THE LAB

We at Re-Vision Labs are only trying to change the world, something that is a group project, so we like to see other grassroots efforts in our community. Through the alumni association at Bainbridge Graduate Institute, I connected with my friend Kristine who is involved with addressing the serious problem of human trafficking. She asked if anyone had any microfinance connections and since we do, with the venerable Oikocredit, I inquired as to why.

Overlake Christian Church, an organization Kristine participates in, has been partnered with international organizations preventing, rescuing and offering healing to those victimized by human trafficking.

As anyone who frequents this blog no doubt already knows, Microfinance Institutions (MFI’s) operate in some areas where human rights take a backseat and exploitation is still a problem. So I think the folks at Overlake are asking – does the MFI “value chain” offer an opportunity to help the people who are outside event the boundaries of the “unbankable” – the victims of human trafficking.

A group based at the Overlake Christian Church near Seattle, Washington, are working on initiatives in orphan care and human trafficking issues and beginning their work in Kenya with orphan care and in Thailand with human trafficking.

Their goal in Kenya is to facilitate adoptions for 2000 street children in the next three years.  They will provide transitional housing for the children and provide training and support to families able and willing to adopt.  We believe it is important to build families and that these children know the love of parents.  Microfinance will be incorporated to make it possible for families to adopt.  We also see microfinance as a way to keep children from becoming orphans.

Their goal in Thailand is to prevent children from being trafficked.  They also are working on rescuing 1000 girls in Pattaya in the next three years.  They will be using microfinance as a tool to empower these women and to help them support themselves.

They hope to build a business plan that is replicable and sustainable so they can move into other countries.

This group is connecting with people and organizations who have been working in the microfinance space to gain knowledge about best practices on the ground. So I invited a few of the folks from OCC to EVO this Tuesday for the launch of our new community organizing movement for Oikocredit. Hopefully the place will be jammed with folks who can help. C’mon down.

Dan hopes to substitute, not compliment, his current line of loafers with these greener models

by Dan O’Shea,

Partner at Re-Vision Labs

 

Does “buying green” just create more junk? If your green purchase is not somehow replacing a non-green product you may just be contributing to more “stuff” in the system. But how are we to know?

I have felt better when plunking my money down on the latest, greatest, greenest most eco–ego–nomical thing, be it citrus-scented cleaner, organic cotton boxers, or organic-fair trade-post-graduate-educated bacon.  But am I really making a difference in anything other than my own feelings of superiority?  Is there a way for me to know that where I put my money is trulymaking LESS of an impact and MORE of a difference?

Green consumerism, while a good intention, is considered a new revenue stream by most companies.  Otherwise why would there have been billions of dollars spent on them?  This questionable green union isn’t unusual.  Ben and Jerry’s Ice Cream sold to Unilever in 2007 for $326 million, Tom’s of Maine is owned by Colgate-Palmolive, Odwalla is owned by Coke and Naked Juice is owned by Pepsi… and so on and so forth.   Did they do it so that they could sell less of their other non–green products? Probably not. They did it to add revenue, diversify their product lines, and grow their companies.

My point follows that these companies (and we as consumers), regardless of their green union, continue to pursue a path of GROWTH vs. DEVELOPMENT where growth = more stuff and development = better stuff. With the acquisitions of these good, green companies the behemoths are selling more stuff and some better stuff but they are not decreasing the sales of the not-as-good-stuff. Therefore, the creation of the green consumer segment yields more stuff….which is a problem and a problem that the green stuff was designed to ameliorate and is now a part of.

I therefore advocate CPR, or Consumer Product REPLACEMENT.  I want to know that my green purchases are not just more stuff in the never ending deluge of junk that ends up in a landfill. I need to know that there will be LESS stuff and in its place SMARTER stuff and that by buying the green products I am helping to fund a transition to a smarter, sustainable development model.

So is it possible that, inadvertently, the green consumer revolution is simply creating more junk that our already stressed system must absorb? And is it the fault of the consumer by demanding it in droves, on demand? Or is it the greed of the corporations or their obligations to Wall Street quarterly performance metrics?

I recently attended a conference on the topic of business sustainability and realized that this topic, new as it is to the mainstream, has reached a saturation point. One more panel of over-privileged white people telling other over-privileged white people (of which I am one) about their sustainability exploits will drive me to leave my car idling outside the next time I go to one of these things, wear a fur suit, and proclaim the benefits of better views from mountaintop removal coal mining.

I have to say… I am an overenthusiastic champion of sustainability issues, and would almost stand on a street corner with a sign saying: “will reduce your footprint for beer.”

I also spent 25 years in the media business and think that a little entertainment, tension, and controversy – plus some authentic stakeholder engagement – would increase retention and perhaps gain more of an audience. If I produce a conference… and I am thinking about it… I want people to want more, and to tell everyone they know how cool that was.

So what would I do differently? Well, in no particular order, since I am kinda thinking out loud…. first, I’d ask YOU, the reader or participant, what do you want to learn and how do you want to learn it. Then, I would find people from as many points on the spectrum – or in the cycle – as I could. And I would invite them. I would find the two most polar opposite thinkers and have them fight it out on the main stage… and film it.

