates excess electricity for lighting. Technology licensed to local entrepreneurs who share electricity revenue with Power to Pump, a social venture.
A high tech, low cost solution to drought and power shortages that can create small, village-level businesses, while self-financing its own distribution. Can be built in any country for a few dollars.
Patented design licensed to village entrepreneurs for a small percentage of their income from selling electricity. License fees are used to support the non-profit, and to finance wider distribution.
Simple design and construction will allow PtP to spread worldwide, raising living standards.
Grant of $100,000 over one year requested to manufacture 10 demonstration pumps, create construction manuals in local languages and formats, send staff to help start local pump/power businesses in Kenya, Darfur and Ethiopia.

Next, do one slide with three bullet points on each of these points, giving details and references. You now have a very tight 10-slide presentation (plus title slide). Assuming 30 seconds a slide you have a 5 minute presentation, and you have the basic outline for your longer 15 minute presentation.

Memorize the five-minute presentation so you can talk it through without the slides if you have to, print it out and put it in a flip book or thin, lightweight 3-hole punch ( or 4 or 5 holes for non-US versions), and you should be ready for anything.

Add to this toolbox and join Patrick O’Heffernan in the conversation.

International Fundraising

Social Edge — Wed, 27 Jun 2007 11:47:04 -0700

Raising money internationally is a unique art form that requires experience, deep knowledge, political sensitivity and creativity.

The sources are highly varied and complex and can be influenced by global or local politics. Many, but no means all, global donors operate in English, so a knowledge of other UN languages is very useful and for some grants, necessary.

Travel ability is also necessary. Meeting staff at the World Bank, the Danish development agency, the Asian or African Development Bank is very useful.

Attending global donor conferences like the Global Philanthropy Forum, or issue conferences on HIV, poverty, women's rights, agriculture development, etc. is also highly valuable to make connections.

International fund raising requires three basic tools in your toolbox:

1. A copy of International Fund Raising for Not-for-Profits: A Country-by-Country Profile by Thomas Harris. This encyclopedic guide is almost as long as a Harry Potter book, but it is the most comprehensive reference available about donors, tax and regulatory systems, not-for-profit sectors, and acceptable fund-raising methods in most countries. Online search can also turn up this kind of information, but all of the facts and context has been assembled in a very easy to search and use volume.

2. Knowledge of multilateral donor agencies. These IGO's (intergovernmental organizations) are key funders that distribute funds for regional development projects. Examples include the African Development Bank (AfDB), Asian Development Bank (AsDB), European Bank for Reconstruction and Development (EBRD), European Commission (EC), European Investment Bank (EIB), Inter-American Development Bank (IDB). Multilateral donor agencies can be searched at the Information Exchange at the First Initiatives website. Some agencies and foundations work together on specific kinds of projects. A good example of this is the list of agencies that collaborate to support agriculture for developing countries through Farm Radio.

3. Knowledge of national governments' funding agencies. Some of the information needed for approaching national governments, such as England, Germany or Denmark - which all fund global NGO's - can be found in International Fund Raising for Not-for-Profits. There are also specialized websites for deeper information, such as Euromedalex, which lists donors to the Mediterranean region. One of the best sources of information is Information Exchange.

To add to this toolbox and tell us your story of global fund raising, click here.

Online Donor Databases

Social Edge — Wed, 27 Jun 2007 11:43:25 -0700

Fundraisers do most of their individual prospect research online. Patrick O’Heffernan shows you the pros, the cons and the costs.

Fundraisers researching US donors often start with newspaper websites, where they can search for current or archived information on individuals. News sources can provide very good personal details, but only a very small percentage of prospects will be available. Cost ranges from free to a very small fee per search.

Biographical sites like Marquis' Who's Who in America are very good sources of biographical information on prospects, but they can cost more than US$1,000 a year, a significant expense for most small social ventures.

More specific biographical websites offered by Internet Prospector are free, but more limited in scope. They include African Americans in Biography and Women in Biography. Celebrity information can be found on the free site Celebrity Fan Mail. These sites are free and can have very useful information, but they are quite narrow and have small databases.

A few commercial search services, like Lexis-Nexis, search US publications for prospect information. They are very powerful and can return critical financial and biographical data very quickly, along with news and feature stories, but they are also quite expensive, with annual costs running in the thousands of dollars for a single license restricted to one person or one computer per organization.

Multiple-source search is a very powerful category of search websites that research prospects through tens or hundreds of public and private databases. These sites can return information on home ownership, stock holdings and recent sales, donations to non-profits and political campaigns, board memberships and personal biography. They range in price from the very reasonable NozaSearch, which charges a very small fee for each name searched, to sites that charge an annual fee such as WealthEngine or WealthPoint, which can cost several hundreds to well over a thousand dollars per year depending on features and use. These sites are invaluable –a critical necessity for major gifts fund raising. They give you the information needed to qualify a prospect and to tailor your solicitation, but, with the exception of NozaSearch, they can be quite expensive and you pay regardless of how much you use them.

Please join Patrick O'Heffernan the conversation and let us know of your favorite source that we missed.

Nothing Ventured, Nothing Gained

Social Edge — Mon, 12 Mar 2007 12:23:59 -0800

Over recent years many entrepreneurs have responded to the siren call of launching a new venture to advance social value, while incorporating strong and sustainable financial models. These entrepreneurs, whether operating nonprofit or for-profit corporations, are often able to secure early stage funding to test their vision, experiment with new business models and create an organization with the potential to generate real value for investor and stakeholder alike.

Social enterprise ventures run the gamut of organizational types, approaches, strategies and forms. Once many of these organizations have achieved success at one scale, what they require are funds similar to second round or the “mezzanine funding” found in traditional for-profit, venture investing. Yet, almost all of these social entrepreneurs share one thing in common: they lack access to risk-taking expansion capital.

If this were due to an appropriate competitive scarcity, where vying best-in-class social enterprises won critical expansion capital through a meritocracy of well-ordered capital markets, then this might be a good thing. But, that is not why we lack the required capital. Social ventures lack access to capital because there are literally almost no institutional, professionalized and at-scale sources of expansion capital for social enterprise.

The problem is that for-profits with strong social missions often don’t qualify for investment within the conventional capital markets and nonprofits with commercial or market enterprise characteristics don’t have access to significant amounts or appropriately structured capital in the philanthropic capital markets.

This creates what is an untenable, and surely bizarre situation: high-performing organizations with demonstrated potential go un-funded, and mission-motivated financiers who could well be willing to integrate extra-financial performance into their understanding of returns, are left scratching their heads as to why they can’t seem to make the numbers square on deals too large for grant funds, but without corporate structure or market rate returns to support private equity investments.

In the end we see wasted time, and market moments lost which could mean success to the venture and the creation of a better world. Considering the level of nuance humans exhibit in almost all others areas of existence in terms of blending value, it is frustrating to those in the social enterprise trenches that our binary, two-pocket market wisdom is so ill-suited to the task at hand.

We hope this discussion and the larger paper form something of a manifesto, a challenge to investors and entrepreneurs to step into an evolutionary stance and begin to form a higher functioning social capital market.

To that end, a two-sided question emerges for your consideration:

• In order for it to be of use to entrepreneurs, what does this type of expansion capital need to look like?

• From a blended value investor or other capital provider perspective, what is required for larger flows of risk capital to be provided in this market?

Join Jed Emerson, Timothy Freundlich and Jim Fruchterman in the conversation.

Debt Financing for NPOs - Part 2

Social Edge — Fri, 26 Jan 2007 15:23:26 -0800

Last month, Fundraising and Strategy Expert Patrick O'Heffernan hosted a very successful discussion about a Financial Partner for Social Entrepreneurs. This week, he revisits the issue with a new angle.

The response to my previous events about the Robert Steiner Foundation and loans for NPOs inspired me to do more research into the world of non-profit banking/credit for NPOs. The results were enlightening, but not especially exciting.

In the U.S., many for-profit banks offer services branded as "non-profit," which usually turn out to be their regular institutional services like credit cards, investment management, etc., slightly repositioned or rebranded for NPOs, but non significantly different from what businesses and individuals can get.

