Through Haas, I’ve had the opportunity to be exposed to many of these organizations — Good Cap, the Hub, Draper Richards, B Corp, Social Capital Markets conference, RISE, Social Edge– and of course, our very own Global Social Venture Competition!

RACHEL’S LIST OF RESOURCES

Investors in both for-profit and nonprofit start-ups

Echoing Green – 12-15 fellowships to start-up for-profit or nonprofit social entrepreneurs with funding of $30,000 for an individual or $90,000 for a two-person partnership over two years. To date, Echoing Green has invested over $28 million in seed grants to over 471 social entrepreneurs. The 2009 application is now open. Apply by December 2, 2009. http://twitter.com/echoinggreen

Unreasonable Institute – Cool new early-stage funder and incubator. The Unreasonable Institute has a $150,000 fund in which 25 selected entrepreneurs choose to allocate amongst each other. The Institute also holds an Investors’ Conference at the end of a 10 week-summer institute, giving entrepreneurs the chance to pitch their ideas to potential funders for serious capital. Applications for the first group of 25 social entrepreneurs will open November 15, 2009. To qualify your venture must have a plan to be financially self-sustaining within one year, to scale beyond country of origin within three years, and ultimately to meet the needs of at least one million people. http://twitter.com/beunreasonable

Sparkseed – Incubates start-ups led by freshman and sophomores in college. Seed capital is capped at $1,000 and web tools worth $10,000, but it appears that the value of the program is for aspiring social entrepreneurs to develop entrepreneurial skills, network, and benefit from mentorship. Applications for 2009 are already closed. http://twitter.com/sparkseed

Investors in for-profit start-ups only

Investor’s Circle – Investor’s Circle’s Fall Conference takes place next week from November 15-17 in Washington DC. Investor’s Circle invites 20-25 companies to present at their Fall and Spring venture fairs, where their 225 angel investors, professional venture capitalists, foundations, family offices and others gather to make investments on companies from early or expansion-stage for-profit social ventures. This Fall Conference, they invited 22 companies of the 250 that applied to present. The application fee is $150, and if you’re invited to present, you have to pay $995 to “cover some of the cost of producing the event” that they help you prepare for. Companies that do not expect to generate revenues of at least $5 million within the next five years will not be accepted. Investor’s Circle also encourages minority and women-led companies. http://twitter.com/investorscircle

Venture Well – Developed by the National Collegiate Inventors & Innovators Alliance (NCIIA), Venture Well promotes collegiate entrepreneurship by investing in a select number of for-profit student ventures (nine this year) that address “health, wellness and the environment,” are broadly scalable, and address a big opportunity for Bottom of the Pyramid (BoP) customers, Top of the Pyramid (ToP) or both. Investment is expected to range from $50,000 – $100,000 and comes in the form of convertible debt. 2010 application information and deadlines will be posted soon. http://twitter.com/venturewell

Jumpstart-Up – Jumpstart-Up appears to have put a hold on making new investments, but I think they’re worth mentioning as they are actively tweeting, so they must be still around, right? Their website is a bit hard to navigate, but after a bit of investigating on their site and their LinkedIn page, it looks like they are interested in U.S. and India based for-profit technology ventures that are highly scalable and commercially sustainable. http://twitter.com/Jumpstart_up

Good Capital and The Hub, Code named “HUB Cap” – This spanking new initiative, not yet launched, is an example of good things that happen when organizations collaborate. Details will be announced early next year, but what I can tell you is that there will be a few new avenues for for-profit social entrepreneurs to access start-up capital in the range of $25,000-$100,000 for a total of up to $1-1.5 million. In addition to funding, HUB Cap will provide peer support, mentorship and professional services. It’s super exciting, so stay tuned.

Investors in nonprofit start-ups only

Draper Richards Foundation – Six fellowships are granted to start-up nonprofit social entrepreneurs with funding of $100,000 annually for three years. Apply anytime – Draper Richards receives and reviews applications throughout the year and award grants throughout the year.

