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 The mission of the "Your Mark on the World Center" is to solve the world's biggest problems before 2045 by identifying and championing the work of experts who have created credible plans and programs to end them once and for all.
Crowdfunding for Social Good
Devin D. Thorpe
Devin Thorpe

Monthly Archives: November 2017

Global Health Challenges Offer Social Entrepreneurs Opportunity

This post was originally produced for Forbes.

You can download an audio podcast here or subscribe via iTunes.

“We have grown far too tolerant of businesses not acting in alignment with the public good,” said Derek Fetzer, director of Johnson and Johnson’s CaringCrowd crowdfunding site for global health. “Shouldn’t all business, all entrepreneurship be for the public good? ”

“The spirit of social entrepreneurs is crucial in solving global health challenges, and has been a driving force in uncovering innovative solutions to tackle the ever-changing global health landscape,” Carol Pandak, PolioPlus director for Rotary International, said. (I am a member of Rotary and once wrote an article for the Rotarian Magazine.)

Pandak noted that global health issues hold a unique space on the plant. “It could be easy to diagnose many global health challenges as problems of individual regions and nations.” After all, it has been decades since anyone in the Americas got polio.

She pointed out that the United Nations’ Sustainable Development Goal number 3 targets healthy lives and well-being for all. “When it comes to global health, there really is no issue from which any group, any nation is immune.” Even with only 15 cases reported so far in 2017, polio is just a plane ride away.

To get a better perspective on global health opportunities for social entrepreneurs, I invited 12 experts and practitioners to join me for a roundtable discussion. You can watch the entire 90-minute discussion in the video player above. Pandak participated only in writing. In a wide-ranging discussion, we covered challenges and opportunities in global health along with specific examples and some key lessons learned.

Leslie Calman, Engineering World Health

Leslie Calman, CEO of Engineering World Health, extended Pandak’s idea. “The answer must be broadly systemic, not singular: a combination of broad public health measures; an educated and paid healthcare workforce including doctors, nurses and technicians; support from governments and NGOs for public hospitals and clinics that serve low-income people; [and] the education of women and girls.”

Entrepreneurs have many roles to play in global health, said Deepak Kapur, the Chairman, India National PolioPlus Committee. He highlights needs assessment, monitoring, cutting red-tape for rapid response to emergent needs, special perspectives of business and industry and piloting new programs.

Challenges in Global Health:

There are no shortages of challenges in global health for social entrepreneurs to pursue as opportunities.

Jill O’Donnell-Tormey, CEO and director of scientific affairs for the Cancer Research Institute, argues that fundamental research is the key to disease eradication. “Ultimately, I believe it comes down to research, and that means funding and time.” She added, “And without that, I feel we don’t get to deliver anything.”

She responded with a hint of irritation to a question about how long will it take to cure cancer, noting she is frequently asked how much money it will take, “Science doesn’t work that way.”

Calman put disease eradication into a broader perspective. “There is much more to health than the eradication of diseases. It is one benefit of a reduction in poverty and war. Health requires good nutrition, education (especially of women and girls), stable governments, public investment, peace. ”

UNICEF’s Stefan Peterson, who has spent most of his career working in or for resource-constrained countries, did take issue with the idea that scientific research should be the priority. “I think we need systems innovation more than product innovation. When two out of three kids and mothers die on necessarily because we have the technology and the knowledge and it doesn’t reach them. We need market research. We need delivery science and systems innovation.”

Contemplating that disagreement, I couldn’t help but wonder if they weren’t just looking at opposite sides of the same $20 bill. Without research, there would be nothing to implement in the field; without distribution, the research has no value.

Social entrepreneur Dean Ornish, the founder and president of the non-profit Preventive Medicine Research Institute and Clinical Professor of Medicine at the University of California at San Francisco, has focused his career on lifestyle’s contribution to health. He concludes that good global health requires attention to both lifestyle and cell biology.

Bruce Aylward, Senior Advisor to the Director-General, of the World Health Organization or WHO, noted that Ornish’s work is important because of what is coming. “The escalating rates of non-communicable diseases are the great epidemic in front of us and not just in industrialized but in middle-income countries and low-income countries as well.”

Agreeing, Ornish noted, “More people are dying today in most countries in the world including much of Africa from heart disease and type 2 diabetes than AIDS, TB [tuberculosis] and malaria combined.”

Highlighting the challenges of dealing with the coming epidemic, Calman noted, “We work in hospitals that don’t have blood pressure cuffs.” Her organization works to train local technicians to service and repair hospital equipment. There are people around the world who have no way of knowing they have high blood pressure.

“The question is what’s available within the first mile the first-mile health system from your house,” she continued. “And chances are that it won’t be a hospital.” These frontline health workers may be at the nearby pharmacy.

Women and Children:

In the global health sphere, there is little that is more important than helping women and children. Peterson cleverly explained, “The best advice to an unborn child is to pick your mother well and make sure that she’s healthy and has a good pregnancy.”

More soberly, he said, “If we are serious about achieving the SDG goals, we need to focus on building strong health systems that deliver quality of care for every woman and every child, everywhere.”

When thinking about women’s health, it is important not to limit the discussion too narrowly. Discouraging girls from becoming parents or getting married as teenagers and staying in school are also public health issues but they don’t happen in hospitals, Calman noted. Organizations and entrepreneurs need to pay special attention to keeping girls in school during menstruation by ensuring they have access to feminine hygiene products and education along with adequate facilities. “Women do in fact hold up half the sky.”

Examples of Social Entrepreneurship in Global Health

Mellanie True Hills, the founder and CEO of StopAfib.org, who participated in the discussion is a great example of a global health social entrepreneur. “We’ve educated people not only in the US but around the globe around this whole issue of atrial fibrillation which for those who are not familiar with that is an irregular heartbeat that leads to strokes.”

