March 27, 2010

Social Responsibility: One Tasty "Peace" at a Time

As I discussed in the previous blog entry, I had the pleasure of attending the Social Venture Capital/Social Enterprise Conference in Miami Beach, Florida. Among the approximately 110 panels during the three-day conference, there was a session titled “Women Social Entrepreneurs in Latin America,” featuring three successful entrepreneurs. One panelist, Sarah Endline, gave a presentation about sweetriot, a New York City-based company that retails natural cacao nibs sourced directly from Latin America. These cacao nibs or “peaces” are genetically modified organism-free, dairy-free, kosher, and gluten-free.

During her presentation, Ms. Endline’s stated that sweetriot is not focused on financial returns, per se, but her company is guided by a social mission that people can change the world. She explained that sweetriot’s social responsibility is composed of three key areas: Product, People, and Partnerships. In addition to using premium, high quality, and all-natural ingredients, the socially responsible company’s values include fair trade with developing countries, celebrating culture and diversity through their products, and creating sweet experiences among customers, partners, and employees. In Ms. Endline’s words, “sweetriot is a joyful celebration of culture, diversity, and understanding — it is the opposite of a civil riot, which is dangerous, violent, and oppressing.”

It is also worth noting that sweetriot is offsetting all of its employee travel and office emissions by partnering with Carbonfund.org. Moreover, customers can join the effort by offsetting their shipment’s CO2 emissions by selecting an option through the ordering process that will make a $.50 contribution toward climate-friendly projects such as energy efficiency, renewable energy, and reforestation. “This effectively offsets the carbon dioxide emitted by delivery vehicles when shipping from our warehouse to your front door,” explains sweetriot’s website. Through the Carbonfund.org’s CarbonFree® Partner program, sweetriot claims to be “the first chocolate retailer to offer customers a chance to improve the world through carbon offsets.”

At the conclusion of the panel, Ms. Endline distributed samples of sweetriot’s flavor 50—roasted cacao nibs covered with 50 percent dark chocolate packed in one-ounce tins. The recyclable and reusable tins feature with works from various artists and my tin features the work of Callie Danae Hirsch, an artist residing in Brooklyn, New York. What about the taste? I find that the cacao nibs are tasty and with each tin holding a serving size of one once (or two spoons), I consumed mine very quickly. For disclosure purposes, except for the one complimentary tin, I am not receiving any compensation for this blog entry nor do I have a business relationship with sweetriot.

March 15, 2010

2010 Global Social Entrepreneurship Competition Presents Innovative Solutions

I had the pleasure to serve as a judge in the 2010 Global Social Entrepreneurship Competition (GSEC) organized by the University of Washington's Global Business Center at the Michael G. Foster School of Business. The purpose of GSEC is to engage “creative minds around the world to encourage bolder and less conventional business solutions to global poverty.” US$18,000 in prize money was available for the sixth annual competition. (Photo: Nuru Light)

GSEC plans are judged on three criteria: (1) effect on the quality of life and poverty alleviation in the developing economies, (2) financial sustainability, and (3) feasibility of implementation. 161 applications were submitted from 36 countries and this year’s five finalist teams traveled from Bangladesh, Canada, China, India, Rwanda, and the United States. Unlike my role of judging the semi-final round in 2009, I participated in this year’s GSEC as a judge in the Investor’s Choice Award, evaluating each team’s brief elevator-pitch and trade show exhibit.