Blue Ridge Foundation – Blue Ridge couples seed money with in-kind support and networking opportunities. Portfolio organizations receive five years of funding and office space for up to three years. Blue Ridge does not fund organizations that are more than two years old.

New York Foundation – NYF funds nonprofits that address a critical need of a disadvantaged population. The applications that stand the best chance of receiving funding emphasize advocacy and community organizing and involve New York City or a particular neighborhood of the city. For start-up organizations, NYF may provide funding for a total of five consecutive years. Grants range from $40,000 to $50,000. In addition to grant money, NYF provides extensive technical assistance in the form of workshops, training, and consultants. The next application cycle is March 1, 2010, but due to the economy NYF will be making fewer new grants this year.

ZeroDivide – ZeroDivide funds, supports and incubates nonprofit social entrepreneurs that leverage technology to benefit low-income, minority and other underserved communities. They receive and review applications on a rolling basis and award grants of no more than $75,000 throughout the year. The first step is to submit a Letter of Inquiry.

The Manhattan Institute – Funds up to five individuals who have originated and effectively implemented a new nonprofit organization providing direct services to those in need (mature nonprofits also quality for the award as long as they have a new idea or approach to a social problem). Nominations for the $25,000 awards are solicited from donors who have demonstrated a belief in the organizations they nominate. Nominations for the 2010 awards will be accepted from January 25 – March 19, 2010.

RSF Social Finance Seed Fund – The RSF Seed Fund provides small gifts (between $1,000 and $5,000) to seed new initiatives that fall within their mission statement and one of their focus areas – social finance, food & agriculture, education & the arts, and ecological stewardship. Grantees should demonstrate capacity for growth, and plans to reach financial independence. The deadline to submit a grant proposal to the RSF Seed Fund for the annual grant cycle is March 15, 2010.

The Social Venture Capital Foundation (SVCF) – SVCF funds nonprofit social entrepreneurs based on the belief that they are “planting Seeds of Change.” While they hope to provide seed money grants in the range of $5,000-50,000, they are currently only able to fund in the $2,000-$5,000 range.

Chinook Fund – Grants of up to $4,000 are awarded to start-up nonprofits four years old or younger for up to two consecutive years.

Kauffman Foundation – In general, Kauffman Foundation grants are limited to nonprofit organizations that have significant potential to demonstrate innovative service delivery, in support of education and entrepreneurship. On their website, there is no mention of a cap on the size of the grant.

Business plan competitions

Global Social Venture Competition – The GSVC funds both nonprofit and for-profit student start-up social ventures. Organized by the Haas School of Business at UC Berkeley in cooperation with five Regional Partners and four Outreach Partners, teams around the world compete for the top prize of $25,000 while gaining valuable professional feedback on their ventures. To qualify, each team must include a graduate business student from any business school in the world or an individual who has graduated from a graduate business program within the past two years (from the date that the plan is first submitted). The graduate business student must be actively involved in the venture. Deadline to submit your executive summary is January 10, 2010.

SocialReturns - Previously the Yale School of Management- The Goldman Sachs Foundation Partnership on Nonprofit Ventures National Business Plan Competition, which ceased operations in September 2005, SocialReturns (a much better name!) is launching a new series of Social Enterprise Business Plan Competitions in the next several months. Stay tuned for an announcement about the award categories, the criteria for entrance, and the start date for the first competition by registering online.

Scaling Social Impact Competition – The “early-stage growth” competition is for U.S. nonprofits with a focus in education, youth development, health, poverty alleviation or community economic development and that have an “intent to scale.” The winner will receive up to $50,000 in cash and the services of a consulting firm to further develop its growth plan. The annual competition includes three rounds of evaluation. To apply for Round 1, submit your application by December 18, 2009.

