42 posts categorized "Microfinance"

COVID-19 Is Prompting a Global Response From Impact Investors

May 13, 2020

Impact investing_610x308For most of us, the coronavirus pandemic is the first truly global crisis of our lifetimes. But while signs of progress against the virus have emerged from parts of Asia and Europe, infections and virus-related deaths continue to climb in the United States, and it seems as if large parts of the Global South are still in the early stages of their infection curves.

Our extensive webs of human connection are the proximate cause of the virus's rapid spread around the globe, highlighting, like nothing in recent memory, our global interconnectedness.

Ironically, those same links are also critical to the solution to the problem.

Across the impact investing community, COVID-19 is prompting a global response that those of us in the impact investing community have been proud to witness. Impact investors are doing what they do best: leveraging the power of finance to address the world's biggest challenges. It is already becoming clear that the ripple effects of the pandemic intersect with many of the goals impact investors have focused on for years: broadening access to affordable health care and housing, creating quality jobs, and building more sustainable agriculture and energy systems.

Among the hundreds of member organizations in the Global Impact Investing Network, tangible actions aimed at changing the course of the pandemic are unfolding. At the GIIN, we see those actions falling into three primary phases: a response phase, with a focus on immediate health and financial needs; a recovery phase, with a focus on rebuilding and tackling the social and economic impacts of the pandemic; and a resilience phase, with a focus on long-term systems change.

In many cases, impact investors are adjusting financing terms for existing investees as a first and immediate response. By making debt repayment terms more forgiving, impact investors are ensuring that social and environmental enterprises can continue to provide critical services — even as many struggle to overcome virus-related cash crunches.

Many impact investors also are offering bridge loans to their investees. Such loans are meant to help businesses cover expenses like payroll, rents, and other operational costs until emergency government aid arrives or consumer demand revives. Others in the GIIN network are expanding microfinance eligibility criteria and loan size, while still others are actively seeking out new investments that can help the world address the global public health emergency — proving, if nothing else, that not all liquidity has dried up.

Development banks across nearly all continents are issuing new bonds at a rapid clip. The proceeds will finance projects with broad COVID-related impacts. These projects are focused on things like improving the efficiency of healthcare systems, supporting the unemployed, and reducing friction in disrupted supply chains.

While we expect the near-term response by impact investors to the pandemic to grow in volume, actions by development finance institutions indicate that many in the impact investing community are thinking a step ahead to the medium-term investments needed to address a host of issues, including global under- and unemployment and inadequate health care, during the post-pandemic recovery phase.

As these efforts take shape, a central theme is becoming clear: in order to be truly effective, the global post-pandemic recovery will require the full spectrum of capital — from philanthropic to commercial. As things stand, we are seeing signs that blended-finance structures — long noted for their potential to bring different types of investors together to address urgent challenges — could rise to a new level of prominence. Such structures use philanthropic grants or concessionary capital to reduce investors' risk and catalyze the entry of larger pools of market-rate-seeking capital into investments with the potential to drive deep impact.

Just as we need to rely on one another more than ever during this crisis, we also need investors and grantmakers to work together as never before. But as we work together to respond to and recover from the impacts of the coronavirus, we must not lose sight of our longer-term goals. The crisis is laying bare deep inequities in our healthcare and financial systems and causing the most harm to those who were already the most vulnerable: the poor, the ill and elderly, minority communities, women and girls. As we strive to become more resilient in the years after the crisis has passed, we must do everything in our power to prevent those inequities from taking hold again.

Our collective efforts over the coming months are likely to shape the way we approach the biggest global challenges we face for decades to come — challenges such as the climate emergency, which, like COVID-19, ignore international borders.

Headshot_giselle_leungAs you begin, in the coming months, to chart your "new normal," I urge you to remain mindful of that broader perspective and to hold tight to a shared vision of a more just, equitable, and resilient future — and to invest in it.

Giselle Leung is managing director of the Global Impact Investing Network.

Xavier de Souza Briggs, Vice President, Economic Opportunity and Markets, Ford Foundation: Changing the World Through Mission-Related Investing

June 01, 2017

In April, Darren Walker, president of the Ford Foundation, the second largest foundation in the United States and one of the most influential in the world, announced a billion-dollar commitment over the next decade to mission-related investments (MRIs). In making the announcement, Walker expressed a belief widely shared within his organization that "MRIs have the potential to become the next great innovation for advancing social good." Walker further suggested that foundations needed to expand their imaginations and tools if they hoped to successfully address "the large-scale problems facing the world today" and added that they shouldn't "neglect the tremendous power of markets, including the capital markets, to contribute."

Ford isn't the first foundation to commit itself in a significant way to mission-related investing, although its commitment would appear to be the largest by a foundation to date. Since the late 1990s, the F.B. Heron Foundation in New York City has distinguished itself as a pioneer in the field, and under the leadership of its president, Clara Miller, has become increasingly willing to challenge others "to jettison outdated operating models that leave resources untapped in the face of systemic social ills." Foundations such as Kresge, Packard, and Surdna have followed suit.

Shortly after Walker's announcement, PND spoke with Xavier de Souza Briggs, vice president for economic opportunity and markets at the Ford Foundation, about the foundation's decision, how and where the funds will be allocated, and what the move means for the field of impact investing.

De Souza Briggs joined the foundation from the Massachusetts Institute of Technology, where he was a professor of sociology and urban planning in the Department of Urban Studies and Planning. An award-winning author, commentator, and educator, he served from January 2009 to August 2011 as associate director of the Office of Management and Budget in the Obama White House. His most recent book, Moving to Opportunity: The Story of an American Experiment to Fight Ghetto Poverty, was published by Oxford University Press in 2010.

Headshot_xavier-de-souza-briggs_220Philanthropy News Digest: Let's start with a question I'm sure many of our readers are asking.What are mission-related investments?

Xavier de Souza Briggs: MRIs are investments that pursue both attractive financial returns and social impact, also known as social returns, and they are made from a foundation's endowment, rather than counted against its program payout. That's the IRS definition, not ours, and private foundations have been making them for a while, albeit not on the scale of a billion dollars.

PND: Why did Ford decide that this was the right time to allocate a billion dollars to MRIs?

XSB: Well, first of all, we felt it was important, at this particular moment, to align as many of our assets as possible with our mission. That includes our grantmaking, of course, and our program-related investments, which, again as defined by the IRS, is the other kind of impact investment that foundations can make. Our building in Manhattan, where we've convened changemakers and social sector leaders for many years, is an important asset, too. But we've never made investments toward our mission out of our endowment, and we felt that, at this moment, the impact investment market was ready for us to take this step. And the board agreed, which is why it approved MRIs of up to a billion dollars over ten years. Now, we're going to be careful and gradual about how we put those funds to work, but we're quite excited about the opportunity.

PND: Did the board have any reservations?