I would webcast portions of it. I would have contests from practitioners that couldn’t make it to send in videos of 2 or 3 minutes, giving us a piece of their mind or their point of view.

And I probably would NOT provide bottled water for the panelists. C’mon people..REALLY!!! This actually happened. I hate to demonize a sector… but how disconnected to your topic do you have to be to have the heavy footprint, landfill happy bottled water product everywhere you turn around?

So, it is time for Conference 2.0. I am making it a mix of Jerry Springer and Charlie Rose. Some brains and brawn. A spoonful of sugar, organic and fairly-traded of course, has always made the medicine go down.

A few weeks ago, I attended a Microfinance Conference at Seattle Pacific University – I was excited to hear the keynote by Matt Flannery, Kiva founder, and to hear what the Gates Foundation is doing with their Global Development arm. I poked my head into the Domestic Microfinance session and found out some interesting things as well.

We’ve heard much about the worldwide poverty issue, and it is an urgent issue, but there are also “unbankable Americans”. Of course there is no denying the fact that, on average, the quality of life enjoyed by Americans is orders of magnitude better than most of the developing world, I don’t want to gloss over that fact.

But as I learned, there are people here in the States that can’t get a loan, that want to work to improve their lives, and who have solid ideas to make a better life for themselves.

According to the US Census Bureau, a household of four, with 2 kids, earning $21,834 USD, is at the poverty level. Compare that with the nearly 2 billion people who live on $2 a day – $730 a year – or less.

In 2007 there were 37.3 million people living in poverty in the US.

In the State of Washington we have the Community Alliance for Self Help (CASH) that provides training, support and loans to otherwise “unbankable” Americans.

There are some 500 microenterprise development organizations in the US. Some operate on a more traditional loan basis and others, like CASH, have significant training benchmarks and a peer-reviewed lending program.

The session at the conference was interactive and we all had to go through a peer lending review on a loan request based on an actual situation.

CASH is an entrepreneur incubator, provides small business loans, provides access to legal work, and an 8 week business plan training program.

The loans are a revolving credit fund. This reminded me of another more informal type of microfinance called a Rotating Savings Club where members put in as little as $1 a week (in developing areas) and each week the peer group decides who can get the money based on need. I have heard this has migrated from places like the Caribbean and Africa to urban neighborhoods here in the States and is a way for the “unbankable” to function in a system that has continually rewarded the rich and privileged.

What I hope, and what is happening, I believe, is that successful ideas like Rotating Savings Clubs can be more formalized and scaled to help more people to be able to work to improve themselves. It’s been noted by many working in and around microfinance that the poor don’t want a handout, they want opportunity, which translates to access to capital.

Thanks to SPU for organizing the Conference. Yet another indication that, for some reason, Seattle is at the nexus of thinking about microfinance and Global Economic Development.

In one of my first posts, I brayed on about the greatness of Micheal Pollan, the White House garden, and how I vowed to join a local pea patch to eat better food and commune with nature, my daughter, and the neighborhood.

Thanks to the White House for getting theirs done. I sort of cheated. But I did do something.

My family – knowing that my “green” thumb is more agent orange than a green agent of change – bought me a fool proof indoor hydroponic grow-light planter.

The Aero Garden is awesome!

Yes, it plugs in so that doesn’t seem so good but the thing uses less electricity than a 60 watt light bulb.

And there are a lot of other sustainability elements to the Aero Garden – check them out. And my daughter helped me put the thing together and let’s me know when it needs water and food. And the food is organic.

The whole family is looking forward to fresh tomatoes. We have red and yellow heirlooms that will be ready when our newborn is 12 weeks old.

Yeah, we got a lot going on! The Aero Garden is allowing us to experience caring for our own garden and learn to take care of it, as we hunker down with a newborn and a 5 year old. Especially since we have no “land” to speak of in our yard.

So while our kitchen may not offer the serenity of an outdoor garden or the tactile sensations of digging and planting, it is an easy on-ramp to better food, caring for a garden, and a general understanding of the food life cycle.

Maybe when the kids are older we’ll be able to get that pea patch going.

That is a quote from a fairly high-level manager responsible for over $65 million in revenue and perhaps hundreds of millions of dollars in assets at a company that was once valued at nearly $1 billion.

Of course I would guess anyone reading this blog scoffs at this quote. It gives me pause to think about what is “green”. I would say, based on conversations with some well educated and very experienced managers, that the “green thing” largely means “the environment” and still smacks of Birkenstocks and patchouli oil.

A week or so ago I attended the Washington State Department of Commerce (the pending new name of CTED) Washington Energy Summit. The Gov spoke, as did the new head of the Department of Commerce – former Microsoft exec Rogers Weed – who organized the sold out show.

Who did I meet there? The usual suspects, of course. But I also met several union reps. How “green” is that?