Global Social Entrepreneurship Competition – Students from around the world, and across fields of study, are invited to apply with their innovative, commercially sustainable business solutions to problems of poverty in developing economies. Applicants go through three rounds to compete for a total of $17,000 in prize money. Applications for this year closed earlier this month.

Incubators, networks, blogs and other resources that help start-up social ventures

B-Corporation
Center for the Advancement of Social Entrepreneurship at Duke University
Global Social Benefit Incubator
GoodCompany Ventures
The Hub
Net Impact
RISE (The Research Initiative on Social Entrepreneurship)
Social Capital Markets Conference
SocialEdge
Social Enterprise Alliance (SEA)
Social Venture Network
StartingBloc
YouthVenture

Grameen Foundation’s mission is to take the thrilling progress of the Grameen Bank in Bangladesh and spread and support these models worldwide to support persons of a “much more modest level of affluence.”  (interesting way to put it…).

Clearly the wall between the terms charity and business have all but been smashed, particularly as a result of the rapid dominance of microfinance as a poverty alleviation tool (and financially profitable asset class).  But there are still a number of common arguments about the MFI model that Alex attempted to address.

1. “Not everyone is an entrepreneur.” - No, they aren’t — but everyone is a survivor.  According to Counts, micro-finance is not just a tool for aspiring entrepreneurs but more broadly for anyone striving for upward trajectory, whether it be to build a scalable enterprise, or to simply improve their own means of subsistence and quality of life for their families. 
2. “Bangladesh is still an impoverished nation.” – True, in a macro sense, but poverty rates HAVE been declining and the country’s GDP has been growing at 6%. There aren’t many other countries that have accomplished this level of growth.  Counts attributes this to two factors: 1) Low-cost manufacturing labor; 2) Microfinance
3.  “MFIs have been experiencing mission drift“- moving from working for the poor to working for investors and IPOs” – Compartamos Banco’s $400M IPO of 2007 was indeed a controversial event for the industry, but other banks have been learning from its shortcomings.  Future IPOs (most likely in India) may explore a profit sharing model with their beneficiaries and members as well as their investors.  Also there are many benefits to thinking like a for-profit organization.  For example,  investment in IT infrastructure and back office applications have not only been making operations more cost-efficient, but also far more accessible for the hard-to-reach last-mile clients.

Alex also spoke confidently that microfinance as an industry has not yet reached its logical conclusion, that even after 20-30 years, there is a still a tremendous amount of work to be done to continue to improve the breadth and effectiveness of this space.  “Half of what we know about Microfinance is wrong… but we don’t know which half.”

1. Costs still need to come down — interests rates are still high, and exchange rates result in loss of capital in international transfers.  Efficiencies and IT (and expert banking knowledge) are necessary to continue to improve the cost to clients.
2. Technology solutions have not been fully leveraged – there exists a huge opportunity to integrate all kinds of innovative ICT technologies to strengthen microfinance channels.
3. Performance measurement -- it’s time to move past process metrics to capture MFI’s true impact on the livelihoods of people and communities.
4. Expanding to failed states — contrary to popular belief, microfinance actually thrives in countries of civil unrest, where political leaders are too pre-occupied to ay attention to MFI activities. It can also be hugely empowering in these nations.
5. Leveraging MFI channels to add additional value beyond micro-loans — find ways to provide products and services to MFI clients including education, healthcare, political empowerment, etc.  There is no other distribution channel like it in the world (except maybe Coca-cola and Wal-mart).

And don’t forget, we’re offering a Microfinance speaker series in Fall B!  So, what are you waiting for?  