The Grand Prize of $10,000, sponsored by Microsoft, was awarded to Nuru Light, which provides a solution to the lighting crisis in Rwanda. Through the POWERCycle, the Nuru Light (Nuro means light in Swahili) provides an affordable, safe, and clean lighting solution to replace kerosene in households without electricity. Nuru lights can be recharged quickly via the world’s first pedal generator. In addition to the Grand Prize, Nuru Light was the winner of the Investor’s Choice Award of $500, People’s Choice Award, and the second place Global Health prize of $2,000 for the health benefits of POD lights including decreased exposure to particulate matter and lowering the risk of kerosene burning. Team Nuru was represented by Charles Ishimwe from Adventist University of Central Africa in Rwanda and Max Fraden of the University of Massachusetts Medical School. (Photo: University of Washington)

The University of Washington’s Department of Global Health sponsored the Global Health Prize of $5,000, which was awarded to TouchHb, an affordable, prick-less anemia scanner used by low-skilled village health workers in rural India that measures, helps diagnose, monitors and screens for anemia. Team TouchHb consists of two doctors, Yogesh Patil and Abhishek Sen, from the Maharashtra University of Health Sciences in India. (Photo: University of Washington)

For this year's GSEC, judges spontaneous created an award and personally donated a total of $3,000 for the Judges’ Choice Award, which Malo Traders received for their business plan that provides technological consultation that minimizes risks of post-harvest losses for small-scale rice farmers in the West Africa nation of Mali. Team Malo consists of two brothers who grew up in Africa and are now studying in the United States: Mohamed Ali Niang is a student at Temple University Fox School of Business in Philadelphia, Pennsylvania and Salif Romano Niang, a doctorate student in political science at Purdue University in West Lafayette, Indiana. (Photo: University of Washington)

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

March 11, 2010

The Peepoo: A Biogradable Single-Use Toilet for Urban Slums

The New York Times published an article written by Sindya N. Bhanoo about the Peepoo, “a biodegradable plastic bag that acts as a single-use toilet for urban slums in the developing world. Once used, the bag can be knotted and buried, and a layer of urea crystals breaks down the waste into fertilizer, killing off disease-producing pathogens found in feces.” (Photo: Peepoople)

Developed, produced, and distributed by Stockholm, Sweden-based Peepoople AB, “The Peepoo is in the form of a slim elongated bag size 14 x 38 cm,” explains the company’s website. “Within the bag there is a thinner gauze that measures 26 x 24 cm. The inside of the Peepoo bags is coated with a thin film of urea. Without sacrificing ergonomic function the bag’s design is adapted in every way so that it might be manufactured at as low a price as possible and sold to the groups with [the] weakest purchasing power in the world.” After successfully testing in Kenya and India, the Peepoo toilet is scheduled to be mass produced and available for delivery in summer 2010 with a price point of 2 or 3 cents each, which is comparable to the cost of an ordinary plastic bag.

One benefit of the Peepoo toilet is its portability and small size, weighing less than ten grams. Peepoo bags are odor free for at least 24 hours after use and can thus be stored in the immediate environment. Moreover, the Peepoo is one of few sanitation solutions which require no water and the only water required is to wash the hands after use. This means that the traditional link between water and sanitation has been cut. A used Peepoo bag is clean to handle. It has become a waste that neither smell nor is dirty to handle and collect.

The bag is made of a high performance degradable bioplastic which meets European Union standards. This means that the plastic not only disintegrates, but also that the molecules are broken down into carbon dioxide, water and bio-mass. 45 percent of the plastic used in the Peepoo is produced using renewable materials and through research and development, the company intends to find a solution that is 100 percent renewable. The bioplastic comprises a mixture of aromatic co-polyesters and polylactone acid (PLA), with small additives of wax and lime. PHB represent alternative bioplastics. (Photo: Peepoople)

This innovative product does not require infrastructural solutions for implementation (i.e., the construction of buildings or pipes), therefore reducing investment costs. The company explains that the “Peepoo can be simply distributed and can thus meet the enormous demand in a highly efficient manner.” Comparing investment costs for different sanitation solutions are listed below to illustrate the product’s financial value.

