Management of the Good

How do we get out of this mess?

2008-10-04T18:12:00.000-07:00

The Center for Responsible Lending (CRL), a non-profit affiliated with Self-Help, a leading community development bank in North Carolina, California, and Washington, DC, conducts independent research and does policy work dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices.

In a recent New York Times article on the collapse of Fannie Mae, former CEO stated, "Almost no one expected what was coming. It’s not fair to blame us for not predicting the unthinkable." I find this statement hard to believe, since CRL has been sounding the alarm about subprime lending for over two years now. The subprime debacle, was a predictable crisis for people who work looking.

CRL's policy prescriptions for responsible lending in the US have been amazingly prescient. If you are looking for new ideas other than the bailout that might be able to right out economy, their website makes for interesting reading.

Making It Real: Quantifying and Measuring Social Impact

2007-08-28T11:46:00.000-07:00

In past posts (i.e. Value = Profit + Public Good), MOTG has talked about the need to measure an organization performance in terms of its financial and social and/or environmental aspects.

For guidance on how you can actually do that check out this great article from RISE (Research Initiative on Social Entrepreneurship), entitled "Assessing Social Impact In Double Bottom Line Ventures"

The articles highlights the strengths and weaknesses of several models for measuring impact and includes examples of how each of the models could be implemented.

Free vs. Fair Trade - Are They Mutually Exclusive Strategies?

2007-08-13T20:05:00.000-07:00

The way the debate is framed about free and fair trade one would think that they are mutually exclusive strategies. I believe that they are not – that they can actually be supportive strategies.

The end goal of both fair and free trade is increased economic activity. Free trade focuses on macro systems – on things like tariffs, trade barriers and exchange rates. Fair trade organizations typically focus their efforts on those who are left behind or excluded from the benefits of free trade.

I worked in South Africa with a group of men and women who were in the unfortunate position of being low-skilled labor in a middle income country. In an international marketplace these men and women could neither undercut the low wage labor from low wage countries nor compete with skilled workers from high wage countries. These men and women were unemployed – in fact 60-70% of the people who lived in their communities were also unemployed. They and their families survived at a subsistence level only because there were able to barter and trade in an informal economy. These were men and women, who although low-skilled, had some skills, and although unemployed, desired employment.

South Africa is currently experiencing tremendous growth as a direct result of of its re-entrance into the international economy. The government has paid down its debt and South African companies like SAB, Investec, Old Mutual, and Anglo-American are now doing extremely well on a global scale. Yet these gains are not trickling down to the people that I worked with – because they live in a community that operates outside of the formal economy.

So I say we need both – both free and fair trade - both a focus on universal systems and a focus on creating opportunities for people who are currently marginalized and excluded from those systems.

Locally, a group of individuals, non-profits, and businesses have recently banded together to form an organization called NC fair trade. NC fair trade will focus on increasing awareness about fair trade activities in North Carolina and opportunities for people to get involved in and grow the fair trade community locally. Please visit us at our recently launched website at www.ncfairtrade.com to learn more.

Durham Love

2007-06-22T14:04:00.000-07:00

Hi all you Durham, NC fans,

Have I got some exciting news for you - this weekend there is a festival celebrating Durham revitalization. Check out the festival website at Durham Rising. There will be music, a parade, and the unveiling of a new bull. Good stuff.

If you can make it to the festival but really are looking for new ways to express your Durham love you may want to consider:

Buying a Durham t-shirt or bumper sticker. (Check out Za Za Zsu, the Anti-Mall, or Dolly's for some good choices)
Visiting Downtown Durham Inc and asking for a free Durham CD featuring Durham artists singing songs about ... Durham. The CD features soon to be classics like "I live in a converted tobacco warehouse."
If you live in Chapel Hill, but still LOVE Durham and you have a facebook profile - join the facebook group (I live in Chapel Hill, but I LOVE Durham) to meet other closeted Durham fans

And never forget ... Durham Love Yourself

Reform of American Holidays & Monuments

2007-02-13T21:06:00.000-08:00

I lived in South Africa a couple of years ago. South African holidays always seemed more inspiring to me than U.S. holidays, when I lived there. Their holidays were named things like "Youth Day" or "Women's Day." After thinking about it for a while, I realized that I liked the South African holidays because they were named for abstract ideas rather than for particular people. You could get behind the spirit of the day and not just behind a person who was fading into history.