Mellanie True Hills

Founded in 2001 by two University of Memphis professors, Bob Malkin and Mohammad Kiani, Engineering World Health set out to train technicians to service medical equipment. Calman notes that if you show up to a hospital with a broken x-ray machine it isn’t any different for the patient than showing up and finding the hospital doesn’t have one.

Calman added, “We encounter over and over again folks who are willing to train or retrain doctors and nurses and as vital as that is if they’re 21st-century doctors and they’re working with 18th-century equipment it’s a waste of resources.” Training technicians should be just as high a priority.

There are opportunities in cancer research as well. O’Donnell-Tormey notes that a revolution in immunology began about five years ago. “I think the medical community believes now that the immune system can be used to treat and control cancer.”

Innovation in cancer treatment doesn’t end there. Acknowledging that some cancers are caused by lifestyle choices, others are caused by viruses, meaning that they can be prevented with vaccines.

Ornish, a consummate social entrepreneur, has spent 40 years working on treating public health with lifestyle changes, focusing on helping people move to a whole foods, plant-based diet.

WHO’s Aylward, noted, “And this is what makes the kind of work that Dean’s doing and others are looking at so exciting when you look at those and say lifestyle choices and changes may actually not only reduce risk but reverse disease that gets really exciting and that starts to eliminate some of the excuses we frequently find when we’re trying to look at how do you tackle this big epidemic in front of us.”

Ornish remarkably reported, “We found that in just three months over 500 genes were changed turning on the good genes turning off the bad genes and particularly the what are called the oncogene to promote prostate, breast, and colon cancer just turned off within just a few months.”

“We found that we could actually lengthen telomeres, in a sense reverse aging at a cellular level,” he added. The length telomeres at the end of each strand of DNA have been shown to correlate with a person’s remaining lifespan; the longer the telomeres, the longer the remaining lifespan.

Dr. Dean Ornish, Preventive Medicine Research Institute

In the context of the discussion on global health, Ornish noted the irony that the diet he advocates is the traditional diet of many low-income countries. As countries become richer, they get KFC and McDonalds, changing the traditional healthier diet.

“You know the natural foods and organic foods and healthy foods market is exploding whereas the soft drink sales are down 50% the last few years,” he added, emphasizing the entrepreneurial opportunities in this arena.

Curt LaBelle, president of Global Health Investment Fund, is a venture capitalist whose limited partners are committed to balancing impact and financial returns. He shared some of his strategy.

“Every investment that we make we have to evaluate not only is it an innovative product that can serve a need in the developing world but is there a way to actually get it to the people who need it,” he said.

The range of possible investments is wide. “But our goal is to take innovative products–and these can be vaccines; these can be pharmaceutical products; these can be medical devices or medical diagnostics–and get them to the people who can benefit the most while generating positive returns for investors.” The firm does exclude medical devices that require substantial capital investments as they are not a fit for resource-constrained markets.

One example of the investments the firm has made is in a cataract treatment company called IanTech that make an affordable, handheld device that doctors can use to treat cataracts with results comparable to the current standard of care. He notes that doctors can learn to use it in just a few days so when the trainers leave, they leave the skill set in country with the device.

Another portfolio company, Path, produces a drug to treat hookworms and roundworms. This is a huge market; LaBelle notes that in terms of people impacted by their products, this has the potential to help the most people.

What happens if a disease is successfully eradicated by one of the portfolio companies? “We want to get rid of the disease and we want to make some money along the way but if we get rid of it and no longer make any money that’s actually fantastic. All of our investors would be thrilled.”

Derek Fetzer, CaringCrowd

Big pharma is sometimes accused of serving the market to treat a disease rather than the business of curing it. Johnson and Johnson’s Fetzer responded:

There is a powerful financial incentive to find and produce a cure, particularly if you think (which is the case) that other companies are also trying to find the cure anyway (and quite possibly not participating in the treatment market). So better you find the cure than someone else.

A great example of this is the hepatitis C market, which commanded huge premiums. The prior standard of care was expensive and had a low cure rate, less than 50%. Gilead with no prior hepatitis C treatment business came in with shorter treatment and a high cure rate, in the neighborhood of 80%, and produced record breaking profits for a single drug.

Fetzer’s argument suggests opportunities for entrepreneurs and researchers.

Opportunities in Global Health:

UNICEF’s Peterson suggests that one overriding reason for business to pursue global health initiatives is that all the people they save are potential customers.

Jack Andraka, who invented a new diagnostic tool for pancreatic cancer as a teenager and now studies at Stanford, says the big data movement presents an especially interesting opportunity. “I think one of the most important things are happening right now is this kind of big data movement that’s going on in cancer with machine learning as well as all these interesting biomarker discovery processes”

“And if you can’t prevent the cancer you can detect it early when treatment is, first, less expensive but also way more effective,” he continued. “And we could really see that with pancreatic cancer where if you’re diagnosed early enough you have a 100 percent chance of survival and you don’t have to do things like the Whipple resection which have huge mortality rates”

Similarly, he thinks the opportunity in the gut is interesting. “Looking at your microbiome inside your gut and looking at these unconventional ways are beginning of treating cancer.”

The Cancer Research Institute, under O’Donnell-Tormey’s leadership, raised a venture philanthropy fund to de-risk promising research and make it more appealing to investors. Of course, this means that some of the projects the Institute funds don’t succeed, but knowing another path that didn’t work is almost as important as knowing what does work.

“So, if we can as, a not-for-profit, create a mechanism where we help to de-risk early, do hard core correlative and translational science to understand mechanistically even when things fail why they fail.” This helps prevent research projects proceeding to phase three clinical trials they would likely have failed, allowing more funds to go to projects with greater promise.