Jacqueline and Tim’s friendship began at a TED conference. Jacqueline was discussing water issues in the developing world and IDEO had just recently been involved in a design project with KickStart aimed at increasing access to water. They immediately realized that they were both working towards a very similar goal: helping people innovate in order to grow. Jacqueline explains that in Acumen Fund, “we were putting ourselves in other people’s shoes to better understand what they want, and that’s design thinking; that was a whole new lexicon for Acumen Fund.”
She admitted that Acumen Fund looked at everything through a design lens and that the concept really changed her life. “I owe a lot to you” she told Tim, adding to the candor and sincerity of the evening. There was clearly enormous mutual respect between the two friends. Stuart chimed in, that Jacqueline took Tim to India for the first time (his first time in the developing world). The two speakers then dove into a conversation about their trip to see VisionSpring, one of Acumen’s investees that sell low cost eyeglasses to base of the pyramid populations. On their visit, Jacqueline brought a wealth of cultural knowledge and on the ground experience and Tim brought a new perspective and inquisitive eye; the combination leading to an entirely new flood of insights.
According to Tim, IDEO’s questioning process is about “drilling down and spending enough time to get beneath the surface. Making people notice things they might not have noticed themselves.” The challenge with bringing this method into development is being aware of cultural context. For that reason, he emphasized the importance of getting design thinking out into the world.
To support this effort, IDEO has developed the Human Centered Design Toolkit which aims to help organizations and entrepreneurs use design thinking in their work with impoverished communities. The aim, as Tim explained, is for people in need to be co-collaborators, for design thinking to be a co-owned process. This approach, in these extreme markets, will lead to innovations never dreamed of in the developed world.
Stuart brought up a question that generally gets asked when discussing social entrepreneurship and innovation: how does this scale? “It’s not about the insight scaling, it’s about the ideas scaling,” Tim explained. The process is about getting ideas; then you develop the ideas which are truly scalable. Jacqueline noted that many top down approaches are “scalable” in theory, but they don’t work effectively and lose traction quickly if locals are not involved from the start.
The discussion shifted to the language of the industry and how it’s changed over time. In Jacqueline’s opinion, “language precedes change.” She explained that 8 years ago, when Acumen Fund started, she had to fight with individuals who refused to be called “investors” because they weren’t getting any financial return. Now the concept of social return on investment is becoming widely accepted. The lexicon of the industry is shifting and acknowledging the power of an investment-oriented approach.
At the core of the investment approach is a full respect for all human beings; a sentiment that continually surfaced throughout the conversation. Market based approaches aim to treat people as consumers, who despite their income level, desire all the things we desire. Jacqueline explained that instead of telling people what they “should” do, it’s about asking what people want, as consumers, and truly listening. In forcing accountability and investing in growth, we are able to actionably demonstrate a belief that all people are capable of achieving success.
When the panel was opened up to questions, the room, of over 300, exploded with hands. The closing sentiment related to each firms contribution to change in the developing world. Tim explained IDEO is about enabling choice; creating new choices that didn’t exist, so that people can make them if they desire. At the core of what both firms seek to produce, Jacqueline concluded, “real dignity ultimately comes from choice and opportunity.”

On behalf of the Global Initiatives team I’d like to welcome everyone back this fall! The Global Initiatives team has worked hard this summer to plan a number of exciting new activities coming this year. Below is an overview of the club and highlights for the coming year!

Global Initiatives is a student-run organization focused on innovative business solutions for emerging markets. We aim to provide meaningful information, opportunities, and career guidance for Microfinance, International Development, and Social Enterprise (co-lead with Net Impact). To find more information about global initiatives activities, and connect with our members, please visit the new GIH Facebook page

To read about student experiences as well as new topics in social enterprise and international development on our blog: www.gihberkeley.org

Membership:
- To become a member of Global Initiatives please pay membership dues via PayPay to global.initiatives.at.haas@gmail.com.
o One year membership = $25.00
o Two year membership = $40.00

Below are our latest updates and upcoming plans for the semester.

