Articles by Ann MacDougall

Arriving bleary-eyed after an overnight flight from New York, I showered quickly and hustled to the Thursday morning session of the Skoll World Forum on Social Entrepreneurship. My colleagues Brian Trelstad (Chief Investment Officer) and Varun Sahni (India Director) had arrived earlier, but there were so many attendees milling around the lobby engaged in animated conversations that I didn’t see Brian or Varun until later in the day.

I spent some time at a panel on Community Development (moderated by 2007 Acumen Fund Fellow Keely Stevenson). As always, Martin Burt (Fundacion Paraguaya), Vera Cordeiro (Reneascer) and Craig Kielburger (Free the Children) inspire and impress.

I’ve met Craig on several occasions and he is an extraordinary young man. His organization is about engaging children as responsible global citizens and the curriculum he has developed for children is mandatory in Canadian public middle schools. He is now getting some traction in US schools (tough nuts to crack!) and has also created a summer leadership program for kids. Acumen has several initiatives underway to reach out to engage more directly with teenagers and college students, and Craig has promised me a brainpick on “kid engagement” during his next trip to NY.

Good panel in the afternoon called “(Financial) Power to the People”, featuring three entrepreneurs who have created big online marketplaces: Premal Shah (Kiva.org, online micro-lending), Mari Kuriashi (Global Giving, online donations) and Mads Kjaer (MYC4, online investing). They are all trying to build movements and to give people the sense that they are part of something bigger and dynamic, the goal is “ to broaden the base of social activism”.

By definition, they all deal with huge stakeholder communities, including their respective lenders/donors/investors and have explored various means of keeping them engaged without expending too much bandwidth. One (Premal) talked about having conference calls with thousands of listeners, each with the ability to type in questions. Premal is also thinking about how to close the gap between lender and borrower. Is there a way through a web cam or Skype that the lender could see how the borrower’s business is doing with the loan? And why would the information all need to be going from south to north to make the lender (north) feel good? Why not advice or other non-financial resources going from north to south (or vice versa!) to help the borrower?

These entrepreneurs are not daunted by the enormous numbers in their respective spheres, they only want to increase them . They spoke of crowdsourcing, a new term for me. Mads talked of his dream to create an investment fund with BILLIONS of investors, at one euro a share. He thinks a whole new vocabulary will be crafted in the online social enterprise space and the words haven’t yet been invented (he reminded us that “iron horse” preceded the word “train” and “horseless carriage” preceded the word “car”). They share the dream of making transactions in the social enterprise space as easy as ordering a book from Amazon online and so exciting that the individual tells her friend and the friend tells a friend etc. Mari’s Global Giving not only lets a person make a donation online but also sells gift certificates so that the ultimate recipient can choose to which charity he’d like to donate.

The panel talked about organizational issues as well. Mads talked about the complexity of running a non-profit organization in affiliation with a for-profit one. Premal described about how Kiva was on the brink of bankruptcy in the fall of 2006. Then Muhammad Yunus won the Nobel Prize and micro-lending burst onto the global scene. Overnight, Kiva’s volume of business grew exponentially and their website was down four days because it could not handle the volume. Business has continued to grow (Kiva says it raises $1 million in $25 increments every 10 days) and their annual operating budget is $5million—Premal does not want it to increase any further but wants to use more and better technology to increase efficiency and support scaling. Interestingly, Kiva has 12 volunteers for every fulltime employee, but the volunteers need to make a minimum 4 month full-time commitment. His advice to new social entrepreneurs: “keep your burn rate down until serendipity hits”.

Later, I spent some time dropping into other panels. “Expansion Finance for Social Impact” was among the best. The late afternoon session was the awards ceremony for the 9 Skoll Awards. I was particularly excited about Soraya Salti who is dazzling in every way. She is doing great things with Injaz which provides youth business training in 12 Arab countries.

A casual dinner with friends from Rockefeller, Visionspring, Lex Mundi Foundation, McKinsey, Mercy Corps, IDEO, Bamboo Finance, Rockefeller, Ashoka and others made for a very full but enjoyable day.

I was in Pakistan for the first week of March, mostly spending time with the Acumen team and its close advisors. This time, unlike my last two trips, I stayed put in Karachi, where Acumen’s Pakistan office is based and did not get to Lahore (the city where the reprehensible attack on the Sri Lankan cricket team occurred on March 3rd) On two prior trips, I have visited Khuda-ki-Basti 4 (KKB-4), Acumen’s low cost housing investment near Lahore.

Although that development is still in a relatively early stage, there are 100 families living there today, a thriving primary school, a small general store and a secondary school in the works. KKB-4 is on the move. On my last trip in May I was happy to see the immense progress made in the few months since I had first visited. I could better imagine what it would be like when the housing plots were fully sold, the houses built, the shops and mosque opened—in short a real self-contained community.

