Michael Fairbanks is a Co-Founder of SEVEN, a philanthropic foundation run by entrepreneurs, whose strategy is to produce films, books and original research to markedly increase the rate of diffusion of enterprise solutions to global poverty.

 

He is the founder and Chairman Emeritus of the OTF Group, a strategy-consulting firm based in Boston, and the first venture-backed U.S. firm to focus on developing nations. He was a U.S. Peace Corps teacher in Kenya, and a Wall Street banker.

 

His most recent projects include advising the President of the Inter-American Development Bank on its Opportunities for the Majority Initiative; working for the President of Rwanda to improve the competitiveness of that nation’s tourism, coffee and agro-industry sectors; and advising the Minister of Finance of Afghanistan on private-sector reforms. He conceived and oversees the Global Pioneers of Prosperity Program, in cooperation with OTF, Legatum, the Multilateral Investment Fund, and the Templeton Foundation, which finds and recognizes role model businesses in the world’s poorest nations.

 

He co–authored Harvard Business School’s landmark book on business strategy in emerging markets, “Plowing the Sea, Nurturing the Hidden Sources of Advantage in Developing Nations,” with a foreword by Michael Porter. Business Week Magazine said, “Plowing the Sea points the way toward creating prosperity in developing nations; ” the Boston Globe named it one of the ten best books of the year in Politics and Economics; and Exame magazine, Brazil’s leading business weekly, called it one of the ten best books of the decade.

 

He co-conceived and contributed to the global best selling book “Culture Matters: How Values Shape Human Progress,” edited by Sam Huntington and Larry Harrison at Harvard. His most recent book, edited with Malik Fal, Marcela Escobari-Rose, and Elizabeth Hooper contains essays by OTF colleagues and clients from around the world. It is entitled “In the River They Swim: Essays from Around the World on Enterprise Solutions to Poverty,” and was released in May 2009.

 

His latest column on HuffPo is well worth reading:

 

Communists are Back in Africa

 

Africa was always the chessboard on which stronger nations played. But the productivity of capitalist nations proved greater than the putative power of the Soviet Union. The communists left Africa, and billboards proclaiming, “All Glory to the Revolution” were replaced by pithy aphorisms: “Democratize, Stabilize, Liberalize, and Privatize.” These were important but insufficient prescriptions by what Nobel Laureate Joe Stiglitz said were “second-tier economists from first-rate universities.”

 

Now, the communists are back. The Chinese have a ravenous appetite for natural resources to fuel their thousands of factories; and a debate rages in Western capitals over the merits of Chinese engagement with Africa. Ten U.S. congressmen toured Africa last month and nervously inquired about Chinese activities. Western activists protest that Chinese investment comes at the expense of democracy and human rights, and fosters corruption. There is merit to these concerns, but where is the introspection? Why is the relationship between the West and Africa shaped by one form of aid or another? President Paul Kagame of Rwanda states, “We should be debating why so little investment is made in the continent, not where it originates.”

 

This may be about to change. A “Presidential Summit on Entrepreneurship” will be held this spring in Washington. It will be the highest-profile event ever regarding entrepreneurship and economic development, and will center on the relationship between the United States and Muslim communities, many of which are in Africa. This forum needs to be extended to all of Africa.

 

Most Aid Never has Impact

 

Eighty percent of assistance from the aid agencies, the not-for-profits, and the United Nations never achieves the desired goal; this is according to an aid agency that shelved their own report. Aid should be used in situations such as Haiti to mitigate the impact of natural disasters on vulnerable populations, but it has never been sufficient to lift nations out of poverty. In fact, there are reasons to believe the opposite.

 

The United Nations has 17,000 peace-keeping forces in Congo costing billions of dollars, but never addresses the underlying issues that caused the war: lack of governance, degrading poverty and intolerance. The U.N. Millennium Village program created high expectations, but failed to coordinate with national governments across Africa. They have programs for visitors that officials call “Poorism.” Tourists pay to visit villages and buy small crafts and agricultural products. One official showed me a brochure that sets rules for the busloads of visitors. The first rule is, please do no not feed the villagers.

 

These places are less like the model villages of the new millennium and more like the Potemkin villages of the last millennium: Russian towns built like theatrical sets, with large fires that glowed in the distance to portray economic activity.

Not-for-profit organizations are uneven in their impact. Pioneers like Paul Farmer who founded Partners in Health, or Greg Mortenson of “Three Cups of Tea” fame, are respected for starting with only a vision.

