Philanthropy

Matt Forti, Co-Founder and Managing Director of the One Acre Fund, Joins Denver Frederick

The following is a conversation between Matt Forti, Co-founder and Managing Director of the One Acre Fund, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.

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Matt Forti

Denver: For those who follow nonprofits and social enterprises closely, there are a number of organizations that carry with them a stellar reputation and embody what the future of this sector should and hopefully will look like. Yet, they remain largely unknown to the general public, especially here in America. One such organization is the One Acre Fund. And here to tell us about it this evening is their Co-founder and Managing Director, Matt Forti. Good evening, Matt, and welcome to The Business of Giving!

Matt: Thanks so much, Denver! It’s great to be here.

Denver: Tell us: who is the One Acre Fund?  And how did you get started on this journey?

Matt: One Acre Fund is a nonprofit social enterprise, and our client is a poor farmer that farms roughly an acre of land in a remote area of Africa. We got started about 10 years ago because when we visited Africa, you go into the rural areas; the whole landscape is dotted with farmers. Their profession is to grow food, and yet, they can’t grow enough to feed their families all-year round. Agriculture has become so much more productive everywhere else in the world over the past few decades. We said, “Why not Africa? What’s driving this? Can we do something about it?” And we pulled together a pilot and a model, and the rest is history.

In the areas where we work, 1 in 10 children will die before the age of 5. Hunger is the primary underlying reason for those deaths. And then, even if you’re lucky enough to survive, you’re going to have a 1 in 3 chance of being physically and mentally stunted.

Denver: Before we get into your actual work, what is the impact, the human toll on a child growing up in extreme poverty and extreme hunger in Sub-Saharan Africa?

Matt: Hunger has just absolutely devastating consequences. In the areas where we work, 1 in 10 children will die before the age of 5. Hunger is the primary underlying reason for those deaths. And then, even if you’re lucky enough to survive, you’re going to have a 1 in 3 chance of being physically and mentally stunted. I mean, literally, your brain doesn’t develop to its full capacity. And so what you have is children that don’t go to school ready to learn, and their full potential is never going to be reached.

Denver: Well, global poverty, as tragic as it is, is really just an inevitable part of the human condition. It will always be with us, and I think that’s a conventional wisdom shared by so, so many people. But that would not include you or One Acre Fund. You believe it is solvable and can be done within your lifetime. What do you base that on?

Matt: Absolutely! One of the most daunting, but exciting facts about poverty is it is primarily a rural phenomenon, and 70% of the world’s poor are farmers. So, this single profession has more poor people combined than every other profession out there. And so, if we can make this single profession more productive, we have a huge lever to try to get the next generation of families out of poverty. And so, One Acre Fund believes that essentially, if you can pull together the right mix of things that makes agriculture more productive, families will be able to invest and get themselves out over a period of time.

Denver: Well, let’s walk through that if we could. You have a very clean and clear business model. It has four pieces to it. Why don’t we begin with Farm Inputs. What are they?

Matt: Farm Inputs are things that you put into the ground to make your crops more productive. So, first, we start with seeds. Hybrid seeds are naturally cross-pollinated. They’re much more effective than saving your seed from the last harvest. Also plant nutrients,–things like compost and animal manure, as well as small amounts of fertilizer– can have a dramatic difference on the growth of your plants. So these are the technologies that have been used in the U.S., for instance, since the ‘30s or ‘40s; they just haven’t been distributed effectively in Africa. And that’s where the model starts.

Denver: The second part of the model is Finance. Now, how do you go about finance with people who are living in extreme poverty?

Matt: Finance is absolutely critical. There are no credit scores in the rural parts of Africa for us to use. But what we find is that if you can finance a productive asset loan…so, instead of giving cash, you actually give the inputs. That’s the loan. And you know that the inputs are going to be used productively.  That’s going to give you a high confidence that those inputs are going to turn into cash that can be repaid down the road. So, that’s exactly what we do.

Denver: And the third piece is the Education part. What kind of training do you provide these farmers?

Matt: The training is critical. It’s really basic techniques. There are really five or six techniques that drive 80% of the productivity of agriculture. It’s really proper spacing of seeds. It’s planting in rows instead of scatter shot. It’s micro-dosing tiny amounts of fertilizer, and a few other things. Basically, what we find is that if farmers can do these six basic things well, then the input loan that they’ve received is going to be productive.

Denver: And the final piece of it…not to be overlooked, is Distribution.

Matt: Yes. Absolutely. A big part of the problem is that the closest place to access seeds for instance might be 30 kilometers away—you may as well be on the moon if you’re in rural Africa, if you think of all the hills and such. So we distribute all of this within walking distance of every farm family we serve.  And the training is provided in the farmer’s field. It’s actually provided by farmers themselves that are in our program that we’ll hire and train up. And when you put it all together, you have a very impactful model.

Denver: Yes. You’re the Amazon of rural farmers, arguably.

Matt: Yes! We do like to say that.

Denver: And you don’t overlook the distribution to the extent that you actually give something called the “D-Prize.”

Matt: Yes! One of the side projects of our founder… which really came out of the recognition that with One Acre Fund, again, the technologies to improve have existed for generations. It’s really about: How do we get these proven models into the hands of the people that need them?  Agriculture is one thing. But in clean energy, for instance, solar lights can be very impactful for a family from a health and education standpoint, and also from avoided kerosene expenditures and batteries and candles. This is something that pays back for a farm family within 8 to 12 months. Bed nets that prevent malaria…So, across all of the different aspects of what it takes to be successful in rural Africa and elsewhere, we know what it is.  And now it’s just about getting it into the hands of the people that need it.

Denver:  Absolutely! Well, although One Acre Fund is a nonprofit organization, and you’re committed to improving lives, Matt, you operate very much like a regular business.  And that stems from your belief in market-based solutions to poverty. Explain what those are, and why you think that is a correct approach to addressing extreme poverty.

Matt: Yes. That’s absolutely right. I think the recognition that we had very early on is: if we treat our farmers not as beneficiaries, but as clients – as paying customers – that all of a sudden, everyone’s incentives are going to be aligned.

One Acre Fund knows that if we don’t deliver high-quality services, farmers aren’t going to repay. And if farmers don’t repay, we’re not going to be able to operate in the next season. And so, what you see all the time in our areas of work is, for instance: repayment– which happens during the course of the farming season week by week, bit by bit– if our repayment is suffering in an area, that’s probably because we’re not delivering the trainings effectively.  Or we didn’t provide the seeds on time. And so we can immediately focus attention on that area.

It basically just makes sure that farmers have a voice in the services that they’re receiving. It also, of course, means we’re much more scalable. We’re not dependent 100% on donations. About half of our revenue this year will be from the very clients we’re trying to benefit, and I think that’s one of the main reasons why we’ve been able to grow from 40 to 450,000 families in just 10 years.

we’re trying to alleviate hunger, but the long-term goal is intergenerationally. We’re trying to get families to be able to educate their children, and those children to be able to pull the whole family out of poverty.

Denver: That’s quite impressive! Let’s talk about your clients for a minute. Who are they? What are their lives like? Share with us a story of one of them, if you would.

