MBAs Lift Non-Profit Sector

From the Financial Times:

By Sarah Murray
July 28, 2008

When discussing the social sector, Bill Drayton, founder and chief executive of Ashoka, a non-profit organisation that promotes social entrepreneurs, remembers the sector 25 years ago.

“Salaries were pathetic, smart people would avoid it, it was disorganised,” he says. “That’s all gone. We’ve been catching up and once you go from non-competitive to competitive, organisations have to join in the party or they’ll be eaten alive.”

As many non-profit organisations strive to make their operations more professional, a growing number of their employees are choosing to take an MBA.

“We are definitely seeing more of them in the part-time MBA programme,” says Liz Livingston Howard, associate director of the Centre for Non-profit Management at the Kellogg School of Management, at Northwestern University in the US. “There’s been a statistically significant increase in the past 10 years.”

In the past, executives seeking qualifications that would help them in the non-profit sector headed to policy schools or took programmes in education or non-profit management. “Now a lot more people are going the MBA route,” says Mel Ochoa, who graduated from the NYU Stern MBA programme in May and heads the marketing department of Achievement First, a charter school organisation in Connecticut and Brooklyn.

Mr Ochoa says this is because of the new requirements of non-profit organisations. “They’re changing their attitude towards the people they want on staff,” he says. “They want a lot of the skills you learn in business school, such as strategy and finance – and they want those applied to their non-profits.”

Lara Galinsky head of strategy at Echoing Green, a US foundation that provides seed money and support to young social entrepreneurs, agrees. “An MBA is a coveted staff person,” she says. “In the non-profit field, we’re good generalists or we come with degrees in public policy or non-profit sector management – but we’re not steeped in traditional business skills. A business school student trained in a traditional curriculum is value added for us.”

Part of the reason more non-profit organisations value business school education lies in the changing nature of the donors that fund their activities. Many of the new generation of philanthropists made their money in business, rather than inheriting it, and look for the same rigorous standards of professionalism and accountability in the charities they fund.

“When you get people with that kind of business savvy, they don’t want to just write a cheque, but they want to change the nature of public education or global health,” says Nora Silver, director and adjunct professor at the Centre for Non-profit and Public Leadership at the Haas School of Business, in Berkeley, California. “Then the philanthropy looks very different.”

Read the full article

A Growth Industry

My admittedly overly simplistic strategy to effectively attack trafficking at the root (one of the root problems at least):

Economic development = jobs = financial stability = increased quality of life = opportunity to pursue education = reduced vulnerability to trafficking = jobs = economic development = so on and so forth.

From Newsweek:

By Martha Brant & Miyoko Ohtake
April 14, 2008

Ash Upadhyaya is no tree hugger. The 29-year-old from India has a master's degree in petroleum engineering, worked as a reservoir engineer at Shell Oil and drives a Porsche Boxster that gets a measly 20 miles per gallon. Yet he has spent the past two years studying environmentally sustainable business at the Stanford Graduate School of Business. "Am I really driven to do this by my values? The honest answer is no," says Upadhyaya, who wants to work for a private-equity fund when he graduates in June. "It just makes good business sense to be sustainable."

Environmentalists and capitalists have typically eyed each other with suspicion, even disdain. A new breed of M.B.A. student thinks it's possible to make a bunch of green by going green. For some, studying sustainable business practices just gives them a competitive edge. For others, it's a fresh way of thinking about business. These eco-M.B.A.s talk about the "triple bottom line"—people, planet, profit. Thousands are joining Net Impact, a networking group for business leaders interested in societal problems. "Business-school students today are much more interested in social and environmental issues—and in business solving those issues," explains Liz Maw, executive director of Net Impact.

Slowly, business schools are catching up. "This is all student-driven," says Stanford B-school professor Erica Plambeck. Seven years ago she offered the first environmental elective at the business school. Today Stanford ranks No. 1 on the Aspen Institute's 2007 "Beyond Grey Pinstripes" report, which rates how business schools integrate social and environmental responsibility into their curricula.

In 2001, when Aspen began ranking schools, only 34 percent of those it surveyed offered any green courses. By 2007, 63 percent did. Even the most traditional schools are weaving in the environment. Harvard Business School students study cases such as Nestlé's sustainable cocoa agriculture, and the Wharton School will host a Net Impact conference this fall.

Mainstream schools weren't changing fast enough for green-business icon Hunter Lovins. The book she coauthored in 1999, "Natural Capitalism," has become the textbook for sustainable management. In it, she argues that companies don't factor the environment into their spreadsheets. "We treat it as if it has a value of zero, and that's bad capitalism," she says. Business leaders needed to start thinking differently. So in 2003 Lovins helped found Presidio School of Management in San Francisco, where climate change permeates every part of the curriculum. Presidio is one of a handful of schools from Washington to Vermont now offering a "Green M.B.A." These being business schools, the term has actually been trademarked and is owned by the Dominican University of California.

Read the full article

Social Activism for the Cool Kids

From the Huffington Post:

Call it enduring a decade with a crazy Texan in the oval office, the never ending wars, global warming, the world food crisis, or the spiking price of oil, but now more than ever, we feel the urge to 'do good'. So we buy recycled Whole Foods bags and replace our lightbulbs. We chat about our carbon footprint, read up on Green fashion in Vogue Magazine (at the nail salon) and eat organic. We bicycle. We walk. As New Yorkers, we feel a burgeoning sense of responsibility on our shoulders. Yet still, we like our Bloody Mary's at brunch, our overpriced denim and designer shoes. Perhaps we carry guilt that we are not doing more.