Some banks do actually tailor services to NPOs and train their staff in the finances of NPOs, but for the most part, this is limited to cash management, checking and other non-loan services, and these are marketed to colleges, hospitals, and private schools.

A few banks have created financing specifically for NPOs. The East West Bank of Pasadena (in California) offers financing for NPOs in the form of real estate loans, purchase/refinance, equipment financing, revolving lines of credit to bridge working capital needs.

Not-for-profit banks not in the international microfinance business are still an anomaly, as far as I can tell. The only one I could find is the Street Bank, launched a few years ago in the UK, which lends money to unemployed people to start small businesses. The Street Bank has been testing this concept for a year in East London, lending money to 110 people.

Based on this research, I can say that there is a ripe opportunity for social entrepreneurs. The for-profit financial sector sees NPOs mostly as a market segment and prefers to work with large semi-business non-profit institutions like colleges, schools and hospitals that have independent revenue sources and large capital or real estate assets that can collateralize loans. Most of the loans these clients receive in fact vary little from loans provided to for-profit entities.

Financing for NPOs that rely on grant funds and that do not hold significant assets that can be used for collateral are limited to very small personal loans, credit card advances, and co-signed loans. Outside of the microcredit world and the Rudolf Steiner Foundation, few banks will make loans based on grant letters and I could only find one (the East West Bank in Pasadena, California) that would make loans based on signature.

What has been your experience? Click here and join the conversation.

Timothy Freundlich - Jan 23, 2007 3:21 pm (#1 Total: 14)
Director, Strategic Development, Calvert Social Investment Foundation and Founding Principal, Good Capital, LLC

A couple ideas...

Nonprofit Finance Fund ( http://www.nonprofitfinancefund.org/ ) and Calvert Social Investment Foundation ( http://www.calvertfoundation.org ), in addition to RSF, have been in the business of loans to nonprofit enterprise for awhile. We are $5m into a $10m social enterprise specific slice of lending at Calvert Foundation as we speak, and actively considering new deals (see attached for profile and how-tos).

One thing I've been working on of late is a new risk capital fund for "equity-like" expansion funding, to your point of lack of collateral backing for growth infusions of investment. If there's a gap for loans to nonprofit enterprises, there is a GRAND CANYON for risk taking burn capital! There's info at http://www.goodcap.net on this.

Best, Tim Freundlich

Calvert Foundation, Good Capital and http://www.xigi.net

Attachments:

SEborrowerbrochure.pdf (189 KB)

Patrick O'Heffernan - Jan 23, 2007 5:09 pm (#2 Total: 14)

thank you. this is the kind of information we were hoping for

Perhaps we can jointly assemble a list. thanks very much

ttfuture - Jan 23, 2007 6:12 pm (#3 Total: 14)

Following Paul Newman's Lead

For the little guy, NPO funding is a drag. We often don’t fit the security blanket needed for mainstream foundations. Nor do we have the big celebrity board of directors to bank roll our visions. Any yet, like Tomas Edison, most innovations come from the fringes, not the conservative center.

I have run a small NPO for fifteen years. Recently I created a for profit social venture corporation to develop a revolutionary line of educational products for parents and early childcare providers. (over 65 million parents supported by 45,000 licensed providers in CA alone.) This subscription based produce line is distributed via NPOs, <st1:Street w:st="on"><st1:address w:st="on">United Way</st1:address></st1:Street>, the YMCA and other existing networks who are already serving parents and providers. NPO distributors receive a wholesale discount which represents approximately 40% of net. The remaining 60% is returned to social venture investors, who have the option of hanging on to the stock or designating their equity to other charities as did Paul Newman. We are in the pilot phase, doing very well, and expect a 1.5m investment to generate 6m to 7m (split 60/40 as described above) in five years. Any suggestions on innovative strategies for the initial 1.5M?

Michael Mendizza

Medley Institute John Goldstein - Jan 25, 2007 11:00 am (#4 Total: 14)

A few others in the UK

A few other relevant examples engaged in different types of lending to NPOs:

* Charity Bank (http://www.charitybank.org/) = about an $80 MM balance sheet focused on being a bank for non-profits in the UK

* Venturesome (http://www.cafonline.org/default.aspx?page=6903) - focuses on higher risk capital for non profits and social enterprises and goal at this point is, I believe, to increase their loss rate. Repayments have been something like 98% which leads them to think they may not be taking enough risk.

* Futurebuilders (http://www.futurebuilders-england.org.uk/content/About.aspx) - Large ($200 MM +) investment fund sponsored by the UK government doing hybrid funding (loans, loan guarantees, some small grants) for non profits and social enterprises

* FJC: New York based non-profit that, in addition to rnning donor advised funds, does short term bridge lending for non profits (http://www.fjc.org/how_agency.html)

tutormentor - Jan 27, 2007 7:16 am (#5 Total: 14)
Cabrini Connections Tutor/Mentor Connection

Big need, few resources

In a book titled "Good to Great and the Social Secto", Jim Collins talks about a flywheel effect of constant growth that leads organizations to become good, then great.

In a variety of articles under the heading of "challenges facing non profits" writers show how the inconsistent way that philanthropy and government funds social benefit organizations reduces the ability many of these organizations have to grow to be good, let alone great. These links are at:

http://www.tutormentorconnection.org/TMLearningNetwork/LinksLibrary/tabid/560/rrcid/8/rrscid/96/rrpid/1/rrepp/20/Default.aspx

Since 2000 many charities have gone out of business because of the sudden loss of revenue due to lower giving by business and foundations, and many, like my own, have taken on debt ( credit cards, personal loans, etc.) in order to stay in business or maintain continuity in key services.

Thus, if some billionare decides to set up a bank that would provide bridge funds/loans to help non profits cover cash flow fluctuations, or to bridge the times when funding drops due to unexpected events such as 9/11, or due to sudden crashes in the economy, such a fund could do much to help many more organizations stablize revenue, and thus stablize staffing, program growth, and social benefit.

The few groups I've investigated for loans, do not fund debt, but will fund capital improvements. As a leader of a small non profit ($350k-$450k annually), I'm not in need of capital investments, but of this more fluid form of support.

Do any of you know of such financing?

Patrick O'Heffernan - Jan 29, 2007 8:32 am (#6 Total: 14)

A question for everyone

Is the main mission of socialling rsponsible finance to provide loans to the poorest and most underserved, or to those who offer the greatest chance of successfully buidling a business and repaying the loan? This question came up at a baord meeting of a micro finance organization recently - although it was in the context of that particular organization, it raised in my mind the question of themission of microfinance, microcredit, SRI (social responsible investing). My answer is all of the above - that it depends on the financing organiation, but at a larger level, should we try and insure that there is an even sprad of funds to borrowers from the $50 loans to start a bike repair shop in a remote village, to the $100,000loan to build a solar farm.

ttfuture - Jan 29, 2007 9:21 am (#7 Total: 14)

A drop contains an ocean's wetness

Patrick

Socially responsible financing is a relatively new model. We might call it Social Capitalism. It reflects Gandhi’s concept of trusteeship. At the core is the profound realization that we are not individuals. As J. Krishnamurti said, We Are The World.

Socially responsible capitalism means using our resources in a way that serves the well being of the largest social web of which we are a part. We are trustees of our energy and capital. Not owners. The scale of this perception matters little. An individual bike ship is just as socially responsible and a large international cooperative.

And there is certainly room for both, large funding organizations and those who fund smaller personal ventures. I agree with you. It is up to the funding organization to set their priorities. A drop contains an ocean’s wetness.

Michael

tutormentor - Jan 29, 2007 1:52 pm (#8 Total: 14)
Cabrini Connections Tutor/Mentor Connection

The reason I use maps

Patrick,

The reason I use maps is that they show all of the geographic in a defined region where a social service is needed. In your question, you asked do we fund the most underserved, or those who offer the greatest chance of success.

In my mind, our goal is to make best practice organizations/services be in all of the places on the map where such services are needed.

I maintain a database of non-school tutor/mentor programs in Chicago. Many times people ask me to tell them who I think is the best tutor/mentor program in Chicago. I say, tell me your zip code and I'll tell you if any programs are in that area. It does not matter who the best are if they are not in the neighborhood you want to serve, or where you live. If there are no programs, or only poorly organized programs, donors, volunteers, community members, etc. need to find ways to learn from the best, and apply those ideas in making the programs in their own neighborhoods even better.