Matt: I’d be happy to. A typical One Acre Fund farmer is a woman. She toils in her fields for probably about six to eight hours a day. She’s also probably responsible for child care… for her children. And she and her family suffer what’s known as the “hunger season.” It’s basically a period of time after the main harvest has run out where the family is skipping meals, regularly substituting high-quality meals with low-quality ones. And this is what creates the cycle we talked about earlier. Well, farmers have this amazing asset. They typically do have enough land to basically grow enough food all-year round.

One of the stories I’d like to share is of a farmer named Teresa Wanyama. She is a widow. She has eight children that she supports. She actually was one of the first 38 farmers in our program in 2006. When we celebrated our 10th anniversary last year, we went back to that first village, and we tried to document: what was the path that Teresa took in our program over that 10 year period of time?  And what we found was three things.

First, it was alleviating the hunger, and that meant the main crop she was growing – maize – needed to be much more productive. She went from growing two bags of maize– which is about enough food for maybe four months of the year– to growing 15 bags of maize.  So, significant improvement. The second thing was nutrition, so really helping to introduce diverse crops like collard greens that provide additional vitamins for her children to keep them healthy.

And then the third thing– and this is very common in our program– is to provide more expensive assets. One of those is trees. Trees are an amazing product. They’re great for the soils. They don’t take up a lot of land. They grow vertically. And if you can keep trees in the ground and harvest them five, six years after you plant them, you could make $5, $10 for something that may have cost just a few pennies to put in the ground.

What we found is that Theresa had last year harvested about 40 of her original trees. She sold them for about $600. That’s a huge windfall in rural Kenya. And with that, she was sending her eight kids to school. Four of them are in secondary school; another four are already in university. And again, that’s unheard of. So when you talk about: we’re trying to alleviate hunger, but the long-term goal is intergenerationally. We’re trying to get families to be able to educate their children, and those children to be able to pull the whole family out of poverty.

Denver: That’s a great story, and it’s hard to believe you have 450,000 of those. What countries do they encompass?

Matt: We work in six countries in Eastern and Southern Africa. Kenya and Rwanda were our first two countries; about 80% of our farmers are there. We work also in Burundi, which is the hungriest country in the world, Tanzania, and then Uganda and Malawi. We launched those countries last year.

We don’t want to do this work to just reach a lot of people. We want to have a very deep quality and measurable amount of impact.

…nothing is sacred at One Acre Fund. If it’s not working, we’ll go back in and figure out how to improve it.  And that’s the central part of what makes us successful, I think.

Denver: You have emphasized measurement and evaluation on everything you do, right from the very get-go. And that as much as anything, I think, defines the culture of the One Acre Fund. Tell us how you’ve gone about doing this, and how it has helped shape the culture of the organization.

Matt: I think the most important thing is, as we’ve said from day one, we don’t want to do this work to just reach a lot of people. We want to have a very deep quality and measurable amount of impact. Secondly, that we don’t just want to measure to provide data to donors and outside parties. We really want to do it, first and foremost, to make sure what we’re doing is working and figure out how to improve our program.

And as a result, every year, every crop, every country, we are going out there and physically weighing the yields of One Acre Fund families, as well as neighboring families that aren’t in the program but possess similar characteristics and similar propensities for farming. And so we know exactly how much extra yield is coming out of the ground because of the One Acre Fund program, and we know where it’s working and where it’s not. We’ve had many examples of failures, particularly in the early years – crops that weren’t growing to the extent that they should have. And nothing is sacred at One Acre Fund. If it’s not working, we’ll go back in and figure out how to improve it.  And that’s the central part of what makes us successful, I think.

Denver: And you also believe that organizations should have the internal capacity to do their own evaluation and testing, and not just rely on outside vendors.  Correct?

Matt: That’s exactly right! I think you can fall into the trap of thinking: “Measurement is so sophisticated. It can only be done by a PhD,” and that’s not the case. Most measurement really is about the weekly process indicators – Did the farmer come to training that week? Is the farmer spacing their seeds properly? – and really being able to use that data immediately to change course, improve what you’re doing. And that kind of measurement can be done absolutely internally.

Denver: Yes.  And in fact, I think this data is really being collected by your front line workers, and they’re going to be the ones who are going to use it.  So, it’s more meaningful when they’ve actually collected it.

Matt: Absolutely! You go to Africa, one of the things I love doing is visiting meetings of our field officers– these front line staff– every week. And there’s a big chalkboard with tons of rows and columns and the words “KPI” at the top – “key performance indicator.”  So you’re talking about people with a primary school education who are tracking these indicators, comparing between different districts.  And that’s exciting. It’s people using business principles to try to make a difference in their communities.

Denver: And I’ve been impressed on how thoughtful you’ve been in going about this. For instance, as you scaled up the organization and entered new countries in Africa, your impact per client– for every dollar that has been spent– has actually fallen in some cases, while the amount of social good you have done has increased. Explain that to us.

Matt: It’s interesting. The main way that we measure impact is thinking about how much extra yield and profit One Acre Fund is generating. Well, one of the exciting things for an overall social good– but less good for the impact that we’re measuring– is the fact that One Acre Fund’s trainings are now spilling over into the communities where we work. Even if you’re not enrolled in One Acre Fund, you’re seeing that your neighbor’s yields are going up; you’re asking them, “How did you do that?” They’re actually teaching these techniques to their neighbors. And so what’s great, what we’re seeing is the entire community is being lifted up. Our impact looks a little bit less, but the total impact we’re generating in the community has gone up.

Denver: You know, Matt, every book on social entrepreneurship or social enterprise talks about the need to scale an organization to have great impact. But One Acre Fund has actually done that, and at breathtaking pace over the past 10 years. Tell us about your growth as an organization and some of the lessons from it that you can share with us.

Matt: We have grown really, really dramatically as I mentioned– 40 to 450,000 families in 10 years. I’d say three things. One is: it starts with: What is the size of the problem you’re trying to address? There are 50 million smallholder farm families in Africa. Ninety-three percent of them fit the characteristics of who we like to serve – two acres roughly, or less, of land, staple crops predominantly. Most other organizations focus on that tiny sliver– 7%– that might be already well-organized into some kind of a value chain. So, it’s going after where the biggest problem is.

I would say secondly, is the visibility of our impact. So we talked about this before. But crops are growing to twice to the height they normally do in our program.  So the neighbors are asking how that happened. Our growth is very organic. We have a group that experiences the program together– of about 7 to 12 farmers. Those groups will then split up, and each of those farmers in the next year will register their own new group. So it’s a very organic way to grow. You put down in an area, and then it grows like a spoke.

I would say the third thing is to—as we talked about earlier—really to treat the farmers as clients and not as beneficiaries. I mean, that’s just really critical. With paying customers, we’re able to spend less per donor dollar than most other organizations to deliver our services. That’s allowed us to grow new countries much more quickly, for instance.

Denver: Yes, and you give them the dignity.

Matt: Absolutely!

Denver: Well, as you look to your future growth, you’re looking to expand by diversifying some of your programs in interesting ways. What are some of those plans, Matt?