Deepak Kapur, India National PolioPlus

In another vein of opportunity, Kapur noted that “In India, we have already begun leveraging the infrastructure and the experience of polio to routine immunizations against all diseases for which vaccines are available.” The lessons and infrastructure are significant. The Journal of Infectious Diseases recently published an article by John L. Sever and others about the lessons and legacy of polio eradication.

Aylward noted one example. “You can’t eradicate a disease if you can’t see it if you can’t find it. And the polio program has got incredible experience putting in place a disease surveillance infrastructure globally where we often do very little else.”

Innovation in polio eradication did not end with Jonas Salk and Albert Sabin and their respective polio vaccines, Aylward said. “Contrary to conventional wisdom, many of the greatest innovations in the eradication of the poliovirus were not those that took place to get us to the starting line of the global eradication initiative, but those that were conceived and taken to scale as we got closer to the finish line.”

The opportunities in global health for social entrepreneurs are as rich today as ever.

Lessons from Global Health:

Global health efforts over the past decades, especially polio eradication, provide lessons for social entrepreneurs hoping to operate in the field.

Long-term opportunity: Despite all the energy we put into disease eradication and lifestyle improvements, the need for health care is not going away. “People may think when somebody arrives at a hospital that public health ventures have already failed. But, you know, people do have motorcycle accidents; they do have pregnancies; they do need maternal care; they do need neonatal care,” Calman said.

Measurement and improvement: “We must build in, from the start, mechanisms to track progress and impact, and to make course adjustments when needed,” Peterson said. “Contexts change, often unexpectedly, and programming needs to adjust accordingly, and rapidly, if impact is to be sustained.” This approach is called “implementation research” and it dovetails nicely with lean startup models that emphasize execution, feedback and improvement cycles.

Quick returns: Ornish asked rhetorically, “Why should I spend my money today for some future benefit that some other company whether it’s another corporation or another insurance company is going to get?” The answer is that with his lifestyle changes, the benefits begin to accrue almost immediately. “We did a demonstration project with Mutual of Omaha and they found that over that they saved almost $30,000 per patient in the first year because under their doctor’s care most of these patients were able to avoid having the bypass surgery angioplasty or stent that they were told that they otherwise would have needed.”

Social transformation: Not all social entrepreneurs begin as social entrepreneurs. LaBelle said, “One of the things that has been really rewarding to me is to really open the eyes of entrepreneurs who otherwise wouldn’t think about these developing markets around the world.” He notes that products like IanTech’s cataract surgical device that has broad application in low-resource countries around the world is just as appealing in developed countries where it can deliver comparable results at a fraction of the price of the standard of care. He calls these “dual market opportunities.”

Global health is ripe for social entrepreneurs to improve the lives of people around the world at the same time they create profit opportunities.

#30ytp

Over 1 million people have read my books; have you? Check out my free webinar exposing the three myths that impair and two keys for crowdfunding success.


Never miss another interview! Join Devin here!

Devin is a journalist, author and corporate social responsibility speaker who calls himself a champion of social good. With a goal to help solve some of the world’s biggest problems by 2045, he focuses on telling the stories of those who are leading the way! Learn more at DevinThorpe.com!

 

‘Wealth Building Isn’t Just For The Wealthy’

This post was originally produced for Forbes.

You can download an audio podcast here or subscribe via iTunes.

Jennifer Williams, a school teacher in Mississippi, has now paid off all nine of her payday loans and hasn’t had one outstanding now for two years. She’s a success story for Southern Bancorp.

Modeled on Shore Bank, which failed during the Great Recession, Southern Bancorp was organized by a collection of Arkansas’s most prominent people, including then Governor Bill Clinton and Rob Walton, a member of the Walton family. Unlike Shore Bank, Southern Bancorp is profitable and growing today.

“Governor Clinton wanted to create economic opportunities and stimulate the economy in Arkansas’s delta region, one of the most persistently poor communities in all of America,” says today’s CEO Darrin Williams. He notes that Hillary Clinton served on the founding board of directors for the bank.

When launched more than 30 years ago, the biggest worry was that what worked for Shore Bank in the urban environs of Chicago and later Detroit and Cleveland might not work in rural Arkansas and Mississippi. The acid test of the past decade suggests the model works just fine in the rural communities it serves.

The bank operates 46 branches in Arkansas and Mississippi, 37% of those branches are in “bank deserts” where the Southern Bancorp branch is either the only bank operating in the zip code or just one of two. What’s more, 28 percent of the population in the bank’s market lives below the federal poverty line.

Darrin Williams, CEO, Southern Bancorp

The CEO Williams explains the market and the bank’s strategy, “Often our competition is not another bank; often our competition is a payday lender or pawn shop or someone who provides alternative forms of capital or credit that really strip wealth. So, we really do a lot of outreach. We don’t wait for people to come to the bank. We take the bank to them.”

The market Southern Bancorp serves is vast, when considered at a global scale. According to the World Bank, about 2 billion people around the world are unbanked or underbanked. In the U.S., an FDIC report in 2015 showed 9 million households were unbanked and another 24.5 million households were underbanked.

Mr. Williams notes, “It’s expensive being poor.” Unbanked customers are forced to routinely pay for services that banked customers receive a low or no charge, from check cashing to check-writing privileges. Check cashing services charge up to 10 percent of the face value of a check and buying a money order costs several dollars.

To be an asset to the communities it serves, the $1.2 billion asset bank operates three related Community Development Finance Institutions or CDFIs. The bank holding company and the bank are the first two; the third is a nonprofit called Southern Bancorp Community Partners.

Mike Myers, vice president, CFO and Treasurer for the nonprofit Winrock International, which partners with Southern Bancorp on some efforts, says, “By providing financial capital in geographic areas too small for the big banks to be profitable, Southern protects the economically disadvantaged from predatory lenders (pawn shops, payday lenders, etc.) Additionally, Southern provides hands on financial counseling teaching people how to use credit rather than credit using them.”

