Fall 2012 Newsletter

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The Real Deal
The Economics and Psychology of Poverty: Social Enterprise Leadership Forum
Columbia Business School's Executive Education launches Strengthening West Harlem Nonprofits Program
SEP Students attend the 20th Annual Net Impact Conference
Adopting a Client-Centric Strategy to the Base of the Pyramid (BoP)
SEP in the News

Strategies for scale explored at annual Social Enterprise Conference

The annual Social Enterprise Conference at Columbia Business School is a leading industry event that brings together business leaders from the private, nonprofit and public sectors as well as students and academics to explore innovative ways to create social value through business. More than 650 attendees gathered at Columbia University on Friday, October 5, for the 2012 conference. A central theme of the conference was the importance of creating social change at all stages of business and across all sectors.


Dr. Paul Farmer, Founding Director of Partners In Health, gave an inspiring keynote at the Social Enterprise Conference on his work in Haiti and addressed the need for public/private partnerships, as well as governmental involvement, to create lasting impact.

Paul Farmer View videos and photos online.

The Eleventh Annual Social Enterprise Conference focused around the theme Aligning Strategy to Maximize Impact. Conference Co-chairs Albert Lim '13 and Regina Lee '13 and Ray Fisman, Co-director of the Social Enterprise Program, speak on some of their key take-aways from the day.

"The idea of partnerships and working together across sectors was a hot topic all day, from Paul Farmer’s keynote address discussing how Partners in Health works with other NGOs, governments, and for-profit companies in order to succeed, to Jennifer Crozier of IBM discussing how IBM works with municipalities to solve a multitude of public concerns. The key takeaway for me was that organizations that “go at it alone” will likely struggle with the multidimensional problems that our society faces today... We live in difficult times, but the three entrepreneurs who presented in the Social Venture Pitch Competition give me a lot of hope. For example, if health care is too expensive, try OKCopay which helps to find the highest quality and cost effective medical professionals. Runaway energy costs in developing countries? Powerhive has an innovative model to bring those costs down while increasing accessibility to energy. High unemployment in lower class neighborhoods? BlocPower is helping create jobs while also bringing down energy costs for churches and non-profits. These are individuals working to help solve some of our issues. "
-Albert Lim

"Partnerships play an extremely important role in tackling challenges in global health; however, nonprofits sometimes donâ??t build capacity at the government level, like what has happened in Haiti. Dr. Farmer noted in his morning keynote that '90% of the $6.06 billion disbursed to Haiti has bypassed government systems,' which limits the governmentâ??s ability to support its own intuitions and people going forward. Dr. Farmer admitted that even Partners in Health could improve on how it coordinates and truly works together with partners."
- Regina Lee

"I enjoyed the comments from Endeavor Global's Fernando Fabre, a lot. What stands out in particular was the idea of trading off sticking to a tunnel vision around mission versus getting distracted by the big picture that you can’t hope to control/measure. That is, they don’t try to micromanage which industries they support, because then you get into the business of trying to measure spillovers, which is just about impossible. I might argue that people err too often on the side of tunnel vision, so it was interesting to hear that he was pretty thoughtful and nuanced on the issue. You really need to watch the full video to get the whole message."
-Ray Fisman

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By Simone Silverbush
This text originally appeared in Hermes

When Kesha Cash ’10 met Denise Adusei ’10, their conversations solved a problem for Adusei and opened an opportunity for Cash.

Midway through her first year at Columbia Business School, Adusei stumbled upon an unanticipated challenge: access to safe and reliable daycare. Although Adusei had added her name to several daycare waiting lists months before her daughter was born, she was still out of luck: there were roughly 5,000 spots for the 25,000 children under five in Harlem, where she lived. Worse still, Adusei learned, Harlem children suffered from one of the highest rates of childhood environmental- related diseases in the country. Read more.

The Social Enterprise Program has produced a research report presenting the views of thought leaders in the field of economics and the social services sector for an exchange of ideas on how best to work together to bring an end to poverty. Read the report online.

For well over a century, economists, policymakers, and idealists have talked about an end to poverty. Yet hunger, destitution, and homelessness continue to afflict even the wealthiest communities, including New York City. We find ourselves today, however, with many promising developments on the horizon. We are in the midst of what has been described as a social enterprise revolution.

From mobile health to microfinance to new approaches to educating and training those born or living in poverty, there are innovative efforts afoot to bring us closer to actually ending poverty. At the same time, a new generation of researchers is applying the latest ideas and techniques from the social sciences to better understand why poverty has been so persistent. How does poverty shape the way individuals view the world, and make decisions? What are the particular challenges they face in managing their households and savings? What can we learn from recent developments in economics, psychology, and the emerging field of behavioral economics to help the poor manage their lives better?

This report is a result of our annual 2012 Social Enterprise Leadership Forum, which focused on themes relevant to organizations working in urban settings, guided by presentations from leading thinkers from academia and practice.

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Photo by Leslye Smith

This October, the Programs in Social Enterprise's Executive Education launched its latest program dedicated to local nonprofit business leaders in the West Harlem neighborhood, co-sponsored by the American Express Foundation. The two-day program, entitled the Strengthening West Harlem Nonprofits Program, taught 21 executives from West Harlem nonprofits on the business principles of value-based leadership, conflict management and team management. Led by faculty director Ray Horton, the program provided the executives with insights on how to increase their organization’s influence in the Harlem neighborhood.