Matt: Absolutely! I think one of the common struggles that nonprofits have is, on the one hand: if you focus on one thing, you can get really good at it, but you might not be addressing all of the needs of the people you’re trying to benefit. On the other hand, if you try to go in on day one and do everything well, you probably won’t do anything particularly well. So I think we’ve taken this nice middle ground. We’ve really focused on agriculture in these early years, but it’s opened up the ability now. We have the trust of the clients we work with. We have this very unique distribution channel that doesn’t exist into these very remote villages. We’re looking to do new things.

A big one a few years ago, as I mentioned earlier, solar energy. Solar lights are very powerful, quick product payback. So that’s one thing that we’re doing. We talked a little bit about nutrition. This year, we’re doing our first-ever trial of providing services to pregnant mothers, really providing them training on things like exclusive breastfeeding, nutritional supplements that children need to grow healthy. So that’s a new area for us. But we’re open to lots of different things so long as it can be trained by the same people; it can go through our distribution channel, and be financed.

Denver: Crop insurance is one of those things, right?

Matt: Yes. Unfortunately, this past year, there was a terrible drought in much of Eastern and Southern Africa. Crop insurance historically has been for rich people, but if you think about it, rich people are  not the kind of people that need insurance. They can cover their risks. It’s the poor people that need it. We’re now East Africa’s largest insurer of crops, and we want to keep improving that product so that farmers are covered for their harvest.

Denver: I want to speak to you a little bit more, Matt, about your corporate culture, and especially the investment that you have made in developing and training your people. Tell us about it.

Matt: I think some people equate nonprofits with just good hearted people out there delivering services. But we really want to borrow from the best of the business world, which is really about good professional development and training. No matter what level you’re at at One Acre Fund, you’re probably going to be spending at our organization 30% of your time in some kind of a formal training program. It’s a leadership accelerant program.

We have examples of front line staff who, as I’ve said, have a primary education. In year one, they might be working with 200 farmers. By year three or four, they might be in charge of a whole district of a few thousand farmers. And they’re getting technical management leadership skills from us. We’re trying to make up for the lack of education that happens in rural Africa. And that’s really critical because it’s much harder to attract… with the salaries we pay… very well-educated African national staff who may be recruited by the large multi-national companies. We’re taking this abundant labor force, kind of making up for the lack of education.  And then all of a sudden, these are the leaders of Africa’s next generation.

Denver: And as the managing director of One Acre Fund, you’re based here in the United States.  But really, the preponderance of your staff is in Africa, close to your clients. Would that be correct?

Matt: Absolutely. I’m an anomaly. We have only 40 staff in the U.S. Ninety-eight percent of our staff are not only in Africa, but in rural Africa. Our headquarters are in these rural communities. And that’s really important, being close to the client. The people who are making decisions about our programs are living a few hundred meters away from the clients that we serve.

Denver:  People often speak of Africa as if it were a country, as opposed to a continent made up of 54 countries. But with that said, tell us what you see as the promise, as well as the perils, for Africa over the next 10 years or so.

Matt: Africa is at an incredibly exciting juncture. It’s the one continent in the world where GDP growth is regularly in the higher single digits than most countries. You generally lack the terrorism problems that exist in other parts of the world. You have a human capital gap that can really be filled.

The challenges are predominantly political. Unfortunately, it’s pretty regular to not see peaceful transfers of power. And then climate!  Climate is going to disproportionately affect, particularly farmers, but many industries in Africa. And that’s one thing. When you invest in farming, you’re not only improving the productivity of existing land, you’re also introducing the incentive to clear cut the remaining savannah.  Africa has got about 70% of the remaining forest and natural land that exist in the world. And so those are the two twin problems we’re trying to address… and I think Africa needs to focus on.

We have pushed ourselves to make our model literally as scalable as humanly possible. I think setting that bold vision, organizing everyone around that vision, and making sure that everyone is putting the farmer first, that’s really, at the end of the day, what’s gotten us there.

Denver: Well, the One Acre Fund is a great success story. I know you have a lot left to do, and it’s a story still being told. But if you have to put your finger on the one thing that would be the most important reason for your success, what would that be? And what would be the one thing that causes you the greatest level of concern right now?

Matt: Really setting a bold vision, I think, at the end of the day, really organizing an entire group of people around the vision of putting the farmer first, and really saying that if you’re working on a problem that’s 50 million in scale, it’s just not acceptable enough to reach a few thousand, a few even tens of thousands. We have pushed ourselves to make our model literally as scalable as humanly possible. And I think setting that bold vision, organizing everyone around that vision, and making sure that everyone is putting the farmer first, that’s really, at the end of the day, what’s gotten us there.

Denver: Yes. You got 450,000. I know you have a goal of a million by 2020, correct?

Matt: Yes. I think the biggest fear we have is:  How are people going to perceive global aid, foreign aid, over the next few years, and not just the U.S. but also in countries in Europe? It’s very common for individuals– citizens of the U.S., for instance– to believe that we divert 10% of our budget to foreign aid. We’re spending less than 0.1% of our budget on foreign aid. And there are programs that are out there working, and it’s not just One Acre Fund. And I want to make sure that people know that investments that are being made on behalf of all of us here– of taxpayers– are really making a big difference in the world.

Denver: Well, I want to thank you, Matt Forti, the Managing Director of One Acre Fund for covering so much ground in a relatively short period of time. For those interested in learning more about One Acre Fund, or who may want to help support your work, your website is?

Matt: Oneacrefund.org. Please go there; visit us. Also talent is the number one resource that we’re always looking to grow.  So if you’re interested in volunteering or working at One Acre Fund, you’ll also find a lot of information on our website about that.

Denver: Great! Well, it was a real pleasure, Matt, to have you on the program.

Matt: Thank you, Denver!

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The Business of Giving can be heard every Sunday evening between 6:00 p.m. and 7:00 p.m. Eastern on AM 970 The Answer in New York and on iHeartRadio. You can follow us @bizofgive on Twitter and at facebook.com/business of giving.

 

Tara Russell, Founder and CEO of Fathom Travel, Joins Denver Frederick

The following is a conversation between Tara Russell, Founder and CEO of Fathom Travel, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.

tara-russell

Tara Russell

 

Denver: There has been a growing interest in “voluntourism” in recent years, whereby vacationers seek to have a social impact when they travel.  And perhaps no one has done this any better than Fathom Travel, which is part of Carnival Corp. And here with us now to explain how it works and what the impact has been is their Founder and CEO, Tara Russell. Good evening, Tara, and welcome to The Business of Giving!

Tara: Hi there, Denver! It’s good to be with you. Thanks so much for having me!

 

We’re a different kind of a travel company. We believe that travel is something that uniquely connects, unites, and inspires people already, and so we’ve essentially built robust programming and robust experiences that really heighten that and allow people to unleash their greatest potential.

Denver: Tell us a little bit about Fathom Travel and exactly what you do.

Tara: So Fathom Travel really got started on this journey with the idea of “How do we take people who love the idea of travel, but want to go a little bit deeper, want to potentially grow themselves, connect to a bigger story, and really make a meaningful difference in the world?” So, we’re a different kind of a travel company. We believe that travel is something that uniquely connects, unites, and inspires people already, and so we’ve essentially built robust programming and robust experiences that really heighten that and allow people to unleash their greatest potential.

And yet what travel does for any of us is: travel reminds us that as human beings, we essentially have this shared “ubuntu,” as Desmond Tutu would call it.  But we have this humanity that’s intertwined with the lives of others.