Thus, until the donor decides if he/she wants to end aids, stop malaria, improve education, etc. in ALL places where this is a problem, we'll have donors who are only solving the problem in a few places, while all other places continue to suffer.

On the other hand, networks of donors and service providers could begin to work together to make sure there were plenty of good programs in all of the areas where such programs were needed, and that they were sharing ideas and learning from each other so that all were constantly improving.

To me, this type of thinking opens the door to lots of other types of innovation.

I wrote about the use of maps in http://tutormentor.blogspot.com/2007/01/changing-demographics-of-chicago.html

Patrick O'Heffernan - Feb 1, 2007 11:45 am (#9 Total: 14)

good idea on the maps

This is very strategic thinking. Too often NPOs focus on their silo and miss the larger picture. Maps bring up the larger picture. I also like to use matrices that show interrelationships.

Patrick O'Heffernan - Feb 1, 2007 11:49 am (#10 Total: 14)

ttfuture...this is the kind of strategic thinking we need

Your willingness to take the time to develop this strategy and to take the risks it entails is the essence of social entrepreneurship. I would very much like it if you could keep us all abreast of your progress and at some point I would like to interview you for a podcast on what you are doing. Congratulations.

Patrick O'Heffernan - Feb 1, 2007 11:50 am (#11 Total: 14)

John Goldstein..thanks

This is good data. I will assemble a list at the end of this event and post it.

Patrick O'Heffernan - Feb 1, 2007 11:53 am (#12 Total: 14)

RSF as a source of small loans

Last week's blog discussed RSF Social Finance. check them out at www.rsfsocialfinance.org/415-561-6151. Also, try FJC: New York based non-profit that, in addition to rnning donor advised funds, does short term bridge lending for non profits (http://www.fjc.org/how_agency.html) posted by John

abromber - Feb 1, 2007 6:58 pm (#13 Total: 14)

Why banks do what they do

One thing you everyone has to keep in mind is that banks are strictly regulated by the Federal Reserve, the Comptroller of the Currency, the Office of Thrift Supervision and/or state banking departments. These regulations include "safety and soundness" criteria for underwriting loans that are somewhat inflexible. That's why so many banks do their NPO lending through CDFI's and other types of financial institutions. Credit Unions have a bit more flexibility, and loan funds are largely unregulated. There are quite a few loan funds that offer creative financing to NPO's.

Patrick O'Heffernan - Feb 2, 2007 10:26 am (#14 Total: 14)

true,

Whichis why, as I understand it, tht RSF Social Finance is not a bank and does not want to be referred to as a bank.

A Financial Partner for Social Entrepreneurs

Social Edge — Tue, 26 Dec 2006 00:00:00 -0800

In 1984 Mark Finser and his colleagues were ready to offer US $6,000 to a social benefit venture when a local school asked him for a half million dollars. He agreed to raise the money and that was the start of the investment and lending programs of RSF Social Finance, a fee-based non-profit financial services institution that provides social investing, lending, and philanthropic services to both NPOs and for-profit social enterprises.

There was no term "social entrepreneur" in 1984, but like any group of entrepreneurs, they saw a need and filled it, thus helping to kick off the triple-bottom line industry we know today. The need RSF saw was the inability of organizations that did not fit the standard banking borrower profile to get loans.

Bank loan officers did not understand the finances of non-profit organizations and innovative social enterprises and turned them down. The result was that they were denied the kind of financing for buildings, equipment, expansion and new endeavors routinely available to profit-driven businesses.

Twenty-two years later, RSF Social Finance boasts a record of close to $100 million in loans to social entrepreneurs, operates donor-advised funds and helps organizations all over the world with their capital needs. RSF ended 2006 with $100 million in total consolidated assets and an outstanding loan portfolio of over $37 million.

For investors, RSF offers financial returns similar to a money market (4% in Q1-07). For donors, RSF offers an innovative social investment vehicle for undeployed charitable funds to maximize the impact of their philanthropy. For borrowers, RSF provides asset-based loans, bridge loans, and guarantee loans to NPOs and social enterprises.

RSF works closely with organizations to prepare them to apply for loans, helps them craft business plans, line up guarantors, and build relationships with other donors. Foundations are often pleased to have RSF-financed grantees because they know that a second set of professional eyes is watching the organization's books. They have also learned that when non-profits borrow money, they manage their funds very carefully to insure repayment.

Nevertheless, some NPOs are very reluctant to take on debt and many foundations will not allow grants to be used to repay loans, two barriers to providing NPOs with the same access to expansion capital as profit-driven businesses. And many NPO boards will not discuss debt because they are afraid they will be legally, and possibly morally, responsible if it is not paid back.

• What do you think?

• Has your NPO borrowed money, and if so was it a positive or negative experience?

• Does your board allow it?

• Do you see dangers in NPO taking on debt despite the high payback rates?

Rupert Ayton - Dec 26, 2006 4:11 pm (#1 Total: 61)

Cash Flow and Leverage

I'd start with some more basic questons pertaining to how conscious people are of how money moves and works in society. Most of us operate within a financial system we can't see and don't really understand. We may exist comfortably in our given environment, but when put in another, such as being a non-profit director, we may not be well enough equipped to make effacious decisions.

This "unconscious incompetence" is very difficult to overcome when money decisions are involved. Sometimes those seemingly most qualified to make decisions are the worst. It's why financial scam artists target successful male senior executives. The scam artists know that their marks will never admit to not understanding financial strategies, and will never, ever admit to having been duped.

To further demonstrate the point, I recently visited the Titanic exhibit in San Francisco. Yes, the Titanic may also be a fine example of unconscious incompentance itself. But the illustrative point here is one display that drew some oohs and aahs from the visitors was the paper money recovered from the Titanic. Unlike dollar bills today, the bills exchanged on the Titanic were drawn on private banks. The Titanic sank more than a year before the advent of the US Federal Reserve banking system that we all take for granted today. Take a recent dollar bill out and read it carefully. Do we know what "legal tender" means? Do we know the purpose of the Treasurer of the United States? Or who the Treasurers have been?

mastrom - Dec 26, 2006 7:21 pm (#2 Total: 61)

Friedman and new variables, NPO vs For Profit Social Ventures

During the holiday season, I was thinking about the positive benefits that "work" and "business" provide in our society. Each individual brings in an income (hopefully). With that income, that individual generates demand in goods and services. Say what you will about the Friedman family, but they understood that money does move from those how want a good to those how create that good.

The conscience is responsibility of the dollar-holder. How many of your holiday/Christmas/New Year purchases were socially conscience? I am trying to improve, but still have room for improvement.

I don't mean to introduce a new variable, but my business brings more traffic to other nonprofit revenue-generating ventures. Are ventures like mine also elegible/good candidates for this type of financing. (mastroianni_mark@hotmail.com) - Live Responsibly in the New Year!

Patrick O'Heffernan - Dec 26, 2006 10:16 pm (#3 Total: 61)

cash flows

I will ask Mark to come on and respond to your comment. I agree, but how much time can any NPO director give to understanding. Let's see if we can find a tghreshold. Incidently, was the Titanic exhibit worth the ticket price of $22?

Patrick O'Heffernan - Dec 26, 2006 10:32 pm (#4 Total: 61)

I think so, but again, I will ask Mark to come on and respond.

On the other hand, many will say that there are already many banks loaning to businesses, so why let them compete with NPO's for NPO loans?

kmniazi - Dec 27, 2006 12:08 am (#5 Total: 61)
Development Professional

RSF Social Finance

First, this initiative was new to me (even after 22 years of operating), so thank you Patrick for increasing my knowledge.

Second, I am a great believer in running NPOs like for profit organizations. By this, I mean that the NPO HAS to carry out social benefit activities, but its sytems / staff / results are held up to same scrutiny as a for profit organization.

for example, a NPO providing grants to small businesses for purchase of consultancy services (BDS is the term in vogue). its staff can be asked to provide details on how much they spent on promotional activities for its services and what was the return on the expenditure (ROI Marketing).

kmniazi - Dec 27, 2006 12:10 am (#6 Total: 61)
Development Professional

Hybrid NPO

the organization would be a hybrid NPO (this was the word, i was trying to describe)

plamb - Dec 27, 2006 10:35 am (#7 Total: 61)
Paul Lamb

More finance opportunities needed

Patrick: Great and important discussion. Thanks! My own experience with loans to nonprofits in the U.S. has been very positive. Institutions like the Northern California Community Loan Fund provide superb services to organizations and community-based projects struggling to stay afloat.

