Convergence between Businesses and Nonprofits

An interesting article in the Stanford Social Innovation Review describes how Nonprofits and businesses are converging - in the value they create, the stakeholders they manage, the organizations they form, and the financial instruments they use.

Examples include that IBM partners with the nonprofit Women in Technology to co-host an engineering camp for middle-school girls and has become a national champion for excellence in public education. And though Goodwill Industries still accepts donations, it’s as much a booming business as it is a charity: Goodwill’s $2.21 billion in revenue from nearly 2,000 stores made it one of the top 15 discount retailers in the United States. The authors claim that IBM and Goodwill are not alone.

Nonprofits and businesses are converging much more quickly, broadly, and deeply than most people suspect. This multifaceted melding of the sectors creates opportunities to improve not only nonprofits and businesses, but also society as a whole. Seizing these opportunities, however, requires a new managerial mind-set. The leaders of nonprofits and businesses would be wise to shift their current mind-set from one of “us and them” to one of “we”. Where are the new managers with this mind-set?

Read the full Stanford Social Innovation Review article.

'MDG Scan': Benchmarking business contribution on poverty reduction

Does the presence of Heineken beer in Sierra Leone contribute to reduction of child mortality? And to what extent does a chemicals company contribute to prevent environmental damage?

The Dutch have set up an 'MDG Scan' to keep the score on what multinational companies do towards realisation of the Millennium Development Goals (MDGs).

In September 2000, the United Nations member countries made a commitment to reaching eight MDGs by 2015, such as halving the proportion of people suffering extreme poverty and hunger, achieving universal primary education, and promoting gender equality and the empowerment of women.

The Dutch Commission on Sustainable Research (NCDO) has now financed the MDG Scan as a tool to raise awareness of the MDGs in the private sector. The scan allows for detailed comparisons between companies within the same sector and evaluation of the progress of a company over time. ...

The United Nations Development and the Global Compact, the UN's voluntary corporate responsibility initiative, have already shown interest in the MDG Scan. The MDG Scan will be made available online later this year as a self-assessment tool in a slightly modified version. "Companies and stakeholders have asked us to attribute more weight to performance indicators that measure real impact results," Lubberts said.

Read the full article on IPS News and World Bank's Private Sector Development Blog.

Also interesting is a MDG Measurement Framework paper and World Bank's Business and MDG website.

Ban Ki-moon: "Information technology plays key role in fostering development"

"Information and communications technologies (ICT) are crucial in spurring development, dignity and peace... Let us turn the digital divide into digital opportunity.”
UN Secretary-General Ban Ki-moon

To leverage ICT-technology for development is a "natural" interest for me after having worked many years for Siemens and Palm. But to transfer it into real action for development is still a big step. Therefore, it's very interesting that the UN called for a meeting with an alliance of ICT companies including Intel in the Silicon Valley.

“It’s time to focus on actions with results, not protocol. Our focus can improve people’s lives.” said Craig Barrett, Global Alliance Chair and Intel Corporation Chairman. Read more at UN News.

Acumen Fund uses entrepreneurial approaches against poverty

The idea using of entrepreneurial approaches to solve problems of global poverty is close to my heart as a "business man" with a passion to "MakePovertyHistory". The non-profit Acumen Fund seeks to prove that small amounts of philanthropic capital, combined with large doses of business acumen, can build thriving enterprises that serve vast numbers of the poor. Their investments focus on delivering affordable, critical goods and services – like health, water and housing – through innovative, market-oriented approaches.

Therefore when I first learned about Acumen Fund, I followed them closely and when they recently announced a fellowship program, I had to apply. They have offices in New York and India as well as operations in Africa... it seems to be a great match between Acumen's and my mission, let's hope it works out. Read more about them in BusinessWeek or Acumen's website.

BusinessWeek: Doing well by doing good

Societal and environmental responsible corporate behavior is slowly but steadily becoming mainstream. BusinessWeek dedicates the latest cover story to Corporate Social Responsibilty (CSR) which the UN Global Compact is promoting.

Here a nice table of companies who are doing well by doing good. Examples include Toyota with its hybrid car Prius, Dell who recycles its computers and many other global players.