Enter alldaybuffet, a "social awareness brand for the cool kids", created in 2007 with the idea of harnessing the creative energy of young New Yorkers and creating a platform to reconcile our busy lives (work hard, play hard) with our hearts' desire to do good. ADB functions as an event filter, party planner, think tank, blog, and social network with a community of five thousand people spread across eight US cities. An ADB member can share ideas, connect with like-minded individuals and organizations and make use of ADB's vast talent pool either virtually or in person at an event. Looking for a way of screening a film in a shantytown with no electricity? Need to set up a red carpet event for inner city New Orleans kids? Someone somewhere will have an answer.

Their most successful initiative, Cause for Drinks, is a monthly happy hour hosted simultaneously in several cities. $2 from every drink goes to that month's chosen cause. The best part? There is no overhead. alldaybuffet approaches bars with existing happy hours, boosts the price of the drink back to its normal cost and asks the bar for the difference. A Cause for Drinks in Austin recently raised $6000 in three hours. The evenings attract all kinds - the thirsty guy off the street, non-profits, friends, family, people that may like cocktails AND doing good. The basic premise is that not everyone can get up before dawn to feed the homeless or shell out $500 at a black tie charity event. So ADB seeks to broaden the community of social activists and shift the perspective of what it can mean to 'do good' and have fun!

"As an Internet based company, we see the power of bringing people and ideas together, both through digital and physical space," said Jerri Chou of alldaybuffet. "We're creating that kind of connection at this event for the social good and between people who don't connect enough -- we're bringing creatives, digital mavens and the social world into one room and seeing what they can do to change the world. We hope that after this, they'll want to meet more often."

Read the full article

The Power of Unreasonable People

From the Harvard University Gazette:

There’s a desire for change, especially among the young, “a spirit sweeping across this country and indeed across the world,” said David Gergen, professor of public service at Harvard’s John F. Kennedy School of Government (HKS) and director of its Center for Public Leadership.

Gergen’s remarks at the John F. Kennedy Jr. Forum opened a panel discussion Monday (March 3) on social entrepreneurship and the power of what he called “unreasonable people.” The term referred to panelist Pamela Hartigan’s recent book, co-written with John Elkington, “The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World,” published by the Harvard Business School Press in February. Hartigan is managing director for the Schwab Foundation for Social Entrepreneurship.

Since the heyday of social activism in the ’60s and ’70s, characterized by charged anti-war protests and the impassioned Civil Rights Movement, experts agree interest in nonprofit work and civic engagement has waned dramatically.

A recent national study of 6,000 emerging nonprofit leaders by CompassPoint Nonprofit Services, The Annie E. Casey Foundation, the Meyer Foundation, and Idealist.org found the nonprofit sector could be in dire straits if it is unable to attract and keep talented employees in leadership roles.

After introducing the event, Gergen handed the moderating duties to his son, Christopher Gergen, a founding partner of New Mountain Ventures, an entrepreneurial consulting and leadership development firm. For a definition of social entrepreneurship, the younger Gergen turned to panelist Stacey Childress M.B.A. ’00, lecturer in the General Management Unit at the Harvard Business School and co-founder of the Public Education Leadership Project at Harvard University. Childress defined the term as “the pursuit of an opportunity to create pattern-breaking social change regardless of the resources you currently control.”

Unlike other organizations in the social sector that focus on reducing the effects of a problem, she said, social entrepreneurs try to change the problem itself. Social entrepreneurs develop new theories about the root cause of an existing problem, create organizations that can eliminate it, and adapt their strategies based on outcomes, said Childress, in an effort to “change the way the world works.” In addition, she said, social entrepreneurs realize they can’t do it alone, and enlist the help of larger organizations to achieve their goals.

In the question-and-answer session, the panel acknowledged that more must be done to attract the next generation to the nonprofit sector. Colleges and universities are, panelists agreed, poised to take the lead. Strategies include encouraging students to consider civic engagement work as a viable career, forgiving loans for students taking nonprofit jobs, and supporting better on-campus recruitment resources for interested students. “We do have a responsibility,” said Childress, “that we haven’t fully embraced and realized yet.”

Read the full article

Crunch Predicted in Nonprofit Sector

Groups Are Not Nurturing and Retaining Tomorrow's Leaders, Study Says

From the Washington Post:

The nonprofit sector is facing what experts call an unprecedented crisis in leadership, with organizations in the Washington region and across the country struggling to recruit and retain talented staff.

Even as baby boomers retire, nonprofit groups stand to lose ambitious young employees who feel underpaid, overwhelmed by long hours and demanding responsibilities, and frustrated by a lack of career progression, according to a major study to be released today.

The sobering report, "Ready to Lead? Next Generation Leaders Speak Out," could shake up the nonprofit sector, which has been successful at recruiting recent college graduates but not always at keeping them. Many leave for jobs at private companies and in the federal government that often offer better pay and more comfortable lifestyles.

The trend is exacerbated in the Washington region, which has more than 200,000 people working in nonprofit groups and is considered the national hub for the sector. Local leaders anticipate a leadership void could have a dramatic effect on groups that offer essential social services such as shelter, food and after-school activities. Jobs in those fields traditionally have the highest turnover, experts said.

People are drawn to work in the nonprofit sector because of the social change mission and the potential to make a positive impact on the community, and the survey finds that such workers remain deeply committed and inspired. But nonprofit organizations are not doing enough to retain them, said Patrick Corvington, a co-author of the report and a senior associate at the Annie E. Casey Foundation. "Next-generation leaders are finding ways to get involved in social change and do good work," Corvington said. "But they're finding ways to do that outside of the sector."

The report, which uses data from a survey last fall of about 6,000 nonprofit employees, is the largest national study to date of emerging nonprofit leaders. It was conducted by the Casey Foundation, the Eugene and Agnes E. Meyer Foundation, CompassPoint Nonprofit Services and the online job site Idealist.org.

The study found that 69 percent of respondents feel underpaid. About two-thirds reported they had financial concerns about committing to a career in the sector, and nearly half of that group said they would not make enough money to retire comfortably.