In my humble opinion, one of the biggest challenges NPOs face is a lack of experience using traditional financial tools, along with a mentality that "loans are for business". It would be great to see more training of nonprofits to take advantage of these offerings and to better understand existing and emerging financial options.

Speaking of emerging options, as direct microfinancing (i.e., Kiva) and person to person loans (i.e., Prosper) become more popular, it opens the door for a variety of choices not previously available to the social sector.

Finally, not to get too far off topic, but some other financial tools for the social sector worth considering are social credit cards and social currency. See: Social Credit Card and Ithaca Hours.

Rupert Ayton - Dec 27, 2006 2:01 pm (#8 Total: 61)

Tickets and Other Prices

I learned two things at the Titanic exhibit that may just have made it worth the price of admission: how big the lumps of coal that fired the boilers were, and that a coal strike had caused a coal shortage for steamers; Titanic was given the priority on available coal and other steamers were idled; the end result being a lot of unfortunate passengers had their berths transferred to the Titanic. It makes me wonder a little about the transfer of ill-fortune from one person to another, coal miner to passenger.

Which leads me back to RSF, which is the perverbial diamond made from coal when it comes to money. As I write this Siegfried Finser's book has just arrived in the mail. It's titled Money Can Heal. Money is a medium, not an object. What good fortune or ill-fortune does it transfer? Who makes that decision?

Patrick O'Heffernan - Dec 27, 2006 2:09 pm (#9 Total: 61)

kmniazi...you are welcome

That is what social edge is for. Incidently. I recorded teh interview with Mark Finser and will try to post it (may need some editing). Will let everyone know when...soon I hope.

Patrick O'Heffernan - Dec 27, 2006 2:13 pm (#10 Total: 61)

Rupert...thanks for the recommendation...

I will check out the Titanic exhibit when I am in SF Friday. As to your questions: It can and often does transfer both ill and good fortune. The decision is made by the transferer. In practical terms, however, the good or ill of money depends on the environment within whcih it flows. It you have been following my conversations with a Amazonian Shaman, you will see that introducing money into the village - regardless of motive - brought ill. When you add corporate transfer of moenyv- corporations having no morals by definition - the scale of ill can become tremendous. (I am not anti-corporate; I am anti giving corporations the same status as humans without investing them with morals and a conscience.)

Patrick O'Heffernan - Dec 27, 2006 2:19 pm (#11 Total: 61)

Paul, great ideas...wonder if Social Edge could do it

You are right on the moeny when it comes to using finance - most NPOs are clueless because it has not been an option and financial risk-taking is not in their (our) DNA. I love the idea of training; perhaps we could get at least a powerpoint or podcast lecture up on the site. Hopefully Victor or Mark Finser will weigh in. As to the creidt cards, another great idea. Non profit banks could compete on social iterest rates..hmmm.

Pamela McLean - Dec 27, 2006 4:12 pm (#12 Total: 61)

Money - social ventures and social entrepreneurs.

I am encouraged to find in this thread that people (besides me) who are involved in social ventures might need training about the possibility of borrowing.

When I first found social edge I thought that perhaps I could claim the label of "Social Entrepreneur" to describe my role in pushing forwards with an innovative project in rural Nigeria. Previously the only labels I'd been given were "philanthropist" and "stupid". "Philanthropist"was totally inappropriate as I didn't have any spare money to speak of to put into the project (instead I had information-type things like vision, knowledge and skills). "Stupid" was probably a more accurate label as my obsession with the project was competing against my day job and winning,

Although "the project" has made real progress in various directions and attracted some positive outside interest my feeling that I probably couldn't claim to be a "social entrepreneur" has kept increasing - and now I describe my self as a "Life-Long-Learner" or "self-directed student".

I think of "the project" as a piece of practical research into the potential of ICT enabled opportunities for education/training in rural Nigeria and similar environments, I recognise that I am not working alone any more - "the project" is now surrounded by a vibrant e-network of mentors, collaborators, supporters and "skill givers" of various kinds - there are even beneficiaries of "the project".

However regarding "social entrepreneurship" I see myself as a non-starter because I have never really managed to get any kind of meaningful relationship between the project and money - and it seems to me,from reading Social Edge, that the right relationship between projects and money is key to being a "real social entrepreneur".

Who knows, things might change. According to this thread it seems I might not be the only person involved in social ventures who needs some training when it comes to thinking about "how money works". Maybe there is hope that sometime I shall graduate from being a "self- directed student" into being a "social entrepreneur"

Pam

tools4humanity - Dec 27, 2006 4:37 pm (#13 Total: 61)
Mohamed Maie Tools For Humanity

Important new approach to poverty reduction

Back to basic traditional and meaningful methods which I found very interesting social justice movement. As several post conflict countries and extrem poverty communities trying to make with the help and support of NGOs or NPOs, I can vision how west world is changing and how it's very important partnership between north and south social enterpreneurser to make some contribution toward the social purpose and put their agenda new honest models for empowerment.

I admire social edge's forward direction, I start small project with Somalia and I can see how many life and poor families benefit very little money we riase and re-distribute. I encourage RSF social finance blue print or easy way to model.

How can we get more information ??

Thanks

Mohamed Maie

KevinDoyleJones - Dec 27, 2006 6:10 pm (#14 Total: 61)
principal at Good Capital, goodcap.net

equity-like capital is what's needed

debt traditionally implies assets. social enterprises that need expansion capital don't have the assets, or the factorable receivables, to warrent debt service. we are raising an equity fund from investors who expect a return on their capital to place into a dozen or so social enterprises, non profit or for profit. goodcap.net. be glad to explain more, engage in a discussion, etc.

isbume - Dec 28, 2006 5:15 am (#15 Total: 61)

Isbume and Small Business Incubation Facility

I am glad to join this conversation. For organisations like ours in Nigeria (Institute of Small Business Management and Entrepreneurship (Centre for Integrated Rural Development Initiatives), finding financial support to back up sustainable entrepreneurial ideas that can achieve sustainable reduction in poverty is a heavy task. The idea of establishing entrepreneurial bank is a worthy one. However, we should not forget that intended beneficiaries should be exposed to the skills of funds management as well as assisting them to build up their integrity in service.

Many lack the funds management ability and the skills for planning their development projects. This means the bank should assemble a team of multi-disciplinary individuals in entrepreneurship as a way of helping the beneficiaries to take good advantage of the facility.

Our NGO has been faced with acute shortage of fund to get our small business incubation facility off ground. The presence of a social entrepreneurship bank will definitely make a difference if the rate is safe and fair to beneficiaries in developing countries.

I will be very much glad to read from individuals and groups that can assist us. We will be prepared to make a fair return. We believe that social entrepreneurship should not be a jamboree. Social enterprise activities should be able to make a fair return on the investment of supporters. This is the only way for recircling the available fund.

Regards to all.

Segun Benson

Patrick O'Heffernan - Dec 28, 2006 9:11 am (#16 Total: 61)

Pamela - we are al lifetime learners

I unerstand what you mean about the relationship of the project to money . As a fund raiser for 25 years I have generated over $60 million and for at least $20 of of that, the relationship of money to the project was not rally clear (but th relationship of the donor to the project was !) . I agree with you that an important aspect of social entrepreneur is the realtionship of money to project and vice-versa. That leads to sustainability. Hopefully this site can help with that.

I will seriously explore some kind of instuction in non profit loans. Mark Finser is outof town until after the New Years, but when he returns, I will ask about finance instruction for NPOs.