Mr. Williams explains that the bank focuses on measures of net worth as that helps to break inter-generational poverty. For many, the difference is as simple as home ownership. The bank, he says, has three “big hairy audacious goals:”

  1. Help 10,000 people with home ownership
  2. Help create 100,000 jobs
  3. Empower 1 million to save money

He was quick to point out that helping people save money will come primarily as a result of the bank’s advocacy work rather than from providing savings accounts to 1 million people.

Mr. Williams has his work cut out for him. “We know that so many people just distrust banks.”

He explains that a typical overdraft fee of $25 or $30 throws customers for a loop. They don’t always appreciate that the bank provided a short-term credit facility and that the service should come with a fee. The effective interest rate on such overdrafts can, in fact, be every bit as penurious as the payday lenders Ms. Williams, no relation to the CEO, has learned to avoid.

One way that Southern Bancorp is working to address unanticipated fees is to create a checkless checking account. Customers get access to their money via a debit card. If the funds in the account are inadequate for the transaction, it is declined and no fees are charged. In this way, the customer picks up right where she left off after the next deposit. The bank offers several accounts with no minimum balance and no or low monthly fees.

The 380-employee bank makes a point to bank customers who have had trouble with banks in the past to help them get back on better financial footing. Banks customarily use ChexSystems to identify customers who’ve had accounts closed by other banks, typically refusing to open new accounts for them. Southern Bancorp uses the system only to screen for fraud. Everyone else is welcome, Mr. Williams says.

One key to the bank’s success is financial education. That’s how Ms. Williams first connected with Southern Bancorp. “My friend and I were looking through the newspaper one day and saw an advertisement for a credit counseling class offered by Southern Bancorp. We called and enquired about the class and began the class immediately,” she reports.

“By combining traditional banking and lending services with financial development tools ranging from credit counseling to public policy advocacy, Southern Bancorp helps underserved families and communities grow financially stronger – regardless of zip code,” Mr. Williams notes.

Mr. Williams, who was a litigator and also served in the Arkansas House of Representatives before joining Southern Bancorp as CEO, likes to ask, “Do you know where your money spends the night?”

He points out that every deposit in the bank is a simple form of impact investment. Not only does the bank use the money to make traditional loans to people in the communities it serves but also makes investments in school bonds, water bonds and other community infrastructure. “I would submit your bank account really is a primary way that you can live your values.”

The bank takes deposits from all around the country from people who want to support the bank’s mission. Mr. Williams points out that the bank is working on a new platform to make it easier for customers outside of the bank’s service area to make deposits there.

The bank is presently raising additional capital to support its growth and impact.

“We believe that wealth building isn’t just for the wealthy. So, we are wealth builders for everyone,” Mr. Williams says.

Myers praises Southern’s work: “Look at the impact…the number of loans less than $10,000, the EIC amounts recovered through free tax preparation, the jobs created and supported, home ownership leading to wealth generation. No other organization in the region has the mission, the tools, the approach, the passion…or the impact. If Southern does not do it, who will?”

Ms. Williams is a fan, too. “I feel that Southern Bancorp really cares about their customers. I feel that they put so much work into getting the word out about credit counselling and helping people build their credit. They make you feel comfortable and willing to share your information with them. Even after the classes, on many occasions, Mrs. Harris has called to check on my progress, and encouraged me to keep going and working on my credit. I feel that Southern Bancorp goes well beyond the basic duties of the typical services provided by banks.

Over 1 million people have read my books; have you? Check out my free webinar exposing the three myths that impair and two keys for crowdfunding success.


Never miss another interview! Join Devin here!

Devin is a journalist, author and corporate social responsibility speaker who calls himself a champion of social good. With a goal to help solve some of the world’s biggest problems by 2045, he focuses on telling the stories of those who are leading the way! Learn more at DevinThorpe.com!

Amidst ICO Flurry, This Social Entrepreneur Seeks $50M for Clean Energy In Developing World

This post was originally produced for Forbes.

You can download an audio podcast here or subscribe via iTunes.

Everyone seems to want in on it. Even my septuagenarian neighbor who recently retired from her position as a clerk has taken up trading cryptocurrencies. Bitcoin jumped in value more than 50% in October alone. Hundreds of millions of dollars are being raised in new coin offerings every month. This surprising source of capital may be a natural match for social entrepreneurs.

Dan Bates, 60, the founder, president and CEO of ImpactPPA is now conducting presales in anticipation of a $50 million initial coin offering or ICO in the coming weeks. Bates has been doing clean energy projects in the developing world for a decade but ImpactPPA is a new business.

It will use not one but two cryptocurrencies. The first, a utility token, it calls NRG will be used to sell the electricity it produces on micro-grids and small utility-scale solar and wind projects. The second token, MPAQ, the one that will be offered in the ICO, will give the holders a voice in selecting the next projects. In part to avoid securities issues, MPAQ holders will not receive ownership or dividends.

Bates’s plan is to use the financing to fund projects that might otherwise have been financed by governments and big NGOs, including the World Bank. Those financing mechanisms are relatively slow.

Of the small villages and communities he works with, he says, “They don’t need to hire a lobbyist in Washington to try and get them a loan guarantee. They need power.”

Once the initial capital is deployed, Bates hopes that the sale of energy will provide adequate cash flow to fund more projects, allowing the company to snowball without the need to repay the initial $50 million.

That, of course, begs the question of why investors would put their money into the project if they won’t get ownership or dividends. The MPAQ token won’t be used in the sale of energy; that function will be accomplished with the NRG token. The “White Paper” just published by ImpactPPA is intended to answer the question.

A white paper plays the role of a prospectus in the wild west of initial coin offerings. As the name implies, a white paper has not been reviewed or approved by any regulatory body. Such a review would seem to violate the libertarian ethos of the crypto community.

Most of the white paper is devoted to the business plan.