It’s green jeans, is what it is. There is the obvious “green” job: developing solar panels. And then the not so obvious green job: installing them. And stringing electrical wire and raising transmission towers.

There are hundreds of millions of dollars headed for the State of Washington directly, and billions available federally on a competitive level. The conference was the beginning of a plan to funnel as much of that money into our state economy as possible.

Some of the money is specifically directed at, for example, low-income housing weatherization: someone has to go to the homes, audit the energy use, and offer services for making the homes “tighter” (more energy efficient). And by the way, that’s a tool belt job that requires steel-toed boots, not open-toed sandals.

So if you know one of these managment dopes who thinks green is “over” or “too expensive,” send them to the CTED site and show them all the money coming from the government designed to make our buildings, transportation, and economy more efficient. That puts our economy in the black, and might make them enviously green, when they are left holding a bag full of something brown.

I’d like to NAB me some money.

Doesn’t the whole system need a “new arrangement”?

NAB (New Arrangements to Borrow) is an arrangement through the IMF (International Monetary Fund) where member countries lend to the IMF in times of crisis. It is reported (IMF/Reuters , NYTimes) to be a short-term cash infusion via the sale of bonds. Sounds pretty good. The funds go to poorer countries such as Poland, Mexico and Colombia with others expected to line up. The IMF wants China, Brazil and Russia to throw in big time. They have been balking because they want more voting power.

What it does, according to the articles, is to provide cash where credit is unavailable (isn’t that everywhere?). It is providing actual money instead of the promise to pay money. It is supposed to be short-term, one to two years. Then the cash comes back out of the system.

Currently one can NAB up to $50 billion USD. This sale of bonds is supposed to raise $500 billion. Wow. That seems like a lot.

It is a short-term cash infusion and therefore, I think, a short-term fix to a systemic problem. Is this a lesson that the closer banks are up to 100% cash reserves, and the closer we are to a real economy and not a “paper chase” economy, the better off we’ll be?

What is credit anyway?

The root of the word is from the latin credere, to trust, entrust, believe or, simply, “faith and trust” Oddly, these two fine attributes are missing from the banking system of today. If I walked in to a bank and said I was trustworthy and would work faithfully to repay I’d be turned around and marched right out the door. I would have to have….a CREDIT HISTORY. I would have to prove that I could repay the money. But what if I could never get any money in the first place? What do I do? I generally don’t have to worry about that, because I was born into a privileged and powerful existence just by virtue of being white and male and American.

But what about the 70% of the poorest people in the world who are women and children – and who are “unbankable”?  Will any of this money go to them? Not if it gets into the hands of the mainstream banking system.

On the one hand, NAB could be a way for the poorer countries to develop infrastructure and economic development that should create long-term living wage employment for the lower rungs of the economic ladder. Maybe it can work in tandem with microfinance, so that there is a top down and a bottom up economic plan to help the poorest people in the world, those living on $1 US or $2 US a day.

But on the other hand, let’s go back to the faith and trust thing. One big difference between the banking system and microfinance, is that the microfinance loans are largely uncollateralized. The microfinance system is based on “knowing the borrower” and in many cases, on peer pressure as well, since loans can be made to a group of unbankable people.

Perhaps this model should be included in the New Arrangement to Borrow.

Do we have an obligation to lead effectively?

I don’t know… what if all the people in the world who make less than $2 US a day started buying tvs and bottled water? There would be so much garbage that landfill would be real estate. How can we create an egalitarian economic system that treats everyone fairly and doesn’t degrade the planet? The reason the US accounts for 25% of all the greenhouse gas emissions in the world is because we have so much damn stuff. That is one challenge we face with the economies of China and India, the rising middle class of the “developing world”. The Western model of consumption economics is the aspirations of hundreds of millions of people around the world. What do we need to do? Show a little restraint perhaps?

It is kind of like parenting. I am relatively new to this parenting thing. I have a 5 year old and another one on the way…like…the call could come while I’m writing this. But what I mean is that I can lecture my kid about this and that but it is what I DO that she will do. Not what I tell her to do. Trust me. OK, we recycle, duh, I think it is on the admissions exam for living in Seattle. I showed my little one the difference between the garbage and the recycling ONE TIME. Now, if she thinks the thing I am throwing away can be recycled, boy do I hear about it. That’s because she sees us doing it every day, not because I sat her down and discussed post-consumer waste and #5 plastics.

A better alternative?

Some poverty alleviation metrics from Grameen Foundation and Oikocredit include having a house with a roof that doesn’t leak, sending your kids to school, and seeing a doctor every year or two. It seems to me to be a long hard road, but one that has begun with the existence of some 10,000 microfinance institutions across the world.

So maybe NAB should be turned around for the poorest people in the world, and instead of the over-leveraged financial systems that created our current problem, the future should be not NAB but its palindrome BAN – Borrow Against Nothing….but Faith and Trust.

And by the way, the poor pay back! The average Microfinance payback rate is 95 – 99%, vs. the average credit card payback rate of 91%. And the default rate on all commercial loans has grown steadily for the past 16 quarters.