Ana Escalante

Fall 2007 Issue of Stanford Social Innovation Review is Out

ssir logoThe latest issue of one of my favorite journals – Stanford Social Innovation Review – is out; they only have 4 issues a year, so I get really excited when the new issue comes out. There are a couple of interesting articles in the Fall 2007 issue addressing both the non-profit and the for-profit worlds that I would like to comment about:

Jessica Flannery, Kiva’s co-founder wrote the article “Micro-franchise Against Malaria” on HealthStore’s micro-franchising model. This model has proven to be very effective; according to Flannery it “?has allowed it to deliver good healthcare while aggressively expanding. Founded in 1997, the foundation has opened 65 CFWshops. In 2004, the HealthStore network treated 177,256 patients. By 2005 that number had nearly tripled to 435,527. As a result, CFWshops? distinctive black and red signage has become a beacon to the sick and poor throughout Kenya.” Of course, WRI managed the first case study on HealthStore’s model back in 2005–check it out in the Case Studies section.It’s interesting to see that for-profit clinics and micro-franchising are starting to be a ?hot topic? in development discussion channels. HealthStore is not the only company taking the micro-franchising approach; we have covered a lot of these types of business models here on NextBillion, including Living Goods in Uganda, Mi Farmacita Nacional in Mexico, MicroClinics, CareShops, and MicroBusiness for Health in Ghana. These for-profit clinics and businesses help address the health care problems in poor countries and rural communities such as CFWShops does in Kenya.

Side note–Jason Fairbourne of BYU’s Microfranchise Development Intitiative tells us that his book, Microfranchising: Creating Wealth at the Bottom of the Pyramid, is now available. A pity that, at $99 per copy, it is more or less inaccessible to those it profiles.

Another article in this issue of SSIR is by Beth Sirull. “Private Equity, Public Good” talks about the new private equity firms that are focusing on ?development investment capital.?
Many businesses serving lower income communities languish because they cannot raise enough money to fund their growth. To meet their needs, a new breed of private equity investment?development investment capital?has emerged. Not only does development investment capital fund growth and social benefits in lower-income communities, it also gives investors a competitive return on their investments. Although this style of investing is still in its infancy, it is already showing promise.

It’s a really interesting article because this new approach of development investment capital is proving to be doing good and doing well. There are many underserved communities and businesses that can enjoy market-rate returns and workers and investors will both benefit.

Finally, The Power of Strategic Mission Investing focuses on how foundations can invest in capital markets by using their endowments to promote market-based solutions to the different social problems that they seek to address. A growing number of foundations are offering low-interest loans, buying into green business ventures, and investing in other asset classes to advance their missions. Yet most mission investing remains haphazard and inconsequential. To bring about real change, foundations need to take a fundamentally different approach, making strategic mission investments that complement their grantmaking and leverage market forces.

If you haven?t read the Fall 2007 SSIR yet, I definitely recommend it. It’s a really good journal in general, especially if you are interested in strategy and leadership in nonprofit management, corporate social responsibility, social entrepreneurship, venture philanthropy, and other similar subjects. The SSIR is one of the few publications by a leading business school that addresses innovative solutions to social issues.