Denver: Oh, that sounds wonderful. Well, I’m going to have you walk us through one of these experiences. And I know that you go to both the Dominican Republic and to Cuba, and you’re going to some other places. But let’s talk a little bit about this voyage. It’s about a week long, and it takes two days of travel each way to the Dominican Republic. What goes on during the time passengers are taking the trip down to the Dominican Republic?

Tara: So our Fathom Dominican Republic sailings are seven days in length. They spend about a day and a half between Miami and the Dominican Republic at sea, and then we have part of four days on the ground in the Dominican Republic, before sailing back another day and a half to return to Miami. So, the Fathom experience is built holistically. Our onboard experience is quite different than what people might imagine in a traditional cruise. Our onboard experience includes workshops like Ashoka’s “Unleashing the Changemaker Within You.” It includes things like Stanford’s “Storytelling Workshop.” It includes things like “Design Your Life” and Curiosity Atlas workshops. We have “Superpower Parties” and help people unleash their own personal gifts, passions, talents, abilities in fun and creative ways.

We have really impactful content and experiences that are really fun, but quite different than what someone might imagine. We don’t have a casino on our ships. We don’t have some of what traditional cruisers might be used to, but we do have a lot of the other benefits.  You get to have this unique neighborhood within this village-feel on this small ship. We have a very small ship that we’ve repurposed. However, part of building this experience was essentially building “software experiences,” so to speak, that we could really take anywhere in the world.

So when you get to the Dominican Republic on that sailing, you can do anything you want. You can adventure and explore at a 27 Waterfall Adventure.  Or you can go and learn more about making organic chocolate and come alongside a group of Dominican women in a cooperative that we’ve partnered with, and you can assist and support their chocolate cooperative. You can also learn to make recycled paper and how the Dominicans are repurposing waste and the ways that we’re serving and supporting that social enterprise. You can come alongside some of the environmental efforts and be part of the reforestation and planting efforts that we take part in. You can learn to make clay water filters and bring access to clean water to Dominican families, as there are about two million people on the island of only about 10 million to 11 million people total that still don’t have access to clean water.

So everything about the Fathom experience is what we call a “participatory experience.” We essentially invite our travelers to not just to be a spectator, but to get in the game. And so we believe there is this emerging trend and hunger for more than just seeing what’s happening in a place. Our travelers want a role on the team, and so we have made that really easy and convenient and safe and fun. A big part of it is education and  exposure to different ways of thinking, different ways of living, and really to new friends and new partners all over the world.

So I think we’re living in a time, Denver, where the world seems to be quite heavily divided, even in our own country. And yet what travel does for any of us is: travel reminds us that as human beings, we essentially have this shared “ubuntu,” as Desmond Tutu would call it.  But we have this humanity that’s intertwined with the lives of others. And I think what’s powerful about the Fathom experience is that people have a very visceral reaction, and that feeling is very, very strong when they have the Fathom experiences because we help really weave the stories of the lives of our travelers to… whether we’re in the Dominican Republic… we weave them to a Dominican. If we’re in Cuba, it’s weaving those traveler stories to the stories of the Cuban people.

Denver: And you eliminate so many obstacles for people. Because I know so many people who want to help, who want to have a volunteer experience overseas, but it is so hard to get started. They don’t know where to begin, and you pretty much just clear those things out of the way and allow people in a very hands-on and meaningful way to get involved in this fashion.

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Kenneth Roth, Executive Director of Human Rights Watch, Joins Denver Frederick

The following is a conversation between Kenneth Roth, Executive Director of Human Rights Watch, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.

Kenneth RothDenver: Most every citizen around the world is concerned about human rights and shudders at the thought of another person’s rights being violated. And that is why we should all be grateful that there is an organization solely dedicated to this – always vigilant, 24/7, 365 days a year, all around the world– exposing human rights abuses like torture, violence against women, and child exploitation. It is Human Rights Watch, and it is a great pleasure to have with us this evening their Executive Director, Kenneth Roth. Good evening, Ken, and welcome to The Business of Giving!

Kenneth: Thanks for having me! My pleasure to be here.

Denver: Before we get into the work of the organization, tell our listeners specifically what are human rights? Their genesis?  And source documents upon which they are based?

Kenneth: That’s a good question. In fact, they’re quite familiar to many Americans in that many of the rights are things you find in the Constitution. The right to free expression and free association; the right not to be mistreated or tortured; the right to a fair trial; the right not to be discriminated against – those are all in the Constitution. But also, human rights include other things that are not in the US Constitution like: the right to access to healthcare, the right to education, the right to employment. All of these are contained in a series of international treaties. The first founding document was something known as the Universal Declaration of Human Rights, which is actually not a treaty. It was a declaration.

Denver: Of 1948, right?

Kenneth: Precisely. But that gave rise in 1966 to the two founding treaties. One is called the International Covenant on Civil and Political Rights, and the other: the International Covenant on Economic, Social and Cultural Rights.  And thereafter, there were other specialized treaties on women’s rights and children’s rights and the like. But these treaties are widely ratified, often by a hundred plus governments around the world.  The US is a party to some of them, but not all of them.

Denver: Give us a bit more about the evolution of the modern day human rights movement. And I know you’re exactly the guy to ask because when you were at Yale Law School– late ‘70s to around 1980– they offered only one human rights course, and you dutifully signed up for it every semester… only to see it canceled because of a lack of interest.  And there were certainly no jobs in the field when you got out. So, tell us how this field has evolved and grown over the past 35 years or so.

Kenneth: You’re right. It didn’t start off very auspiciously for me. But it began really with Amnesty International in terms of the big international organizations in 1961. But even Amnesty was pretty tiny by the time I graduated from law school. And Human Rights Watch at that stage, in 1980, had two employees. It had started just a couple of years before. But what we’ve seen is Amnesty International and Human Rights Watch both have grown incredibly over the years and have been joined by many smaller groups around the world. And so, if you’d go to almost any country today, there is a local human rights organization or more that are our close partners in monitoring and defending human rights practice.

…we put public pressure on governments. And foremost, we shame governments, because in today’s world, most governments find it shameful to violate human rights. Almost everybody pretends that they respect human rights; they then fall short. And if we can highlight that discrepancy between pretense and practice, that embarrassing gap forces the government over time to change.

Denver: Well, your organization has an exemplary reputation for being “factually accurate.” In fact, some people might say you’re a little obsessive about all that. So with that said, Ken, how do you go about your work? How do you decide what countries to go into? How do you gather your information? And then, how do you make a determination whether something is a human rights violation or not?

Kenneth: We are meticulous with the fact finding, and we have to be because it’s the key to our credibility. But Human Rights Watch works today in about 90 countries around the world, basically every place where there are serious human rights violations. And in each place, we begin by conducting a very detailed investigation on the ground. We have what we call “researchers” who could be lawyers; they could be journalists; they could be academics, and many, many different nationalities. We have 77 nationalities on staff. They often live in the country, or if that’s not possible, they live nearby.

And their job is to go and talk to the victims of human rights abuse, talk to the eyewitnesses, talk to the government.  So they get all sides and put together as complete and accurate a picture as they can of what actually happened. We will then analyze that fact situation under international human rights law to see “Were human rights violated or not?” If they were, we publish our findings. And that publication becomes the source of an effort to pressure governments to change.

