Examples of some of Recipients of Skoll Awards for Social Enterpreneurship

Kashf Foundation

	http://www.kashf.org.pkSocial Entrepreneur: Roshaneh Zafar Grant Amount: $1,015,000 over three years Award Year: 2007
Click To Watch Videos About Kashf Foundation

A chance meeting with Muhammad Yunus inspired Roshaneh Zafar to quit her job and establish the Kashf Foundation in 1996. Ignoring warnings that a microfinance program focusing on women would not work in Pakistan, she enlisted the help of five women and used her own family’s funds to start microfinance centers. Kashf delivers collateral-free microloans, savings and life insurance products to poor women through branches that become sustainable within 18 months. Thirty-five percent of its clients move out of poverty within three years. Kashf made 228,603 loans during 2006, has 135,797 clients and maintains a recovery rate of 99.9 percent. It intends to expand operations to 1 million clients by 2010.

KickStart (formely ApproTEC)

	www.kickstart.orgSocial Entrepreneurs: Martin Fisher and Nick Moon Grant Amount: $615,000 over three years to help expand the distribution of irrigation devices into new markets in developing countries Award Year: 2005
Click To Watch Videos About KickStart

Martin Fisher and Nick Moon founded Appropriate Technologies for Enterprise Creation (ApproTEC) in 1991 and renamed it KickStart in 2005. The organization promotes sustainable economic growth and employment by developing and promoting technologies that can be used to run profitable small-scale enterprises. Working in developing countries in Africa, KickStart introduced low-cost, human-powered irrigation pumps that enable farmers to grow more crops and sell produce in the dry season, when prices are high and supply is low. Since its inception, KickStart has helped farmers start 36,000 new businesses in Kenya, Tanzania and Mali that collectively generate more than $38 million in new profits and wages per year. The new revenues are equivalent to 0.5 percent and 0.2 percent of the Gross Domestic Product of Kenya and Tanzania, respectively. Skoll funding will help KickStart strengthen its operations, develop two new products and reach 50,000 more clients.

We need ‘social business’ to couple the human heart to the capitalist system.

By Muhammad Yunus

from the February 15, 2008 edition

Dhaka, Bangladesh – Bill Gates caused a stir in Davos last month with his call for “creative capitalism.” He pointed out that while capitalism is “responsible for the great innovations that have improved the lives of billions … to harness this power so it benefits everyone, we need to refine the system.”

I see traditional capitalism as a half-developed structure. It ignores the humanity within all of us.

Moneymaking is an important part of humanity, but it is not the only part. Caring, concern, sharing, empathy – all of these aspects also must be considered when developing an economic framework that takes the whole person into account.

Enter the missing piece of the global development puzzle: social business.

Social business – not a charity

A social business is not a charity. It is a nonloss, nondividend company with a social objective. It aims to maximize the positive impact on society while earning enough to cover its costs, and, if possible, generate a surplus to help the business grow. The owner never intends to take any profit for himself.

As evidenced every day by religious ministers and practitioners, social activists, and philanthropists, making money is not always the only driving force. They may be a special group of people who makes it visible, but the desire to help others exists in various degrees in every human being.

Capitalism’s limits

Traditional capitalism doesn’t tap into that universal desire. Capitalism delivers limited results because it takes too narrow a view of human nature, assuming people are one-dimensional, concerned only with maximizing profits.

Capitalism has long been a source of prosperity, spurring industrial, technological, and social progress in North America and Western Europe. But even as standards of living rise, large numbers of people are still left behind.

While free markets have ushered in many benefits, these gains have bypassed too many of the world’s people, especially the poor.

And yet, in recent decades, powerful tools have been developed that leverage capitalism’s strengths to enrich the lives of those who get left behind.

Take microcredit. It has been a powerful tool in combating poverty, enabling the poorest of the poor to change their lives and provide for their families. Through these small, collateral-free loans with a nearly 100 percent return rate, borrowers – mostly women – have been able to harness entrepreneurial abilities inherent in them.

Microcredit is just one example of how a business approach can help alleviate poverty when we move beyond the idea that business by definition has to mean making financial profit for the owner.

We need social businesses to couple the human heart to the capitalist system. This is a sure way of meeting needs that either remain unmet or are met extremely inadequately through the efforts of philanthropy, charity, or welfare.

Traditional philanthropy and nonprofits generate a social gain, but they do not design their programs as self-sustaining business models. A charitable dollar can be used only once. A dollar invested in a self-sustaining social business is recycled endlessly.

A social business is designed to be both self-sustaining and to maximize social returns like patients treated, houses built, or health insurance extended to people who never had this coverage. An investor in a social business retains an ownership interest to hold management accountable and to get the investment back over time, but no dividends are expected, and any profits should be reinvested in the business or used to start new similar businesses.

Social businesses could be viewed akin to investment accounts, where the money is returned over time but the interest is paid in social dividends, rather than in economic profit.

Bottom line: affect on society

While both personal entrepreneurship and social businesses need to be profitable, the bottom line for a social business is how much impact it makes on society,not how much money it returns to the investors. This represents an opportunity for the extension of capitalism to meet the social needs that are not currently met.