XSB: The board had a set of smart questions. Are the investable opportunities really there? Are we confident that we can generate social return in addition to financial return, which is better understood and more easily measured? They were good, smart questions, and the board was very prudent in its approach to oversight. But ultimately it concluded, based on the foundation's many years of experience with impact investing, that we were ready and the market was ready, and that by stepping up now we could help catalyze a broader movement in the impact investing field, which includes not only foundations but other major institutional investors such as pension funds, sovereign wealth funds, and university endowments. That's where the really big pools of investable capital are, and that's where the larger promise lies.

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NGO Aid Map: See More. Do Better.

June 13, 2014

Headshot_julie_montgomeryThere are certain moments in your life that you never forget. Some of mine include graduating from college, buying a home, and having a baby. The same thing happens in one's career, and for me, Wednesday was one of those moments.

For the past six years, InterAction has been using online maps to help tell our members’ story. Wednesday was important because we launched a new global map on InterAction's NGO Aid Map, one that will allow us to tell this story as it applies to all countries and all sectors.

As the world of development actors continues to grow and expand, it is more important than ever to make aid smarter. One way to help improve aid is through data sharing, but in the midst of a data revolution, how does one make sense of it all?

It may sound simple, but gathering up-to-date, standardized data from NGOs is no small feat, even for InterAction — an alliance made up of more than one hundred and eighty individual organizations working to advance human dignity and fight poverty around the world.

Collecting data is one thing, but ensuring that it stays relevant, useful, and accessible is a massive undertaking. That is why we built the NGO Aid Map, an online platform that demonstrates, using maps and other data visualizations, where our members work and what they do around the world. Through data, we can help determine whether we are on the right track to fighting poverty.


Now that you know why Wednesday mattered to me, I'd like to share five reasons why NGO Aid Map should matter to you:

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Weekend Link Roundup (March 3-4, 2012)

March 04, 2012

Lion_lambOur weekly roundup of new and noteworthy posts from and about the nonprofit sector....

African Americans

In a followup to her post last week on NCRP's Keeping a Close Eye blog, Niki Jagpal reminds of us how Black History Month came to be and, with an eye to this year's theme, asks others to share their stories "about the innumerable contributions that our African American sisters have made to our culture and society and the role that they play today in philanthropy in the continuing struggle for equity and justice."


On her Getting Attention blog, Nancy Schwartz makes the case for marketing as the key driver of "how your organization builds and strengthens [its] relationships with the people whose help you need to move your mission forward." If your organization isn't paying attention to how it markets itself, adds Schwartz, it's "losing out on the potential to develop more and stronger relationships."


On his Open Book blog, David Roodman shares a couple of charts illustrating the rise and decline of Indian microfinance.

Nonprofit Management

Over at the Nonprofit Quarterly, Kate Barr and Ruth McCambridge take issue with the findings of a recent report from the Center on Philanthropy at Indiana University which surveyed 526 nonprofit financial managers at midsize charities -- those with revenues between $1 million and $5 million -- and concluded that many of those professionals have gaps in their financial knowledge. Write Barr and McCambridge:

The report is heralded by a press release entitled "Gaps in Financial Knowledge Challenge Mid-Size Nonprofits" but there is no information in the survey results or even in the report that supports the claim that the nonprofits represented have any particular or acute challenges that could not be explained by a bad economy. In fact, about half have more than four months of operating funds in the bank and about a quarter have more than seven months' worth....

In the Spring issue of the Stanford Social Innovation Review, Peter Kim and Jeffrey Bradach look at a few themes that provide insight into what has shaped, and will continue to shape, the growth of a new class of super-sized, $50 million-plus nonprofits.

Social Good

Using examples from the recent Give to the Max Day: Greater Washington, Geoff Livingston, vice president of strategic partnerships at Razoo, offers sixteen tips on the Case Foundation blog for nonprofit organizations and funders looking to participate in a giving day or other online social good contest.

Elsewhere, the Acumen Fund's Sasha Dichter shares an interview at Say100 Media in which he explains why Generosity Day, a day-long event in February that sought to inspire generous acts nationwide, was a success.

Social Media

Facebook is now making its Timeline format available to organizations with a brand page. To help nonprofits get started, social media guru Beth Kanter offers a list of tips in a post on her blog.


In a guest post on the Communications Network blog, Philanthomedia's Susan Herr shares a video in which Foundation Center president Brad Smith explains why foundations have a responsibility to communicate their role in driving social change.

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a great week!

-- The Editors

Microfinance and the 'Smart Campaign'

February 17, 2012

After a tough year, the microfinance industry is looking to heal itself. As Elisabeth Rhyne, managing director of the Center for Financial Inclusion at ACCION, writes in PND:

It could be argued that, after two decades, microfinance was slow to develop a client protection consciousness. (One might say something even stronger about the mainstream financial sector in the U.S.) After all, a sector built with intent to improve the lives of the poor should have the best interests of its clients at heart. And I believe it does. But the microfinance community — and here I include myself — was naïve in thinking that its good intentions would always benefit clients. We assumed too readily that borrowers always benefited from our services and thus the more borrowers, the greater the benefit. The drive for growth caused some providers to cut corners, lose their focus on quality, or simply be blind to the possibility that some clients were experiencing substandard treatment.

It took several instances of rapid growth leading to client over-indebtedness -- particularly in Bosnia, India, Morocco, and Nicaragua -- to make it clear that a model geared toward reaching people as fast as possible needed adjustment. In addition to the Smart Campaign, the microfinance industry is working on initiatives such as Microfinance Transparency (which promotes the release of comprehensive pricing data), as well as efforts to increase credit information reporting to identify clients who may be over-indebted. In Bosnia, MFIs have worked together to create a debt counseling center.

As the Smart Campaign has delved into the actual practices of MFIs through on-site observation, we find that most MFIs implicitly have been practicing client protection, even if they have not made explicit reference to the principles. The Smart Campaign recently analyzed the results of on-site third-party assessments of more than three hundred and fifty MFIs. The overwhelming majority (88 percent) earned passing scores. This exercise was a first-ever assessment of practices, mostly by social investors carrying out pre-investment due diligence, and we expect such assessments to grow more rigorous in coming years. Meanwhile, on-site assessments of MFIs like these are helping organizations identify their weaknesses and take steps to correct them....

Read Rhyne's commentary and learn more about the Smart Campaign here....

2011 Year in Review: Microfinance Vows to Do Better

December 29, 2011

Once viewed as pioneers in the fight against poverty, microfinance institutions (MFIs) -- under siege since 2010 when loan default rates in many developing countries soared and Indian politicians accused lenders of exploiting the poor -- faced growing political hostility and calls for stricter regulation in 2011.