Bates says the company has already lined up projects in Africa, Haiti and Latin America. In the developing world, reliable access to power can be life-changing.

Dan Bates, ImpactPPA

Bates shared an example from his work in Africa:

“My favorite project that we have is a guy who has the smallest unit that we make, a 750-watt device that runs a fan. That’s all it runs. But he lives in Nigeria and he had a chicken farm and his chickens were outdoors and they were being eaten by the wild animals. He moved them indoors but it’s so hot that they died of heat. So, now he takes one of these units and the fans blow air through it to keep the chickens cool. And, sure enough, he has a business now.”

Other projects he reports completing include a 150-kilowatt project in Haiti that serves a hospital and a school. “The project is completely expandable, so we will get to all 15,000 residents over time.” In Sudan, he’s looking at four 10 megawatt projects. Another 50-megawatt project may be on the table in Rwanda, he adds. “ImpactPPA has identified greater than 200 megawatts of projects and revenue opportunities in the near term.”

He adds that projects can be completed just 60 to 90 days after funding so the impact could be quick. It could also be significant. “Power begets education. Education, of course, begets a better way of life, better quality of life,” he says.

Today, about 1 billion people lack access to electricity. Billions more lack reliable access.

During the interview with Bates, which you can watch in the player at the top of the article, he shared his history with renewable energy:

When I started this project 10 years ago, it was designed to be U.S.-based; U.S. urban residential wind and solar is needed in the United States. But we pay 10 cents a kilowatt hour kilowatt hour average. And the lights always go on when you flip the switch

I met some guys in India. I traveled to India to see what the market would bear there and literally, Devin, in every meeting that I had on my first trip, the power would go off and the generator would kick back on a minute or two later and I thought to myself, I have a clean energy product. It’s scalable. It fits anywhere in the world. Why am I looking at the United States as my sole market? The globe is my market.

We started exploring opportunities in India. I was able to build a factory there to manufacture our products in Hyderabad. We’ve electrified over 150 or so off grid rural schools already. We’re selling the product to all sorts of people in the major cities as well as the rural areas.

Bates argues compellingly that “distributed energy will be the biggest driver for social change in the near future.”

Of course, to have the intended impact, customers need to be able to buy the power efficiently and affordably. Could the introduction of blockchain technology via the NRG token into the transaction prove to be a barrier?

Bates says the technology works now and is completely invisible to consumers. He argues that because people in the developing world are more accustomed to storing value on their phones and exchanging it for goods and services that they will painlessly adopt the new service. “They don’t need to know that it’s a blockchain device that’s running it.”

Vince Molinari, CEO of LiquidM Capital, LLC, (also a past client) who has spent decades on Wall Street and is now focused on cryptocurrencies, looked at the ImpactPPA website and provided some feedback.

First, he suggests some preliminary due diligence questions:

  • Is there expectation to speculate on the ICO itself as an alternative currency or an expectation of a rate of return from the underlying business or project?
  • The key to much of this is, is the token regulated and or approved in the jurisdiction of where it is being purchased and issued?
  • Is there alignment of the token holder and the issuer?
  • Are there investor protections for the token holders and fiduciary responsibility in place from the Issuer?

While it is beyond the scope of this article to answer those questions, they highlight some of the issues that those considering investments in ICOs should consider before investing.

Molinari, long an advocate for impact investing, says, “There is a massive opportunity for ICOs to be used to facilitate and aggregate capital to companies and projects globally which are doing levels of environmental, societal or cause-related good.” He points out that the crowdfunding approach that ICOs have been using may allow for issuers to connect effectively with affinity groups and diaspora communities that have a favorable predisposition to the offering.

Molinari is also a fan of the blockchain technology that underlies the ICO. “The ability to use smart contracts in the form of ICO is massively powerful and laudable. The ability to utilize the transparency of and immutable nature of blockchain to move capital to need, while reducing the ability for corruption and having the enabling outcome of disrupting and innovating energy generation and its associating financing is the epitome of democratization of access to capital and energy in one.”

Bates agrees. “I think the blockchain allows for this is be truly a disruptive technology if we do this right.”

Could ICOs provide a ready source of capital for more social enterprises? I can’t wait to find out.

Over 1 million people have read my books; have you? Check out my free webinar exposing the three myths that impair and two keys for crowdfunding success.


Never miss another interview! Join Devin here!

Devin is a journalist, author and corporate social responsibility speaker who calls himself a champion of social good. With a goal to help solve some of the world’s biggest problems by 2045, he focuses on telling the stories of those who are leading the way! Learn more at DevinThorpe.com!

Is It Ethical To Lend To Working People At A 200% Interest Rate?

This post was originally produced for Forbes.

You can download an audio podcast here or subscribe via iTunes.

We’re all familiar with payday lenders who are providing loans to people who can least afford it at interest rates that shock the greediest of corporate bankers. Can a fintech company that lends at rates up to 200% annual percentage rates ever be considered ethical? In this piece, I’m going to share my conclusion.

To help me make this evaluation, I turned to Morgan Simon, a vocal advocate for using a social justice lens for impact investing. She is the author of Real Impact: The New Economics of Social Change and Managing Director of Candide Group. She framed the question for me:

In general, when we think about fintech, from microfinance in the global south to financial services for working class populations in the US, we think a lot about the question of fairness. It’s common for a social enterprise to focus on providing better rates to a customer compared to what they had access to. But better does not always mean fair. So, we always look at a company and try to assess–is the financing non-extractive, meaning the customer receives more value than the company?  Is the operating margin reasonable compared to the consumer value created? Does the product help build assets as opposed to focusing predominately on consumption? Each company and case is different, and hence it’s impossible to say that a certain range of APRs enables fairness. It’s important to take each company case-by-case and try to assess its particular impact.

She framed the question well but didn’t answer it for me.

