Finance II: Raj Melville

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Social Entrepreneurship TYE Presentation

Transcript of Finance II: Raj Melville

  • 1. Social Entrepreneurship TiE Young Entrepreneurs Raj Melville January 10, 2009
  • 2. Agenda
    • What is Social Entrepreneurship?
    • Social Challenges and Solutions
    • Examples of Social Entrepreneurs
      • Grameen
      • Aravind Eye Clinics
      • Agastya
    • Getting Started
    • Resources
  • 3. Key Ingredients of a Social Entrepreneur = + Social Activist Business pioneer Social Entrepreneur
  • 4. What Is Social Entrepreneurship ?
    • Business entrepreneurs change the face of business
    • Social entrepreneurs play the role of change agents in the social sector
    • Social entrepreneurs create sustainable solutions that change society for the better
  • 5. Business and Social Entrepreneurs Share Common Traits
    • Strategic thinkers: Like business entrepreneurs, social entrepreneurs act upon what others miss
    • Mission driven: Work hard to generate value
    • Focused: Both entrepreneurs are intensely focused and hard-driving in their pursuit of a social vision
    • Resourceful: They are skilled at mobilizing and motivating resources
    • Results oriented: Driven to produce tangible results
    • Challenge Seekers: Tackle major issues, opportunities or challenges
    • Perseverance: Continue efforts despite obstacles
  • 6. What sets Social Entrepreneurs Apart?
    • Social Entrepreneurs are innovative, resourceful, and results oriented addressing the root cause of a social issue
    • As leaders, social entrepreneurs draw upon the best thinking in the business, nonprofit, and public policy worlds to develop strategies that maximize their social and economic impact
    • "Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry." Bill Drayton, CEO, chair and founder of Ashoka Foundation
  • 7. Social Entrepreneurship Governmental Organizations For Profit Businesses Non-Profits Social Entrepreneurs
  • 8. The Non-profit Sector
    • Total US Non Profit Organizations (2006): 1,478,194
      • 904,313 Public Charities
        • Organizations do not pay federal tax
        • Donations are tax deductible
      • 109,852 Private Foundations
        • Created to distribute money to charities or individuals
      • About 29 % of Americans over the age of 16 volunteered in 2005
      • In 2004, public charities reported nearly $1.1 trillion in total revenues
      • (Source: National Center for Charitable Statistics)
    • Total charitable giving in the U.S (2007): $306.39 billion, consists of 2.2 % of GDP
      • (Source: Giving USA Foundation)
  • 9. What Challenges do Social Entrepreneurs tackle?
    • Social entrepreneurs typically address areas of unmet social need or social opportunity creation that the public or private sectors have failed to address
      • Health
      • Water/Sanitation
      • Education
      • Sustainable Infrastructure: Housing, Communications
      • Renewable Energy
      • Environmental Sustainability
      • Food and Nutrition
      • Womens Issues
      • Sustainable Agriculture & Technology
      • Also see the UN Millennium Development Goals http:// www.un.org/millenniumgoals /
  • 10. SEs Bring New Approaches to Social Issues
    • New Design Solutions
      • Process Redesign Aravind Eye Care ( www.aravind.org )
      • Product Redesign Jaipur Foot
      • Distribution/Logistics Saafwater www.saafwater.com
      • Infrastructure/Technology Grameen Phone
    • New Business Models
      • Micro-Finance
        • Grameen
      • Cooperatives
        • SEWA http://www.sewa.org
        • Muthu Velayutham, Gram Mooligai Co Ltd http://www.new-ventures.org/arquivos/GramMooligai.pdf
      • Triple Bottom Line
    • New Funding Models
      • Venture Philanthropy
      • Socially responsible funds.
        • Calvert Funds
        • Acumen Fund
      • Creative Leverage models
  • 11. Examples of Social Entrepreneurs
    • Grameen
    • Aravind and Aurolab
    • Agastya
    • Water Centric (presenting today)
    • Additional examples:
    • How to Change the World by D. Bornstein
    • The Fortune at the Bottom of the Pyramid by C. K. Prahalad
    • www.Ashoka.org
  • 12. Grameen
    • Grameen Bank was started by Prof. Muhammad Yunus in Bangladesh in 1976 ( http://www.grameen-info.org/ )
    • Social goal was to
      • Extend banking facilities to poor men and women who otherwise would not get bank loans
      • Eliminate the exploitation of the poor by money lenders
      • Create opportunities for self-employment for the large number of unemployed people in rural Bangladesh
    • Currently Grameen has
      • 7.61 million borrowers, 97 per cent of whom are women
      • 2,535 branches in 83,343 villages
      • Loan recovery rate is 98.24 per cent.
      • 2008 Projected loan disbursement of US $ 874 million
      • For profit concern generating dividends to borrowers who are shareholders
  • 13. Grameen
  • 14. Grameen
    • What did they do differently?
      • Went after untapped sector
        • Were willing to take a risk with uncollateralized loans to poor
        • Focused on women entrepreneurs
      • Introduced new business processes
        • No legal paperwork for loans
        • Created self help groups to ensure repayment thru social pressure
        • Simplified loan repayments with weekly meetings for incremental loan payments
      • Created competitive product
        • Set market rates of interest versus usurious money lender rates
    • Websites like www.kiva.org and www.microplace.org now allow individuals to help entrepreneurs in developing countries
  • 15. Aravind Eye Hospital
    • Founded in 1976 by Dr. G. Venkataswamy, in Madurai, India ( http://www.aravind.org/ )
    • A social organization committed to the goal of elimination of needless blindness through comprehensive eye care services.
    • Every year the Aravind Eye Care System
      • Sees over 2.4 million patients
      • Does over 200,000 cataract operations, nearly half of them free
      • Average cost at one hundredth of that in the US.
      • Doctors conduct over 2000 operations a year, over 6 times the national average
    • Aurolab, a manufacturing spinoff, makes interocular lenses to world class standards at tenth of international cost ($4-5 versus $100 -$150)
  • 16. Aravind Eye Hospital
    • What did they do differently?
      • Focused on the social objective