One in three respondents aspires to become the head of a nonprofit organization, but only 4 percent said they were being groomed for top leadership positions.

The study's authors recommend that nonprofit groups provide mentors and help employees meet leaders of similar organizations. They also suggest that nonprofit groups offer better salaries and benefits when possible and restructure organizations to give younger staff members more responsibility and create a more evident career track.

This could help lessen the frustrations felt by people working in the sector, said Russ Finkelstein, associate director at Idealist.org. "I think it's incumbent on organizations to go and treat people like they matter, show them that they care about them and treat them as leaders, and I think that's always been a challenge," Finkelstein said.

Read the full article

The Age of Ambition

From the New York Times:

By Nicholas Kristof- With the American presidential campaign in full swing, the obvious way to change the world might seem to be through politics.But growing numbers of young people are leaping into the fray and doing the job themselves.

These are the social entrepreneurs, the 21st-century answer to the student protesters of the 1960s, and they are some of the most interesting people here at the World Economic Forum (not only because they’re half the age of everyone else).

Andrew Klaber, a 26-year-old playing hooky from Harvard Business School to come here (don’t tell his professors!), is an example of the social entrepreneur. He spent the summer after his sophomore year in college in Thailand and was aghast to see teenage girls being forced into prostitution after their parents had died of AIDS.So he started Orphans Against AIDS (www.orphansagainstaids.org), which pays school-related expenses for hundreds of children who have been orphaned or otherwise affected by AIDS in poor countries. He and his friends volunteer their time and pay administrative costs out of their own pockets so that every penny goes to the children.

Mr. Klaber was able to expand the nonprofit organization in Africa through introductions made by Jennifer Staple, who was a year ahead of him when they were in college. When she was a sophomore, Ms. Staple founded an organization in her dorm room to collect old reading glasses in the United States and ship them to poor countries. That group, Unite for Sight, has ballooned, and last year it provided eye care to 200,000 people (www.uniteforsight.org).

In the ’60s, perhaps the most remarkable Americans were the civil rights workers and antiwar protesters who started movements that transformed the country. In the 1980s, the most fascinating people were entrepreneurs like Steve Jobs and Bill Gates, who started companies and ended up revolutionizing the way we use technology.

Today the most remarkable young people are the social entrepreneurs, those who see a problem in society and roll up their sleeves to address it in new ways.

Bill Drayton, the chief executive of an organization called Ashoka that supports social entrepreneurs, likes to say that such people neither hand out fish nor teach people to fish; their aim is to revolutionize the fishing industry. If that sounds insanely ambitious, it is. John Elkington and Pamela Hartigan title their new book on social entrepreneurs “The Power of Unreasonable People.”

Universities are now offering classes in social entrepreneurship, and there are a growing number of role models. Wendy Kopp turned her thesis at Princeton into Teach for America and has had far more impact on schools than the average secretary of education.

So as we follow the presidential campaign, let’s not forget that the winner isn’t the only one who will shape the world. Only one person can become president of the United States, but there’s no limit to the number of social entrepreneurs who can make this planet a better place.

Read the full article

Everybody Wants to Save the World

From the Financial Times:

Business school students once coveted jobs in finance and consulting. Now they want to save the world. They once strove to accumulate wealth. Now, before they’ve even made it, they learn how to give it away.

At the same time, non-profit staff, who historically valued practical experience over time in the classroom, are approaching charity work like business people. They enroll in graduate programmes to learn to run their operations, and work with donors and policymakers to achieve goals.

The trend towards non-profit management training mirrors Americans’ mounting engagement in the field as a whole. According to the Bureau of Economic Analysis, in the past 30 years non-profit value added to the US’s gross domestic product grew tenfold, almost twice as much as the public sector and 64 per cent more than the private sector. Non-profit salaries increased 115 and 66 per cent faster than those in the public and corporate sectors, respectively.

Recent years have seen greater employee crossover between corporate, non-profit and public sectors, and this increased fluidity has created more professional non-profits and a business world with a burgeoning social conscience. As a result, non-profit education has become centralised and formalised, both at stand-alone graduate schools and in business schools, where these courses are often oversubscribed.

Rising Interest
“There has been an astronomical increase in student interest,” says Raymond Horton, director of the social enterprise programme at Columbia Business School, which recently launched a $20m capital campaign. “It’s growing so fast we’re having trouble keeping up with demand.”

Horton believes his students have been affected by the corporate scandals of the late 1990s and the events of September 11 2001, and are acutely aware of global issues such as climate change. “Today’s students understand the problems and perils that lie ahead of them both professionally and personally. There aren’t as many Gordon Gekkos as there used to be.”

Social enterprise courses top other courses in terms of average enrolment. His degree concentration provides two student clubs with about 400 members, almost a third of the business school.

Harvard Business School

Professor V Kasturi Rangan, faculty co-chair of Harvard Business School’s social enterprise initiative, says students “have really shown that they care ... especially about healthcare and education”. Last year’s social enterprise conference attracted 1,000 people, and the accompanying club has the highest affiliation of any at the business school: each class of 850 students yields more than 300 members.

A wider-reaching admissions policy is also responsible for business students’ demand for non-profit courses. Prof Rangan says in order to produce a more diverse class with varied experiences, the Harvard admissions office screens applicants from non-traditional sectors. “If you work for United Way or Teach for America, that’s now considered relevant experience. It has increased the number of students who apply from these places and get in.”

After School
Few business school students join non-profits directly after graduation. Only 5 to 7 per cent of Harvard students take non-profit jobs. However, Oster says: “If you look five years out, you see a bigger number. If you were interested in working at a high level in a museum, you might decide your first job out should be at Goldman Sachs, that you need to get experience in a mainstream firm first.”