Patrick O'Heffernan - Dec 28, 2006 9:14 am (#17 Total: 61)

Isbume....does the micro loan industry help

Thee are many "non-profit banks" that actually call themselves "micro-lending agencies". Are these useful/available to you. I am on the obared of one that makes loans to women in Guatamala, Equador and souther Mexico. Is there a similar bank that makes loans in Nigeria? If not, I think there is a business opportunityhere for someone with capital and a heart

mfidelman - Dec 28, 2006 9:17 am (#18 Total: 61)
Center for Civic Networking

cooperative bank

There are a lot of non-profit cooperatives that seem to have no problem taking on debt, as well as well-funded sources of debt that serve cooperatives (both for-profit and non-profit). The Cooperative Bank comes to mind.

Patrick O'Heffernan - Dec 28, 2006 9:32 am (#19 Total: 61)

Mohamed Maie..where to get information

Mohamed Welcome and we are very glad to have you. Pleae continue posting as your viewpoint is very valuable. Feel free to put up a longer post about your work. As to information: RSF bank is at www.rsfsocialfinance.org. I noteice there is a new non profit bank in the UK...see my next post.

Patrick O'Heffernan - Dec 28, 2006 9:33 am (#20 Total: 61)

non profit bank starts up in the UK

Brum trial sparks non-profit bank http://icbirmingham.icnetwork.co.uk

Nov 29 2002

A new bank - trialed in Birmingham - was launched today which aims to help people get back to work by offering them loans to set up their own businesses.

Street, which will be run on a not-for-profit basis, will lend money to unemployed people who want to become sole traders or small-scale entrepreneurs but find it difficult to get credit from the major lenders.

It will also give loans and financial advice to people who already operate as sole traders or run businesses employing no more than five people.

The group today opened a branch in Bromley-by-Bow, east London, following a year-long pilot in Birmingham and Newcastle, during which it leant money to about 110 people, ranging from window cleaners and dress designers, to newsagents and market traders.

It hopes to expand to have about 40 branches across the whole UK during the next five years.

Patrick O'Heffernan - Dec 28, 2006 9:42 am (#21 Total: 61)

which cooperative bank

Which Cooperataive Bank? The one in the UK (www.co-operativebank.co.uk) is employee owned and does work with NPO's. The one MA (www.thecooperativebank.com) is a commercial bank. The National Cooperative Bank (http://www.ncb.coop/index.aspx) makes loans to coops in the US.

mfidelman - Dec 28, 2006 9:47 am (#22 Total: 61)
Center for Civic Networking

National Cooperative Bank

I was thinking the National Cooperative Bank. I know there are other debt sources as well, for the coop sector.

The non-profit coop sector seems to provide a good example of a sector where reasonably large amounts of loan funding are available, and used, by non-profits. There are probably lessons to be learned here.

DR.PRABIR DUTTA - Dec 28, 2006 10:17 am (#23 Total: 61)
CALCUTTA MANAGEMENT ASSOCIATION

To be or not to be profit organisation

To be candid no organisation is without profit.Because we express profit in terms of money.But if we express profit in terms of return of investment--it could have gained beyond profit in money terms;but in context of community and society.Thus once Human resource is being turned into Human capital;they know how to bring finance and physical resources and that show sustainability of organisation by overall profit.

Patrick O'Heffernan - Dec 29, 2006 9:59 am (#24 Total: 61)

As far as I can tell the Nat'l Cooperative Bank only loands to coops

Do you know of other banks that loan more widely?

Patrick O'Heffernan - Dec 29, 2006 10:01 am (#25 Total: 61)

Human Resources to Human Capital

I agree that we all make profit in some form...when I worked for Gov. Jerry Brown he used to talk about "psychic dollars" as our profit (i.e., compensation for low pay). But I am not sure what you mean by a difference betseen human resoures and human capital....doesn't "capital" de-humanize humans?

mfidelman - Dec 29, 2006 10:24 am (#26 Total: 61)
Center for Civic Networking

coop banks

My point about the Coop Bank is in response to the opening statement that "some NPOs are very reluctant to take on debt and many foundations will not allow grants to be used to repay loans"

Non-profit coops are a sector that seem to have learned to use debt in much the same way as traditional commercial businesses. I think that there are lessons to be learned by non-profits there - about when and how to use debt - lessons that probably need to be learned before we're going to see more general debt avaialability to the non-profit sector.

All of which is a very different set of issues than those addressed by micro-lenders.

DR.PRABIR DUTTA - Dec 31, 2006 9:52 am (#27 Total: 61)
CALCUTTA MANAGEMENT ASSOCIATION

TRADITIONAL ACCOUNTING VS WELFARE ACCOUNTING

Existing management system oflate showing liabilities for societal development. But while accounting this liability is not yet considered by the Accountant. Traditional Accounting system prevailing thus fails to boost modernization. Sometimes exellance is being suppressed by organized mediocrities. This sort of hindrance is possible to be removed by changing and incorporating the welfare accounting system. From manufacture to marketing process the lots of pollutants are being produced. Traditional accounting system remains silent on this issue. The prevailing system refrains to bring natural resources viz. land, air and water etc. used in manufacture process. The cost of these resources were not being taken in preparation of balance sheet by the Accountant which is now mandatory in company acts. It is liability of the management to pay for pollution removal technology and it is felt to be essential what amount of money is being spent for the welfare of the society. Principle 16th of the Rio-conference declaration on environment and development states that national authorities should endeavour to promote the internalization of costs and use of economic instruments, taking into account the approach that polluter should,in principle, bear the cost of pollution and measures to protect human health and the environment from the harmful impacts of persistent pollutants. In natural resource accounting the quantity of resource is to be multiplied by the market price for getting money value. There are some resources which have no market utility at present but exist possibility in future.Now health is one of the criterion of HDI(Human Development Index) accordingly nutritious diet of animal origin is vital per se healthy animal may be considered as HI(Health Index) of a nation. Can any country be called developed without healthy productive livestocks? So there is necessity of shadow accounting for animal resources for future generation which is being ignored both by economist and accountant. Modernization means certain shifting from traditional system for convenience of good production and marketing keeping conformity the pace of development.Say for example, entry of high-tech application in medicine has brought convenient more accurate methods for diagnosis and efficient treatment facilities.While accounting on money spent by the client appears to be more; becomes cost effective and same as in traditional system when period to cure is less with minimum expenditure and more satisfaction avoiding complication of old system. This is true and same while application of high-tech for animal health, production and welfare of animals and public health. Similarly computer application in account system itself is cost effective where staff wages fall with higher efficiency. The important role played by accounting can be appreciated by considering the example of national income accounts. Estimation of GDP are so ubiquitous that one forgets that such estimates are little more than in old system.Suppose a man marries his maid and the couple do not employ another maid, national income decreases as unpaid household work is not valued in national income.It appears fall of income in traiditional system but welfare accounting estimates to judge the modern performances; though expenditure is more at first instance but if degradation guarded ultimately gains in profitability over all.For example, the productivity improves when a land is left fallow.The load of carbon dioxide in the air or organic wastes in water get absorbed and the air and water quality improves which were lost by over use.So accounting is not perfect if our perception about the kind of development and in turn the policy is not taken. When a person saves he plans to be better off in the future; if he lives beyond his capacity his plans to be worse off ultimately. This is the actual meaning of welfare accounting – a logical extension of ideas while organizational accounting. Doing business in a better way means- doing faster, less cost, with less waste, higher quality and in a simpler way.All good business all over the world will have to be done with commercially functional and socially beneficial.This business skill that can be learnt which empowers people by adding strength to their natural abilities for improving teamwork, productivity where exists appropriate profits. Integrated social and economic assessment(ISEA) impact and environment in welfare accounting can not be avoided. To replenish the traditional accounting by welfare accounting, political will and understanding of social benefits should be reckoned with future perspective. Government may provide some incentive like tax benefit if any organization plays a role for welfare along with profit.

isbume - Jan 2, 2007 5:01 am (#28 Total: 61)

Micro-Loan Industry Help: Institute of Small Business Managt. & Entrepreneurship

Hi Patrick,

Compliments of the Season. I am always impressed with the commitment of the gentlemen at the Socialedge to the idea of entrepreneurship as a basis for championing sustainable development in our world. I love your dedication and zeal to be of help to people of this generation. I received your post with great relief and trust you will be of assistance to us.

In Nigeria we do not have a micro loan facility of the sort you mentioned. Even the conventional microfinance institutions are not really living up to expectation. I believe a micro loan industry of the sort mentioned by you will be able to help us to jump start our idea of small business incubation facility in Nigeria.