Lendup is a fintech company based in San Francisco with offices in Richmond, Virginia that provides four tiers of consumer lending, with the stated objective of providing customers with a path to better financial health. At the bottom rung of their credit ladder, they provide loans of about $250 at an APR of 200%. The company, backed by Kleiner Perkins, among other well-regarded venture investors, now has 220 employees, has made 4 million loans totaling more than $1 billion. By their estimate, they’ve saved their customers $130 million. They have also provided 1.6 million free online courses about money management.

For this article, I visited with Sasha Orloff, CEO and Vijesh Iyer, COO, to learn what they do and how they justify lending at such rates. You can—and should—watch the entire interview in the video player at the top of the article.

Vijesh Iyer, Lendup COO

Iyer explained the Lendup vision, saying, “We believe there are two types of financial products: chutes and ladders. Ladders help people up; chutes push people down. One of our core values is that every product we offer at LendUp is a ladder, and our success is measured by the long-term financial well-being of our customers.”

That lending at 200% interest rates could be a ladder to greater financial health begs scrutiny.

Orloff, 40, was quick to put Lendup’s practices in greater context. “When you’re thinking about the payday lending industry you’re typically talking about 400 to 1,000% APR annualized rates. You’re paying the same rate day after day, week after week, month after month, year after year.”

Obviously, lending at half the rate or better than the competition is better for the customer, but it could still be a debt trap from which the customer might never escape.

The scale of the problem or opportunity, depending on your view of the situation, is staggering. Orloff points out that 56% of Americans don’t have access to traditional financial services. Payday loans are typically not reported to credit bureaus, which serves customers just fine when they default but is no help when they repay the loans according to the terms, leaving them stuck in financial purgatory.

No reader of this piece would want to borrow at 200% unless it were the best available option. Even then, we’d want to be sure that we wouldn’t be better off not borrowing the money.

Lendup takes the ladder concept seriously. Rather than go to a store-front with the employees working behind bullet-proof glass, customers borrow on their phones. They are encouraged to take financial literacy courses. As they make payments in a timely way, they move up Lendup’s ladder, earning the right to borrow more money at lower interest rates. At the top two tiers of service, the company reports credit results to all three major credit bureaus, potentially helping customers establish a credit score that would give them access to traditional credit products, Orloff explains.

Still, I worried what happens to customers that can’t repay their loans on time. Some payday lenders have been reputed to compound interest and fees monthly or even weekly, allowing an unpaid loan of a few hundred dollars to balloon out of control within a year. Does Lendup take the same approach to its slow-paying customers?

No. They assure me that the company never charges another fee. For their single payment loan customers, no late fees or interest accrue. Instead, the company works with the clients to ensure that customers are not stuck in a debt trap when they can’t pay.

Orloff says, “At the end of the day, we try to structure our products so that we make money when they pay us back not when they get further into trouble because we’re trying to lend people up.”

The problem has persisted despite the continued economic recovery, in part because so many people have been moving from salaried positions to hourly or even to the gig economy where people are paid only for the brief moments when they are working on a paid task. Uber and Lyft drivers, Upwork freelancers, Task Rabbit contractors and so many others now experience unprecedented volatility in their incomes.

Understanding how their model is designed to work, I set out to understand whether or not it does work. Orloff and Iyer were unwilling to provide data on the proportion of their customers who are able to climb to the top of their ladder and graduate. One can reasonably conclude the data isn’t encouraging.

They did share that a comparison of cohorts of their customers and non-customers showed that their customers improved their credit scores faster and farther than non-customers.

Credit scores matter. Iyer notes that a graduate of their program can save hundreds of thousands of dollars over a lifetime by earning a higher credit score.

A graduate of their program gains access to traditional credit cards with a grace period that allows them to borrow money for longer than just one payroll cycle at zero cost. Orloff says, “They’re going from paying 400 to 1,000% APR to a zero-dollar borrowing cost. To me, that’s one of the proudest most incredible things that we’ve accomplished here at Lendup.”

They don’t see Lendup as the solution to the problem. Iyer points out, “We’re talking about over 50 percent of the US population not having $400 to take care of themselves in an emergency.”

They see Lendup as part of a growing movement to give people better access to the financial services they need. The company collaborates with nonprofits to help address the systemic challenges that make being poor so expensive.

Orloff says, “If our system is working really well for 44% of the country and it’s not working really well for 56% of the country then something has to change.”

He adds, “The reason why I’m excited about this interview and other interviews is creating a broader awareness of this movement has started and that we need the support of a lot of different players from the press from the regulators from the financial markets.”

One of the nonprofits with which Lendup collaborates is The Aspen Institute. Joanna Smith Ramani, the associate director for the Institute’s financial security program, helps answer my fundamental question:

One of our goals at the Aspen Financial Security Program is to build and spotlight leadership that is committed to solving the financial challenges of working Americans. Sasha is a real innovator in the financial service and fintech industry around his commitment to solving not just the credit needs of low-wage earners, but also the overall financial health needs of families as well. We have been encouraged by LendUp’s eagerness to directly learn from their consumers, to iterate their products, and to engage in cross-sector discussions, even with critics and advocates, about how to not just make their product better, but also the industry better.

So, is it ethical to lend to people who are struggling financially at an APR of 200%? Yes. When the customer’s interests are put before corporate interests, lending at such high rates is ethical. But I’ll be watching.

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Devin is a journalist, author and corporate social responsibility speaker who calls himself a champion of social good. With a goal to help solve some of the world’s biggest problems by 2045, he focuses on telling the stories of those who are leading the way! Learn more at DevinThorpe.com!

Impact Investor: You Don’t Have To Give Up Returns To Do Good

This post was originally produced for Forbes.

You can download an audio podcast here or subscribe via iTunes.