Students who join corporations are also likely to become non-profit board members at some point in their lives. Within five years, 25 to 30 per cent of Harvard Business School alumni engage in some way with the non-profit world. After 20 years, that figure jumps to between 75 and 80 per cent.



For this reason business school administrators aim to design civic-minded courses that are relevant to students who pursue a for-profit route. “The emphasis is social enterprise rather than non-profit. You can work for a for-profit company and still create social value,” Prof Rangan says. “We are trying to teach our students that the role of a business leader is to add value to shareholders but also to help society as a whole.”

Professionalizing Non-Profits
As the non-profit world becomes more proficient, adopting the language and metrics of business, some charities actively seek to hire people with MBAs. And this new focus provides legitimacy to a non-profit career track that business school students require.

“There is genuine recognition that non-profit management is a highly disciplined area,” Prof Rangan says. “People have started thinking about it professionally, as opposed to [things] like social work, like the thing you do on Sunday to cleanse your soul.”

Eugene Tempel, executive director of the Center on Philanthropy at Indiana University, says philanthropy and volunteerism should be viewed as vital aspects of all social activity. The programme teaches financial management in addition to humanities and social science courses.

“Our students learn how to engage donors and volunteers and make them more effective, and how to build strong boards,” Tempel says. “This is all part of the professionalisation of non-profits.”

Lower salaries often dissuade non-profit staff from pursuing additional degrees and business school students from joining non-profits; it is too hard to repay debts. Columbia and Yale offer loan forgiveness programmes, and Harvard helps students get strategic positions at leading agencies, then supplements their income to $90,000.

But, as Tempel says: “People are not generally working in this field because of money. They accept the burden of loans and earning less money to be in a more satisfying career. These are people who want to make a difference and spend their lives doing something they believe in.”

Building Bridges

May-an Villalba, Director of Unlad Kabayan Migrant Services Foundation, Named Philippines Social Entrepreneur of the Year 2007 in Ernst & Young Competition



From Business World:

Maria Angela Villalba, Executive Director of Unlad Kabayan Migrant Services Foundation was cited for applying a practical, innovative, and market-oriented approach to her business through creation of products and services that address the challenges faced by communities, help solve complex social problems, and benefit the marginalized and the poor. She was given the Social Entrepreneur category award. She links migration of Overseas Filipino Workers to local community development by harnessing migrants’ resources through credit programs and eventually investing these in local social enterprises or commercial operations such as in a coco coir plant, a rice center, milling, and palay trading business.

Ms. Villalba was first exposed to the plight of overseas Filipino workers (OFWs) when she worked in Hong Kong as a Training and Organizing Consultant. She observed the behavior and learned about the pressing concerns of migrant workers, bringing these to the attention of her Korean boss.

Her involvement with migrant issues eventually led to the creation of the Asian Migrants Center (AMC) and she became its first director. AMC focused on helping abused migrants and assisting them in their legal requirements. What struck her was that in each of the cases that she handled, the abused migrants would choose to stay and search for a new employer. "We had very interesting cases where the women were clearly abused but were not willing to come home. I can only imagine the kind of trauma that they had. I would ask, ’What would it take to help you go home?’ They would answer, ’We would lose face with our family. We would lose face in our community. What is there to go home to?’."



Because of this recurring phenomenon, Ms. Villalba sought to create a program for migrant workers to help them build long-term assets back home. She also prepared savings and investment studies about migrant communities in Hong Kong and Malaysia. She took her cause to the United Nations where she was able to help draw better policies for migrants all over the world.

After conducting the studies, Ms. Villalba finally formed the Migrant Savings and Alternative Investment for Community Development and Reintegration (MSAI-CDR) development model. Migrants of different nationalities were grouped together.


Unlad Kabayan gives an MSAI training to women from a Davao community.

In 1996, she launched Unlad Kabayan in the Philippines with the MSAI-CDR development model at its core. Ms. Villalba then formed partnerships with local cooperatives to perform studies on what types of businesses are most suitable for investment. The first $100,000 of migrant savings was invested in a shoe factory in Cebu. A campaign to convince Filipino migrants to invest in local businesses in their hometowns also followed.


Lolita Tocayon's candy and toy-making business is one of the credit program's most diligent borrowers.

Unlad Kabayan concentrates its operations in poor communities in the Philippines. This in turn presents benefits for all the parties involved. Migrant workers invest in a business that they can manage when they retire or when they decide to return home. The investments are welcomed enthusiastically by the community. Local residents are provided with jobs and the community can progress economically.

At present, the organization is incubating five businesses in different communities nationwide. These include P7-8 million in assets ($171,500 to $200,000 US) in a coco plant, a rice center, milling, and palay trading business. In the next four years, Unlad Kabayan is set to support farming communities with new agricultural technology, crop and livestock production techniques, and farm credit.

May-an Villalba (center) at the awards ceremony

The success of Unlad Kabayan signals a very crucial shift in the common belief that there is little hope left for the Philippines. Ms. Villalba has demonstrated that social entrepreneurship can link people and their dreams; that there is hope in alleviating poverty. Unlad Kabayan bridges two of Philippine society’s significant yet under-represented sectors — OFWs and impoverished communities — by harnessing migrants’ resources, investing these wisely in communities and that, in turn, developing the local economy.

Congratulations to

*Visit Unlad's website for more information on the innovative services they offer

Related articles
Cooking Up Profit- Social Entrepreneurship as a Key to Development in the Philippines

International Labor Migration & Remittances in the Philippines

International Labor Migration & Human Trafficking

Bill Gates on Creative Capitalism

A Creative Capitalist- Social Enterprise at Work



From PBS:

BRAZIL- Fabio Rosa is a charismatic, charming Gaucho -- a guitar-playing cowboy with the energy and vision of a corporate titan who is determined to bring electricity and new farming opportunities to millions of rural Brazilians, allowing them to enjoy sustainable livelihoods while preserving the environment for future generations.