When I got back to the States, I started fixating on Columbus Day. Not everyone is in agreement that Columbus was the hero that he is celebrated as, yet we still have a holiday for him. I decided that it would be a lot more meaningful for me if the holiday was named Adventurer's Day instead of Columbus Day. That way we could still honor Columbus , but also honor other explorer's like Lewis and Clark or the first team that went to the moon. I also really liked that Columbus Day weekend could be transformed into Adventure weekend.

So once I started down this path, I got a little carried away and decided to rename all American holidays. On my calendar:

President's Day -> Leadership Day
MLK Day -> Civil Right's Day (so that we can honor all the civil's rights heroes to come)
Veteran's Day and Memorial -> War & Peace Day
Independence Day -> Freedom Day (that way we could celebrate not only when the US got its independence, but also when black people and women were granted the right to vote)
I also added Earth Day to the mix

If you want to view a presentation about the reformation movement, click here.
Stay tuned for more information about the reformation of American Monuments ....

Value = Profit + Public Good

2007-01-17T19:56:00.000-08:00

When people talk about how well a company is doing or try to value a company, it is common practice to refer to its stock price or its most recent quarterly earning statements. I would contend that profit is a narrow way to value a company. Profit tells us very little about intangibles like what the a company's impact on the environment is or whether a company is treating its workforce fairly. I would argue that a much better way to value an organization, whether it be for-profit or not-for-profit, would be to look at both the income it is generating and the public good that it is creating. Jed Emerson, a senior Fellow at the Generation Foundation, has made a very similar argument in his essays about blended value. To learn more about his theory of blended values visit: www.blendedvalue.org

In a utopian world, public good be quantified and measured, so that the true value of both for-profit and not-for-profit organizations could be known. Conceivably, in this world, companies that produce negative public good, could fund the work of social sector organizations that generate little economic profit, but create a lot of public good, through a system that is much like the one we see for carbon trading today.

Accountability for Foundations

2007-01-17T19:39:00.000-08:00

This broadcast on the State of Things on WUNC with Joel Fleischman, a professor at Duke, was music to MOTG's ears.

Joel covers a wide range of topics that are covered in his new book, The Foundation, including accountability for foundations, the need for information disclosure in the sector, the investing practices of foundations, and the trend of convergence between the business sector and the social sector.

For vs not-for-profits. What is the difference?

2006-12-11T18:25:00.000-08:00

The line between for-profits and not-for-profits is becoming increasingly blurred. Two quick examples of this are:

For-profit companies launching public health campaigns in India around soap. The campaigns not only increase soap sales, but also help improve human health
Google just registered its $90 million philanthropic arm, google.org, as a for-profit

The economist Susan Raymond recently argued in the journal On Philanthropy in September that, “We are beginning to understand that old categories” — commerce, capitalism and philanthropy — “do not serve the new generation of either social problems or market opportunities.”

An organization should not be judged by its tax status, but rather by the value and results that it creates (similarly traditional for-profit companies should not be judged solely by how much money they make). People should ask questions like:

How many jobs has your organization created?
What is your organization’s impact on the environment?
Has your organized delivered on its mission?
How many resources have you invested in raising the capital that you need to run your enterprise (whether it is for or non-for-profit)?

Caveat Emptor

2006-12-01T11:19:00.000-08:00

Not all companies use the same standards for fair trade. For example, one business Grassroots Creations, labels their products as fair trade and as helping African workers. While the designs from their products do come from designers in Zimbabwe, their products are acutally manufactured in China.

Labels from certification organizations like TransFair and the Fair Trade Federation can be good guides to help you determine whether products are actually Fair Trade or not.

Its All in a Word

2006-05-12T13:07:00.000-07:00

Sometimes the words we choose to describe something have a big effect on how people perceive different issues. We in the social sector need to stop using the words "nonprofit," "charity, " and "donation."