In this new year, and particularly in the first quarter, we will be glad to take-off as we already have 6-acre of land for the project. I have written extensively on this idea, even at the international level. I presented a paper to the 4th Global Conference on Business and Economics which took place at Oxford University, Oxford, in the year 2005. The paper contained the idea of Small Business Incubation Facility as a strategy for alleviating economic poverty in developing society like Nigeria.

We are anxious to conduct a pilot stage of the project after which we hope to replicate it in other Local Giovernment Areas in the State. Finding a financial support will go a long way to drive our entrepreneurial spirit along. Many will be sustainably brought out of the poverty level as we have mapped out high-growth agro-industrial enterprises having abundance of local raw materials. We are out to strengthen the agro-industrial base of the rural people and thus help them to maximise their economic potentials. In addition, we are geographically focus, and this is in the area of people living in fadama areas with high enterprise potentials but who do not know how to tap into their resources.

We will definitely appreciate your assistance of connecting us to the organisation with the capital and a heart to assist developing countries like Nigeria.

Remember, we love the work you are doing across the world.

Remain blessed.

Segun Benson

isbume - Jan 2, 2007 5:14 am (#29 Total: 61)

Equity-Like Capital: Kevin Doyles Jones

Hi Kevin,

I find your posting very interesting. Our organisation will probably benefit from your organisation's support. We have a project idea needing support and which we believe will make a difference in the position of many poor in the rural areas of our country. It is the idea of establishing a small business incubation facility. We hope to incubate a lot of small business operators in various agro-industries enterprises for a given period after which they will be able to stand on their own in a competitive business environment.

We will be glad to hear from you on how you can be of assistance. Please contact me on isbume@yahoo.com at your earliest. Let us network for the good of our fellow men in the land of the living.

Remain blessed.

Segun Benson

Patrick O'Heffernan - Jan 2, 2007 12:30 pm (#30 Total: 61)

Segun Benson

check out Africa Pride micro loans <http://www.opt-init.org/framework/pages/appendix2Case1.html> this may be a good source for you

KevinDoyleJones - Jan 2, 2007 12:50 pm (#31 Total: 61)
principal at Good Capital, goodcap.net

equity like capital

thanks for the inquiry segun. i've responded via email. also our folks at synapse fund could be an option. i don't know enough about what you are doing to tell exactly. is there a profile of your organization on social edge and i didn't see it? (i confess i'm not as familiar with the social edge interface as i'd like to become. here is the map of synapse and their relationships in our xigi database. http://www.xigi.net/index.php?map=entity&map_en=551

ChrisCook - Jan 2, 2007 4:08 pm (#32 Total: 61)

Capital Partnerships

Hi Patrick

The conventional wisdom is that the only options available to Social Enterprises are grants/gifts or loans of one type or another.

I've been working for some time now on simple new production/revenue-sharing options - Capital Partnerships - using the unintended consequences of the UK LLP (close cousin to the US LLC - no relation whatever to a US LP or LLP).

In this model investors simply receive a proportional share of the production - or the revenues from the sale of production - of a productive asset which they finance as "Capital Member" and the Social Enterprise operates as "Operating Member". It's not borrrowing, and its's not Equity as we know it, either.

I also advocate mutualised credit through "Guarantee Societies" where bilateral "trade" credit is subject to a multilateral guarantee, backed by a provision into a Default Fund.

There is a lot of material at my site

www.opencapital.net

Also recently started a workspace

http://www.omidyar.net/group/opencapital/

aimed at teasing out the issues and leading to practical applications.

I am working on a number of prototypes in Scotland and Norway in the context of the "Hanseatic Microfinance Initiative", and we have initial funding from the Norwegian government plus considerable interest from local government.

To date, I have found it virtually impossible to get these concepts across in the US because thinking seems to be so totally embedded in current stereotypes.

Still, I live in hope.

Best Regards

Chris Cook

KevinDoyleJones - Jan 2, 2007 10:36 pm (#33 Total: 61)
principal at Good Capital, goodcap.net

embedded in stereotypes

Chris cook said" "I am working on a number of prototypes in Scotland and Norway in the context of the "Hanseatic Microfinance Initiative", and we have initial funding from the Norwegian government plus considerable interest from local government.

To date, I have found it virtually impossible to get these concepts across in the US because thinking seems to be so totally embedded in current stereotypes."

We are not finding that to be the case, though the movement is not as fast as we would like, we think there is a revealed appetite for something more.

ChrisCook - Jan 3, 2007 2:17 am (#34 Total: 61)

Embedded in Stereotypes

Good to hear it Kevin.

Having had a browse around your site, I am interested in what you are doing but it is not at all clear to me - maybe I missed something on the site- how your solution differs from conventional Equity and Debt.

I am tapping in to some seriously interesting new financial tools - I used to be a Director of the International Petroleum Exchange, so I have some knowledge of financial products of all types.

The market in Equity Release (merely one application of the model) - where I have developed what I believe may be an optimal new product - is illustrated by the fact that in the UK alone there is over £1trillion in property owned free of mortgage by over-65's.

If you are interested, please email me on cojock@hotmail.com

Best Regards

Chris Cook

44 7770 843087

Jeff.Mowatt - Jan 3, 2007 2:59 am (#35 Total: 61)
P-CED

Embedded

Hi Kevin,

By the sound of it, you and I are singing from the same hymnsheet as you may see at www.p-ced.com

Chris and I have been talking a lot and he's certainly opened my eyes to possibilities which are staggering in their implications.

Hope you join in on our discussions.

Regards,

Jeff

isbume - Jan 3, 2007 7:36 am (#36 Total: 61)

The Champions of Positive Transformation

Hello Patrick, I am impressed with your speedy response to our request. The idea you suggested will be taken up. I do hope to find solution. We see you gentlemen as champions of positive transformation in developing countries. As we are seeing, we hope to find a tremendous improvement in sustainable enterprise development among voiceless and vulnerable people in developing societies if you keep up the pace at which you are going in finding solution to the need of the poor.

Our organisation is interested in contributing to an explosion of small scale businesses in developing countries of the world starting from Nigeria. With the help of people like you with heart and mind for this innovative approach to entrepreneurship we can find strength and encouragement.

I love you.

Remain blessed.

Segun Benson

isbume - Jan 3, 2007 7:42 am (#37 Total: 61)

Kevin Doyles Jones

Hello Kevin,

Thank you for your email and your posting on the discussions. I will check the site for the detail information on how your organisation can be of assistance. This kind of network is what is needed. A practical approach devoid of theoretical ambiquity that does not address the need of the poor.

I surely will get back to you in a couple of days. I will also discuss your programe with the rest members of our organisation. We are active and alive to be a blessing to many in our generation.

The Lord bless the work of your hands.

Segun Benson

Patrick O'Heffernan - Jan 3, 2007 8:57 am (#38 Total: 61)

Chris, Kevin this is great

I think we have enough material here for a summary/bullet-point list of options for NP financing. I am especially interested in capitol partnerships. Independent films sometimes are financed this way - its called "participation". It makes a lot of sense. I will be in London in late Feb and if possible would like to chat. I think this is the right time to introduce the American NPO community and donor community to the wide range of forms of financing out there now.

Patrick O'Heffernan - Jan 3, 2007 9:01 am (#39 Total: 61)

Isbume, keep us posted on your progress

I think that all of us here are very interested in how well you fare in exploring these new financing tools in an African context.

KevinDoyleJones - Jan 3, 2007 10:30 am (#40 Total: 61)
principal at Good Capital, goodcap.net

np financing

we are taking in equity from investors who want a financial return (though the investment is philanthropically motivated; lots to say on that). then we are investing in non profits and for profits. in for profit social enterprises as traditional equity, essentially. in non profits, the investment could be in the form of deeply subordinated debt (no debt service, but the interest capitalizes until some agreed upon revenue milestones, or other targets or met) or it could be revenue rights, depending on the nature of the enterprise and the opportunity. for the investee, it functions like equity; aligning investor interests with the success and growth of the enterprise. obviously, we are limiting our field by looking for enterprises with real and substantial growth opportunities.