Rosa first came to the Brazilian state of Rio Grande Do Sol in the early 1980s, when much of the rural population lived without electricity because they could not afford the installation costs. He saw that by using a single wire system instead of the ususal three wire he could bring affordable electricity to most the people in the region and create a model for bringing it to all Brazilians and people of other countries. Rosa's first effort in the countryside outside the town of Palmeras was wildly successful — bringing hundreds of families electric powered pumps, refrigerators and lights for the first time in their lives. Rosa spread his idea to thousands of families, and eventually to more than half a million Brazilians.

Recently, in one of Rosa's most unexpected victories, the Brazilian government announced it will use his single wire model to bring electricity to millions of Brazilians.

From How to Change the World by David Bornstein:

When asked why he does the kind of work he does and why he doesn't want to just make a lot of money, Fabio responded:

I am trying to build a little part of the world in which I would like to live. A project only makes sense to me when it proves useful to make people happier and the environment more respected, and when it represents a hope for a better future. This is the soul of my projects.

Looking back, many times I have asked myself exactly the same question- since there are easier things to do. But this has been the only way I feel happy. And I also believe that persistence and coherence are virtues and I like to see that I have them.

Working on the kind of projects I do means to dream with a new world in mind. My projects always renew my faith in an harmonic way of living, without misery. With our intelligence, knowledge and culture, it is not necessary to destroy the environment to build. When people work together they are powerful; there is friendship. In the end, there is peace, harmony, tranquility, optimism.

If there is a deeply human motivation in all of this, it is that my projects are related to practical, doable work. We need to actuate and cause change. Even if the inspiration is romantic, it desires material results, a re-colored reality.

About money- I need money. Money is very important to accomplish my projects. But money only matters if it helps to solve people's problems and to create the world I described above. My projects help people around me to acquire wealth and in some ways this comes back to me.

It has been an intellectual and creative challenge to build models that can be used by excluded and deprived people, to create sustainable livelihoods and promote social inclusion.

Creating projects, implementing them and succeeding, witnessing one's dreams come true, is happiness. Money just makes it easier.

For all these reasons, I work the way I do. I am a slave to my dreams, thoughts and ideas.

That is all.

Young Entrepreneurs for Sustainability

From the Inquirer:

Entrepreneurs typically measure performance in terms of financial profits, but a new breed called social entrepreneurs apparently care more about the impact of their enterprise on society and the community.

DHL Express Philippines, the local presence of the Deutsche Post subsidiary, recently selected its top social entrepreneur through the DHL Young Entrepreneurs for Sustainability (DHL YES) Awards.

The award seeks to recognize and support young community leaders as part of its thrust for social responsibility. DHL defined the social entrepreneur as an individual who conceptualizes, innovates and implements programs to help improve the lives of his or her countrymen in line with the millennium development goals.

Read the full article

More on Illac Diaz, a social entrepreneur who has created several successful ventures in the Philippines including temporary housing facilities for seafarers, a peanut sheller, and a device that grows coral at four times the normal rate.

Read about Mr. Diaz here

The Do-gooder's MBA

Source: Corbis

Social enterprise is an emerging field that has great potential to fight global issues like poverty and human trafficking through generating financial and social capital.

From Business 2.0:

Several organizations, including for-profits, give B-school graduates real-world experience in the trendy and growing field of social entrepreneurship. The pay is lousy, but the benefits to the host countries and the graduates are worth a fortune.

For MBAs with global ambitions and a willingness to get their hands dirty, working in a developing country does more than feed the spirit. Graduates aren't just examining case studies; they're creating new ones, jump-starting real businesses, and bringing the gospel of entrepreneurship to places where it's never been preached. It could take years for a young person to get that kind of power in the developed world.

Read the full article here.

The Feast Returns

ALL DAY BUFFET

Before I left for the Philippines I helped start All Day Buffet, an organization dedicated to connecting young adults to important humanitarian issues throughout the world.

It's a simple idea: Inspire Action. Change the world. Have Fun.

I'm happy to announce we're back and better than ever! We have a new website and a growing community in the Big Easy. And now we are starting a series of happy hours called 'Cause for Drinks.'

Come join us next Wednesday, Aug. 22nd, for our very first one at Gallery Bar in NYC and LePhare in New Orleans. $2 from every drink purchased will go towards school supplies for kids in under-resourced schools in NYC and helping to educate veteran child soldiers in Ghana.

When:
Wednesday, August 22, 2007, 6:30 - 8:30 PM

Where:
(NYC) Gallery Bar, 120 Orchard Street (Between Delancy & Rivington) - Map

(NO) Le Phare, 523 Gravier - Map

Being in the Philippines I am unable to attend, but I will be there in spirit.

Hats off to those who organized this event and have various surprises and treats in the pipeline. Although I'm on the other side of the world I'm overjoyed to see your hard work come to fruition- congratulations and thank you for keeping the idea alive!

Cheers!

Cooking Up Profit

Social Entrepreneurship as a Key to Development in the Philippines

Written by Justin Hakuta

Water boils. Machinery grinds and whirls. Dough is shredded into thin ribbons.



I am at a factory in Davao, Mindanao surrounded by piles of pancit, the ubiquitous noodle of the Philippines sold by the kilo, boiled or fried, and devoured by the ton with vegetables and a combination of shrimp, chicken, or pork topped off with a dab of fish sauce and calamansi, the Filipino version of lemon.

But this is no ordinary factory—it is an enterprise funded by the heroes of the Philippines, the balikbayans or overseas migrant workers who are single-handedly saving the Filipino economy from plummeting into disarray one foreign dollar at a time (in 2006, remittances totaled between 12-14 billion US). Two seafarer brothers, the Jandugs, have combined their savings to build this noodle factory named Best Choice, a prosperous, family-owned small business run by a third brother, an ex-teacher who manages daily operations.