Human Rights Watch doesn’t go to court. We operate in many countries where, frankly, the court systems are broken. They don’t restrain governments. So instead, we put public pressure on governments. And foremost, we shame governments, because in today’s world, most governments find it shameful to violate human rights. Almost everybody pretends that they respect human rights; they then fall short. And if we can highlight that discrepancy between pretense and practice, that embarrassing gap forces the government over time to change.

We also work with various powerful governments who care about human rights. And so, we will go to the U.S. government or the European Union or various governments around the world and say, “Would you help us put pressure on government “so and so” until they change their human rights practices?” “Would you condition your military aid until they stop executing people?”  “Would you make sure that they don’t get the next state visit until they release their political prisoners?” You figure out: What does the target government want, and you try to pressure them until they change.

Denver: Looking at both sides of this now– both gathering the information and then trying to pressure the governments at the other end of it– how has technology or social media changed the nature of how you go about that work?

Kenneth: In the old days, you would hear about a problem in a distant country, and you might start off by writing a letter – remember those things? – and put them in the post.  And two months later, you might get a response. Perhaps you could afford an international phone call, but they were outrageously expensive, so you didn’t do that very often. (more…)

Karl Zinsmeister, Author of The Almanac of American Philanthropy, Joins Denver Frederick

The following is a conversation between Karl Zinsmeister, Vice President of Publications at Philanthropy Roundtable,  and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.

Denver:  If you stop and take a moment to think about endeavors that have been woefully underappreciated in terms of what they have meant in building and shaping America, philanthropy would most certainly be on that list. Karl Zinsmeister, who oversees publication at the Philanthropy Roundtable, has taken upon himself to address this with two recent books to help us better appreciate the pivotal role that private resources have played in solving public problems. Those books are The Almanac of American Philanthropy and What Comes Next? : How private giving can rescue America in an era of political frustration. And he is with us now. Good evening, Karl, and welcome to The Business of Giving!

Karl: It’s great to be on your show, Denver!

Denver: Before we delve into the history of philanthropy and some of the fascinating stories you tell of philanthropists, first provide us with some context about the nonprofit sector itself, its significance and breadth, and what it really means to the American economy.

karl-zKarl: Boy, it’s such a huge secret, Denver, as you implied in your intro. People don’t realize that we give away $373 billion every single year in voluntary cash donations, and the value of voluntary time and labor that we put in is about that much more; so you can roughly double that. And just to give you a little perspective, that’s about twice the size of the so-called military industrial complex that people use as a kind of a metaphor for a big serious part of the American economy– big industry. It’s such a huge part of our economy.  And even more than that, Denver, it’s a huge part of our culture. Philanthropy ends up being kind of our risk capital… or our venture capital. It’s the thing that we pour into new problems, to sticky problems, to difficult problems because it’s much more flexible. It’s much more nimble. It’s much more inventive. It’s much more willing to make mistakes and to correct  course and to redirect itself than almost any kind of funding available–either governmental or corporate. So philanthropy has historically played just a giant role in fixing some of our really dreadful national issues and lots of little things as well.

Denver: Well, I want to talk to you about some of those… and some of the people who made it happen. In your book, The Almanac of American Philanthropy, all 1,342 pages of it, you really do tell, Karl, some fascinating stories of American philanthropists. There was a fellow who made his fame and fortune through Tabasco sauce, which is still sold in stores today. Who was he?  And where did his philanthropic interests lie?

Karl: That’s a great place to start. You know, people can’t imagine that a product like Tabasco sauce could actually accumulate enough money to change the world, but it did. And in this case, it’s a really delightful guy. I just kept finding these kinds of people the more I dug into philanthropy, Denver. There are thousands of them. This guy is named Ned McIlheny, and he’s a Southern boy, grew up in Louisiana bayous, and he’s just one of those kind of Forrest Gump-type personalities, had adventure after adventure after adventure. And at some point, he became very much of an outdoorsman and loved  nature.  And one of the stories I tell about him in the Almanac was that he realized that a bird he just loved– a fellow native of the bayous in Louisiana called the Snowy Egret– was disappearing. And what had happened, it was the egret’s feathers had become just a fashion craze for women’s hats. They were being hunted to death, and nobody was doing anything about it. And rather than dial 911, or call his congressman, or say somebody should do something about this, McIlheny went into direct action himself. The first thing he did was: he literally went out and beat the bushes on the island that his family owns down in Louisiana– still owns– and it took two full days for him to find two nests. That’s how rare these birds had become. And he finally found two nests, and he scooped up eight little baby fledglings from these nests and brought them back and raised them in a protected area on his own property. And over a period of about 10 years, he increased this flock to about 90,000  to 100,000 birds as a kind of  seed capital. And at the same time, he was working on this microscale, he was also talking to his fellow philanthropist friends like Olivia Sage and John Rockefeller, and he was saying, “You know?  A lot of these swampy lands along the Louisiana coast that people think is just wasteland? That’s really important to birds!  We should preserve that. You should buy that up and just hang on to it as kind of conservation land.” And he convinced them to do that. And with this kind of double-pronged approach, and this combination of his money and his energy and his ideas and his enthusiasm, he was really instrumental in bringing the Snowy Egret back from extinction.  This is the kind of personality we’re dealing with, Denver.

The American spiritual is just one of our original art forms, but it existed entirely  in an oral form. It had never been written down. And you forget that those kinds of things can disappear. It only takes one broken link generation in the chain, and it’s gone. So when he figured this out, McIlheny again just decided:  “I’m going to do something about it. I’m not going to wait for somebody else.”

And then I just love the fact that the second story I tell about McIlheny:  that’s also about extinction, but it’s a totally different kind of extinction… So I mentioned he’s a Southern boy. He grew up in the South, and he just loved Negro spirituals. They were part of his life, and he adored them. And he noticed, when he was getting to be an older man in his 60s, he just wasn’t hearing them anymore. People didn’t sing them on the porches like they used to. People couldn’t remember the words when he asked them to join him, and he became worried about this.

Now, you have to remember, this music, which is obviously deep Americana…. The American spiritual is just one of our original art forms, but it existed entirely  in an oral form. It had never been written down. And you forget that those kinds of things can disappear. It only takes one broken link generation in the chain, and it’s gone. So when he figured this out, McIlheny again just decided:  “I’m going to do something about it. I’m not going to wait for somebody else.”

First, philanthropy, as you know well, tends to be personal. So the first thing he did, he ran  around his neighborhood to figure out:  who remembers any of these songs? And he found these two delightful elderly women, both in their 90s, in his neighborhood, who remembered hundreds of spirituals– both the songs and the lyrics. And he then hired a musicologist,  and the two men sat down with these two ladies, and they just asked them to sing their hearts out. And while they did that, they scrupulously wrote as fast as they could,  to record all the melodies and the harmonies and the lyrics; and they got these down. Anyway, McIlheny published these as a book.  I’m trying to remember, I think there were like 125 spirituals in this book. And I went to some trouble when I was working on the Almanac to figure out how many of those spirituals had been recorded any other place and would’ve survived anyway. And it’s only like five or six that were written down anywhere else. And by the way, one of the spirituals that was saved by McIlheny in this way was the one that Martin Luther King Jr.  quoted in his very famous address– when he talked about: “Free at last, free at last; Thank God Almighty, I’m free at last!” That was one of the McIlheny spirituals.