ChrisCook - Jan 3, 2007 4:03 pm (#41 Total: 61)

Films

Patrick

I've prototyped a Capital Partnership on a film "The Art of Flirting". `For £20 we created Art of Flirting LLP as a "wrapper" for it and we evolved a very simple and consensual LLP agreement setting out the relationships.

The Actors didn't get paid: they got "Equity Shares"/ Participation in the Gross: the producer didn't get paid either, and neither did I - I got a 5% proportional "Equity Share" in the Gross revenues -IF THERE ARE ANY.

Now, we needed £10k for lights, cameras, sandwiches etc and two "Capital Partners" came in on the basis that in return for the use of their Capital they got x% of the revenues - if there are any.

Now that's not Debt (cos there's no obligation to repay the capital) and it's not Shares as we know them, Jim.

But it IS tremendously tax effective because UK LLP's are "tax transparent" (ie " pass through" like the US LLC they resemble and improve upon) and the Capital Partners have genuinely made losses they can offset at their highest rate.

Simple, but hugely effective.

I believe that Capital Partnerships make possible investments that are not viable any other way. But they can't make a silk purse out of a sow's ear!

Patrick O'Heffernan - Jan 3, 2007 4:45 pm (#42 Total: 61)

CHRIS...VERY SIMILAR TO HOW MANY INDIE FILMS ARE MADE HERE

As part of a film investment group, I hear pitches every month from indie fim makers, some of whom capitalize their films in a similar fashion. Or, they have the film paid for and tehy seek capitalization participation for marketing and distributor fees. Either way, it is the same as you described. I believe NPOs can do the same thing even if they are C3's

ChrisCook - Jan 3, 2007 11:37 pm (#43 Total: 61)

Films and other IP

When you say "Capitalization" how are the indies constituting their films? Does anyone wrap them in LLC's?

The way I see it, a good structure would be an "umbrella" generic Indie Film LLC with the following members:

(a) an Indie Institution/Foundation, which "owns" the IP purely as "Trustee" or Custodian;

(b) "Guilds" or unincorporated associations of Indie film Makers etc ;

(d) a management partner/ platform provider;

(e) a "Club" of Indie watchers.

Each film would be the subject of a "sub-agreement" I call an "Enterprise agreement". The master LLC agreement would incorporate a Creative Commons licence.

The Indie's, Investors and Managers would share revenues (if any) from customers in pre -agreed proportions set out in Enterprise Agreements, and the relevant "Equity Shares" in individual films would be tradeable on the Guild site.

The same approach works as a wrapper for any other IP, and in particular gives rise to a "CommonSource" software wrapper which is BOTH "Closed"/Proprietary (because only LLC members can use it) AND "Open" (because anyone may consent to and sign up to the LLC agreement).

We are also exploring the use of this approach to bring together commercial investors and academic institutions in a non-toxic way to develop research.

Best Regards

Chris Cook

Patrick O'Heffernan - Jan 4, 2007 2:50 pm (#44 Total: 61)

films

Many indie producers create LLC's and sell units, or shares. Ssome offer to repay investors +10% out of the first proceeds and then a share of net after the distribution fees, production costs, actors participation, marketing costs, etc.

Others borrow money against proceeds, with a co-signer who is often also an investor.

I like the Guild idea and will bring it up at our next Film Angels meeting. It would not work quite the same,for legal reasons, but it is a good model.

Inciodently, we are seeing "packages" coming from talent agencies looking for investoers. the package includes the script, director, talent and distribution contract. The agency is looking for production money; they don't need marketing or distgribution fees beause that is sltgheir part of the package. Of courfse theys get fees from the actors and directors too.

Patrick O'Heffernan - Jan 4, 2007 2:54 pm (#45 Total: 61)

Good Capital

Kevin How would good capital feel about investing in sustainable agriculture projects in a developing country? Small cap investments ($1000 - $5000) with 3-year return horizon and ongoing revenue after that.

ClaraJ - Jan 6, 2007 3:35 pm (#46 Total: 61)
Founder: Be Good, Give Goooood (tm?), Promote Good

Buon Anno di Italia 2007

Kevin Doyle Jones,

Buon Giorno! How do you say how are you in your language? Sono Chiara di Assisi o di Corea o di tutto el mundo. Parlese italiano? Su cara est molto intelligente. (You look like a massive leader). Will you tell me more about your personal spiritual autobiography and why you chose this particular site to blog? I also have an interest in setting up a bank... pero no puedo explicar ahora. Tal vez, si dios quiere en el futuro antes de mi vida est completa.

Hope you understand my global language. If not, Google has some great language translators.

p.s I do not want to mislead you. I was born in Korea and live - well, my house is in Silicon Valley - but my home is tutto el mundo wherever mi corazon e mi amore e mi famiglia estan y estaban. Heaven and earth.

Sae Hae Bok Manni Badduseyo. Buon Anno. Happy New Year.

Piace. Peace. Pyungwha.

A bientot. aka "Chiara di Assisi"

isbume - Jan 8, 2007 8:18 am (#47 Total: 61)

$5,000: The Door-Key To Jump Start Operation Sustainable Rural Enterprises Explosion Project

Hello Patrick,

Thank you for your effort on this site. Let me make my request for explicit. We are in search of the door-key for unlocking the economic potential of the poor in rural communities of Ogun State, Nigeria.

This key is to open the door that will lead to an explosion of cottage/small scale agro-industrial ent

rprises that will bail out the rural poor from their state of economic slavery.

Our Institute needs individuals and groups with the capital and a compassionate heart to lift the poor from the dunghill into the palaces of their economic destiny. We are prepared to make a good return for the supply of this key.

For sure, we are prepared to start off with high growth enterprises that will loose the rural poor from the chain of abject povertyu. As honest and skilled stewards we are prepared to provide interested enterprise angels with returns for their equity capital contributions.

The economic needs of the rural poor in our community is an opportunity for enterprise angels to make additional income and to put smile on the faces of family heads, housewives and children in our community. It will also trnaslate into relieving our own long term burden to usher many rural dwellers into their era of economic independence.

For this pilot project, isbume has multi-=disciplinary team of professionals dedicated to trural enterprise development to justify the congtribution of individuals and groups to isbume's pfroject tagged: Operation Sustainable Ebnterprises Expolision in the rural areas of Ogun State, Nigeria.

Interested individuals and groups can please contact me on isbume@yahoo.com for further information and clarification.

Remain bvlessed.

Segun Benson,ACIS, M.Sc.(Aston) President and Head of Missions

Bruce Cahan - Jan 8, 2007 9:23 pm (#48 Total: 61)
Sustainability Banker, Lawyer & Pioneer

As Rupert Ayton and Kevin Jones know, I am working to create a bank whose loan, credit card, insurance and other operations generate sustainable, resilient communities using an objective benchmark called sustainable resiliency™ (SR).

My experience as a small NPO in NYC was that, while commercial banks would pitch us for business, they did not understand the cyclical nature of our government grants.

My vision is that NPOs whose activities generate regional sustainable resiliencywould qualify as better borrowers because their activities are implicitly part of the improved credit rating for SR-leveled institutional debt (something I call socially-responsive debt, SRD).

I am looking for foundations, like Skoll, and others who are interested in exploring and supporting the domestic and global implications of SR and SRD finance.

Best regards,

Bruce

Contact Info:

Bruce Cahan, President

Urban Logic, Inc. (A New York nonprofit, qualified in California)

email: bcahan (at) urbanlogic.org

isbume - Jan 9, 2007 4:59 am (#49 Total: 61)

Kevin Doyle Jones

Good day Patrick,

Thanks for your posting to Kevin Doyle Jones about agricultural project in developing societies like Nigeria. I am interested in Kevin's response to your posting.

I indicated an interest to have the support of individuals and organisations like Good Capital. We look forward to hearing from you and Kevin. We appreciate your beautiful contributions on this forum.

Remain blessed.

Segun

Patrick O'Heffernan - Jan 9, 2007 8:35 am (#50 Total: 61)

Understanding NPO financing

Bruce That will likely alwauys be the case for most banks as NPOs are not a large enough part of the market to stimulate training and hiring of bank officers who do understand NPO financing. That is why an alternative is being developed. But, I predict athat at some point the commercial banking world will take notice and incorporate NPO financing into their routines. there are already glimmers of that happening. One thing about capitalistic entitites - they jump on opportunities.