Launched in 2001 with the brothers’ savings and a loan from Unlad Kayaban Migrant Services Foundation (Unlad), a social entrepreneurship-focused NGO, Best Choice produces two varieties of pancit (canton or bihon, thick or thin) as well as fruit preserves of coconut and different beans used to make the popular Filipino desert halo-halo, literally mix-mix.

Now self-sustainable, Best Choice has a full-time staff of 22 and has managed to fill a niche market supplying supermarkets and department stores with freshly made noodles and halo-halo ingredients, all while beating off the competition’s cost undercutting by providing a superior quality product and service with a smile.



But this transition from savings to concept, from start-up to self-sustainability did not happen overnight.

Migration Nation
The Filipino economy is heavily dependent on remittances, or money sent home from workers abroad. It is an oversimplification to say that this alone contributes to a stagnant local economy. But a dependence on international labor markets where close to a million workers per year, including many of the country’s best and brightest, seek employment elsewhere has an undeniable impact on the local economy’s productivity and ability to generate new jobs.

I won’t go too in-depth on this topic, Filipino labor migration has been covered in a past entry (click here); however, it is within this culture of seeking a better life through international employment that I stumble upon Best Choice, which was built from the savings of overseas Filipino workers (OFWs) and is now generating jobs and creating economic activity in a community where previously there was little.

Studies have shown that OFW savings are generally spent fulfilling the basic needs of the family: improving housing, funding educational opportunities for children, and starting or investing in small businesses such as sari-sari stores (your local bodega shop) or money lending businesses. The issue with starting businesses is that many OFWs lack the technical or financial skills required to run a successful operation.

Oftentimes the go-to business solution for returning migrants is to open a sari-sari store. This business can potentially be doomed from the start for a number of reasons including the following:

1) If you create a sari-sari store that is one of say twenty other sari-sari stores within several blocks radius, carving out your niche will be tough. Unless you have a unique product line or genius marketing skills, more than likely you will be one amongst a crowd of stores who are saturating the market with candy, cigarettes, chips, soap, and bubblegum. There is actually a Filipino term for killing a successful business through market saturation. It is called the “hot pandesal syndrome” which refers to the delicious semi-sweet buns you can buy freshly baked on almost every block in the Philippines. Essentially when one pandesal store opens and becomes popular in a neighborhood, the hordes soon follow until there are so many pandesal joints that profit amongst them becomes close to nil. The same phenomena can be observed with water purification stores, chicken breeding, or cell phone accessories—name a popular product and chances are “hot pandesal syndrome” has already struck it.

2) Beware the family, for they eye your products with hunger. It is not uncommon for family members to use the food, drinks, etc. of their sari-sari store without paying for them. While skimming from the top of the inventory may be necessary for those who would otherwise spend the day with an empty stomach, it ultimately results in the store taking a financial loss, and with the size of Filipino families, this loss could be quick and devastating.

Avoiding a variety of these common pitfalls, Best Choice represents something refreshing and unique amidst the economic landscape. It has secured deals with its clientele—as long as its product maintains its quality and reasonable price, it will retain its accounts and beat back the competitors. Because of Unlad’s business trainings and ongoing support, management is equipped with the skills to run a successful business. Complemented by a committed, happy-to-be-employed staff, who by the way receive full healthcare coverage, Best Choice has become self-sustainable and is able to provide jobs to community members with plans of expanding in the near future.



Best Choice is an example of a need being identified, in this case a lack of noodles and fruit preserves, and met with sound business skills and know-how. Best Choice is an example of money being used to not only generate profit for an individual and his/her family, but also to create jobs where previously there were none, and share the wealth. It is a glimmer of possibility for the Filipino economy that the billions of dollars pouring in from abroad can be used towards creating local employment opportunities, where perhaps one day Filipinos will be able to choose between staying in their country or moving abroad for work out of preference, not necessity.

A For Profit Non-Profit
Unlad Kayaban Migrant Services Foundation (Unlad) is a humble non-governmental organization (NGO) with grand ambitions. Tucked away in a quiet Metro Manila neighborhood next to the University of the Philippines, Unlad is one of the organizations at the forefront of social entrepreneurship in the Philippines.

Unlad originates from migrant labor roots. In 1989 its founder and current Executive Director, May-an Villalba, a former teacher, established the Asian Migrant Centre (www.asian-migrants.org) in Hong Kong, which focused on legal assistance and crisis intervention for migrants. Invariably after each case, migrant workers would look for a new employer no matter how harrowing their experiences had been because they had no job opportunities at home and their families depended on them for income. The only option was to find a new job abroad and pray for an employer who would not abuse them.

It was this lack of opportunity and vulnerability of migrant workers that spurred Ms. Villabla to build a mechanism whereby migrants could work abroad in the near-term, but create long-term opportunities in their hometowns so that they would not have to migrate for lack of work or money. In 1996, Ms. Villalba formed Unlad Kabayan to become the dedicated vehicle to develop this concept in the Philippines.

More about Unlad Kabayan straight from the horse’s mouth:

Our strategy is to empower local communities in the Philippines to build strong and sustainable communities through enterprise development. We are different in that we work with previously untapped sources of entrepreneurs and finances: migrants and remittances. As of 2006, nine million Filipinos reside and work overseas, earning and sending money to their families for primary needs and personal consumption. These monies are called remittances, which in 2005 totaled $10.7 billion. If mobilized, remittances can jumpstart local enterprises, creating jobs and income for local people. Unlad works with migrants to curtail extraneous spending and to save and invest in projects that will raise the socio-economic well-being of local communities.

Unlad was established in 1996 to respond to the urgent need for migrant workers to plan and organize their return to the Philippines. In 1994, it started as a special program of the Asian Migrant Center based in Hong Kong organizing savings associations [or groups of migrants that save a percentage of their earnings] as a capital build-up mechanism that would establish income-generating activities in the Philippines.