(1) As part of our market based approaches class, we will be hosting Tim Brown, CEO of IDEO and Jacqueline Novogratz, CEO and Founder of Acumen Fund. For more information on this event visit our events website

(2) We have prepared two Speaker Series this fall designed to introduce students to different methods of addressing poverty through new and innovative business models. The two speaker series are:
o MBA 294.4 – Market Based Approaches to Poverty Alleviation
o MBA 294.6 – Introduction to Microfinance

(3) Global Initiatives will be working with the Nonprofit Center for Public Leadership to develop small part-time consulting projects for students interested in getting direct experience with development projects. We aim to partner with social entrepreneurs and supporting organizations internationally to bring these opportunities to members.

(4) Global Initiatives is working with Net Impact and Career Services to create a Social Impact Career Guide. The Career guides will among other sections, include a focus on social enterprise and international development.

(5) Global Initiatives will be planning out small and informal career treks this semester with social enterprises and development organizations in the bay area. If you’re interested in helping organizing these or have suggestions for companies you’d like to visit in the area, please sign up to volunteer or contact me with suggestions!

Get Involved: Sign up to help with particular events and initiatives this fall! Add your name and area of interest to our collaboration spreadsheet

Good luck to everyone as classes get started. We’re really excited about a great year ahead and can’t wait to see you all soon!

All the best,

The Global Initiatives Leadership Team

SOCAP09 just wrapped up today in Fort Mason, San Francisco — it’s one of the premier events for social investors, philanthropies, social VCs, and entrepreneurs interested in connecting and learning.  There was over a dozen Hassies volunteering and blogging at the conference — check out some of the blog coverage by your classmates on Nextbillion.net!

• Emily Smith on Innovation in Africa
• Cindy Chen on Funding High Impact Ventures
• Abhay Nihalani (to be published)

My favorite part of the conference? Re-connecting with speakers, GSVC judges, and Haas alums as well as meeting new folks who are doing game-changing work in this space.  It’s incredible how tight-knit this network is, and I’m constantly amazed (but in reality shouldn’t be!) when I meet Haas alums from organizations like Skoll Foundation, Gray Ghost Ventures, and GSMA Development Fund.

TedxKibera Speaker

Last weekend I had the opportunity to support an Acumen Fellow and friend named Suraj at an event he helped to organize called Tedx-Kibera, a syndication of the popular TED conference, except that this event took place in a small church in the center of one of the largest slums in the world, with an audience comprised of individuals for the area.  I thought the event was a great success, and a perfect manifestation of my previous post on meaningfully engaging communities, and working directly with our target consumer. Most of us in the social entrepreneurship space spend much of our time in an office and out in the field with entrepreneurs, folks who already have the opportunity and choice to build successful enterprises and give back, but what I’ve learned from this event is that there is immense potential that we as a community need to learn to tap into directly at the BoP.

Look out the window...

One of the poignant moments in the event for me was around a discussion on innovation.  The first speaker’s opinion was that innovation is looking at something that already exists for a specific purpose and stretching your mind to come up with a host of other things it can be used for. For example, an empty plastic coke bottle, can be…?  A flower pot! A musical instrument!  An ant farm!  The final speaker picked up this thread, and asked the audience to look out the window of the venue, across the vast expanse of crowded roofs of the ramshackle slum shacks, and conduct the same exercise — to look at the space, the materials, and to consider how to harness the inhabitants and their individual and collective potential to help them innovate and enhance their communities and others.   In order to succeed in our endeavors, we need to consistently push ourselves to not settle for what we already know, but to probe the depths of what the possibilities are, and look for innovations where we would least expect to find them.

Debt can also be empowering.  Microfinance, for example, is a leapfrog innovation to bring the economically marginalised into mainstream capital markets with small loans that help build micro-businesses.  Traditionally, the risk of lending to those who have no assets is managed through the group-lending model, pioneered by Grameen’s village banking initiatives.  And the financial success and social impact of micro-lending has led to a tremendous amount of investment, and a veritable explosion of a formalised banking sector focused on the poor.