One of the most controversial topics in impact investing is whether it is possible or fair to expect market returns on investments that do good. Gloria Nelund, chairman and CEO of TriLinc Global, says yes.

Nelund says her firm, which manages about $320 million, is designed to prove it. “The whole firm is really dedicated to creating and sponsoring funds that will prove to investors that they don’t have to give up investment returns to do good.”

TriLinc is a private investment fund that lends money to small businesses, including businesses in the developing world. To do business effectively in frontier and emerging markets, the firm partners with local experts.

Nelund explains, “We created a partner model where we went out and found the best private debt fund managers in the world in the countries where we wanted to invest and we developed a partnership with them where they would originate loans for us. We actually co-underwrite and co-structure all of the loans.”

Gloria Nelund, TriLinc Global

TriLinc typically funds the loans directly to the businesses; local partners do not act as intermediaries. Some of the loans are sufficiently large that TriLinc reaches out to other funds to complete the financing.

Nelund highlights a loan to Corporacion Prodesa, S.R.L., a manufacturer of affordable disposable diapers in Peru, as an example of the firm’s impact. The company’s founder, a Peruvian American who worked at Kimberly Clark identified hygiene problems associated with cloth diapers being used in Peru and utilized abandoned technology to produce diapers low and moderate-income families there could afford.

The company not only solves a social problem in the developing world but also provides jobs that raise the standard of living for the community.

Nelund says, “When they were really struggling at one point and we were working with them to try to restructure everything, his biggest concern was the people in the community losing their jobs because it was so important to them and their families.”

The loan of about $3 million represented about 2.1% of the funds’ assets, according to the 2015 10K filed with the SEC and has an interest rate of 15.5-15.6%. The firm’s loans have interest rates ranging from more than 8% to just less than 18%. The loans are made in Central and South America and in Africa.

Nelund explains the investment strategy. “We have a private debt strategy that makes loans to growth stage companies that meet certain environmental social and governance standards and who are committed to creating impact and then we provide loans to those companies so that they can grow and they can create more jobs and they can pay higher wages.”

While Nelund admits that some projects require non-investment capital—philanthropic or aid forms of capital—she sees market rate impact investing as the key to attracting sufficient capital to solve big problems. She says, “You should hold companies to the same [return] standard regardless of the impact they create.”

Matthew Weatherley-White, co-founder and managing director of The Caprock Group, who has invested in the funds, highlights two features of the TriLinc funds. First, he notes that retail investors have been invited to participate in the funds via public offerings—most impact investments are limited to accredited or institutional investors. The other point he highlights is the firm’s focus on doing things better. “This isn’t about perfect. It is about steadily raising the bar.”

Jeff Shafer, co-founder of CommonGood Capital, praises Tirlinc’s team and procedures for sourcing deals outside the US with an emphasis on impact. He adds, “Since investing today in the US is dominated by the left brain, market rate returns and proof of positive impact are critical to mobilizing large amounts of capital.”

Dr. Patricia Dinneen, senior advisor, EMPEA and chair of Impact Investing Council, agrees with Shafer’s analysis. Like Weatherley-White, Shafer and Nelund, she concludes that impact investing at market rates is possible. “TriLinc Global provides credible and convincing evidence that you can achieve both financial returns and social benefits.”

Over 1 million people have read my books; have you? Check out my free webinar exposing the three myths that impair and two keys for crowdfunding success.


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Devin is a journalist, author and corporate social responsibility speaker who calls himself a champion of social good. With a goal to help solve some of the world’s biggest problems by 2045, he focuses on telling the stories of those who are leading the way! Learn more at DevinThorpe.com!

How to Promote Your Cause Without Provoking Your Friends

Recently the Pew Research Center published a report showing that Americans are more politically divided than any time since they started tracking such data in 1994. Our country has survived greater divisions than we now see: abortion, civil rights, slavery, and federalism.

Increasingly, at least anecdotally, it appears that people are fed up with divisions and conflict. At some level both liberals and conservatives find themselves wanting to check out. My readers challenged me to write this article to find a path forward.

Tempting as it may be to check out, the things that divide Americans are important issues. Gun safety is a critical issue with 35,000 people dying from gun deaths every year. Those on the left would like to reduce the availability of guns. Those on the right see more guns as the key to safety. That’s a pretty big disagreement on a topic that matters.

Climate change threatens to destabilize the planet while some continue to argue that it isn’t anthropogenic or even that it isn’t happening at all. And this issue doesn’t just impact America; what we do here impacts the entire planet. We need a process by which we can talk about this without completely talking past one another.

The social safety net helps millions of Americans avoid death, despair or homelessness each year but millions of others slip through the cracks. One sure way to avoid finding solutions is to not talk about the problems.

To figure out how we can have a productive discussion that respects people more than policies I had to ask experts because I’m not good at this. I’m as prone to getting emotional as anyone else but like my readers, I want to find a way to have these conversations constructively.

Cheryl Snapp Conner, courtesy of Snapp Conner PR

Cheryl Snapp Conner, courtesy of Snapp Conner PR

Cheryl Snapp Conner, CEO of Snapp Conner PR and a regular Forbes contributor approaches communications professionally. She helps businesses formulate messaging in these fraught times with an eye toward building audiences and customers.

She suggests you start by highlighting your common ground and acknowledge them for the things you may admire about them: awareness, passion, civic engagement. Only then does she suggest delving into the areas of disagreement.

Dr. Paul Jenkins, courtesy of Live on Purpose

Dr. Paul Jenkins, courtesy of Live on Purpose

Dr. Paul Jenkins, a professional psychologist and author of Pathological Positivity offers this advice:  “I remind myself to put people before problems and values before valuables.”

He points out that we are all prone to confusing facts and opinions.

In the animated film Inside Out the characters are riding along on the train of thoughts and a stack of boxes containing facts and opinions get jostled and spills out on the floor. One of the characters is concerned about getting them all back into the right boxes, and another character comments that it doesn’t really matter because they all look alike anyway. Your position is an opinion.

