Scott Anderson

Friday Roundup ? 8/26/11: Profits Without Social Compromises

Much literal and virtual ink has been spilled this week on the blurring of lines between what constitutes nonprofit and for-profit in the social space. Of course many for-profits are, not by choice, shoehorned into nonprofit status. Similarly, many a nonprofit, in witnessing the success and efficiency of profit-seeking social ventures, have changed course toward bottom line (in addition to social and environmental) success.

This week, our blog and several other sources pondered when, why and how to convert toward profits, while maintaining and enhancing their missions. Kevin Short, of New Ventures profiled Mexico’s Echale a Tu Casa and Ecuador’s EcoMadera, two nonprofits that under the tutelage of New Ventures, made the leap to profit-driven entities. The results, from increased employees to project growth to net income, were the tangible results.

Forbes’ ENTREVENTURES blog by Elmira Bayrasli, told the story of former Ashoka veteran Dahna Goldstein who founded Philantech. Philantech helps nonprofits reduce inefficiency, while renewing in on their central objectives. Philantech however, isn’t a nonprofit enterprise. Money quote:

“When I was setting up the company I thought it would be a non-profit, since all non-profits are driven by mission,” says Goldstein. After being told, however, that funding for an NGO focused on technology was hard to come-by and finding it easier to raise money in the private sector, she embraced a revenue-driven model. Goldstein, however, absolutely refused to compromise on being a mission-driven enterprise. She made sure that Philantech registered as a B-Corporation and has turned down clients that could have potentially compromised her social and environmental values.

The examples of Philantech, not to mention the firms profiled in Kevin’s piece, provide excellent mini case studies on socially inclined nonprofit transformation. For those considering such a journey, I’d also refer to this detailed discussion kicked off by Social Edge a couple years ago. It hones in on the top questions every nonprofit thinking of converting to for profit should first consider; from pragmatic considerations of how to value assets to the ramifications to an organization’s image that goes for-profit.

SME, Microcredit Gatherings

Speaking of New Ventures, it will host Growing SMEs in Bogota, Colombia in association with BiD, Universidad de los Andes, the Colombian Ministry of Commerce and Creame next month. The small and medium size business conference is set for Sept. 22-23 and will feature numerous experts, both regional and global, on SME financing advancements, green business creation and best practices in serving the base of the pyramid, among other topics.

Further down on the calendar, anyone with an interest in microcredit should block out Nov. 14-17 in Valladolid, Spain for the Microcredit Summit. Although three months away, the summit already has lined up more than 260 authors, panelists and chairs. Two important plenary sessions to look out for:

* Beyond ’Ethical’ Financial Services: Developing a Seal of Excellence for Poverty Outreach and Transformation in Microfinance (Author: Frances Sinha, Director, EDA Rural Systems, India).??

* Challenges to the Field and Solutions: Over-Indebtedness, Client Drop-Outs, Unethical Collection Practices, Exorbitant Interest Rates, Mission Drift, Poor Governance Structures and More (Author: Anton Simanowitz, Founder, Imp-Act Consortium, UK)??.

Check out the full list of workshops, plenaries, associated sessions, courses and confirmed speakers. ??

Those who register before Sept. 30 will receive a 10 percent conference discount by entering “MCSDIS” in promotional code box on the registration page.

Piramal Fellows Reminder

Just a friendly reminder that the deadline to register for the Piramal Fellowship is Sept. 1, just six days from now. You can register here, and check out the engrossing stories past fellows shared on NextBillion here.

In Case You Missed It … This Week on NextBillion

NexThought Monday: Coming 2011, An India Without Corruption? By Martin Herrndorf

The BOP and Corruption By Naresh Gupta

Accelerating BoP Development at the Intersection of CSR & Impact Investing By Josh Cleveland

Bangladesh’s Mobile Tech Surge, What It Means for Development By Usha Ganesh

Extreme Makeover: Social Enterprise Edition By Kevin Short

Mixing Oil and Water in SME Development By Elly S. Brown

Unlikely Partnerships in the Social Sector By Nilima Achwal

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