Put your money where your heart is

 
Friend: “Hey Salah, did you see the company selling scarves at the conference?”
Me: “You mean WORN?”
Friend: “That’s the one. Women refugees make the scarves. They can work from home and earn sustainable income. I think what they are doing is wonderful.”
Me: “So do I. I like the idea and I support their work.”
Friend: “Me too!”
Me: “That’s great! What did you get?”
Friend: “Oh I didn’t get anything, I just love what they are doing.”

I hope I don’t offend anyone, most of all my friend, by pointing out that she does not support WORN. She admires them. She thinks their concept is exciting. And she is glad that they are tackling a problem with their money and energy. But she does not support them.

WORN is a social enterprise – that means it’s a business. If my friend actually wants to support WORN, she has three options:

Buy a scarf.
Tell others to buy a scarf.
Give WORN her time.

Yes, social entrepreneurs are grateful when you recognize their efforts, and like all people they love to hear your encouragement. But if you want to actually participate in changing the world through social businesses, you must buy something from them – or drive other customers to them. Social businesses are businesses. Without purchases, there is no social change.

If you decide to actually support socially focused businesses, you have to become conscious of your buying patterns for a little while. It takes just a bit of attention at first to remember to purchase from social businesses. But once you get in the habit, it becomes second nature. You go to Demeter Project’s It’s A Grind for your coffee meeting instead of a chain. You wait until you get to a store that sells Project 7 gum instead of picking it up at the superstore. You take your spouse to dinner at Cafe Momentum for date night instead of your regular spot. And yes, you skip the household and body care aisles at the grocery store and buy online from Soap Hope instead.

I admit that it takes a small additional effort to buy this way. Sometimes you have to wait, and sometimes you have to go online. But if you aren’t willing to make that effort, why exactly are you excited about social entrepreneurship? Social entrepreneurs aren’t working to enable abstract masses of people to change the world through commerce: they are working to enable you to change the world through your choices. I don’t mean the general audience of this blog – I mean you, the person reading this blog right now.

Social entrepreneurs are realists. They know a $100 scarf or a $75 dinner might not be right for everyone’s budget right now, and they know everyone’s got a favorite flavor of something that they will never switch from – but you can still support these businesses by converting your social network into value for them. They need customers above all else. Put an entry in your calendar once a week to post a tweet, share a link on Facebook, or e-mail a friend. That’s the best kind of marketing there is, and in two minutes a week you will be truly supporting your favorite social entrepreneurs.

You can change the world with very little extra effort by doing this one simple thing: put a sticky note in your wallet that says “Who gets this money?” Whenever you take out your credit card, ask yourself who is receiving the profits. Is it a faceless investment pool with shares in a multinational corporation? Or is it someone whose life is being transformed by support from a social business?

Social entrepreneurs are in it because they want to do the heavy lifting – they will identify the problems, the people, and the sustainable solutions. But they need you to become conscious of your buying habits. At Soap Hope we say, “Your choice is your voice.” So become aware of how your money contributes, or doesn’t, to society. Put your money where your heart is.

Soap Hope supports WORN. To make the scarves even more wonderful, we send cuts of fragrant soaps to WORN that they sprinkle throughout their inventory to give the scarves a gentle and wonderful aroma. We plan to have WORN available for sale at Soap Hope later this summer. If you would like to be notified when WORN scarves are available on our site, please sign up for Soap Hope’s weekly e-mail.

What You Spend Is What You Get

I often ask people, “What’s the biggest problem in the world?” If you don’t know your personal answer to this question, please stop and take a moment to think about it. When you know what the biggest problem in the world is to you, keep reading.

Did you say “potato chips and soft drinks?” No one ever does. Some of the most common answers I hear are water, energy, poverty, intolerance, and war. But did you know that last year, PepsiCo spend over $50 billion in their business of distributing drinks and snacks across the globe? Compare that to the World Health Organization’s (WHO) budget last year of just $5 billion.

You may not think of your potato chip purchase as a driver of human behavior, but it is. PepsiCo has built factories all around the planet; hired some of the smartest engineers, scientists, financial minds, and management experts; created an IT infrastructure that spans the globe – all to support the purchase of potato chips by you and billions of other people. It’s because you spend money on snacks and drinks that drives PepsiCo to create this amazing infrastructure and to organize these incredible resources.

Are snacks and soft drinks ten times more important than global health? They why do we spend ten times as much through PepsiCo than we do through the WHO?

Whatever your biggest problem in the world is, here’s how NOT to solve it: try to convince people to spend their potato chip money on your world problem instead. Trying to change powerful forces like capitalism or culture is a recipe for wasting time and energy. If you want to solve a problem quickly and effectively, use existing forces to accomplish your goal.

That’s where most non-profits take a wrong turn. They reframe the question like this: “How do we arrange for money to be spent on problems we care about like World Health, rather than on problems we don’t care about like Potato Chips?”

It’s the “rather than” that’s the error in thinking. Instead we need to ask the question in forms like these:

  • “Can we get people to spend money on World Health every time they spend money on potato chips?”
  • “Can we get potato chip companies to spend money on World Health?”
  • “Can we create powerful financial incentives for investors that will motivate them or their companies to invest in World Health?”

Guess what: the answer to all these questions is, “Yes!”

There are many ways to leverage existing forces to solve world problems. My favorite is to teach companies that they can make bigger profits if they will partner with world-problem-solvers under a model I call Good Returns (see Scaling Social Ventures).

So I ask you again, “What’s the biggest problem in the world?” Each person has their own answer, so to make it easy to write about here let’s just call it Your Opportunity for now. Now I challenge you to think about Your Opportunity using our new approach: can you get people to spend money on Your Opportunity every time they spend money on coffee? Can you get a glass cleaner company to spend money on Your Opportunity? Can you create powerful financial incentives for investors in a fast food chain that will motivate them to invest in Your Opportunity?

The answer to all these questions is, “Yes.” Now, go do it. Don’t delay, Your Opportunity is here.

If you read my blog, please shop at Soap Hope where we carry everything good for body and home. Every dollar of profit is invested into programs that enable women to lift themselves from poverty.

If you appreciate my ideas, please write on your blog or Facebook right now about Soap Hope and help me solve the biggest problem in the world – poverty in women. You’ll be busy tomorrow, so write a post now!

It’s not enough to teach a man to fish (or, Poverty is a Process)

Almost everyone knowns the proverb: “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.”

But what good is teaching a woman to fish if she cannot afford a fishing pole? If her children are sick and she cannot leave them? If a middleman buys her fish for a pittance and keeps all the profit, because she cannot determine the market price?

Most people view poverty as a problem, as a situation. But poverty is actually a process. The many intertwined aspects of the poverty process are self-reinforcing. In order to end the process, many simultaneous individual problems need to be addressed at the same time.

Think about a 28-year-old woman in Africa who is currently trapped in the process of poverty:

Unlike us, she was not taught to read. Did you ever learn anything from a book? Do you remember every recipe you will ever make? Do you ever use a list to remember what to do? Have you ever read how to repair something, or how to use a medicine?

Our friend cannot learn anything except what she experiences directly in person. She must remember everything important in her head. There is no to-do list, no planning. No recipes. No new food preservation technique unless she can remember exactly how to do it when shown. She certainly cannot make any written agreement with a buyer of goods. If her children need three medicines, she will need to remember the dosage and timing of each one by the color and shape of the pill. Can you do all this?

Unlike us, she was not taught how to do basic math. “How much feed can I afford to buy to raise my livestock, given the amount of time it takes to mature them and the price at the market?” “Given the cost of this thread and dye, how much do I have to be able to sell these shawls for to make it profitable?” It is almost impossible to operate the simplest trade without some basic math skills.

Unlike us, she does not have water nearby. Have you ever been thirsty for a few hours? Do you remember how slow you become, how tired it makes you , how it becomes difficult to think and the mood it puts you in?

Our friend cannot fetch water because it is 2 hours away, and she must be with her baby, prepare food and tend to her family’s other needs. So her two oldest sons, perhaps 8 and 10, walk with containers to fetch water for the family. It takes 2 hours to get there, and it takes 3 hours to get back. Have you ever carried water? It is heavy. The boys make this trip 3 times weekly. This trip is one of the main reasons they are not in school. They, like their mother, will not learn to read and write, perpetuating the poverty process.

