Microfinance has gained tremendous momentum in the last year following a large infusion of venture capital. Two companies dominate the mindshare in this space: Prosper and Zopa.
However, a lesser known microfinance venture, Kiva.org, is already using the model to demonstrate remarkable social returns by focusing specifically on “loaning money to businesses in the developing world.”
BusinessWeek recently ran an article about Kiva and provided some great success stories:
For 15 years, Angel Asenov Isaev, a 29-year-old Gypsy living in Sliven, Bulgaria, worked in a bike repair shop in the center of town, struggling to save enough capital to start his own shop. About five months ago, Isaev applied for a $250 loan from a local microfinance institution (MFI) called REDC Bulgaria.
He got the loan, opened the business, and is now working seven days a week to keep up with demand. But the money didn’t come from Bulgaria: It came from America. That’s because REDC had partnered with a U.S.-based Web site, Kiva.org…
Check out this link to Businessweek for a slideshow on how Kiva is creating social value in the developing world.
I’m definitely a fan now, and will probably be purchasing a bunch of these gift cards soon.
This weekend’s featured article, Spamming for Good comes from the Sept 1st issue of Fast Company.
The article is about Mani Sivasubramanian, a Chennai-based pediatric heart surgeon who donates up to 50% of his profits from his spam email business to the Children’s Heart Foundation, which he founded himself in 2003.
Last year, he took home about $25,000 from his “email marketing” and donated about $10,000 to his foundation. This money helped fund 13 surgeries.
As a victim of spam, it was hard for me to get past the “email marketing”, even though a portion of the revenues go to save children’s lives. However, what is remarkable is that the marketing response rates increases by 4-6 times when the emails stipulate that the proceeds go to the foundation.
For most of his email pitches, Sivasubramanian gets a response of %5 to 10%. But when offers stipulate that proceeds go to the foundation, his response jumps to between 30% and 40%.
That increase in performance gives me a better feeling about the whole thing– when 30% to 40% of the people are responding to the offers, it sounds useful or relevant (even if its just for the charity aspect).
Subscription is required to read the article now, so you can either pick up the September issue at your local newstand or wait until Fast Company makes it publicly available in a few weeks.
Foundation Center released a report titled “Giving in the Aftermath of the Gulf Coast Hurricanes: Report on the Foundation and Corporate Response,” which can be found here. The headliner at Business Week is that the report revealed that corporate foundations were the leaders in funding the Katrina relief efforts. (Via. Businessweek)
While so many foundations are decisively finished with funding, the continuing donations are largely geared toward long-term rebuilding and restructuring. For example, cereal maker Kellogg announced in late July a $12.5 million pledge to aid rebuilding efforts in the area.
Just throught I’d post a quick link to Charity Navigator, a 501(c)(3) non profit that evaluates charities. Why is this important? Because charitable giving is a huge market, approximately $700 billion dollars last year, according to Charity Navigator.
We help charitable givers make intelligent giving decisions by providing information on over five thousand charities and by evaluating the financial health of each of these charities. We ensure our evaluations are widely used by making them easy to understand and available to the public free of charge. By guiding intelligent giving, we aim to advance a more efficient and responsive philanthropic marketplace, in which givers and the charities they support work in tandem to overcome our nation’s most persistent challenges.
There’s a lot of information there, but if you want to take a look at the most interesting page, try the Top 10 Lists.
That’s the question Scott McNealy, chairman of Sun Microsystems, is asking.
McNealy, who handed Sun’s chief executive reins to Jonathan Schwartz earlier this year, is now applying his know-how to steer the Global Education and Learning Community (GELC). That’s a non-profit entity, spun off from Sun in January, which aims to make open-source software available to the world’s kids for free–just as Sun sought to distribute its Solaris operating system (OS) and other wares to businesses, for profit.
Global Education & Learning Community
The following is a link to a New York Times article about how coffee is making a difference in Rwanda, a country recently ravaged by civil war and genocide.
Rwanda, a tiny East African country recently rent by a famously savage civil war, has found hope in that most colonial of crops: coffee. By riding booming demand in the developed world for specialty brews — and, to a certain extent, by turning its own challenges to its advantage — Rwanda has made premium coffee-growing a national priority. That has not only brought in a trickle of money to a country with little else to trade, but provided a stage on which one-time blood enemies can reconcile their terrible history.
Facing declining coffee prices, Rwandans decided to improve the quality of their coffee, and in doing so, they’ve been able to double their incomes. The US Agency for International Development (A.I.D.) has been behind some of these changes:
Since 2001, A.I.D. has invested $10 million in helping Rwandans improve the quality of their coffee, mainly by providing farmers’ cooperatives and small entrepreneurs with financing for washing stations and training in their use. The Rwanda government’s goal is to make all coffee produced in the country specialty coffee by 2008.
This article is an excellent case study and here are what I consider the most important learning points:
- Move from commodity to specialty beans. Smaller market but beans can be sold for premium
- Support infrastructure for helping farmers sell on speciality market by providing washing stations
- Create farming cooperatives to cut out the middle man so farmers can collect most of the profits
Read the entire article about numerous other benefits resulting from the evolution of the co-op system.
While the $100 Laptop is getting much attention these days, Green Wi-Fi is doing some equally interesting work in the space.
A number of non profit entities focus on addressing the digital divide by providing internet access to developing areas. Green WiFi addresses one of the biggest barriers to success: the lack of reliable electricity in developing areas required to power the network. Green WiFi has developed a low cost, solar-powered, standardized WiFi access solution that runs out-of-the-box with no systems integration or power requirements.
Green Wi-Fi’s mission is perfectly complementary with the $100 Laptop project, and they mention it in their mission:
Green WiFi aims to compliment and extend the power and promise of initiatives such as the UN/MIT One Laptop Per Child (OLPC) project, Intel’s World Ahead Program and other NGO efforts dedicated to providing affordable computing capabilities to developing areas by providing critical last mile access; last mile internet access with nothing more than a single broadband internet connection, rooftops and the sun.
Now if One Laptop Per Child can get enough orders to start manufacturing, we can see some real traction here.
Earlier, I posted about Nigeria Ordering 1 Million $100 Laptops from OLPC
However, this article on Desktop Linux suggests that OLPC has already secured four million orders that it needs to begin production, and that the earlier report was wrong. Either way, its all good news. Once an official report is out, I’ll post to it.