Local costs for installation (not including use, maintenance costs, water costs and emptying):
  • Flush toilet connected to sewer or septic tank, 400-1,500 USD
  • Urban dry or wet Eco San, 675-1,500 USD
  • Condominal sewers, 75-600 USD
  • Dry vault urine diversion, 35-400 USD
  • Improved pit latrine or pour flush toilet, 40-260 USD
  • Basic pit latrine, 10-50 USD
  • Soil composting ecosan, 10-40 USD
  • Communal toilet/latrine (50 persons per seat), 12-40 USD
  • Peepoo bag, 0 USD
The need for proper sanitation is greatly needed in the developing world where, according to United Nations figures, an estimated 2.6 billion people, or about 40 percent of the earth’s population, do not have access to a toilet. This creates a public health crisis where open defecation contaminates drinking water, “and an estimated 1.5 million children worldwide die yearly from diarrhea, largely because of poor sanitation and hygiene,” explains The New York Times article. “To mitigate this, the United Nations has a goal to reduce by half the number of people without access to toilets by 2015.”

March 7, 2010

Student Loans as Development Aid

While I am a supporter of the microfinance concept, namely, the access of basic financial services such as loans, savings, money transfer services and microinsurance by underserved populations, I am critical of the application strategies employed by microfinance institutions (MFIs). I am pleased, however, to discuss the workings of an organization that is effectively administering small loans to help students in the developing world achieve a college education or vocational training.

Vittana recognizes that the students benefiting from microloans ordinarily could not receive loans to finance their education from local banks. The Seattle, Washington-based nonprofit organization partners with local microfinance organizations to establish student loan programs—often providing the only access to college loans. Through Vittana’s website, individuals are able to lend $25 and $50 at a time to individual students. Currently, Vittana, which is an Indian word for “seed,” has active partnerships in five countries: Mongolia, Nicaragua, Paraguay, Peru and Vietnam.

I had the opportunity to attend an event organized by SeaMo in November 2009 that featured Vittana’s co-founder and chief executive officer, Kushal Chakrabarti. One issue Mr. Chakrabarti discussed was the focus to provide student loans rather than scholarships. He said, “Students do not want a hand-out, they want a hand up. A loan enables them to go to school without feeling beholden.” He explained that small monthly payments provide an easy way for students (borrowers) to repay the money. In fact, many students actually begin repaying ahead of schedule, which represents their personal drive for financial responsibility.

Recognizing the impact of education, Mr. Chakrabarti said, “Education is income generating; more than microfinance (small loans for entrepreneurs).” In the developing world, a college graduate can earn 200-300 percent more than they would have otherwise. However, there are less quantifiable measurements that have an equal impact to the college graduate, their family and surrounding community. Single mothers gain self-confidence by receiving a college education or vocational training. Not only is she acquiring the skills to obtain a skilled job with a higher income, but she is becoming a role model to her children and perhaps other single mothers in the community. Moreover, communities become stronger by having some of its residents possess an education in high-valued professions such as teaching, medicine, engineering or law.

During his presentation, Mr. Chakrabarti noted that the typical borrowers are 18-25 years old, loan amounts range from $500-$1,500 and repayment periods last from 6-24 months with a successful repayment rate of 97-98 percent. While the interest rates vary from region to region, Vittana’s partners usually charge a 10-15 percent annual rate. And to mitigate the loss of the loan, most partners require that a close relative co-sign on the loan. It is rare that a student is unable to repay the loan him or herself, but in the case that the student has difficulty making a payment, a parent, grandparent, or spouse will ensure that the student repays on schedule.

It is important to note that donors providing funds (loans) to students through Vittana are not making a charitable donation; the loan will be returned to the donor upon repayment by the student. Upon repayment, the donor will have the option keep their money or make a loan to another student. How does Vittana generate revenue? Although not required, many people make a donation beyond the loan amount help Vittana cover their costs. Vittana also received direct financial support from individuals and foundations such as the Peery Foundation, the Mitchell Kapor Foundation, and the Crystal Springs Foundation.

Here is a video that highlights Vittana’s operations through testimonials of students receiving loans through this innovative application of microlending: