Stand-Up

Everyone knows the classic joke about the man who complains, “Doctor, it hurts when I do this,” and the doctor says, “Well don’t do that.”

Think about it for a second – why is that funny to us?

The doctor’s advice is actually completely practical. But we all understand the doctor is ignoring the actual problem, and that makes it funny.

So – have you heard the one about the poor villager and the cause marketing business? The villager says, “We have no opportunity.” The business says, “Here, have these shoes.”

This time, it’s not funny. Not only is the problem being ignored, the prescription is creating side effects.

The reason people are without shoes is because they are in poverty. Shoelessness is, “Doctor, it hurts when I do this.” Dumping shoes on the problem is, “Don’t do that.” A real doctor – and a real social entrepreneur – will spend time to understand the root cause, and work with the patient to cure the condition.

Social entrepreneurs have a natural impulse to help others. But when you take large-scale actions, it’s important to look at the side effects of your activity.

What are the side effects when you give away masses of shoes in a poor area?

– What happens to the people who make shoes in the region? What about the people who make the leather or fabric for them? The people who bring them to the village to sell?

– What happens to a child when she wears shoes for six months and then outgrows them, and there is no replacement?

– If only half the children in a village receive free shoes, what is the impact on the other half?

Real, sustainable solutions to poverty focus on empowerment – which in practice means information and access to basic resources. If a social entrepreneur wants to make a healthy impact, she focuses on sustainable ways to increase access to water, nutrition, education, healthcare, capital, employment, and legal rights – the necessary foundations for sustainable prosperity. A family with access to these foundations will buy their own shoes – the right shoes for them, at the right time for them.

It’s important to follow our impulse to help others. It’s also important to be wise about how we go about providing that help. To address the right problems. To use tools of empowerment, so that those in the grip of poverty can stand up their own lives and their own communities. No joke.

The Easy Way

I once told my friend Lucy something I secretly had been thinking about for a while.

I told her I wanted to get rid of the few things I keep around in life, and move to the Dominican Republic to work for Esperanza International – an anti-poverty institution that I love and admire.

I’d spend half my time at headquarters, helping to improve operations and fundraising. And I’d spend half my time in the field, working directly with the women who are empowered by Esperanza.

It’s so compelling to me. For the rest of my life I would know that I had helped, hands-on, some of the most vulnerable people in my human family. I would forever have those memories, being shoulder to shoulder with the women and the field workers, changing lives. I would have the incomparable experience of helping to build a first class poverty fighting institution.

Lucy is one of the most practical people I know, so I thought she was going to tell me that wouldn’t be very wise for my career or retirement plans. But that’s not what she said at all. Her eyes flashed, and she spoke sharply, so I would remember it.

“Salah! You’re being selfish!”

It wasn’t the reaction I expected after just explaining that I wanted to get rid of all my worldly possessions and move to another land to help impoverished women.

Lucy said, “You’re mixing up feeling good about what you do with actual impact. There are many people who can go help the women of Esperanza. There are less that can help improve the operations of Esperanza, but there are still a lot. But you told me that you are working on a business model that could enable thousands of entrepreneurs to impact the lives of millions of people around the globe.”

“Your problem,” she said, “is that you are scared that you might fail. If you strive for something really big and really difficult, the likelihood of failure is high. You might waste precious years in your effort to create a platform to empower millions of lives. You might be left with nothing to show for your work. But if you don’t make the attempt, you will certainly not achieve your potential.”

“If you go to the island, the likelihood that you will help a few people is very high. It will certainly make you feel good. But you will be squandering any chance you have at making a big, worldwide impact. There’s nothing wrong with that – but see it with clear eyes. It’s selfish.”

If you are a social entrepreneur, I hope you have a Lucy in your life. Whenever I have a difficult decision to make, I remember what she showed me that evening. It helps give me the courage to go all-in. It keeps me from accidentally taking the easy way.

Thanks Lucy!

I’d like to hear your stories about risk taking and impact. Comments are open, or e-mail me at salah@soaphope.com, or connect with me on Facebook.

Stop Talking About The Poor

  • “I’m looking at the best models out there for using business to solve social problems.”
  • “This is so hard – I’ve been looking for the right organization to work with for almost a year. I don’t want to waste my time working on something that won’t really make a difference.”
  • “One day, I hope to get involved in ending poverty, so I’m studying as much as I can today.”

These are a few of the things I’ve been told by people in the last month who have e-mailed and called because they are passionate about social entrepreneurship and microfinance.

I hate to be the one to break it to them, but talking with other people about helping the poor does not help the poor. While you are talking, they are still hungry.

If you want to discover the best model for combining business and social problems, the very first thing you should do is start a business to solve social problems, or go work for one – right now. Then you will learn what is really involved in a social enterprise. I can tell you from experience, you will be throwing out almost all the ideas and opinions you have about the matter until you do it yourself.

If you want to find the best organization to work with, go work for any organization that is focused on changing any life besides your own – right now. During the year you have been carefully avoiding wasting your time, you have wasted a year.

If you are studying as much as you can today, you have forgotten that while you are studying the problem, a child has missed her opportunity to go to school, so the cycle of poverty is being extended an entire generation in her family. Why are you studying to work on the problem later? The problem is now – work on it right now, and you will learn more than any book could ever teach you.

I’m not saying we shouldn’t talk, reflect, or study. But I have noticed there are too many people who are mostly talking, reflecting and studying. Ask yourself now, am I spending more time talking about changing the world than I am actually working on it? If so, I suggest correcting that imbalance – now.

Stop looking for the perfect way to participate. Go do anything for those in extreme poverty, anywhere – not for you, for them. Not a conference – first provide a meal. Not a study – first send money for medicine. Not a meeting – first fund a water well.

Raise money for Grameen Foundation. Volunteer with Women For Women. Buy a scarf from WORN. Fund a Bank of Hope at Esperanza International. Donate services to CitySquare. Start a weekend business that funds microloans.

Stop talking about it, and do it.

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
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One Billion Dollars Toward Ending Poverty – Let’s Do It

A reporter asked me today what my goals are for Soap Hope, and I gave her the answer that most of my friends know by now: to teach 1,000 small businesses the Good Returns Model and thereby raise one billion dollars for anti-poverty microloan initiatives.

I’m pretty sure this reporter was shocked – she said, “How much?!,” and actually sounded a bit disappointed. I think she felt I was being naive. Others have told me to start with a more “realistic” goal.  I’d like to show you how I believe it is reasonable to raise a billion dollars for microfinance over ten years, with just a few key numbers:

50 small businesses just like Soap Hope
In each of 20 American cities
Each generating $100,000 in profits
Each lending their profits interest-free to a microfinance institution for just 1 year
Over a 10 year period.

50 businesses x 20 cities x $100,000 x 1 year interest-free loan x 10 years = 1 billion dollars.

Let me share some key milestones and goals with you:

  • 2009 marks Soap Hope’s first full year in business
  • I first discussed the Good Returns model in public in the summer of 2009, just a few months ago
  • We’ve already had two small businesses in Dallas spontaneously ask us for help in implementing Good Returns in their own companies
  • In 2009 we’ve formed partnerships with three non-profit microfinance institutions
  • In 2010 we’ll be launching an organized effort to teach Good Returns to businesses
  • Simultaneously we will define sustainability programs that help nonprofits become ready for Good Returns style investments
  • In 2011 we’ll be working to form an insurance fund that guarantees the return of Good Returns investment capital to participating businesses, virtually eliminating participants’ risk

One billion dollars may sound like a big number – but when you break it down, it’s right within our grasp.  If you read my last post (We Need 166 More People To End Poverty Worldwide) you know that there are six million people in poverty in the Dominican Republic.  One billion dollars is just about what it would take to give each of them a microloan.

1,000 Good Returns businesses generating one billion dollars toward ending poverty through microfinance – I don’t think it’s naive at all. Let’s do it!

Regards,

Salah Boukadoum
Co-Founder, Soap Hope

———————
Please help us eradicate poverty: tell someone you know about Soap Hope right now.

shop: SoapHope.com
learn: Soap Hope Learning Center
facebook: facebook.com/soaphope
twitter: @soaphope

e-mail: info@soaphope.com
phone: 888-893-SOAP

Soap Hope Bar Soaps
Some Soap Hope Bar Soaps

We Need 166 More People (to End Poverty Worldwide)

I recently met a remarkable man named Steve Brookshire, an entrepreneur and philanthropist in Dallas, Texas. Steve’s passion since 2005 has been ending poverty in the Dominican Republic through microfinance.  He channels his efforts through the nonprofit group Esperanza International.  Esperanza is one of only a few microfinance institutions worldwide that has reached sustainability: through years of persistent effort in the Dominican Republic, Esperanza now earns as much as it spends in its programs that lift people from poverty on the island.

Steve has a laser-like focus on the issue of poverty in the Dominican Republic.  He views it as a truly solvable problem: he believes it is possible that through diligent and focused effort in the DR, groups like Esperanza can eliminate poverty on the island in his lifetime.

There are six million people beneath the poverty line in the Dominican Republic. Steve is determined to use his energy, relationships, and creativity until these six million women, children, and men have adequate nutrition, education, healthcare, infrastructure, and economic opportunity.

I’m not suggesting that Steve will single-handedly transform the island.  There are many people and organizations doing innovative and often difficult work there. Esperanza alone has hundreds of leadership and staff in the U.S. and in the Dominican Republic.  I’m simply suggesting that we need more Steve Brookshires – people with sustained energy, focus, passion, determination, and a vision for the end of poverty in a corner of the world.

There are one billion people worldwide in poverty.  When I first saw that number, I despaired.  I thought, that number is so big – how can we ever hope to solve the problem?  But my encounter with Steve has made me realize that the challenge, while difficult, is manageable.  One billion people in poverty is 167 Dominican Republics.

If you meet Steve, you will know as I do that he will see the end of poverty for six million people in his lifetime.  The world needs 166 more people just like him, to take up the mantle one group of people at a time.  So here is my call to action:

The presence of poverty in our world is unacceptable.  The problem demands our attention, our resources, our energy, and our continued action until all human beings have the essentials of life: food, water, education, basic healthcare, and the opportunity to be self-sufficient.  Be like Steve Brookshire – dedicate a portion of your life to ending poverty in our world. Hold a vision of economic opportunity for six million people. Share that vision so that it spreads to others in your community. Take consistent and disciplined action on behalf of six million people.  If 166 of you do that, we will see the end of poverty in our lifetime.

If you aren’t sure where to begin, start by learning more about microfinance and how it transforms lives:

Esperanza International
Grameen Foundation
The Chiapas Project
The PLAN Fund

I welcome your thoughts.

Salah Boukadoum
Co-Founder, Soap Hope

———————
Please help us eradicate poverty: tell someone you know about Soap Hope right now.

shop: SoapHope.com
learn: Soap Hope Learning Center
facebook: facebook.com/soaphope
twitter: @soaphope

e-mail:  info@soaphope.com
phone:  888-893-SOAP

Soap Hope Bar Soaps
Some Soap Hope Bar Soaps