All the term non-profit denotes is the lack of profit generated in the sector. It doesn't begin to touch on all the positive things that the sector does create. Additionally the term "non-profit" no longer accurately describes a number of organizations that are providing social good in our society. Increasingly social sector organizations are creating for-profit income streams or even registering as for-profit entities to support their missions. Charity is also a dirty word in my opinion and is suggestive of an organization that requires a handout. Social sector organizations are not down on your luck organizations that require the largesse of donors. Social sector organizations are providing value. Rather than referring to donations, we should refer to investments. We are helping the people who choose to invest in our organizations create the type of world we all want to live in. Our work may not always return a profit in terms of money, but it certainly does create value in terms of our collective quality of life.

What Makes a Social Sector Organization Great?

2006-05-08T17:28:00.000-07:00

I just finished reading "Good to Great and the Social Sector" written by Jim Collins, the author of the classic managment book, "Good to Great." In this monograph, Jim Collins points out the societal need to stop judging social sector organizations by their inputs and starting judging them by their outputs. In other words, we should just stop measuring whether a nonprofit is succesful by how little they spend on their staff costs and start measuring a nonprofit's success by how well the organization delivers on its mission.

Nonprofits should be able to invest in the infrastructure of their organization by purchasing items like new computers or professional development experiences for their staff without invoking the ire of their donors. Only when we measure a nonprofit's success by its results will we will truly start getting the results from a nonprofit that we as donors expect.

MOTG's Top Ten List

2006-04-26T17:40:00.000-07:00

These ten organizations are all approaching the social sector in unique and innovative ways and particularly excel in bringing fresh capital into the social sector.

1. World Resources Institute: Check out the project sponsored by WRI called nextbillion.net that is seeking sustainable business solution to help the world's poor.

2. Robert’s Enterprise Development Fund: This nonprofit is helping other nonprofits create for-profit enterprises to help fund their social missions. Very cool.

3. Echoing Green: Identifies and funds emerging leaders in the social sector in the US with revolutionary ideas.

4. Ashoka: Innovators for the Public: An international version of Echoing Green. Ashoka identifies and funds social entrepreneurs whose projects are changing systems around the world. (I must admit my bias with this organization - I have worked for them before).

5. Self-Help: Another organization I have worked for. Self-Help is the largest non-profit community development finance institute in the U.S. (in other words – a nonprofit bank). Self-Help has been making loans to people who would not have access to capital otherwise for 25 years. Self-Help makes the list for being the best run nonprofit I have encountered yet.

6. Acumen Fund: The Acumen Fund is a non-profit venture fund that invests in enterprises that provide critical goods and services for the world’s poor.

7. Endeavor: Endeavor is helping create jobs around the world by supporting entrepreneurs in six developing countries.

8. Global Giving: Have you ever wanted to donate to an organization in another country, but not known if an organization was quality or not? Global Giving screens high impact, grassroots social and environmental projects from around the world so you know where to invest.

9. Grameen Bank: The Grameen Bank is the pioneer microfinance organization. Grameen has now expanded to new innovative projects like making cellphones affordable to the world’s poor.

10. Kiva: This organization actually makes it possible for you to lend to micro-entrepreneurs in Uganda and get paid back through paypal.

Weekend Plans? Support Social Entrepreneurship

2006-04-14T15:46:00.000-07:00

On Saturday, April 22nd, at UNC's Kenan-Flagler School of Business, eight teams will be presenting plans for new socially-oriented ventures in the Carolina Challenge. Zebra Crossings will be there, along with another fair trade gift retailer, Zarkan. In addition to North Carolina-based fair trade gift retailers, there will be organizations tackling other social issues, such as literacy, eco-friendly fuel, and global women's issues.

Welcome to the Management of the Good

2006-04-14T11:38:00.000-07:00

The Management of the Good is a forum for discussion of the trend in both the social sector and the business sector toward convergence.

Please feel free to comment on any posting made.

Beth Richardson and Sarah Chasnovitz