There are many other dimensions to the poverty process. Chronic illness, climate change, political unrest and many other forces can create instability that makes it difficult to thrive.

Because there are so many interacting factors that work to keep people in poverty, many attempts to address poverty fail. If there are five or six intertwined problems and a program only addresses one or two, the program won’t work.

One of the most powerful tools for addressing all the elements of poverty comes in the form of nonprofit microfinance institutions. In the absence of an industry term, in my group we call it “Microfinance Plus.” Microfinance Plus institutions deploy programs that enable the local population to address all their poverty drivers. They provide small loans to women who use the capital to fund a personal business, like making something to sell at market, opening a kiosk, raising livestock, and yes even fishing. But these loans are also tied to antipoverty programs like literacy training, math skills, healthcare education, schools, and highly local needs like how to preserve an abundant local food or how to avoid a particular local pathogen.

They also provide the intangible but critical ingredient of human support – also known as “hope.” In many areas, poverty has been present for so long and is so profound that the people need to hear about the possibility for a different and better future for themselves and their children, in order to kick-start the process of working toward that future in a new way.

Now we can see that our old proverb doesn’t give us the outcome we want: the end of the process of poverty. “Teach a woman to read and to do basic math; provide her with affordable sources of clean drinking water, basic healthcare, and business training; give her human support and respect; and enable her children to go to school.” Then you don’t need to feed her for a lifetime. She can do that for herself and her family, just as we do.

The Moneylender in Microlender’s Clothing

When Dr. Muhammad Yunus first went into the villages of Bangladesh to study the causes of poverty up close, he found the people oppressed by loan sharks or as he calls them “moneylenders.”

Dr. Yunus’ model involved lending small sums of money to women in self-motivating, self-regulating groups of women for the purpose of creating sustainable income. His approach has improved the lives of millions of people around the world. The model became known as “microfinance.” One key success factor in his model is that the lender’s primary goal is not to earn a profit; instead the first goal is to lift women from poverty.

Dr. Yunus’ approach became so large and successful that it attracted the attention of corporate, banking and political interests around the world – most of which do not have the cause of ending poverty as their priority, but rather see profit potential in lending to the world’s poorest. These interests now dominate the microlending landscape. They have usurped the term “microfinance.” The most egregious of them are big, sophisticated, well-financed and powerfully marketed versions of the moneylenders that Dr. Yunus fought so hard against.

I have called on Grameen Foundation and other anti-poverty leaders to create a new, legally protected term for the kind of microfinance that is designed to end poverty, and to develop an international certifying body that will let philanthropists, foundations and social entrepreneurs have a clear picture of what groups are practicing anti-poverty driven microfinance. Minimum standards and practices would be developed by this international body and would evolve as our knowledge, tools and methods evolve.

In the absence of a branded term, those in my circle who work in anti-poverty driven microfinance have begun to call it “Microfinance Plus.” Microfinance Plus implies the following to us:

– The lender is either not for profit, of if it is a for profit institution (which is required by law to engage in lending in some countries) then the lender is owned almost exclusively either by a not-for-profit or by the clients of the lender themselves. Another way to think about it: the lender’s profits are not for the enrichment of anyone except the poor.

– Although failure to pay loans may impact a borrower’s ability to borrow again, the lender never punishes a borrower for failure to pay. Another way to think about this: a borrower’s financial situation is not to be made worse by having taken a loan, whether repaid or not.

– Money is only loaned for purposes of investment (for example business, education, home, and so on) and the borrower must demonstrate a plan for repayment. Loans are never given for paying back other debt or for purposes that do not increase the borrower’s ability to improve her financial situation.

– The lender, whether itself or through partners, actively works with its clients to eliminate the drivers of poverty in borrowers’ lives. These drivers are different in various parts of the world, so each lender creates its own approach. Some common drivers of poverty that are currently addressed by Microfinance Plus institutions are: lack of affordable clean water, lack of basic health education, malnutrition, illiteracy, chronic illness, lack of affordable childcare, and cultural or political oppression. There are many more. Each organization addresses its local needs.