Denver: Thanks to Ned. Well, another great guy you talk about is Alfred Loomis. Actually, his great grandson is Reed Hastings, the CEO of Netflix, and he’s disrupted a couple of industries. But boy, what Alfred Loomis did was even more interesting and significant in many ways. Tell us about him.

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Marcus Shingles, CEO of XPRIZE Foundation, Joins Denver Frederick

The following is a conversation between Marcus Shingles, CEO of the XPRIZE Foundation and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.

xv2y7drp8dalfslzz739Denver: As the world changes with some 3 billion people able to connect online….. and with so many of them holding extraordinary computing capacity right in the palm of their hand……it only stands to reason that the way we go about trying to solve our most complex social problems would change as well. One of the very first to recognize that was the XPRIZE Foundation, and it is a great pleasure to have with us this evening their Chief Executive Officer, Marcus Shingles. Good evening, Marcus and welcome to The Business of Giving!

Marcus: Thank you! I’m glad to be here. Appreciate it.

Denver: So tell us, Marcus, what is the XPRIZE?  And how did this whole thing get started?

Marcus: The XPRIZE is a nonprofit. It’s a foundation that’s based in Southern California.  Dr. Peter Diamandis is the Executive Chairman and the founder of the XPRIZE Foundation. He was CEO up until a few months ago when I was honorably given the privilege to take over that role. Peter is a prolific inventor and entrepreneur innovator. He’s wired in a very interesting way. He completed a doctorate from Harvard and has two degrees from MIT, so he  understands the science and the technology. He’s one of these individuals that is just a dreamer and an innovator.

A couple of decades ago, he announced the XPRIZE Foundation, which essentially was a competition that he arranged, inspired by Lindbergh crossing the Atlantic and that prize.  He was looking at a situation in which NASA and the government was really starting to shut down an era of space travel. There was this period in time a couple of decades ago when you saw NASA and others kind of backpedaling on the whole space exploration piece. Peter grew up very interested in that space, focused on it. At one point, he wanted to be an astronaut himself. As a matter of fact, I think he aspired for most of his life to be an astronaut. And so he wanted not to rely on the government to do this. He wanted to rely on entrepreneurs and innovators to do this, even private citizens to do it. So he launched a $10 million XPRIZE, which was to put a spacecraft up into sub-orbit– or 100 kilometers– and back down, and to do that twice in a two-week period.

Now, the reason why it was twice in a two-week period was the goal was to demonstrate that there was a “there” there in terms of private commercial space industry, and it had to be reusable technology, very similar to what you see Elon Musk doing right now with the repurposing and reusing of rockets. So he launched this prize– $10 million. It was called the Ansari XPRIZE. X was actually a placeholder until he got a sponsor because he didn’t have the $10 million he announced.  He thought that was going to be the easy part, and of course, he had a lot of people telling him:  “No!” mainly because they were worried:  “What if someone gets killed doing this?”

Long story short, Burt Rutan and his team– I think it was 2007– demonstrated with SpaceShipOne the ability to do this, and they won the $10 million XPRIZE. That SpaceShipOne is now hanging in the Smithsonian – I think it’s a space and science museum – right next to the Lindbergh plane that inspired the whole thing. So, just a really interesting background. Peter had a very good ecosystem around him, just with his colleagues and his friends and his ecosystem. He knew Elon Musk and Larry Page and all these individuals.

Denver: It’s a good crowd.

Marcus: Very good crowd!  And they’re all on the board today of XPRIZE.  But he knew them at a time before they were completely the rock stars that they are; I guess maybe they’ve always been rock stars, but they’re super rock stars now. They looked at the model and said, “This is very interesting.  If you think about what just happened, not only did we achieve the goal, but think about some of the things that just happened.

We put out a $10 million prize, and we had basically rapid experimentation through a bunch of diverse lenses of people that competed on this prize… teams that competed that we didn’t ask them for their resume, or their background, or their education. If they wanted to compete, they could compete. So we didn’t filter anything; there was no cognitive bias as far as who can compete and how they compete. It was: ‘Here’s a problem. Here’s how we want you to solve it. We’re not going to tell you how you’ve got to solve it. You’ve just got to put something up 100 kilometers into the orbit, back down safely, and do it twice.’” So, $10 million prize, but those teams cumulatively spent over $100 million to win the $10 million prize.

It was people donating their time and effort and finances to win the prize because it was for an impact.

Denver: That’s a way to leverage $10 million; that’s for sure.

Marcus: Exactly. So that was interesting, right? It was strong economics, strong leverage. It was people donating their time and effort and finances to win the prize because it was for an impact. The other thing that was interesting about that whole model was that you only pay if someone accomplished it. So that’s another good way to underwrite or mitigate your risk is: you’re only paying if somebody comes up with a breakthrough, and you’re getting a lot of R&D; you’re spurring a lot of R&D as a result of putting out the $10 million, but getting a lot of teams to focus on it.

And that ultimately was a domino that needed to be tipped at a time when people were losing  a line of sight on the private space industry. There was none. And Peter is very much attributed and XPRIZE is attributed with creating that line of sight to the private space industry that we have today. Richard Branson was literally on the final ceremony buying the intellectual property from the winning team that he then used as his inspiration and first domino with Virgin Galactic, which he has today. So it’s attributed to being a very important historical force in getting the private space industry launched, which you see now is a multi-billion dollar industry.

The magic comes from: you have a haystack and you’re getting a needle in that haystack to incentivize to come to you. And that haystack, you have to think of as a crowd… someone out there– could be anyone–who’s just wired in a way to think about how to solve for X in a way that maybe the experts say can’t even be done.

All of the smart people don’t assimilate right around your neighborhood necessarily. They’re anywhere in the world, and now you can reach them through internet and communications and social media.

Denver: Well, it certainly is a milestone achievement. And this XPRIZE competition is essentially, I guess from what you’re saying, Marcus, a form of “crowdsourcing.” What exactly is crowdsourcing?

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Cheryl Dorsey, President and CEO of Echoing Green, Joins Denver Frederick

The following is a conversation between Cheryl Dorsey, President and CEO of Echoing Green, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.

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Cheryl Dorsey

Denver: Every social entrepreneur who has ever had a great idea needs others to believe in him or her and that idea, especially in the very early stages. One of the first organizations that has taken this leap of faith, albeit a carefully thought out and calibrated one, is Echoing Green, which has helped to finance and launch some incredible organizations that have made the world a better place. And with us now is the President and CEO of Echoing Green, Cheryl Dorsey. Good evening, Cheryl, and welcome to The Business of Giving!

Cheryl: Denver, thank you so much for having me. It’s wonderful to see you again.

The mission of Echoing Green is simple and wonderful: It is to unleash next generation talent to solve the world’s greatest problems.

Denver: Likewise. Tell us about Echoing Green, how it got started and the work of the organization.

Cheryl: Yes, thank you for asking. Echoing Green has been around—it’s hard to believe— almost 30 years. We were founded in 1987 by the senior leadership of a private equity firm called General Atlantic, who were true pioneers in the space of social entrepreneurship. And the mission of Echoing Green is simple and wonderful: It is to unleash next generation talent to solve the world’s greatest problems.

We are probably best known for our world-class fellowship program, through which we go out across the world looking for next generation leadership who have good ideas to make their communities, regions, countries and world a better place… and ask them to submit their ideas for social change. And through a pretty rigorous, tough social business plan competition,we will ultimately winnow down the thousands of submissions we receive each year and ultimately make investments in anywhere from 20 to 40 great next-gen leaders with next-gen ideas, and help them get farther faster. So it is a wonderful collection of top talent.

Denver: Give us an idea of some of the people and ideas that you have supported early on and nurtured that maybe some of our listeners will recognize.

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Matt Smith, Director of PepsiCo’s Food for Good, Joins Denver Frederick

The following is a conversation between Matt Smith, Director of PepsiCo’s Food for Good program, and Denver Frederick, host of The Business of Giving on AM 970 The Answer in New York City.

matt-smith-qd4x3pDenver: When we get to this time of year, I always look to do a segment about food. So I looked around in search of a good story… for someone who is really making a difference in getting healthy and nutritious food to those in need, and doing so on a consistent basis. And I found my answer when I came across PepsiCo’s “Food for Good” program. And it’s a pleasure to have with us tonight, the Director of that program, Matt Smith. Good evening, Matt, and welcome to The Business of Giving!

Matt: Thank you for having me.

Food for Good is a purpose-driven initiative within PepsiCo that tries to use our expertise as a company to fight hunger in communities across the United States.

Denver: Give us a brief overview of Food for Good and what the objectives of the program are.

Matt: Thank you, first of all, for having me and for this platform that you do here with The Business of Giving– to give an opportunity to hear from others and learn from others about how they’re trying to do good. I think business has a huge role in doing that and trying to solve problems in our communities.  And that’s what we’re trying to do with Food for Good.  Food for Good is a purpose-driven initiative within PepsiCo that tries to use our expertise as a company to fight hunger in communities across the United States.

Denver: And this started back in 2009. How did it come into being?

Matt: It started with a group of employees that looked to take our company’s “Performance with Purpose” vision and really start with” Purpose.”  And we said, “How can we start by trying to address real needs in our communities, but create the business to address those needs?” We wanted it to be something that could generate revenue, cover our operating costs, and continue to scale indefinitely. So we started by sitting around conference room tables in community centers with a number of community leaders and asking them that question – “What would it look like if PepsiCo tried to partner together with you to address the needs in your community?”

Performance with Purpose is essentially saying that it’s important for us to understand as a company that we are stewards of the work that we get to do, and it’s not just about the money that we make. We have a responsibility to make money as a company, but it’s how we make the money.

Denver: And you just said PepsiCo’s “Performance with Purpose” vision. Can you tell us a little more about that?

Matt: Sure. Performance with Purpose is essentially saying that it’s important for us to understand as a company that we are stewards of the work that we get to do, and it’s not just about the money that we make. We have a responsibility to make money as a company, but it’s how we make the money.

We have three platforms at Performance with Purpose: the products that we make, our impact on the planet, and empowering people. A lot of the work that we’re doing with Food for Good really falls on that product side of making sure that we are helping to create healthy products for everyone, but also making sure, in particular, to get healthy food to the underserved.

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Carol Glazer, President of the National Organization on Disability, Joins Denver Frederick

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The following is a conversation between Carol Glazer, President of the National Organization on Disability, and Denver Frederick, host of The Business of Giving on AM 970 The Answer in New York City.

Denver: Researchers tell us that among the most important characteristics that a person must possess in order to be successful in any pursuit are passion and grit. My next guest has both of those, in abundance. She is Carol Glazer, the President of the National Organization on Disability. Good evening, Carol, and welcome to The Business of Giving!

Carol: Hello. It’s nice to see you, Denver.

Denver: Tell us about the National Organization on Disability, the mission and purpose of the organization, and where you place your particular focus to assist those with disabilities.

Carol: Sure. Thank you, Denver. We’ve been around for 34 years. When disability was just a thought… and the fact of equality for people with disabilities was still a thought, we were created as one of two so-called “cross-disability organizations” nationally. Very few disability organizations address all Americans with disabilities; we do.  The number is about 57 million today.

Denver: Wow.

Carol: That’s about one out of every five Americans. We were formed to ensure the full participation of all of those people in all aspects of American life. Over the 34 years, so much has changed about disability. NOD as an organization has changed and addressed whatever issue was dominant for the time, primarily from an advocacy orientation – it’s about changing public opinion.

Today, we are exclusively about employment. It’s the single biggest barrier to a good quality of life affecting working-aged Americans with disabilities. There’s only about 20% employment rate among those 30 million Americans who are working age, and we devote ourselves exclusively to try to change that number.

Denver: Well, that is refreshing to hear. I love organizations with focus, and so many of them out there try to be everything to everybody and really don’t make any kind of an impact. This kind of focus is going to let you dig deep and really change some things. So, let me ask you this, Carol. When you speak of disability, what exactly does that mean? How broad or narrow is that definition?

Carol: It’s a definition that was first placed into law in 1990 with the Americans with Disabilities Act, and later amended in 2008 with the Americans with Disabilities Act Amendments Act (ADAAA). That Amendment Act said that “a disability is defined as one or more physical or mental impairments that substantially limit one or more major life activities.” That’s a very big group, and there’s a three-prong definition – either you have a disability or you had disability at one time, or you are presumed to have a disability. So that third bar is a higher bar to reach than perhaps any of the other definitions of disability, and it’s part of the reason that that number – 57 million Americans – is as large as it is.

Denver: Looking at that 57 million Americans– and the 30 million who are of working age, what kind of discrimination do they face? What kinds of limitations are placed on them living as full and productive lives as they possibly could? (more…)

David Levin, President and CEO of McGraw-Hill Education, Joins Denver Frederick

The following is a conversation between David Levin, President and CEO of McGraw-Hill Education, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.

1448002996481Denver: When there is a discussion of how entire industries have been disrupted and radically altered, one that often doesn’t get included in that conversation is education. In fact, some fret that our classrooms and the way teaching and learning are conducted are quite similar to the way it was done 50, even 100 years ago. But in actuality, things are changing, and quite dramatically, and there is no one more on the cutting edge of that change and transformation than McGraw-Hill Education. And it is a great pleasure for me to welcome to the show their President and CEO, David Levin. Good evening, David, and thanks for coming in!

David: Denver, thank you very much.

Denver: You know there have been some significant changes in the ownership and management of McGraw-Hill over the last several years that everyone may not be familiar with. So let’s begin by having you tell us what they have been, and precisely who is McGraw-Hill Education.

David: So I think the story really begins just over three years ago. In 2012, the investors in what was McGraw-Hill, a very old, established company– a 128-year-old company– said that the education business was passé, and the board decided to sell it. It was considered, frankly, a bit of a basket case, and the company was put up to bid. A third-party bought it; an investor group bought it.  And that really provoked an opportunity to rebirth the whole company. So, we’re now a completely stand-alone, focused-only-on-education business, completely independent and separately-owned. Nothing to do with the other company, which is actually now called Standard & Poor’s. We’re just McGraw-Hill Education.