As it mobilized savings, investments and building enterprises, Unlad realized the potential for migrant savings to generate jobs and income for the unemployed and to support the livelihood of poor farmers and workers [at home in the Philippines]. Upcoming entrepreneurs and small enterprises also confront problems that usually cause their businesses to fail, such as lack of management skills, knowledge and technology. To counter these problems, Unlad [employs training sessions and ongoing project monitoring] towards [developing sustainable businesses that can] compete in a dynamic and challenging economic environment.

Since 1994, Unlad has been involved in migration at various levels, both in addressing its benefits and harnessing it as a tool for socio-economic development.

Through Unlad’s programs, products are created, jobs and incomes are generated, economic transactions in the community are stimulated, and migrant workers can come home with dignity. Since 1996, Unlad has expanded from assisting small trading enterprises such as sari-sari and supply stores to incubating larger enterprises such as food processing, free-range poultry production, and agribusiness production and processing.

Not everyone is born an entrepreneur, and Unlad goes to great lengths to reach out and educate migrants about the risks and rewards of investing. For those who chose to participate, training in savings strategies, business management, and investing is provided.

From left to right: Best Choice's manager, assistant, and Unlad's Executive Director, May-an Villalba, reminisce about Best Choice when it first stared

The idea is to arm returning migrants with the knowledge, skills, and support required to operate a successful business so they can be part of revitalizing the local economy instead of becoming a victim of it.

Successful Unlad projects include Best Choice, a coconut husk processing plant, a biodynamic farm, a rice center, and food processing as well as virgin coconut oil processing enterprises.

Social Entrepreneurship & Human Trafficking
You may be wondering what this has to do with human trafficking (trafficking). Why, if I am conducting a study on trafficking, would I spend my time interviewing an organization that deals not with migrants who have been enslaved, abused, and exploited but instead with those who have finished their overseas contracts and are returning home looking for ways to maximize their earnings?

Trafficking is the product of a number of factors including poverty, poor education, lack of jobs, feminization of migration, organized crime syndicates, government corruption, and low awareness of trafficking at all levels of society. One of the major factors driving migration, and as a result creating a large population that is susceptible to trafficking, is the lack of local job opportunities. Many communities in the Philippines are rife with unemployment, not from lack of demand or motivation but from lack of jobs. The urban centers such as Manila in the north and Davao in the south offer some possibilities, but the demand for jobs far outweighs the supply.

While jobs can be scarce in the Philippines, particularly to those who have not attended a big name university, the global market is hungry for low-skilled, low paying jobs such as domestic and agricultural work that may be viewed as undesirable to those living in the developed world. Globalization has brought countries and economies across the world closer together. A country like the Philippines, who’s economy is based largely on exporting labor, has reacted to this increased connectivity by meeting international demand for these low-skilled jobs.

While this provides opportunities for the unemployed, it also creates a large population of migrants who are vulnerable to trafficking and exploitation at the hands of dishonest recruiters, corrupt government officials, and scheming employers. Further, the nature of jobs like domestic work, where a woman is placed into the home of a family and potentially cut off from the outside world, creates a risky environment for the maid who can be abused by the employer away from the public eye.



Percentage of the Filipino population living below poverty line in 2003, by province. Provinces with darker shades have more people living below the poverty line. Source: Wikipedia

Trafficking is a problem that reflects a variety of issues in a culture and an economy such as a patriarchal society and widespread corruption. This is why a holistic approach to combating trafficking that includes social entrepreneurship is needed. Anything less would be incomplete.

While donations and charity are still needed to address socio-economic issues, social entrepreneurship and the services offered by Unlad are integral in stimulating the local economy and combating trafficking, potentially putting more than 10 billion dollars worth of annual remittances to productive use that could benefit individuals, communities and, if effective on a large enough scale, the country.

Transforming Waste into Profit
Three hours from Best Choice, down dirt rounds, past lines of banana and mango trees and blue-domed mosques with peeling paint, past countless posters promoting local politicians and the projects they have sponsored to drum up support for the coming election in May, past the eyes of countless vigilant cocks confidently strutting and curious half-clothed children, past military check points complete with guards armed with what looked like M-1 Garrands from the second world war, there lies a factory that has taken a formerly useless waste material and converted it into pure profit.

The material in question is coconut, the husks to be exact. Coconuts are harvested for their meat and juice, not for their hard shells, which traditionally are discarded to form heaps of what resemble brownish skulls.



Macabre imagery aside, Davao Oriental Coco Husk Social Enterprise Inc. (Davao Enterprise) is generating serious business. Processing coconut husks into fiber which is used to make anti-erosion nets (for which Unlad won an Ashoka Changemaker Award in 2005), handicrafts, wallpaper, bed fillings and more, Davao Enterprise has found a truly productive use for an abundantly cheap resource that was previously discarded and left to rot.

Launched in 2004, Davao Enterprise was incubated by Unlad and a local development NGO, Kalumonan Development Foundation. It is an example of an enterprise that corresponds to Unlad’s vision of social entrepreneurship: economically sustainable, gender-fair, protects the environment, practices accountability and transparency, and promotes the community’s health and well-being.


Photo by Bernice Roldan

With an onsite staff of 70, an additional 30 home-based artisans, and plans to expand, Davao Enterprise has been able to provide jobs in a community that has few other employment opportunities. Unlad was instrumental in getting Davao Enterprise off the ground and to this day continues to monitor the business and assess opportunities for growth and ways to further streamline the production process and improve efficiency.


Photo by Bernice Roldan

With production nearing 100 tons a month, demand for processed coco fiber is showing no sign of slowing—something that has not gone unnoticed by others. Indeed several other coco-processing factories have sprung up in the past few years, including one started by a local government official, giving Davao Enterprise a run for its money; however, the migrant-supported facility has managed to keep its edge through faster production. China has been one of the main destinations for this processed fiber where it is used to fill mattresses, although a market has emerged for coco fiber handicrafts and anti-erosion nets as well.