The year got off to an inauspicious start when Bangladeshi prime minister Sheikh Hasina, long a champion of microfinance, accused MFIs in general and Grameen Bank and its Nobel Peace Prize-winning founder, Muhammad Yunus, specifically of "sucking blood from the poor in the name of poverty alleviation." In January, nearly a month after a documentary film on Norwegian state television raised questions about the use of $100 million in Norwegian aid funds by Grameen in the 1990s, Hasina initiated a probe into the matter -- despite assurances from the Norwegian government that the bank had been cleared of wrongdoing.

Subsequently, Hasina moved to dismiss the 70-year-old Yunus as managing director of the partially government-owned bank on grounds he was well past the country's mandatory retirement age of 60 -- a move that Yunus supporters viewed as politically motivated. While an investigating committee failed to dig up anything it could use against the bank, the Bangladeshi High Court rejected Yunus' appeal of the order, and he resigned from the bank in May.

That same month, the Reserve Bank of India issued new regulations capping interest rates and margins for MFIs operating in the country, limiting the size of loans and total debt per household, and requiring a minimum loan term and other protections for borrowers.

Meanwhile, MFIs continued to expand their operations in other countries, many with an eye to integrating their lending with so-called livelihood services. As of February, for example, Seattle-based Global Partnerships had invested $4.5 million of a new $20 million social investment fund in six Latin American MFIs -- all of which bundle their loan activities with business education, health services, agricultural training, and other services -- and expected to disburse the fund's capital by year-end. In March, a $25 million grant from the MasterCard Foundation enabled Bangladesh-based BRAC, the world's largest nongovernmental development organization, to export its "microfinance multiplied model" to Uganda and expand its capacity to undertake longitudinal analyses of the effectiveness of its integrated microfinance and livelihoods model. And in May, Opportunity International, a global nonprofit microfinance institution headquartered in Oak Brook, Illinois, was awarded a $2.5 million grant by the United Nations Capital Development Fund to provide access to safe savings accounts, business loans and training, and other services in the Democratic Republic of Congo -- a grant followed, in July, by a $2.5 million award to the organization from the John Deere Foundation to expand its community banking network in Ghana, Malawi, Mozambique, Rwanda, and Uganda.

As of October, roughly a year after the Indian state of Andhra Pradesh promulgated an ordinance regulating microfinance activities, MFIs reportedly had stopped making new loans in the state. At the same time, many appeared to be committed to improving their accountability and client protection practices. Indeed, the Smart Campaign, a global initiative committed to embedding client protection practices into the institutional culture and operations of the microfinance industry, issued a report (48 pages, PDF) in November that examined MFI practices in areas such as preventing over-indebtedness, transparency, responsible pricing, protection of client data privacy, and mechanisms for complaint resolution and gave 88 percent of the rated MFIs overall passing marks.

"The fact that we now have data from almost five hundred third-party, external assessments of client protection practices at MFIs shows the extent to which the microfinance industry has committed itself to accountability on this all-important front," said Smart Campaign director Isabelle Barrès. "Responsible finance is assured when we develop and apply tools to hold MFIs accountable for the way they interact with customers."

Related Links:

Government of Bangladesh to Investigate Grameen Bank (1/14/11)

Global Partnerships Announces Investment of $4.5 Million in Latin American MFIs (2/23/11)

Bangladesh Court Upholds Order to Dismiss Yunus as Head of Grameen Bank (3/09/11)

5 Questions for...Alex Counts, President and CEO, Grameen Foundation (3/23/11)

BRAC Receives $25 Million to Expand Microfinance Model in Uganda (3/31/11)

Yunus Loses Final Appeal (4/7/11)

Reserve Bank of India Issues New Microfinance Regulations (5/04/11)

Bankers Without Borders Announces Partnership With Association for Enterprise Opportunity (5/08/11)

UN Capital Development Fund Awards $2.5 Million to Expand Community Banks Network Into DRC (5/15/11)

Opportunity International Receives $1.3 Million From Credit Suisse (5/24/11)

John Deere Foundation Awards $2.5 Million for Banking on Africa Initiative (7/08/11)

Microfinance Industry Embraces Accountability, Report Finds (11/13/11)

Paths Out of Poverty: Microfinance and Social Entrepreneurship in the 21st Century

October 20, 2011

(Amit Shah is a Massachusetts-based digital and print entrepreneur, co-founder of Green Comma, and an observer of microfinance possibilities and solutions. In a previous postfor PhilanTopic, he wrote about literacy for a new generation.)

TIMS_logoIn September, I attended what was billed as North America's largest microfinance conference, the Toronto International Microfinance Summit (TIMS), at the Allstream Centre in Toronto. In addition to the conference, TIMS also held a fundraising gala, with proceeds going to support domestic and international microfinance projects and an educational scholarship.

The inspiration of the Rotarian Action Group for Microcredit(RAGM) and Rotary International's District 7070 Microfinance Committee, the event is run entirely by volunteers. And for the second year, the MasterCard Foundation provided financial assistance for the first hundred college and university students who registered to attend the conference.

The theme of this year's event was "From Microcredit to Financial Inclusion: Making a Difference in our World," and the conference program featured more than forty presenters from thirty organizations.

Of course, the origins of microfinance are familiar to many. In 1974, in the midst of a terrible famine in Bangladesh, Bangladeshi economist and Fulbright Scholar Muhammad Yunus made a $27 loan to a 42-year-old woman who made cane chairs; she had borrowed the money originally from a local usurer at an astonishingly exorbitant rate. The loan was repaid in full -- and the seed for what eventually became Grameen Bank, a "bank for the poor," was planted.

Today, Grameen is known and admired around the world, and Yunus and his revolutionary idea have been recognized with the Nobel Prize Peace Prize. More importantly, Grameen has lent some $5.7 billion to more than six million Bangladeshis, and his idea has spread around the world.

But while terms such as microfinance, microlending, social business, and social entrepreneurship have become part of our 21st-century lexicon, they are frequently misunderstood by people for whom these activities and issues are a central concern. That may be changing, however, as the microfinance conversation increasingly enters the mainstream. (See, for example, this recent Sunday New York Times Magazine profile of Diana Taylor, the high-visibility board chair of Accion, one of the largest MFIs in the world.)

Given the growing interest in the topic, I spent a good deal of my time at TIMS speaking with other participants and presenters about the overarching issues in the social investment sector. Those I spoke with included Thomas Haubenreisser, vice chair, TIMS 2011 Planning Committee and the founder of Invest 4 Impact, an advisory firm committed to the advancement of impact investing; Beck Pryor, project manager, Community Enterprise Solutions; Joyce Kaplan, associate, Solar Ear, which manufactures a low-cost hearing aid charged by solar-powered batteries; Joseph Appalsamy, director, social ventures, Dream Fund Holdings; and Mignonne Spiegelman, associate, WiUS Remittance, Inc.

Their answers to some of my questions follow:

Amit Shah: What are the most challenging issues in the microfinance and social entrepreneurship spaces?

Beck Pryor:In my opinion, the top three challenges in microfinance and social entrepreneurship are scalability, impact measurement, and profitability. The effective scaling of the solutions that are at the forefront of social entrepreneurship is key to global impact, but growth in this sector is very difficult. You are working in a field where money is almost always limited, and for some reason, fierce competition, as opposed to collaboration, is the norm. Instead of organizations with similar goals working together, they fight each other for donors and international attention. So for social entrepreneurs, finding a way to scale -- in part by finding sources of funding that allow growth on a truly impactful level and partnering effectively with those around the world who are working toward the same goals -- is both a challenge and a requirement for success.

Another challenge in social entrepreneurship is impact measurement. Finding quantifiable ways to measure the impact of a model or an activity on a target population is integral to the health and growth of an organization: it allows you to test what is working and what is not, it proves to the community that your work is important, and it attracts the attention of donors/investors. But in this work it is often difficult to measure impact. Take the example of a large microfinance institution. Let's say that in a given week this MFI gives out a hundred loans. Its primary goal is to ensure that these loans are paid back. Can the MFI measure its "success" in number of loans administered? Sure. But what does this really mean? If all one hundred of these loans lead to the creation of successful new businesses, then yes, this has been an impactful endeavor. But what if fifty go to non-income-generating activities, such as taking a sick child to the hospital? What if fifty people have to take out another loan to pay back the first? Is the MFI still successful? For the MFI to really understand its impact, it needs to know how each and every loan it administers is used — in both the short and long term. Perhaps this is feasible, perhaps it is not. But if an organization values its impact, and it should, these are important issues to consider.

The third challenge I see is managing profitability. With the increasing focus on the concept of social business, how do we balance financial and social return? An organization has to be financially viable in order to be sustainable, but a development organization should not be so focused on increasing its financial return that it sacrifices its social impact while doing so. In my opinion, as the sustainability and viability of social entrepreneurship organizations come increasingly under scrutiny, the challenge of profitability and managing this double bottom line will become ever more important.

Thomas Haubenreisser:The challenges in microfinance that are also common in social enterprises to some degree include the following: Shifting the mind-set from "charity" or "not-for-profit" to thinking of business as something that can add value to society and be profitable/self-sustaining without being seen as "usury." Building scale as a path to sustainability is also a critical issue for microfinance and social enterprise start-ups. In microfinance, a significant challenge is to do more with less and become a legitimized financial institution that can offer full financial services that include savings, insurance, and money-transfer services.

Joseph Appalsamy:With millions of microcredit deals by thousands of MFIs taking place, it's time for the MFI industry to convene around such issues as establishing standards, adopting best practices, and enforcing a code of conduct like that of most professional industries. Microfinance is too important an innovation and yet too fragile a mechanism to be left to the mercy of government regulators. A starting point in consensus building would be to agree about what constitutes social performance. A free and easily adoptable framework available to MFIs and donors by the Social Performance Task Force is a good place to start. 

Another question is "What's next?" for the borrower who has repaid her loan and moved up a notch on Maslow's hierarchy of needs. Such a person would need bank and financial services that before she never had a need of. She would need more "options," such as expanding her business, hiring workers, franchising, even becoming an exporter herself. As all first-year business students are taught, 80 percent of your business will eventually come from 20 percent of your clients. MFIs should not create a no-next-level or closed-second-floor scenario for their enterprising clients. MFIs then need to deliver financial literacy, personal and professional skill development to make the entrepreneur successful.

And, finally, the MFI industry, needs to look at the "cost of money" to make more funding available through venture philanthropy and the emerging field of impact investing.

AS: What panel discussion really got your attention?

Thomas Haubenreisser:If I had to choose, "Financial Access Through Mobile Banking and Technology" would be the one, since it clearly demonstrated the potential of technology to help lift people out of poverty. The fact that 90 percent of poor people in developing countries don't have access to financial services, while many have access to mobile phones, presents a unique opportunity for microfinance institutions to increase the value they offer the poor. The session did an amazing job of sharing the vision of the Bill and Melinda Gates Foundation in this regard, while also demonstrating what is actually happening at FINCA in Uganda, where they have introduced mobile technology as part of their service platform.

Beck Pryor: The panel that was the most enlightening for me was "Investment Funds That Have Impact." Referencing my third point above, an interesting aspect of the panel was how the different funds handled financial return. Oikocredit, for example, caps its financial return to investors at 2 percent, meaning that any return on investment (ROI) above 2 percent goes back into the organization. Sarona Asset Management, on the other hand, aims at a much higher financial ROI of upwards of 8 percent to 10 percent.

The logical follow-up here is, again, much to the third challenge I mentioned above: How do you balance financial and social return on investment (SROI)? At the Social Good Summit in New York this week, Muhammad Yunus stated that any MFI looking to generate revenues of more than 15 percent above costs is not in fact microfinance, as he defines it, and should call its model something different. Obviously there is space enough for the Oikocredits and the Grameens and the Saronas of the world to fulfill different goals and create different types of impact, but a discussion of the different approaches to this issue would be quite interesting.

Joyce Kaplan:I attended "Local Microfinance: Learn the Process and Meet the Clients," where the panelists were entrepreneur clients, a volunteer mentor, and an executive from Toronto-based Access Community Capital Fund. It was enlightening to realize there is a need right here in Toronto. It was really interesting to see how the policies and processes of the fund were applied to building real-life businesses from scratch, business that might not otherwise have had a chance.

Joseph Appalsamy: I found "Social Enterprises: Transforming Lives by Linking Markets" to be the most enlightening, engaging, and even frightening. One panelist was just starting out, another had built a modest business that created jobs, and the third -- well, let's just say it knocked my shoes off with the level of social impact and market sophistication required to sustain it.

What I saw was the past, present, and future of social investment -- a metamorphosis that affects all of us involved. I learned about the essential role the donor-based MFI played in the larval stage, where the need, survival, is purely personal; the role of an expanded-service hybrid MFI facilitating the transformation from newly minted borrower to seasoned entrepreneur; and, lastly, the role investors can play now that blended-value returns are possible.

AS: What issues and challenges require further exploration?

Beck Pryor: As impact investing becomes an increasingly larger and more global field, I think there are a number of different approaches necessary to create an engaging discussion surrounding the sector. I would like to see a focus on investors and investees from a financial perspective: Who is interested in funding social businesses? What sort of returns are they expecting, and how do they expect them to be achieved? What do investment funds mean to social businesses? What social businesses are looking for investments, and what types of returns do they believe they can provide? Why become a social business instead of an NGO? I would love to see those questions covered in another conference setting featuring projects that are operating in the impact investor and impact investee space.

Thomas Haubenreisser:I would welcome greater focus on evolving areas such as insurance and payments, to show how microfinance is actually evolving. Controversial areas that are rarely talked about include, for example, the role of charity/NGOs in the sector and when do they transition from nonprofit to for-profit? Interest rates also are controversial, and we need to get better transparency and understanding of the whole risk-reward, cost-profit picture of microfinance organizations.