It is imperative that the anti-poverty driven microfinance industry move quickly to create a protected term and a certification process, because without it we cannot drive large capital flows into Microfinance Plus institutions. Companies like my business Soap Hope (which invests all its profits into Microfinance Plus institutions) and philanthropic donors and investors need a simple and reliable way to identify these groups and to hold them accountable. By making the investment to define and certify what qualifies as anti-poverty microfinance, our industry will be able to grow the number of people served under Dr. Yunus’ original intent.

– Salah Boukadoum

Stay in touch with me:
salah@soaphope.com
@soaphope
(subscribe to this blog in the sidebar on the right)

The Deep Well

Regardless of any political party, sociological theory, or business organization telling you to the contrary: it is a fundamental part of our humanity to help those who are in great need. It is totally unacceptable to allow another human being to suffer in poverty without assistance.

I did not teach myself to read, did not haul my own drinking water across miles today, did not give myself a vaccine against polio. Because I’m smarter or work harder? Of course not – it was a gift of the circumstance of my birth, and yours.

A close up look at the lives of those in extreme poverty will show that the poor are creative, resourceful, and hard-working – contrary to common prejudices held by many in the developed world. Realize the amazing enormity of the gifts you were given in life, and give just a small share to those who haven’t been so lucky. Use your time, talent or money – all three if you can. Start right now, not tomorrow.

If you don’t know where to start, I invite you to go to any of the pages at the end of this post to learn about nonprofit microfinance, my preferred way of enabling those in very deep poverty to lift themselves up.

If you are in a deep well, no amount of creativity and hard work will get you out of that well. You will need someone outside the well to throw you a lifeline, or you will die in the well.

Those in the deep well of poverty cannot climb out without a ladder provided by someone else. Nonprofit microfinance is such a ladder. It’s not charity. The recipient does all the climbing themselves.

Pick whatever you see as the greatest need that another human being is facing, and begin to do something about it, today – don’t let this day go by without taking an action for another human being who needs you.

Please visit:

Grameen Foundation
Grameen America
Chiapas International
Esperanza International
The PLAN Fund

– Salah

How Good Is Magnified (or, thank you Herb Kelleher)

Today I was at a luncheon honoring Herb Kelleher, the founder of Southwest Airlines. He probably doesn’t realize it, but 27 years ago I got a letter from Mr. Kelleher that would change my life – and if I get it right, that will change the lives of millions of women in poverty around the world.

Although I was only 15 years old at the time, I had already decided that my career would be as a classical concert pianist. The proof came when the head of the piano department at the University of Texas at Austin extended an offer to accept me as a student in his college studio. We didn’t have the resources to pay for those lessons, and he offered to teach me without pay. The only problem: how would I get from my home in Dallas to my professor’s studio in Austin for my 3-hour lesson every two weeks?

Without telling me, my teacher wrote a letter to Herb Kelleher explaining the investment that he wanted to make in a promising young pianist and asked for his help. A few short weeks later, I received a surprise letter from Mr. Kelleher. It contained 12 round trip vouchers in it – enough for half a year of lessons – and a note wishing me good luck in my career.

Well I did have good luck – seven years later I was fortunate enough to travel the world playing concerts in America, Europe, the Middle East and Africa. While on tour I was invited by the Ambassador of Kenya to a high-level dinner where I was seated by the country director of the World Bank in Kenya. He told me a story that has always haunted me: he explained that at least 50% and perhaps up to 90% of the aid being delivered to the people of Kenya was being lost to corruption. His story led me to a lifelong interest and study in creating effective solutions to end poverty.

What Herb Kelleher did for me is what an antipoverty group like Esperanza International does for its clients. It gives people an opportunity to break free of circumstantial limitations and create their own destinies. I have been to visit with these women, so I know from first hand experience that the poorest in our world have powerful internal resources: intelligence, drive, creativity. They need just a small amount of education, healthcare and capital to become self-sufficient and to break the cycle of poverty for their children and their communities. To become a concert pianist, you need the startup resources to get to your teacher. To have a microenterprise and escape poverty, you need the startup resources to learn your trade and start your business.

Now 27 years after receiving that letter, I spend all my efforts to scale enterprises that address global challenges, starting with poverty in women. My social venture Soap Hope sells natural products nationwide and then invests 100% of profits into antipoverty efforts for women. I’m on a nationwide recruiting effort to bring 1,000 more companies under this model, which I call Good Returns, to create a billion dollar capital pool for scaling sustainable social ventures.

The moral of this story is: don’t hesitate to help those around you. Do it in small ways and large, as often as possible. You don’t know how the seed you planted will grow. Herb Kelleher sent me 12 tickets to Austin; he didn’t know those 12 tickets would start a process that would lead me around the world and ignite a passion for making a global impact on poverty. So listen for those opportunities, and be a Herb Kelleher for someone in your world as often as you can.

And Mr. Kelleher, thank you for the tickets.

Salah Boukadoum
Co-Founder, Soap Hope

Please share the Soap Hope mission – empowering institutions that help women in poverty around the world – with friends,  family, and the media. Buy from Soap Hope and help change the world.

The Leverage of … You

We’ve all recently heard the “dangers of leverage” – housing crisis, debt crisis, derivative losses – when it multiplies risk. But it’s also important to understand the power of personal leverage, which enables each of us to maximize our impact for good in the world.

Leverage allows you to take a small action that multiplies itself over and over, so your action can create a large positive effect in the world. It’s dear to me because it makes nonprofit microfinance work, it makes Soap Hope work, and it makes the Good Returns social business model work. Leverage will create the scale we need to solve the world’s greatest problems.

AlSol is a microfinance institution in Chiapas, the state in Mexico with the deepest level of poverty today. When AlSol provides a $50 loan to a woman and helps her start a business we see leverage operating at every level. The woman who receives the loan gets a permanent investment in her well-being. Unlike charity organizations, AlSol doesn’t give its clients food or money or clothing. Instead it gives them knowledge, confidence, skills and loan capital to start a business. AlSol uses leverage: it creates a lifelong change for its client, not just one-time help.

The $50 loan has its own leverage. As AlSol’s client becomes successful the loan is repaid. The $50 can be loaned to another woman who will also repay it. Over ten years the $50 loan will help twenty different women. A $50 gift would have helped only one.

AlSol as an institution creates leverage through the entire world of sustainable nonprofit initiatives. It shares its best practices and its lessons learned with other institutions. As it succeeds, other groups learn from its model and grow faster. Other people become inspired to start their own similar institutions around the world.

It’s because of this kind of leverage at every level that my social business Soap Hope chooses to invest in AlSol. Our own model provides leverage too. Soap Hope’s model of Good Returns, where every dollar of profit spends one year interest-free in sustainable non-profit partners, is designed to scale to thousands of businesses, creating billions of dollars of capital to solve the world’s most pressing problems.

It’s important to remember the power of your own personal leverage. As you make your every day choices in life, notice which ones will multiply many times over for the good of yourself, your family, your community, and your world.

Participate!

You can use your personal leverage with me right now. You might be surprised at the power you have to influence the behavior of thousands of people. Here are three things you can do with me right now in 10 minutes for far-reaching results:

– Share this blog. If you share this blog with 100 friends and colleagues, and they share it with 100 friends and colleagues, what will happen? One of those people – whom you may not even know – may be the next person to adopt the Good Returns model in their business. If that person’s business is an average Good Returns small business, it will generate $100,000 in loan capital – enough to serve four thousand woman through AlSol. Look at that again: one person who shares this blog can help four thousand women from poverty. That one person can be you.

– You can send a bar of soap to a friend. Soap Hope’s packages are designed for leverage. They are designed to capture your attention and educate you about microfinance and the power of each individual to make a difference in the world. If you receive a gift from Soap Hope, you can’t help but give a gift from Soap Hope to another. The profits provide capital to groups like AlSol all around the world.

– Post our video to your Facebook, blog, and Twitter. Videos have leverage – they have the opportunity to become virally active and seen by millions of people.

Salah Boukadoum
Founder, Soap Hope