Act against Climate Change

Have you already exchanged your light bulbs with energy saving ones? This discussion with my dad today reminded me that we also have to "walk the talk"... and that everyone can do something against climate change, step by step. First the light bulbs, energy saving, waste reduction through recycling, one day a hybrid car?

We also should raise our voice to increase the pressure on our politicians to set the right framework. Jeffrey Sachs' Earth Institute has hosted a Global Roundtable which issued a consensus statement for global cooperation to meet the world's growing energy needs while also protecting the environment. Nearly 100 global companies and organizations have already signed on. Add your voice here! If you are in Sydney, additionally support the Earth Hour!

Speaking German? Read this interesting SZ-interview with Jeffrey Sachs (in German).
Still not sure what causes climate change? Watch this BBC coverage on the Intergovernmental Panel on Climate Change (IPCC) report:

Economists disagree on how to solve poverty: "Easterly vs. Sachs"

Two of the highest-profile development economists Jeffrey Sachs and William Easterly continue on disagreeing on how to tackle best global poverty. It's going back for years and seems to continue in 2007. The story usually goes like this: "Planner" Sachs (with a more top down approach) proposes how development aid can work. "Searcher" Easterly (more grassroots approach) disagrees highlighting why aid hasn't worked in the past. Latest example is Easterly's "The White Man's Burden" article (Jan.'07) in response to Sachs ' "How Aid Can Work" (Dec.'06).

For sure it's an interesting discussion going on between the two and it might helpful for academics. But frankly I wonder if it wouldn't be more beneficial for the poor they try to help (and less confusing for non-experts) if they'd sit down over a beer and write down their common ground? Has anyone done a comparative analysis between the two?

So far I have no opinion who is right, although critizicing is easier than going ahead with action as Sachs has done with the UN Millennium Development Goals. My feeling is: Don't we need both, UN planned development cooperation as well as entrepreneurial development on the grassroots level? I believe we need more cooperation to really make "MakePovertyHistory".

Germany proposes Microcredit fund for Africa

Now it's getting interesting: I feel that this story has the potential to bring together my interest areas Microfinance and Social Entrepreneurship with my German background plus my plan to go to Africa at the end of this year! Does anyone have contacts to the right people? :)

The Financial Times writes: "Germany is to press other Group of Eight industrial nations to create a micro-credit fund for African entrepreneurs as part of efforts to promote investment in the continent, according to Germany’s development minister. Heidemarie Wieczorek-Zeul said the fund, which could be managed by the World Bank, would be a 'positive signal' to the poorest people in African countries, who 'often miss out on the effects of investment'."

Read the full Financial Times article.
Another interesting microcredit article: Value change next to money.

Yunus on "Social Business Enterprise"

I have been following closely Nobel Peace Prize winner Muhammad Yunus, "the father of microcredit". He combines business approaches with social goals... therefore I am superinterested in his new idea: it's called "social business enterprise". First step is a yogurt factory in Bangladesh, the Fortune magazine reports...

What if, by raising "social capital" and investing it in sustainable businesses without a profit motive, companies could reach into new markets, expanding their core businesses at the same time they improved lives? That's the world Yunus envisages. " It could be a very big idea," says a fellow Nobel laureate, the economist Joseph Stiglitz, who has been hearing Yunus talk about his new endeavor for years. The question, he says, is how to implement it. Read the Fortune magazine article.

Business and the Global Poor: "The Bottom of the Pyramid"

With interest I have been following the discussion on "the Bottom of the Pyramid" (BOP) which means the 4 billion people poor who live on less than 2-5$ disposable income per day. There is an interesting overlap with Corporate Social Responsibility, Social Entrepreneurship and Microfinance because all these concepts somehow link "business" with "social".

Although the definitions vary the idea behind the BOP discussions is clear: "How the global poor can become producers as well as consumers?" and "how can poverty can be alleviated by business activity?". Ideally, this would be a win-win situation for business (new markets, new customers, growth) and the poor (affordable products, employment, income). Simple examples include shampoo that works best with cold water or soap in very small sizes affordable for the poor - both even improve health by reducing diseases.

Here a good article from the Harvard Business School.
And the BOP "bible": The Fortune at the Bottom of the Pyramid