But as credit becomes more ubiquitous among this segment of the population, wouldn’t it necessarily succumb to the same perils as unmanaged and uneducated credit card use in the U.S.?  According to a recent WSJ article, this is exactly what’s happening in India. The preponderance of microlenders hoping to take advantage of the strong financial returns in this sector have all but lost focus on the social impact element to microfinance and have consequently instigated the same type of (micro) credit bubble that we’ve now seen far too many times.  

This trend is disconcerting because hypothetically, as microlending institutions become formal banks, it’s a small step between lending and securitizing these loans for the capital markets, effectively amplifying the risk of lending to the poor. One large micro-financial meltdown and the flows of investment could drastically slow or even halt, switching off the prosperous tap of credit that is so vital to low-income communities.  And as microfinance as an industry continues to grow, it can be too easy to lose sight of the fact that it’s still not a fully mature marketplace, and the lending is still happening to enterprising individuals who nonetheless are naive to the notion of credit, and are not educated in credit management. Increasingly, in a hurry to disburse microloans and begin receiving revenue from interest payments, loan recipients are not properly screened by lenders for factual evidence of current or future assets of a micro-business.

I really hope the microfinance industry as a whole will take a step back and consider its rapid and successful growth in light of the many historical learnings regarding debt and its discontents, for the sake of the industry and the communities that it serves.

Now, the bad news: Our ‘club’ is still small, exclusive and somewhat esoteric.  Certainly the message and learnings about social entrepreneurship  are spreading like wildfire in certain geographies — there is now no shortage of conferences, websites, wikis, blogs, forums on the topic.  But where is the actual BoP in these conferences and discussions?  How do we include our brothers and sisters in developing countries in this intellectual discourse?  Even more than that, why is it mostly just U.S. MBAs that are savvy and desired as employees in many social enterprises and social investment firms?

These are the exact notions that Ashni Mohnot discusses in her recent blog post on Pop! Tech.  

For example, C.K. Prahalad, one of the first to coin the idea of business strategy at the bottom of the pyramid, is speaking in Nairobi next week.  The ticket price for the event is 65,000 Kenyan shillings = $850 USD.  Already the majority of the population is priced out of participating in the event.

I’ve met with entrepreneurs here who are interesting in serving low-income communities through private sector approaches, but have no notion that Acumen Fund and other social investment firms exist, and don’t have access to any of the frameworks, ideas and methodologies regarding BoP strategy and social enterprise.  Why is that?  How do we bring them into this club?  This intellectual debate cannot proceed without inclusion of the marginalised consumers, producers and entrepreneurs we are supposedly setting out to support.

And until we find a way to do so, I don’t think the idea of poverty alleviation through enterprise can really acheive critical mass and challenge the behemoth institutions that continue to implement status quo paternalistic charity and aid techniques.

Their first event included three amazing entrepreneurs: Matt Flannery of Kiva.org, Steve Newcomb of Virgance, and Ben Rattray of Change.org. The three seemed similar enough at first, but the questions unfolded into a multi-perspective discussion, filled with debate, inspiration and powerful words of advice. Although each speaker’s approach was unique, they all passionately rallied around the common theme: mobilizing action for change.

Some of My Lessons Learned: How do you mobilize people to do good…?

- Build in quick and constant feedback; make it an “addictive experience”.
- Create measurable change, and be honest. Transparency is key.
- People don’t want to start their own community, they want to be part of an existing community with a single and compelling message.
- Make people feel powerful. Get them to come AND come back.
- Do the big things right, the rest will fall into place.

All three panelists were filled with amazing lessons and exciting ideas, but the two most important take-aways for me came towards the end of the evening: “get shit done” and “do what you love”. Get things done aggressively; go for it completely. And enjoy what you do on a daily basis. If you love something, then do it; it will be worth it.

After the event, students, Hub Members, panelists and organizers all shifted to a local bar to continue the discussion. It was truly a night of insight, learning and inspiration. Check out The Hub and get involved.

http://www.rockfound.org/efforts/impact_investing/impact_investing.shtml

Great new insights on how to deliver social change on a more scalable and sustainable level.