In my next two posts, I will focus on the needs-analysis process and development and delivery mechanisms in the microfinance space, as well as the always-critical sustainability plans for specific projects with a demonstrated track record of success.

In the meantime, feel free to share your own thoughts about pressing issues and challenges in the microfinance and social investment spaces. Here are a few that were surfaced at the conference: Is there a crisis of identity in the MFI sector? Have the scandalous lending practices of profit-seeking MFIs in Andhra Pradesh(in India)  accelerated the need for self-regulation in the microfinance space? Are notions like "museum of poverty" a pipe dream without proven sustainable financial models? And how does Kiva, the wildly popular person-to-person online microlending powerhouse, impact economic behavior in a region? Is it a form of unregulated philanthropy?

-- Amit Shah

Weekend Link Roundup (July 30 - 31, 2011)

July 31, 2011

Dog-days Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....


On the National Committee for Responsive Philanthropy’s Keeping a Close Eye blog, Aaron Dorfman looks at the largest grants awarded in recent years for advocacy and organizing efforts and wonders whether (and how) we should be keeping score.

Corporate Philanthropy

Writing on Forbes's CSR Blog, James Epstein-Reeves explains the difference between corporate social responsibility and philanthropy. "You see, CSR is much broader than philanthropy," writes Epstein-Reeves. "CSR looks to change business operations in a way that maximizes a company's benefits to society and minimizes the risks and costs to society -- all while keeping the company focused on creating business and brand value. The idea that a company can be socially responsible while only and exclusively focusing on philanthropy is as old-fashioned as my grandmother serving me Ovaltine while we huddle around waiting for the latest news from the telegraph...."


On her Good Intentions Are Not Enough blog, Saudra Schimmelpfennig has some advice for donors interested in supporting microfinance projects.

Nonprofit Management

Hosting this month's Nonprofit Blog Carnival, Britt Bravo shares a selection of blog posts chock-full of time-management tips.


In a recent post on the Deep Social Impact blog, Ellen Remmer makes a case for why passion "can play a critical role in achieving deep social impact" in philanthropy.

Sean Stannard-Stockton argues in a Tactical Philanthropy blog post that foundations should "subject themselves to external accountability as a tactic to achieve better results." Writes Stannard-Stockton:

I think foundations should be free to run their programs in any way they like within the bounds of the law. But for foundations that strive to be effective in their giving, some sort of "pre-registration" of new programs could be very helpful in keeping them focused and motivated.

Self-discipline is critical for success in every domain of human endeavors. But self-discipline is hard. One savvy way to stay on track towards the results you seek is to voluntarily create systems that maintain pressure on you to perform. We all face moments when we're tired and can’t keep up. Or moments of judgment when we need to grade ourselves but go too easy and choose not to face hard facts. Creating a system of external accountability can help us accomplish our goals, whether those goals are getting in shape or running effective philanthropic programs.


On her Philanthropy 2173 blog, Lucy Bernholz wonders how "the choices we make organizationally reflect our view of who is a stakeholder in an issue? And how is this changing with technology?"

"Technology makes it possible for a charity of any size to deliver a far better experience at very little cost," writes Katya Andresen on her Non-Profit Marketing blog. "We have no excuse not to do better, and it's dangerous not to improve our engagement drastically...."

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a great week!

-- Regina Mahone

A 'Flip' Chat With...Premal Shah, President, Kiva (Parts 2 and 3)

June 15, 2011

(The videos below were recorded as part of our 'Flip' chat series of conversations with thought leaders in the nonprofit and philanthropic sectors. You can check out other videos in the series here, including our previous chat, with Big Duck VP of client relationships and strategy Farra Trompeter.)

In part one of our three-part video conversation with Premal Shah, president of the online microlending site Kiva, we asked Shah to explain how Kiva works, where it fits into the microfinance landscape, and how it has been received by more established players in the field of philanthropy.

In part two (below), we ask Shah about the SMART campaign, a global effort to create and promote agreed-upon principles for the microfinance industry; the difference between profiting from and exploiting the poor; and Americans' awareness of microfinance in general.

(If you're reading this in an e-mail, click here.)


(Running time: 5 minutes, 43 seconds)

And in part three, Shah talks about Kiva's growing presence in the United States; the obstacles to the continued development of microfinance in this country; and what he's most excited about as he looks ahead a year or three.


(Running time: 6 minutes, 3 seconds)

What do you think? Is Kiva changing the way the world thinks about the billion or so people at the bottom of pyramid (BoP)? Will the organization's first-mover advantage continue to insulate it from meaningful competition? Does microfinance have a future in the United States? What could or should Kiva be doing to have even more of an impact?

Share your thoughts in the comments section below.

-- Matt Sinclair

A 'Flip' Chat With...Premal Shah, President, Kiva (Part 1)

June 14, 2011

(This video was recorded as part of our 'Flip' chat series of conversations with thought leaders in the nonprofit and philanthropic sectors. You can check out other videos in the series here, including our previous chat, with Big Duck VP of client relationships and strategy Farra Trompeter.)

For much of its existence, Kiva.org -- an online platform that enables people to make small loans to poor people in developing countries -- has been one of the coolest nonprofit Web sites around. Founded by Silicon Valley entrepreneurs Matt Flannery and Jessica Jackley in 2005, the organization capitalized on its Silicon Valley connections -- its current president, Premal Shah, was a product manager at PayPal -- and the Web 2.0 boom to become the darling of social change activists and the DIY philanthropy crowd in just a few years.

Indeed, by the end of 2009 the organization had won a Skoll Award for Social Entrepreneurship and a Webby People’s Choice Award, had been named one of TIME’s “50 Best Web Sites” (2008), had registered more than 250,000 users, and had facilitated over $100 million in loans.

That same year (2009), the organization announced that it was piloting a program in the U.S. to allow individuals across the globe to make small loans to U.S. entrepreneurs through its field partners, ACCION USA and the Opportunity Fund. A year later, with unemployment hovering in the low double digits, Kiva announced a $1 million contribution from Visa to expand its reach within the U.S. generally -- and, through the addition of ACCION Texas-Louisiana, the largest microfinance institution in the country, the Gulf Coast specifically -- and further empower small businesses.

Having been named one of Oprah’s Favorite Things of 2010, the now five-year-old organization continues to expand. During the recent Microfinance USA 2011 conference in New York City, PND spoke with Premal Shah about the state of the microfinance industry, how the field of philanthropy has responded to Kiva’s emergence, and the status of the organization’s efforts in the U.S. Part one of our chat with Shah is posted below; parts two and three will follow tomorrow.

(If you're reading this in an e-mail, click here.)


(Total running time: 5 minutes, 36 seconds)

What do you think? Is Kiva changing the way we think about the billion or so people worldwide at the bottom of pyramid (BoP)? Is the organization's business model sustainable? What should it be doing to have even more of an impact?

-- Matt Sinclair

Weekend Link Roundup (April 16-17, 2011)

April 17, 2011

Burberry_april_showers Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....


Writing about his favorite topic, social media, Zoetica co-founder Geoff Livingston says he hopes that "amateur hour is over, and that unknowledgeable social media communicators go the way of the dodo bird...."

Disaster Relief

Last Monday marked the one-month anniversary of the massive 9.0 earthquake and tsunami that struck northern Japan, a calamity that claimed the lives of at least 13,000 people and has left more than 154,000 people homeless. On the GiveWell blog, Holden Karnofsky provides a thorough update on the philanthropic response to the disaster.


Nonprofit Quarterly correspondent Rick Cohen takes a closer look at a new report from Boston-based Commongood Careers and the Level Playing Institute which suggests that while nonprofits are perceived as valuing diversity and inclusiveness, they often fail to live up to those goals. While Cohen generally agrees with the report's findings, he also notes that "real diversity includes providing the opportunity for marginalized population groups to have a stake in the organizations, not just paychecks."


On the Deep Social Impact blog, Maureen O’Brien and Cynthia Gibson share findings from the 2011 Millennial Donor survey, which analyzed giving trends among nearly 3,000 respondents between the ages of 20 and 35. According to the survey, "Millennials don't actually prefer to donate through texts, mobile apps, Twitter or Facebook...[and] Millennials, who are commonly seen as following Hollywood trendsetters, are really not swayed to give by celebrity endorsements." Surprised? We didn't think so. But as O'Brien and Gibson note, "The data gleaned from this study are hard to interpret without comparable data from other generational cohorts."

"For the last hundred years Americans have given about 2% of income to charity," writes Sean Stannard-Stockton in a recent post on his Tactical Philanthropy blog. "This percentage has been remarkably consistent during good times and bad. Maybe the key to increasing the amount given to charity is to get away from the 'give because it is good for you' (good for your soul, good for others, something you 'should' do) approach and embrace a philanthropy as junk food mentality...." Read the rest of Sean's post to see what he means.

A number of philanthropic leaders who traveled to Philadelphia this week for the Council on Foundation's annual conference shared their thoughts and perspectives on Kris Putnam-Walkerly's Philanthropy 411 blog. We especially liked the posts by Levi Strauss Foundation social media fellow Jorge Cino, who in a three-part series provided a look at how the foundation communicates its work through stories; Draper Consulting Group president Lee Draper, who recapped a lecture on diversity and philanthropy by Ambassador James Joseph; and Horizons Foundation executive director Roger Doughty, who discussed the importance of investing in fundraising to increase overall giving.

National Committee for Responsive Philanthropy field associate Christine Reeves shares her top ten themes and takeaways from the Emerging Practitioners in Philanthropy conference, which also was held last week in Philadelphia.

Social Entrepreneurship

Philanthropy Action's Tim Ogden commends the "Microfinance in Crisis?" panelists at this year's Global Philanthropy Forum for acknowledging that it's time for the industry to reflect on where it is and where it is going. But Ogden being Ogden, he goes on to criticize the panel and the industry at large for not digging deeper into "how microcredit clients are managing cash flows and the rest of their financial lives when they no longer have confidence in the availability of microcredit."


In conjunction with National Volunteer Week, Idealist's Amy Potthast shares three volunteering ideas "that even busy professionals -- including folks with families -- can try."

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a great week!

-- Regina Mahone

Weekend Link Roundup (March 26-27, 2011)

March 27, 2011

Crocuses_snow Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Arts and Culture

In a post on his Createquity blog, Ian David Moss deconstructs the recent controversy sparked by NEA chair Rocco Landesman’s comments about supply and demand in the arts. The "phenomenon of oversupply...is far, far bigger than the nonprofit arts sector," writes Moss.

It affects industries ranging from video games to smartphone application stores, Facebook, cable TV, and yes, blogs. In many ways, it is existential in scope: our brains and lifespans are not built to withstand this onslaught of choices. The supply of artists, arts organizations, and even capital may increase with relative ease, but the supply of time in the day, last I checked, remains pretty constant.

So to me, the conversation we should be having is not about reducing supply. Instead it is about defining the responsibilities of cultural institutions to provide stewardship for a world in which supply of creative content is exploding and will never shrink. In this era of infinite choice, there is a desperate need for guidance as to how we should allocate the precious few hours that we have to experience something that will feed our souls, make us think differently, or incur a hearty laugh. In other words: for curation. We need someone to listen to, watch, and view all of the chaff so that we can confine our own time to the wheat....


On her Non-Profit Marketing blog, Katya Andresen shares findings from a recent study which found that when it comes to social media adoption, the top 200 charities outpace both Fortune 500 and Inc. 500 companies.

To help nonprofit communicators working at emergency response organizations formulate a better ask in the wake of a disaster, Getting Attention's Nancy Schwartz offers some advice on her blog.

Disaster Relief

More than two weeks have passed since a violent earthquake and massive tsunami devastated large areas of northeastern Japan. On the GiveWell blog, Holden Karnofsky updates and clarifies the GiveWell position vis-a-vis to donating to relief and recovery efforts in Japan, especially in light of a bulletin issued this week by the Japanese Red Cross which states that the relief organization, "with the support of the International Federation of Red Cross and Red Crescent Societies, has determined that external assistance is not required, and is therefore not seeking funding or other assistance from donors at this time."


National Committee for Responsive Philanthropy executive director Aaron Dorfman explains why the size and diversity of a foundation's board matters on the organization's Keeping a Close Eye blog.


In the second part of a two-part series on the Foundation Center's Transparency Talk blog, Commonwealth Fund executive vice president and COO John Craig offers a few guidelines for revising the 990-PF form that, says Craig, "would strengthen the sector's own self-regulatory efforts to ensure effective use of the nation's philanthropic resources."

GuideStar president and CEO Bob Ottenhoff proposes three ideas to help high-performing organizations better prepare for "black swans" -– "high-impact, hard to predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology."


On the Philanthropy Potluck blog, Chuck Peterson, vice president of member relations at the Minnesota Council on Foundations, celebrates the fortieth anniversary of the Association of Black Foundation Executives.

Rosetta Thurman explains why nonprofit leaders should not be encouraged to vie for mangement roles like the folks on NBC's hit TV show The Apprentice. Writes Thurman, "Organizations have an enormous opportunity (especially nonprofits) to reframe how they define and reward leadership among staff. If people are only rewarded when they earn promotions, it's much more likely that there will be competition to be the 'top dog.'"


Nice Q&A in the Wall Street Journal with Grameen Bank founder Muhammad Yunus about the Nobel laureate's rift with the government of Bangladesh, what it means for Grameen's future, and the status of succession plans at the bank.


On the Harvard Business Review blog, Uncharitable author Dan Pallotta gives six reasons why a bill proposed by Oregon's attorney general that would strip the tax-deductibility of donations made to organizations spending less than 30 percent of their annual budget on services over a three-year period should be withdrawn.

Social Entrepreneurship

The Case Foundation's Allie Burns rounds up news from and blog coverage of the recently concluded South by Southwest (SXSW) Interactive conference, including a video in which Skimbaco's Katja Presnal chats with PepsiCo social media and digital director Bonin Bough and Fast Company senior innovation editor Ellen McGirt about the most exciting things to emerge at the conference.

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a great week!

-- Regina Mahone

5 Questions for...Alex Counts, President/CEO, Grameen Foundation

March 23, 2011

As recently as 2006, Muhammad Yunus was the nonprofit equivalent of a rock star. That year, Yunus and Grameen Bank, the microcredit institution he founded in the 1970s, won the Nobel Peace Prize, and Yunus was hailed globally as that rare thing: a social entrepreneur who had succeeded in scaling his innovation.

But as a flood of new lenders, many of them for-profit, entered the field, microfinance increasingly came under attack from politicians who questioned its efficacy and critics who derided the often exorbitant interest rates charged by lenders. Adding to the confusion, a Norwegian documentary raised questions about how Norwegian aid funds awarded to Grameen during the 1990s had been used. Even though a subsequent investigation by the government of Norway absolved Grameen of any wrongdoing, Yunus continued to face criticism in Bangladesh, where Grameen is based. Indeed, earlier this year, the Bangladeshi government took steps to dismiss Yunus as managing director of Grameen on the grounds  he had long since passed the country's mandatory retirement age for people working in government-owned banks (the government owns a quarter of Grameen).

Alex_counts Philanthropy News Digest recently spoke with Alex Counts, president and CEO of the Washington, D.C.-based Grameen Foundation, which was created in 1997 by friends of the Grameen Bank to help spread the Grameen philosophy, about the controversy involving Yunus and the future of microfinance in general.

Philanthropy News Digest: Where do things stand with respect to Professor Yunus and the government of Bangladesh?

Alex Counts: First, it's important to note that the Grameen Foundation, with the exception of funding some educational scholarships, does not do any programming in Bangladesh. The Grameen family of organizations there is so well established that we don't feel we would bring anything new to the table.

That said, the fortunes of our sister Grameen organizations matters to us. And while there were many rumors reported in the media, only two material things really happened. One is that the government of Bangladesh set up something called an inquiry committee to investigate Grameen Bank — which, by the way, welcomed the investigation as long as it was impartial and based its recommendations on the facts. Second, the government named a new chairman for Grameen Bank. The position had been vacant for about eight months, and the government has the right to do that. But in doing so, the government of Bangladesh did something unexpected — they appointed Khondaker Muzammel Huq, a former employee of Grameen Bank who did not leave the bank on good terms, to the position. Huq, who was once a deputy of Professor Yunus', was quoted in the New York Times as saying he didn't think Yunus gave enough credit to his deputies. Again, the government had the right to do so, but it certainly raises questions. In addition, there have been a lot of leaks to the media behind the scenes as well as a couple of hostile comments made publicly by the prime minister of Bangladesh, Sheikh Hasina. Of course, since you and I last spoke, the government has taken steps to dismiss Professor Yunus as managing director of the bank, on the grounds that, at the age of seventy, he is well past the country's mandatory retirement age. Professor Yunus has challenged their authority to do this and we believe he has solid legal grounds for doing so. In the midst of all of this, the bank is continuing to operate more or less as it always has.

PND: What effect has the controversy had on Grameen in general?

AC: Unlike many microfinance institutions, Grameen's financial backers are also its borrowers. It is 97 percent owned by the women who borrow from it. Two-thirds of its deposits come from loan clients, while one-third comes from ordinary Bangladeshis who have chosen to open accounts there. The latter group of depositors cannot receive loans and do not own a stake in the bank; they use the bank because it provides a good service. Both groups have remained steadfast. There has been no run on the bank or widespread withdrawal of savings. Its financial backers, so to speak, are waiting the crisis out calmly. The same can be said of its borrowers. Their loan repayments, discipline, attendance at the borrower repayment meetings — what we call center meetings — all have stayed at the levels we saw pre-crisis.

PND: What might the ramifications of the situation in Bangladesh be for microfinance in the larger South Asia region and elsewhere?

AC: As microfinance in countries such as India, Bangladesh, and Bolivia grows to become a significant part of the financial landscape, not to mention a significant piece of national poverty reduction efforts, microfinance groups are going to be subject to more scrutiny from the media and from government. And that means that microfinance organizations, especially in India, are going to have to work harder to develop the case that they actually do help to reduce poverty. This is where the Grameen Foundation has been building on an innovation pioneered by Grameen Bank — namely, the Progress Out of Poverty Index™. It's a kind of scorecard that enables microfinance organizations, at very little cost, to create an evidence base for how quickly their clients climb out of poverty after receiving a microloan or series of loans. We believe it can bolster the pro-microfinance argument within governments and the media while giving pause to those who are opposed to what microfinance organizations are doing. Ultimately, as microfinance organizations grow in scale and scope, they need to be prepared for political leaders to ask hard questions and to even threaten interference in their operations as a way of scoring political points. This is what is happening in India and Bangladesh, and we hope that political leaders in those two countries step back from the brink before the situation evolves into a full-blown crisis.

PND: Is building an evidence base enough?

AC: Probably not. Microfinance organizations need to maintain good relations with both the media and political leaders and not leave their public relations in the hands of others. They need to be proactive. And they need to create some sort of policing mechanism, like a credit bureau, that can determine whether a borrower is becoming over-indebted, as well as consumer protection codes that help define and enforce ethical treatment of clients. The truth is, in every country where microfinance has been introduced, there are some lenders who don't adhere to the high ethical standards of people like Professor Yunus.

PND: Do you have a sense of how the controversy might affect the ongoing rollout of microcredit services in the United States? And what is your organization doing to improve the environment for microfinance, both here and abroad?

AC: I don't see the situation in Bangladesh having any affect on the continued rollout of microfinance in the states. As you know, Grameen America has done very well, for itself and its clients, by introducing the Grameen methodology in a couple of U.S. cities. And there are many other groups in the U.S. that are offering microloans. I've been involved with a group called Project Enterprise that provides microloans in New York City. For what it's worth, the majority of the financial supporters and clients of these organizations are unaware of what is happening in Bangladesh. And among those who have been following the news, the vast majority feel sympathy for and a sense of solidarity with Professor Yunus.

For our part, we've talked to like-minded organizations that are trying to defuse the situation. We've also provided people in the Obama administration and in Congress with information that has enabled them to engage, through diplomatic channels, certain stakeholders in Bangladesh. But we don't believe the situation in Bangladesh has changed how microfinance is perceived in the U.S. or how the Grameen Foundation is portrayed in the media. If anything, it's made Professor Yunus an even more compelling and sympathetic figure.

-- Matt Sinclair

Weekend Link Roundup (March 5 - 6, 2011)

March 06, 2011

Strategic_philanthropy Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Corporate Philanthropy

In conjunction with International Corporate Philanthropy Day, Case Foundation CEO Jean Case suggests in a post on the Case Foundation blog that the corporate sector has yet to fully leverage its potential "to do well by doing good."


In the second part of a two-part series on the Foundation Center's Transparency Talk blog, Beth Kanter explains how foundations can use social networking tools to visualize their network. Kanter also discusses a few obstacles to sucessfully incorporating network-weaving tasks into your daily work and how they can be overcome.

On her Non-Profit Marketing blog, Katya Andresen looks at six "truths" about giving.


At the National Committee for Responsive Philanthropy's Keeping a Close Eye blog, Meredith Brodbeck shares a few suggestions from Steve Mayer of the Effective Communities Project on how "to make the practice of evaluation -- and philanthropy -- better."


On Wednesday, the government of Bangladesh used the the country's mandatory retirement law as a pretext to order the dismissal of Muhammad Yunus as managing director of Grameen Bank. The Nobel laureate's many friends and supporters were quick to condemn the move. "There is a real danger that what is in effect an attempted takeover by the Bangladesh government will do serious damage to Grameen and the people it helps," write Philanthrocapitalism co-authors Matthew Bishop and Michael Green on their blog. "While there are certainly examples of for-profit microlenders harming the poor, we think the greater harm to the poor is often done by the politicians who purport to be on their side...."


On Thursday, Sean Stannard-Stockton sparked a lively debate with a post on his Tactical Philanthropy blog that looked at the differences between tactical and strategic philanthropy. According to Stannard-Stockton, the former involves grantmaking decisions "driven primarily by the questions 'In what enterprise?’ and 'On what terms is the commitment proposed?'" A strategic philanthropist, on the other hand, "sees themselves not as an investor, but as an entrepreneur. A strategic philanthropist believes that [he] can solve the world's problems. They are problem solvers, not investors."

Stannard-Stockton goes on to say:

The investment approach to philanthropy is wholly different from the problem solving approach to philanthropy. This recognition is critical because the two approaches require entirely different methods of implementation....

What do you think? Is Sean on to something? And is the distinction between "tactical" and "strategic" philanthropy helpful? Use the comments section to share your thoughts.

On the Deep Social Impact blog, Cynthia Gibson asks, "If funders and nonprofit leaders heading up organizations with huge budgets aren't willing to personally support what they're doing, why should anyone else?" Why, indeed...

Social Entrepreneurship

Lucy Bernholz takes a look at some of the "overlapping and somewhat exclusive uses" of the phrase social capital on her Philanthropy 2173 blog and wonders "what the rapidity of these definitional changes [say] about technology, finance, and social good."

Social Media

And in the most recent episode of her Social Good podcast, Allison Fine chats with Personal Democracy Forum co-founder Micah Sifry and Global Voices co-founder Ethan Zuckerman about "the role of social media [in] making protests inside of countries with dictatorial governments more visible to the world."

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a great week!

-- Regina Mahone

Weekend Link Roundup (February 19 - 20, 2011)

February 20, 2011

Social_media_group Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....


After doing some more thinking about so-called cause competitions like America's Giving Challenge and the Pepsi Refresh Project, Networked Nonprofit co-author Allison Fine wonders how other groups might structure an effort that combines "the fun of competing without the detriment of causes competing against one another."

"I've always thought the catchphrase 'accounting is destiny!' that Clara Miller and George [Overholser] would throw around when they ran the Nonprofit Finance Fund was a little...nerdy," writes Sean Stannard-Stockton on his Tactical Philanthropy blog. "But it sure seems to me that our simplistic nonprofit accounting standards, paired with our moralistic views around spending money on fundraising, is a major culprit of our undercapitalized nonprofit sector...."

On the Harvard Business Review blog, Uncharitable author Dan Pallotta suggests that we're all to blame for convincing donors that organizations with low overhead costs are more efficient than those with higher costs. Writes Pallotta:

We've been telling the donating public that good charities have low overhead, and bad charities have high overhead. Well, I don't know about you, but when I hear "good," I think, "makes a difference." So, if you tell me [that] good charities have low overhead, then I don't need to know whether the money I give makes a difference. If they have low overhead, I can assume that they do! The Nonprofit Overhead Cost Project at Indiana University's Center on Philanthropy came to the opposite conclusion. Their report, "Getting What We Pay For: Low Overhead Limits Nonprofit Effectiveness," indicates that the charities that spend less on capacity tend to have inferior programs. The donating public might want to know that, don't you think?

We have, as a result of our timidity, managed to confuse a well-intentioned public into basing their giving decisions on the wrong data. That's not what they want. And if they knew that's what we've been up to they'd be pissed....


Still confused about why it's okay for for-profit microfinance lenders to charge exorbitant interest rates? Watch as Philanthrocapitalism author Matthew Bishop explains it to a skeptical Felix Salmon in this seven-minute video.


On the Case Foundation blog, Change Your Career author Laura Gassner Otting looks at the pros and cons of working in the nonprofit sector.


Philanthropy 2173 blogger Lucy Bernholz recaps a recent Guidestar webinar based on her ten predictions about how philanthropy is likely to change over the next decade.

Social Entrepreneurship

Sasha Dichter shares a few reflections on Generosity Day, a twenty-four-hour version of his Generosity Experiment. Organized by Dichter, Network for Good's Katya Andresen, and Malaria No More's Scott Case, the effort sought to "make [Valentine's Day] about love, action, and human connection -- because we can do better than smarmy greeting cards, overpriced roses, and stressed-out couples trying to create romantic meals on the fly."

Social Media

On the Chronicle's Social Philanthropy blog, Cody Switzer explains how the American Red Cross went "from #gettngslizzerd to getting donations" last week. After a young employee accidently posted a tweet about drinking using the organization's Twitter account on Hootsuite, a social media application that allows users to send updates from multiple accounts, the Red Cross quickly deleted the tweet and owned up to it on various social media channels. Writes Switzer:

The results were overwhelmingly positive. At one point on Wednesday, the phrase #gettngslizzerd was a trending topic on Twitter. Dogfish Head Brewery asked people to donate to the Red Cross, and several donors responded by posting that they had donated either money or blood. HootSuite pledged to donate $100. [Red Cross social media director Wendy] Harman said it's impossible to calculate the total direct impact of the tweet, but donations were up slightly above average....

And on the Foundation Center's Transparency Talk blog, Greater New Orleans Foundation president and CEO Albert Ruesga explains how his foundation uses social media to communicate with local residents, especially during a disaster like last year’s BP oil spill.

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a great week!

-- Regina Mahone

Quote of the Week

  • "[L]et me assert my firm belief that the only thing we have to fear is...fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance...."

    — Franklin D. Roosevelt, 32nd president of the United States

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