100% coco fiber handicrafts


Anti-erosion nets for which Unlad won an Ashoka Changemaker Award in 2005
Photo by Bernice Roldan

The processing plant is a lively place. Women laugh and gossip as they spin thread from the coco fiber. Nearby a dozen men are busy throwing coconuts onto a conveyor belt that moves slowly towards a grinder. Dust fills the air. Shirts cover mouths. Thousands of coconuts sit in patient silence, awaiting their turn. Trucks arrive sporadically with fresh shipments of husks. Processed fiber is packed into bales and stacked on top of one another like giant cubes of shredded wheat cereal.



Inside the factory store, rows of multi-colored handicrafts, from bowls to purses, fans to hats, fill the shelves, each with its unique blend of colors. The texture of the processed fiber is almost rubbery: soft and malleable to the touch yet with enough firmness to hold shape.



May-an, the Executive Director of Unlad, chats with the staff about equipment upgrades and maintenance work. There is discussion about renting an extra machine that will increase production but the plant will be essentially breaking even. This will, however, allow more people to work at the plant. “We should rent the additional machine,” says May-an. After all, this business has two forms of profit: monetary and social. The more staff are employed, the more money flows into the community: supporting families, putting food on the table, supporting education.

This is social capital.

Keeping production constant and increasing processing speed will be integral to staying competitive. There is no shortage of husks. The key is maintaining the machines so they can continue to produce ton after ton of processed fiber.



The processing plant bumps and shakes through the window of my van. The cracking and grinding of husks fade into the distance. It is time to head back. The drive home is spent discussing social entrepreneurship as a tool for social change: everything from blogs to online social networks, biodynamic farms to animal manure, apathy to activism, and dedication, delusion, and romanticism was touched on.


Photo by Bernice Roldan

Two Examples, One Blueprint
I sit in the lounge of my business hotel (free Wi-Fi) in downtown Davao after a day of visiting two Unlad-supported businesses. Sipping a San Mig Light (the Filipino equivalent of Bud Light) and pecking away at my laptop, my head spins from the possibilities and the excitement of seeing such an idealistic concept in the flesh. In many ways social entrepreneurship is idealistic, but this does not mean unrealistic. The concept is based on finding creative ways to address social issues. One interpretation would be running a business whose profit is measured not only in net monetary gain, but also social capital. Other examples of social entrepreneurship include reforming the school curriculum in India to reinforce the cultural identity of minority ethnic groups, working to provide electrical energy to impoverished rural areas in Brazil, or, like Nobel Peace Prize winner Muhammad Yunus, using microfinance as a gateway out of poverty for the poor in Bangladesh and beyond.



For Unlad, social entrepreneurship brings with it the promise of using migrant savings to revitalize the Filipino economy, inject much needed cash to poor communities, and create employment alternatives to the exodus that is labor migration.

Of course, like anything else, there are obstacles. According to the U.S. Small Business Administration, ninety five percent of small businesses in the U.S. fail within the first five years. For Filipino migrants, who return home with their savings, generally to unemployment and with few viable options beyond reapplying to work abroad, sending a son/daughter who is old enough to be a nurse, domestic worker, or seafarer to the Middle East, Europe, Asia, or the United States, or depending on a cousin or uncle who is currently abroad, the need to generate income from savings is critical to a family’s ongoing financial well-being.

Businesses like Best Choice and Davao Enterprise offer only a taste of what can be achieved with savings and support provided by organizations like Unlad, even within an economy that offers few breaks and is often completely closed to the poor.



Social entrepreneurship is not the be-all end-all of the Philippines’ local economic woes, but it is certainly a step in the right direction. While the government and large corporations are strategizing on how to best maximize labor migration and cater to international markets, organizations like Unlad are pushing the concept of social entrepreneurship and encouraging the use of migrant savings in a way that fuels jobs, benefits the local economy, and ultimately helps lift people out of poverty and the financial vulnerability that allows trafficking to prosper.

Back Home
I return to Manila with a different feeling than what I’m used to after conducting four months worth of trafficking-related interviews. Usually I talk to anti-trafficking NGOs that, after describing their generally excellent programs and revealing an inhuman perseverance, lament about the state of the justice system, the state of the government, and the need for additional funding. These are real, serious issues that often put a damper on the work of NGOs in the face of scarce resources and overworked staff. This is not to say anti-trafficking NGOs in the Philippines do not experience successes—the passing of the anti-trafficking law in 2003, the local systems that have been established to identify, rescue, rehabilitate, and reintegrate trafficking victims, and the push towards creating more aware criminal justice and law enforcement agencies—are all tangible signs of progress that can firmly be accredited to NGOs. But hearing about social entrepreneurship and seeing the possibilities in the flesh was refreshing and uplifting.

It is inspiring knowing that through self-empowerment and providing an opportunity, determined Filipino migrant workers, many of whom took the risk of being trafficked by working abroad, are able to return home and build off of their earnings in a way that can, with enough momentum, help rebuild their country and economy one noodle, one fruit preserve, one coco fiber at a time.


Photo by Bernice Roldan

About the Author
Justin Hakuta is a U.S. Fulbright Scholar currently studying non-governmental organizations combating human trafficking in the Philippines. A graduate of Carnegie Mellon University (2004, B.S. in Decision Science), Hakuta has worked as a researcher at the Midtown Community Court in New York City helping formulate policy to reform the criminal justice system and continues to pursue his interest in human rights and social entrepreneurship by collaborating with organizations like Unlad Kabayan.

Related Links
New York Times Magazine- A Good Provider Is One Who Leaves
Carnegie Mellon University News Blog