Ouch.

Jenkins goes on to say that once we form an opinion, we are subject to confirmation bias, where we look for or even create evidence to support our opinion. I’ve seen this happen in my own life. Having no opinion about the color of the new carpet, asked for one I weakly offered one. Suddenly, I find myself offended by every other color option. Three minutes earlier, I couldn’t have cared less.

It is probably more important to be open than to be right,” he says.

Conner similarly suggests acknowledging the inherent biases we all have.

Even when you’re on your best behavior, others may push your buttons, perhaps making a personal attack. What to do then?

Nancy Hoole Taylor, licensed mental health counselor, says, “Do not internalize what others say. It is usually more of a reflection of who they are and not yourself.”

Or, as Jenkins puts it, “A sure fire way to escalate a situation is to take things personally.”

He spent over a dozen years doing child custody evaluations for the court. “In these nasty divorce situations where people really needed to discuss issues in the interest of the children, their engagement in the personal conflicts commonly derailed the discussions and they spent an enormous amount of time and energy fighting and being offended.”

Jenkins offers four ideas for de-escalation:

  1. Understand that person’s opinion is not about you, even if they say it is. It is about their own position and may include their perception of you. The troubling aspect here is that it sounds like they are describing you because the character in their story has your name, face, and social security number. But think about it, how well does that person really know you at your core? They really don’t, right? That means that the person they are railing against, hating, or disparaging is not you – it is a fictional character they have fabricated in their own mind. Don’t defend that person – you would hate them too.
  2. Use the social gifts of appreciation, connection, enlightenment, and elevation instead of defensiveness or retaliation.
  3. Remember that the person who has offended you is merely supporting their opinion. It is not their job to support your opinion, take care of you emotionally, or make you feel good about yourself – those things are your job.
  4. Use the strategic non-response.

Jenkins’ number four seems especially appropriate when the only response you can conceive involves language your mother wouldn’t approve.

Conner has her own approach. She notes that if someone else was personally attacked she’d come to their defense. “If it were about me, I’d maybe address it with humor–‘I may somewhat have resembled that’–and then move the focus to the issue at hand.”

She suggests making a kind or empathetic remark and then closing the discussion with a note of mutual agreement more positive than simply agreeing to disagree. She also agrees that in some cases, the best strategy is to disengage.

Therapist Judith S. Moore shares her strategy: “I express my love for the one disagreeing with me, letting them know we can still be friends.”

Jenkins offers this important reminder, “People are not wrong about how they feel or their opinions, their position is completely consistent with their current set of beliefs and perceptions. Let them be right about that. It’s also okay to not have an end to a discussion, to remain in the question and remember that opinions (including, and perhaps especially, your own) change.

The best advice of all, I think, was Jenkins’ parting wisdom: “Give up your need to be right.”

Key Job Skill for This Position: No Complaining About Rats and Roaches

“I look for a great communicator who can tell some of the most important stories in the world. Also, someone who won’t complain about staying in a $2-a-night room with rats and roaches,” New York Times columnist Nick Kristof summarized by email what he looks for in his annual “Win-a-Trip” contest.

Each year, Kristof of the New York Times holds a “Win-a-Trip” contest to find a student journalist to travel with him on a reporting trip. For 2017, he selected Aneri Pattani to accompany him to Liberia.

Pattani, 22, described her experience as a “one of the best” she’s had.

“Because I had the privilege of traveling with Nick, interviewing people and writing about my experiences for a global community of readers, I was able to chip away at my own ignorance and hopefully spread new knowledge to a few others, too.”

Nick Kristof and Aneri Pattani, courtesy of the New York Times

“Aneri was fabulous!” Kristof said.

“She’s a natural journalist who wrote compellingly about leprosy, African journalism and so much more–and her work is blessed with empathy and intelligence, even though she’s pecking away at full speed,” he explained.

Pattani, for her part, admits that the key lesson she learned in Liberia was “how little I know.”

She admitted feeling “guilty” when visiting a hospital that serves 75,000 people, knowing all the while that she had more medicine in her luggage–including some basic antibiotics and ibuprofen–than the entire hospital had.

She was inspired by Mae Azango, a Liberian journalist who wrote about female genital mutilation and was then forced into hiding.

That experience is exactly what Kristof hopes to accomplish with the “Win-a-Trip” program each year. “I want to help nurture the next generation of journalists who care about the issues that I consider important, and more broadly, I want to encourage young people to engage with issues of global health and poverty.”

For the sake of future applicants, I coaxed some advice out of Pattani. She noted that Kristof chooses all sorts of students, not just journalism students. Her primary advice, “Just be really authentic and explain why this is important to you in a personal way.”

See my past interviews with 2015 winner Austin Meyer and 2016 winner Cassidy McDonald.

As for this year’s winner, Kristof shared his final thoughts on Pattani’s performance: “She didn’t protest a room with rats!”

Aneri Pattani

Aneri Pattani

Pattani’s bio:

Twitter: @aneripattani

Aneri Pattani is a recent graduate of Northeastern University, where she studied journalism and Spanish. She spent part of the summer traveling with Nicholas Kristof to Liberia as the winner of his annual international reporting trip contest. After that, she spent 10 weeks working as a James Reston reporting fellow on the health/science desk of The New York Times. Her work has previously appeared in The Boston Globe, The Texas Tribune, CNBC and The Hartford Courant. When she’s not working, she enjoys learning new dance forms and cooking new types of food.

Never miss another interview! Join Devin here!

Devin is a journalist, author and corporate social responsibility speaker who calls himself a champion of social good. With a goal to help solve some of the world’s biggest problems by 2045, he focuses on telling the stories of those who are leading the way! Learn more at DevinThorpe.com!

 

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