Denver: Very interesting. Well, tell us a little bit about that company, what you do, how it works, and the educational experience you’re trying to create for today’s student.

David: Well, as you’ve correctly said, the world of education has been… not quite in aspic… but very, very slow in evolving. And that’s not for lack of trying; it’s because it’s complex to change education. Parents themselves are not that keen necessarily for their children to have something radically different. So, there’s an innate sort of conservatism (with a small “c”) around how we do this. And, of course, you only get one shot at fifth grade, so having somebody gleefully tell you they’re about to experiment with your child is not going to promote a great teacher-parent dialogue.

Denver: Great point.

David: People want confidence as they go into this. We’ve embarked on this very much saying, “Look, we can see that there is a whole range of things which can come.” And in the last few years, we’ve put a lot of energy and effort into: How do we create a software that supports learners and educators?  And the educator’s bit is very important, and I know we’ll come back to that.

If we think about the way that people learn:  people learn by trying things, by experimenting with things, and by actually trying and failing. Much of the education system is unfortunately aligned so that people are too scared to fail.

But to an educator, the understanding of where somebody is struggling in a very specific way… not they’re struggling with this concept as a whole, but here’s the individual step in the maze where they keep stumbling… allows the teacher who’s great to intervene and make a difference.

Denver: What does this software do? One thing that I understand, David, is that it creates feedback. So how does that feedback work for the student?  And how does that feedback work for the teacher?

David: That’s the key point. If we think about the way that people learn: people learn by trying things, by experimenting with things, and by actually trying and failing. Much of the education system is unfortunately aligned so that people are too scared to fail. You only need to think about the big summative assessments, the end of period tests that people do. It’s victory or death.

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Randall Kempner of ANDE Joins Denver Frederick

The following is a conversation between Randall Kempner, Executive Director of Aspen Network of Development Entrepreneurs or ANDE, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.

randalDenver: In the United States, when politicians and economic thought leaders discuss getting the economy going again and creating jobs, what do they talk about? That’s right; small business. That is where all the job creation is coming from, they tell us. So, it only stands to reason that the best way to create jobs and build economies across the globe –especially in less developed countries– is through small and growing businesses. And one organization that is dedicated to making that happen is the Aspen Network of Development Entrepreneurs or ANDE for short. And joining me now is their Executive Director, Randall Kempner. Good evening, Randall, and welcome to The Business of Giving.

Randall: Denver, it’s great to be here.

Denver: Tell us about ANDE, how and why you were founded, and what you do.

Randall: Thanks. So ANDE basically was created because its founders wanted to find a way to help millions of people in developing countries lift themselves out of poverty. Essentially, what we want to do is to create a movement like “microfinance,”  but aimed at the next level up. So we’re trying to help small businesses–those that are led by growth-oriented managers– to get access to the money, to the technical assistance, to the training, to the talented people that they need in order to thrive in the developing countries around the world…  ultimately creating jobs… and addressing social environmental issues that the poor face in hundreds of countries around the world.

Denver: How would you define a “small and growing business?”

Randall: So first of all, let me apologize to those of you who don’t want to hear another DC- created acronym, but the “SGB” we thought was important to create as a term and to adopt. Because it is the segment of small and medium enterprise…which is the term of art… that represents businesses that are seeking growth capital between $20,000 and $2 million, and are explicitly led by growth-oriented managers. These are the small sub-segment of “SMEs” that actually have the potential to grow and create those jobs and those social impacts that we’re looking for.

Denver: And ANDE would be what they call an “intermediary organization.” What is that,  and how do you operate?

Randall: Yeah.  We’re basically an industry association, to put it in simple terms. We have 262 members as of today.  And like any industry association, we do two big things: we try to help our members be more effective at what they do;  we try to grow the industry.

Denver: What kind of members, and who are some of your members?

Randall: The idea is that our members would reflect the full ecosystem of players that are relevant to helping entrepreneurs in developing countries. So what does that mean? It means we’ve got development agencies like USAID and the World Bank. It means we’ve got big corporations like Citi and Shell. It means we’ve got dozens of impact investing funds. We’ve got multiple multiple dozens– over a hundred– of capacity development organizations. These are like business accelerators and other technical assistance groups that are helping these businesses directly in emerging markets. We also have foundations; we have universities; we have research institutions. So collectively, we’ve got information; we’ve got training; we’ve got financing; we’ve got technical assistance. If you’d offer one of those things to entrepreneurs in emerging markets, you might be an ANDE member.

Denver: That’s quite a breadth!  The Aspen Network of Development Entrepreneurs is part of the Aspen Institute. Just give us a word about the Aspen Institute and how your work connects with them.

Randall: The Aspen Institute is a 60+ year-old institution based in Washington whose basic mission is to promote a better society. It’s really that broad, and in that context, the Aspen Institute does a whole series of things– from leadership development programs to our big highlight festival: The Aspen Ideas Festival, which is out in Aspen, Colorado. And then 30+ policy programs that literally run the gamut– from promoting investment in the Middle East, to trying to address poverty in rural areas in the United States, to promoting youth engagement.  One of those 30 policy programs is ANDE, the Aspen Network and Development Entrepreneurs. So, we are part of the Aspen Institute in that way.  But like all of the policy programs at the Institute, we are quite independent and autonomous and responsible for raising our own money. It’s actually a great place to be based– a lot of independence, but access to an array of brilliant people and ideas.

I personally think that there’s still a role for government support, and we need strong government entities in emerging markets…

Denver: That’s great. I think that the interest in supporting these social businesses and finding market-based solutions to solve problems has been driven, in part, by those who are frustrated with this international development enterprise. What have those frustrations been?

Randall: Yeah. As ANDE was being formed, there were a couple of popular books: one was called The Aid Trap;  the other was called Dead Aid.  So, you get the sense of what was going on.  I think there was legitimate… and is… legitimate frustration that the traditional development community had not embraced private sector development– had not embraced market-based approaches to development sufficiently.  Part of that was because you looked at the history, and you saw lots of cases where money was being given directly to, loaned to, or sometimes invested in government entities without thinking enough about how that actually gets translated into impact on the ground– to the individuals in the families that we’re trying to help. And so ANDE was created in that  era and ethos saying: “You know what?  There are some other approaches that we need to try.” And I personally think that there’s still a role for government support, and we need strong government entities in emerging markets…

Denver: Right.

Randall: …That’s key!  But I also feel… critically… that entrepreneurship, in particular, is a development strategy which has definitely not been fully leveraged.  And ANDE exists to try to push more organizations to get involved in that.

You, as the investor, need to intentionally be saying: “Ah! I am making an investment in company X because I hope that I will get a 5% return, and I will see the reduction of carbon by X millions of tons.

Denver: This entrepreneurship and these social businesses– what they’re going to need at the end of the day, is investment, and that specifically would be impact investing.   I was over at the Clinton Global Initiative recently, and I was speaking to someone about impact investing, and that it hasn’t perhaps lived up to its hype.  They felt that one of the reasons for that is that it kind of got muddled somehow. So, let me ask you to give us a clean and clear definition of what impact investing is. (more…)