As an investor in a social business, I expect my investment money to come back to me, but the real reason for my investment is to see that it benefits society, as opposed to my pocketbook.

A profit-maximizing business owned by the poor can be considered a social business. The Grameen Bank is an example of a social business that is both owned by its poor borrowers and that seeks to maximize the benefits for those borrowers.

Another well-known example of social business is Grameen Danone Foods (known as Dannon in the US). It was inaugurated in 2006 as a partnership between Grameen Bank and Groupe Danone of France.

Groupe Danone produces and distributes Danone yogurt and Evian bottled water throughout the world. The mission of Grameen Danone Foods is to manufacture nutrient-rich, fortified yogurt in small local plants that minimize the need for expensive refrigeration and to sell it at a low price to improve the diets of rural children in Bangladesh.

By investing in this joint venture with Grameen Group, Groupe Danone can help to eradicate malnutrition in Bangladesh, one of the least developed countries in the world, by doing business, not by simply donating the money.

The experiment is a win-win situation and the first of many multinational social businesses that Grameen would like to partner.

The current capitalist framework does not allow us to fully mobilize mankind’s will to do good.

Tap into the urge to do good

Because we are creatures who are motivated to solve the problems of the world, we need to add a new component. Capitalism has the capacity to do good in the world, provided we recognize that the motivation for the entrepreneur need not be exclusively economic and personal.

The urge to do good exists in all of us – right along with self-interest. We can harness that urge to do good in addition to human ingenuity to help the world’s poor become self-sustaining with dignity and self-respect.

Thirty-one years ago, when I launched the Grameen microcredit program, no one in the banking world thought low-cost loans for poor people would be viable on a large scale. I was not sure myself how large it could grow.

Just as microcredit has proved to be a success, so, too, can social business. Working together, we can expand the predominant view of capitalism and enterprise to include social business.

This new perspective will move us one step closer to bringing all people into prosperity, and one step closer to a world without poverty.

• Muhammad Yunus is the founder and managing director of Grameen Bank and the author of “Creating a World Without Poverty: Social Business and the Future of Capitalism.” He won the Nobel Peace Prize in 2006 for his work on microcredit.

NOTE: On the website where you can find the article there is an additional bonus – Monitor Opinion editor Josh Burek speaks with Nobel Prize winner Muhammad Yunus about social businesses! Listen to it, please.

I know there is a lot of cynicism involved in activities of large companies related to their efforts around the world – I prefer to judge each on their merits.

Social Innovation Conversations: Maria Eitel

Nike’s Efforts to Empower Young Girls Maria Eitel

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[runtime: 00:49:56, 22.9 mb, recorded 2007-05-11]

Nike has taken pains to clean up its act since the media brought public attention to human rights violations in its supplier factories in the 1990s. Now, through the Nike Foundation, the sports and fitness giant is taking a proactive approach to some of the world’s most challenging social problems. Foundation president Maria Eitel talks about how the organization is focusing on creating economic opportunities for adolescent girls around the world as a means of alleviating poverty.

Maria Eitel was the person hired in 1998 to help Nike deal with the highly publicized worker rights violations taking place in its outsourced factories around the world. In this talk, sponsored by the Stanford Center for Social Innovation, Eitel discusses her strategy for approaching that enormous problem among suppliers in 55 countries. She then details how, after helping the organization successfully address its systemic difficulties in that arena, she moved Nike in the direction of becoming a force for social change by using its foundation as an organ to address challenges in the field of development. She discusses the foundation’s business-oriented approach to creating opportunities that are pulling young girls off the track to poverty, and putting them on the road to economic empowerment.

Author: Muhammad Yunus
Wed, Sep 05, 2007

Social Entrepreneurship – Audio – Creating a Poverty-Free World – (June 11, 2007) Muhammad Yunus, 2006 Nobel Peace Prize winner and founder of Grameen Bank, changes traditional principles of banking by putting poor people’s needs first. Yunus describes the reasons behind his philosophies and how they have led to the lau

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Building Social Business Ventures

Author: Muhammad Yunus
Tue, Sep 25, 2007

Social Entrepreneurship – Audio – Building Social Business Ventures – (July 21, 2007) Microfinance, the extension of small loans to entrepreneurs too poor to qualify for traditional bank loans, has proved to be an effective strategy for raising millions of families from poverty worldwide. Nobel Laureate Muhammad Yunus is th

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Creating a World Without Poverty: how social business can transform our lives
Speaker: Professor Muhammad Yunus
Chair: Professor Mary Kaldor
This event was recorded on 15 Feb 2008 in Old Theatre, Old Building
Professor Yunus will outline his vision for a new business model that combines the power of free markets with the quest for a more human world – and tell the inspiring stories of companies that are doing this work today. This event marks the launch of his new book Creating a World Without Poverty: how social business can transform our lives.Muhammad Yunus is founder and managing director of Grameen Bank and winner of the 2006 Nobel Peace Prize.
Available as: mp3 (20 mb; approx 88 minutes)
Event Posting: Creating a World Without Poverty: how social business can transform our lives