KevinDoyleJones - Jan 9, 2007 6:53 pm (#51 Total: 61)
principal at Good Capital, goodcap.net

developing world investing

it's on our radar. our first fund is domestic, or principally a domestic footprint (i.e. a remittance business that had a positive impact in the u.s and in mexic might make it in, e.g). but we are working on something we are calling the digital village fund

Jeff.Mowatt - Jan 10, 2007 12:49 am (#52 Total: 61)
P-CED

Digital village funding

Kevin, This is very much the heart of what we've been working on over the past 3 years, Developing a model for digital villages that not only empowers but provides a revenue generator for onward social investment.

Having proven in Russia that full cost recovery from business driven investment can be returned over 5 years, this now moves into the area of the more than full cost recovery component, supporting a partial cost recovery component for a specific social object.

Essentially, we're talking about an economy of scale for national level schemes in the order of $100m investment being deployed over 4 years.

Until I began talking to Chris recently, others would have me believe that other than large scale international development funding there was no way that private capital could be attracted to such projects.

I'm glad to report that I now have a different view and it doesn't stop there. Housing, energy, agriculture and many other social needs in the developing world all have the potential for shared asset investment which is in essence, partnering with the poor.

Chris has already demonstrated this potential, with a wind energy project in Pakistan. There will be many more, I'm sure.

Jeff

nkafka - Jan 10, 2007 2:25 am (#53 Total: 61)
Nik Kafka

From Banking Social Enterprises to Banking School Enterprises...

RSF highlights a finance gap that has often existed even for well established NPOs & social enterprises in developed countries, but one that is at least begining to be filled.

Similarly the huge rise in microfinance has brought significant social benefits by plugging the gap at the level of individual entrepreneurs in developing countries.

The social enterprise spectrum is however so broad that there are a wide variety of organisations of intermediate scale who are still underserved, particularly in developing countries.

At Teach A Man To Fish for example we're working with educational institutions in developing countries to build up school-based enterprises capable of generating income to support teaching activities.

Too large for microfinance, too unusual for commercial banks, these small scale social enterprises represent a legitimate social investment opportunity capable of generating risk-based returns - yet finding finance to support their growth is a real challenge.

We're currently looking at setting up a fund to meet this need (albeit at the very earliest stages).

If anyone has any interesting ideas or experiences to share, please get in touch!

Cheers

Nik

For more info see http://www.teachamantofish.org.uk/

Patrick O'Heffernan - Jan 10, 2007 10:54 am (#54 Total: 61)

great website and great idea!

Nik I checked out your site and am very impressed. This a natural collaboration and well presented. DI seeyou are building an international networl. I am goinf to rocommend to

Patrick O'Heffernan - Jan 10, 2007 10:54 am (#55 Total: 61)

a number of American instituions tht they join

isbume - Jan 11, 2007 6:12 am (#56 Total: 61)

Nik Kafka

Dear Nik,

I am impressed with your great idea on developing entrepreneurship at school level. This looks like what we are trying to do at the Institute of Small Business Management and Entrepreneurship through our small business incubation facilities. We are very much interested in devel;oping agro-industrial enterprises. Please let us get in touch. I am on isbume@yahoo.com I will like to network with you further.

Remain blessed.

Segun Benson

Patrick O'Heffernan - Jan 16, 2007 10:16 am (#57 Total: 61)

Continue discussion

I have received some comments offline that continuing this discussion but with a slightly different direction would be useful. The direction that has been suggested is what are the drawbacks to borrowing money for NPOs, and some real experiences from NPOs that borrowed money. Another suggestion was, given that some states are putting the brakes on NPO conversions to For-profits (Kansas, Maryland, N North Carolina and Washington State among others), and debt can have a role in these decisions, do NPO entrepreneurs need to start thinking more precisely about debt and future strategy.

KevinDoyleJones - Jan 16, 2007 10:37 am (#58 Total: 61)
principal at Good Capital, goodcap.net

debt that acts like equity

is what a social entrepreneur needs if she is looking for expansion capital. that is, where debt service is delayed until growth milestones are reached and the ability to pay a return to the investor is possible. from the standpoint of the entrepeneur, the money invested acts like equity; the investor and investee's interests are aligned for growth. im an advisor to a calvert social investment foundaiton $10 social enterprise debt fund, and we have not found that entrepreneurs who need growth capital typically have assets or receivables that can service traditional or even newer types of soft debt.

isbume - Jan 18, 2007 4:26 am (#59 Total: 61)

www./teachamantofish.org.uk

Dear Nik,

Compliments of the Season. I am delighted to have visited your website. I am equally excited to say that your website is capable of opening the floodgate for NGOs domiciled in developing countries to sustain their drive toward sustainable enterprise explosion in the context of eliminating poverty. Your website is different from being theoretical about entrepreneurship. It is in all respect practical!

Our NGO (Institute of Small Business Management and Entrepreneurship - Centre for Integrated Rural Development Initiative) has now found a true website on entrepreneurship development that can be of sustainable support to the idea we have been trying to push across for very long time in Nigeria.

We have been working on the development of a Small Business Incubation Facilities targeted at the poor rural residents in fadama areas of Ogun State, Nigeria. In the year 2005, I presented a paper to the 4th Global Conference on Business and Economics which took place at Oxford University, Oxford, England. The paper is titled: "The Dynamics of Small Business Incubation Facilities in Ogun State, Nigeria: An Anti-Poverty Device." This paper contained a full explanation of the idea of Small Business Incubation Facilities.

Myself and my colleagues have been seeking assistance to translate the concept into reality through a pilot project that will benefit the rural and urban poor in Ogun State, Nigeria. We are focusing on education and production activities among our target groups.

On the production side, we are concerned about creating an explosion of cottage/small scale enterprises in the agro-industrial sector. This will embrace unemployed and underemployed individuals and groups in our community. Final year students in our tertiary institutions are particularly targeted as our existing educational institutions merely focus on producing job seekers as opposed to job creators.

In order to facilitate an accelerated job creation in developing societies, it is eassential that a corps of entrepreneurs should be created first and that is what we are setting out to accomplish in Ogun State, Nigeria.

I am persuaded that our partnership with your organisation will go a long way to facilitate our dream for the people of Ogun State, Nigeria.

Our interdisciplinary team of professionals will be very much glad to read from you and to concretise a relationship that will lead to the glory of God and the good of humanity in our generation.

I love what you are doing to make poverty a thing of the past through sustainable entrepreneurship in our world.

Remain blessed.

Segun Benson, ACIS, M.Sc.(Aston),

President and Head of Missions

noahroger - Jan 20, 2007 10:00 am (#60 Total: 61)

seed financing

Dear Sirs,

Hi! I'm Noah Roger from Cameroon, CENTRAL AFRICA, and we are starting a social enterprise dedicated to providing efficient and affordable technologies in water, energy and agriculture to the people to emancipate them from poverty. At this time, we have 3 products to market:

1. Portable water purification devices that can worn around the neck and turn any surface water-wells,river,sea...- into safe drinking water. And it costs only $5.

2. Efficient solar oven lasting as long as 20 years and heating quickly. People get a cheaper and healthier cooking device and protect our forests. The larger ones can be used to start a micro bakery therefore providing income to a community or a group.

3. Manual irrigation pumps to help increase the income of small farmers.

At this time, we are looking for financing for this project that will return a lot of social benefits and a good financial return to investors.

read more about us on www.investorworldonline.com and click on sanaga emancipation corp. under "companies to watch". A business plan is available on request.

Looking forward to hearing from you very soon.

NOAH R. JUSTIN, CEO

SANAGA EMANCIPATION CORP.

PO BOX 12 107 YAOUNDE CAMEROON

TEL-237 983 84 68

Email: sanagafinancial@yahoo.com

Matt Jones - Jan 23, 2007 1:36 am (#61 Total: 61)
Director, Social Alchemy Pty Ltd, Australia

Isbume

Dear Segun,

Looking forward to connecting soon by email about our work supporting drought affected and isolated rural communities in Australia.

I will contact you by email separately, and I can be reached at matt.jones@fusemail.com

Regards,

Matt.