On this trip, I was able to visit Khuda-ki-Basti 3 (KKB-3), a mature housing development outskirts of Karachi in which Acumen made a small investment several years back. KKB-3 (near Karachi) was the inspiration for KKB-4 (near Lahore) and are both brainchildren of Tasneem Siddiqui, the lead developer. I went with Shuaib Siddiqui (no relation), a Pakistani-American who has been working in our Karachi office for the last 18 months as a portfolio associate. Shuaib, along with Aun Rahman our Pakistan country leader, has become expert in the area of housing for the poor and is the relationship manager for our KKB-4 investment.

The drive to KKB-3 took about 45 minutes from Karachi center and when we arrived at the entrance, public buses plied the road. Other developments and commercial establishments crowded the area. Shuaib explained that, 8 years back when the development was just getting started, the area was a wasteland with virtually no roads or buildings.

We walked into the building which had originally been the sales office and now serves as a community center and management office. It was lined with photographs documenting the inception and progress of the development starting 8 years back. The original would-be buyers of land plots were required to live in temporary homes for two weeks before being accepted as buyers and members of the community. This procedure was designed to test their mettle as serious buyers and builders.

We then walked down the central artery of the development—I should say town because it is a teeming, vital town of 25,000. All of the plots have been sold and most have been built up with small single family homes. There is now a thriving secondary market in houses, as the improved land has shot up in value. Some of the poor laborers who were early buyers have sold at a substantial profit and have moved into a higher socio-economic class. Teachers and other professionals are starting to buy these houses and move in (real-estate prices in Karachi are sky-high and there is severely limited availability). And while most of the houses are very simple, a few have second and third floors and spectacular gardens.

We visited a primary school, one of 12 in the town; this one was built by The Citizens Foundation. The school was clean, open and attractive and requires a payment of a modest tuition fee. We visited briefly with the principal of the school who explained that because demand is so high, the school is run on a split session with half the students coming in the morning and half in the afternoon. Other primary schools in the town are even less expensive or free. When we visited later with the manager of the entire development, Akthar Sb, he explained that there is nearly 90% school attendance at the primary level—I had wondered aloud about this as there were many children walking about and playing during what seemed to me to be normal school hours. This was due to the split sessions, Akthar Sb explained.

However, the statistics for attendance at the secondary level drop off significantly, as many children in their early teens are expected to contribute to the family coffers. Given that school attendance is mandatory only until age 10, overcoming this attitude and getting parents to understand the value of secondary education is a long slow battle.

We visited a vocational school for older children and young adults, a clinic for women and children (which sold condoms on a prominently posted price list), a vet shop (mostly focused on goat care), a Catholic church, a vegetable farm, several small textile manufactures. We saw stores selling a vast variety of goods. We saw but did not visit several mosques. There are no banks are within KKB-3, but some can be found just outside in other developments which have sprung up close by.

In short an entire ecosystem has been formed out of empty land near a densely packed city with desperate housing shortage and an enormous population of poor residents. Those who have been able to make the leap now live in a community which provides access to their basic needs: clean water, power, sewage treatment, local government, education, health services and employment opportunities (1/3 of the residents of KKB-3 work within the town). Seeing possibility realized gave me hope and vision for our work at KKB-4, and a real sense of excitement for its future.

Last week, I attended a session of the NYU Reynolds Program series “Social Entrepreneurship in the 21st Century,” with speaker Paul Farmer (our own CEO, Jacqueline Novogratz, spoke in an earlier session). Farmer is a physician-anthropologist who co-founded Partners in Health, a non-profit providing health care service to poor in various parts of the world (including Haiti, Rwanda, Peru, Russia, Lesotho and Malawi). Partners in Health is also a leading public health research and advocacy organization.

Dr. Farmer coined his talk an ‘insider’s critique’ of social entrepreneurship, and started by wondering whether he was in fact a social entrepreneur. Does he, by his own definition, bring real innovation to solving big problems? What’s so innovative about what he does? Partners in Health basically says that poor people deserve basic health services and then makes it happen. Farmer thinks that access to those services should be a right enjoyed by all people. However, the fact is that most of the world’s poor don’t have access to basic health needs – even defined by mid-19th century standards: clean water, food, sanitation. (Amartya Sen might describe these deprivations as “unfreedoms.”)

According to Farmer, the efforts of most social entrepreneurs are falling short – despite the best of intentions. Their innovations are not reaching the people they are designed to help. Much hard work is being done, but it is scattershot. He asks the questions: are we innovating merely for the sake of innovating? Are we targeting the right problems? Answering himself, he argues that we must keep our innovations grounded in solving the problems of the poor.

Last week, Jacqueline and I attended the Global Philanthropy Forum, a three day conference convening donors, social entrepreneurs, political leaders, academics and activists to discuss problems and solutions in the areas of global security, human rights, violent conflict, resource scarcity and health.

Bishop Desmond Tutu gave an inspiring and wide-ranging talk at the opening plenary, notwithstanding a bad case of the flu. He spoke of the recent violence in Kenya and the vulnerability of any country to a similar situation when colonial structures persist, leaving one group as top dog. He spoke of his hope that Zimbabwe will come through its current difficult period and that Robert Mugabe will step down or otherwise leave office. Even so, Tutu warned, there is a long road for recovery ahead and one key element of that recovery will be a framework or platform for people to “say what happened” (as happened in South Africa with the Truth and Reconciliation Commission).

He also expressed a wish I heard several times throughout the Forum, a wish that more women should be at the table, as heads of government, the military and in major policymaking bodies. Tutu asserted that the “attributes of women” would bring more balance to the debate and to decisions like whether to go to war. As he put it, “I cannot imagine a woman who nurtures a child in her womb for nine months and then rears that child going on to let him be turned into cannon fodder.”

The Forum alternated between plenary sessions and smaller workshops and panels, some of which were very timely and relevant to Acumen’s work (Hunger, Agriculture and Inequality; Fragile Successes in Rwanda and Uganda; Predictable Surprises: Pakistan and Afghanistan; Maternal Health and Childcare). In the plenary session entitled “Entrepreneurship and Social Change,” we heard Fazle Abed (BRAC) and Larry Brilliant (Google.org) talked about the “missing middle” - the space between micro-finance and traditional investing - which is the next place (i.e., beyond microfinance) to move the needle on poverty alleviation through a business approach. Abed and Brilliant cited Acumen Fund as a good and established example of this approach. Mr. Abed hastened to add to that while the microfinance business model was mature, the need for more microfinance facilities was far from fully met. Both panelists said that women were often the “better bet” as entrepreneurs, social or otherwise.

Thursday afternoon of the Skoll World Forum also offered so many interesting panels that the choice of which to attend was hard. Editor’s note: this was not the first time Ann had a hard choice of panels this week. I buzzed between a panel called “Mirror, Mirror on the Wall, What’s the Impact of this All?” which tackled social impact and metrics to track it (Acumen’s Chief Investment Officer, Brian Trelstad, was a panelist) and another called “Addressing the Talent Gap,” on which Acumen’s Talent Manager, Deepti Doshi, was a panelist.

Marc Freedman, CEO of Civic Ventures, was also on the Talent panel and described his organization’s initiatives redirecting mid- to late-career executives in the private sector to work with social entrepreneurs and innovators addressing pressing issues. Civic Ventures has an innovative Senior Fellows program which selects high performing baby boomers and places them with NGOs or social entrepreneurs for a year. Half of the stipend is paid by the NGOs and half by the Fellow’s corporation. Freedman passionately described the Fellows as folks who feel “midlife is getting to the top of the ladder and finding it was leaning against the wrong wall.”

Through the first 2 days, the Forum’s highlight was definitely the evening speech by former U.S. President Jimmy Carter. He is 84; witty, erudite and humble all at the same time. He described responding to Jeff Skoll’s invitation with the question: what is a social entrepreneur? Jeff responded “you are one, Mr. President.”

Thursday morning’s break-out panels were difficult to choose among. I had every intention of visiting several, but ended up staying the full two hours at the panel called “Hybrid and For-Profit Business Models,” moderated by David Brancaccio, host and senior editor of NOW on PBS.

The room was packed. Tina Seelig, Executive Director of the Stanford Technology Ventures program talked about an international competition in which business school teams are given 5 days and one Post-It pad to come up with a project that “creates value” under any definition. 95% of the projects submitted were social enterprises.

We also heard from Tralance Addy, President and CEO of Waterhealth International (WHI), an Acumen investee. Tralance described a dam - built 40 years ago in his home country of Ghana - which displaced thousands of people during construction. Those people are still waiting for drinkable water today and the government is still debating what to do about it. This kind of paralysis inspired Tralance’s commitment to private-sector solutions.

The January 19 edition of The Economist contains a special report on corporate social responsibility. Several long and interesting articles, some with conflicting perspectives, but a few points emerge. First, CSR is moving slowly but inexorably to the mainstream corporate agenda. There are many arguments about what it should be called (corporate responsibility, corporate citizenship, building a sustainable business) but CSR is increasingly seen as just good business. That said, there is still a significant cadre of doubters whose core argument is that corporate executives should not be spending other people’s money on CSR—their job is to be making money for the shareholders. Period.

In one article, Nike’s VP of corporate responsibility, Hannah Jones, talks about CSR as a source of innovation for companies. Instead of spending her time at CSR conferences full of other corporate folks, she prefers to focus on interacting with the social entrepreneurs and in helping to reap both social and financial returns.

“Do it right,” the last article in the section, really resonates with us here at Acumen. It asks the question that, assuming this trend corporate “goodness” continues, where will it evolve? Some believe it is the social entrepreneur who has “cracked the code” with an approach which is for-profit and self-sustaining. The approach “brings financial rigour as well as an appreciation for risk…and can teach the big companies a thing or two about how to measure the success of social investments.”