"This collaboration involved senior leaders and change-makers in the West Harlem community. By providing these leaders with business leadership and management tools, they are able to broaden their impact in their local communities," said Professor Horton.

Prof. Paul Ingram’s Values-Based Leadership class provided an opportunity to engage in a case designed to highlight the challenges associated with leading and acting according to values. The session also included an exercise designed to allow participants to discover their own values within the context of dynamic business environments.

In Managing Conflict, Prof. Daniel Ames identified the dynamics of conflict as well as its consequences for individuals and work-team relationships, allowing participants the opportunity to use hands-on exercises to practice using these valuable skills.

Finally, Prof. Kathy Phillips discussed leadership styles, coaching opportunities and emotional intelligence during Leading Teams by having the executives participate in an experimental exercise intended to provide a common starting point for understanding misconceptions about what it means to lead.

For more information about the Columbia Business School’s Executive Education programs, please visit here. To see a full collection of photos, please click here.

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By Jenny Tolan '13 and Vidula Menon'13

On October 25th, 20 Columbia Business School students packed their bags, climbed aboard a Bolt Bus and headed to Baltimore, Maryland for the 20th Annual Net Impact Conference. Coming from various different backgrounds, we were all passionate about creating a viable social impact through the rest of our careers. Meeting 2,700 like-minded and inspirational Net Impact attendees, was a great way to start down that path.

Upon arriving, it quickly became evident that prioritizing panels and speakers would be necessary. With 367 speakers, chairing over 100 panels ranging a diverse array of subjects – from International Development to Social Entrepreneurship to Corporate Social Responsibility – the next 48 hours promised to be jam-packed and inspiring. The conference was kicked off with an invigorating discussion on how unlikely partnerships can help create social impact that may otherwise be missed. Real life examples presented by the Honest Tea and Coca-Cola partnership and the Waste Management and RecycleBank partnership left us all wondering -- would this conference be the place to build our network and create our own unlikely partnership?

Following the opening keynote, we began to attend various panels of interest. Corporate Social Responsibility panels focused on the new breed of conscious consumers while International Development panels discussed food and water shortages in emerging markets. Mary Kay’s example of women’s empowerment and the Fair Labor Associations plea for support left audiences moved and determined to change things.

But no matter what the discussion or the cause, “scalability” was the buzz word of the weekend. This got us thinking: how do we transform ourselves into large-scale companies making a large-scale impact? How do we ensure that our competitors adopt sustainable practices? How do we grow by targeting our Base of Pyramid consumers? Questions about growth and large-scale change circulated the panels and left all of us business students pondering our place in the future of social enterprise solutions.

By Seema Gohil '13
This text originally appeared on the Social Enterprise Program blog

Microfinance has long been heralded as one of the key tools to economic development and financial inclusion for the underbanked. From its humble beginnings in the 1970’s, it has now grown to a $25Bn industry, and studies estimate that it will require another $250Bn to provide capital to all the poor worldwide. However, as the industry has matured, it has also come under increasing scrutiny over the last few years.

Critics argue that the pursuit of scale, efficiency, and a profit-oriented approach has driven the industry away from its core mission of serving the poor. High interest rates and over indebtedness have many people questioning the real motives of the MFIs, and they are calling on these organizations to re-evaluate their strategies towards a client-centric approach. The recent issues in Andhra Pradesh and the SKS IPO have put a spotlight on these issues, and attracted a harsh political and social backlash towards the industry at large. Is all microfinance bad then? What best practices can the industry adopt to ensure a balance between sustainability, scale and client centricity?

Over the last few years, MFIs have come together to adopt client protection policies such as the Smart Campaign, to ensure accountability to borrowers. Additionally, governments have stepped in to set rules and regulations to govern local MFIs and ensure transparency and fair and responsible lending practices. While there is still a lot more work to be done, the industry is moving in the right direction to ensure consumer protection.

MFIs are also expanding their products and services to meet the holistic financial needs of their clients. They recognize that a “one size fits all” approach is unrealistic and that similar to large corporations, there is a need to tailor services to different levels of clients. Another fast-growing product area is microsavings, which has strong implications for encouraging positive financial behaviors. Microinsurance, remittances and mobile payment systems are additional products that MFIs have introduced to provide innovative client solutions.

Pricing transparency also remains a key issue that will drive positive changes in the industry. A regulatory framework will be integral to ensuring pricing transparency. However, they must also recognize the increased cost of providing microfinance services due to the smaller scale of infrastructure in low income communities and the higher touch and deeper lending relationships needed between microfinance organizations and their clients. Balancing the interests of the clients, while also providing for sustainable and scalable organizations is a tricky balance and will be vastly different in different places.

Finally, the industry needs to build its capacity around impact measurement and evaluation. While there are several ongoing initiatives, most MFIs agree that there is a lack of focus monitoring and measurement within their organizations. A lack of financial and labor resources are cited as the primary reasons; it becomes a difficult trade-off between deploying resources towards serving more customers and impact evaluation. Additionally, there are no universal measurement standards, and it is extremely difficult to compare across organizations.
As with any growing industry, the microfinance sector has its challenges and is trying to address these issues to create a sustainable path forward. It has come a long way over the last 40 years, and while we continue to build upon it, we must also recognize the impact it has had to-date on millions of people worldwide.

The 2012 Social Enterprise Conference session, Adopting a Client-Centric Strategy to the Base of the Pyramid (BoP) covered these topics. Watch the session here.

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