 

Other not-for-profit leaders, especially some of those who refer to themselves as Social Entrepreneurs, claim they borrow the best ideas of the private sector, and focus on innovation to serve the poor. Yet, they often spend more money on public relations than on R&D and training their own staff; and they place their headquarters closer to media centers and the affluent rather than the needy. Their impact is tiny compared to the multilaterals, or faith-based initiatives, or even the development aid provided by the Pentagon.

 

The Gates Foundation’s investments in health care and education promote a long-term perspective and catalyze others to solve some of the earth’s biggest challenges. But investments in business environments may be different. According to a successful East African entrepreneur, Gates is “the elephant that tramples the grass.” They invested so much money in coffee growing regions, for example, that they distorted incentives for local investors, forcing some to the sidelines. No one disputes that the Gates folks are smart, and have a heart as big as their endowment, but do they also have a mind for the poor?

 

Aid largesse can distort private initiatives, stifle democracies, amplify ethnic-based patron-client relationships, and promote corruption. Former Finance Minister of Afghanistan, Ashraf Ghani, who has been shortlisted to lead the U.N. and the World Bank, observes that aid can even “sever the sovereign relationship between people and their leaders.”

 

There are features of successful aid programs: a shared vision by both the provider and recipient, disbursement through national institutions, investment that increases competence beyond applying for aid, and no parallel donor structures that undermine all of the above. According to some leaders in Africa, the United States Agency for International Development (USAID) is one of the worst at meeting these criteria; the U.K.’s DFID is the ‘best of the West.’

Meanwhile, Shanghai hosted the African Development Bank meetings in 2007. Chinese Premier, Wen Jiabao, recently vowed to increase bilateral trade, extend zero-tariff treatment, provide interest-free loans to African nations, increase technology transfer, and to encourage his citizens to build sustainable businesses in Africa. Trade between Africa and China is already over USD 100 billion, though much of that is oil. The China Africa Development Fund has invested USD 540 million in 27 projects in Africa, and intends to invest USD 5 billion over the next few years in housing, energy, and industrial projects.

 

Africans have Choices

 

We are now in the mid-game: Many Africans believe that China values Africa and believes in its future more than the West. But the West can improve its position.

 

First, we need to value what Africans say: they don’t intend to trade their independence for a relationship with China. Rwanda, for example, doesn’t have to: GDP grew at 11.2% in 2008, and over 6% in the throes of 2009. Wages in key export sectors grew up to 30% each year since 2001. The country cut aid in half as a percentage of their budget, and was recognized as the top reformer in the world last year. Fifty-six percent of their legislature is women, which leads the world; women hold the key posts in the cabinet and judiciary; and free and closely scrutinized elections will be held again in August. Rwanda has a mutually respectful relationship with the Chinese, but theirs is not the Chinese model.

 

Second, the West should do what it can do better than anyone: focus on “Enterprise Solutions to Poverty.” The greatest thing we could do to build international trust and help poor people is to stop protecting industries where the West has lost competitive advantages. We should broaden the definition of international security from geo-strategic to upgrading firm-level relationships between our societies; and, we should bond with the thousands of African entrepreneurs who are already successful and give them ‘rocket fuel’ by connecting them to global networks of productivity, trade and investment. The best way to create many new entrepreneurs is to show that great ones are already there to emulate.

 

The West remains attractive to Africans. We share a difficult history and some languages and culture. But we are no longer the only ones who shape the discussion there. Our paternalistic attitude toward Africa does not work because Africans now have choices.

China is the largest developing nation, and regards relations with other poor nations as the basis for its entire foreign policy. Their leaders are sober, goal-oriented and have a long-term perspective. Our foreign aid vision lacks coherence, is uninformed, does not balance the past with the future, and is over-influenced by donor fashions and sentimentality concocted by PR executives with skinny passports.

 

I look forward to the U.S.A.’s Presidential Summit on Entrepreneurship. I hope future summits will cover all of Africa, and focus not on top-down solutions, or massive infusions of aid, or what the rest of the world should think or do, but on our own values and attitudes and what we can do better. We need to check our vanity and condescension, and look deeper for underlying causes and for the unanticipated consequences of our own strategies.

We need a better metaphor than the chessboard to explain a new approach to Africa. We should have a discussion for the times in which we live, be open to learn from the Africans, and focus on what we can do better than anyone: eradicating poverty through entrepreneurship. Until then, the Chinese will parry any frantic moves to discredit them, and patiently wait for the endgame.

 

Michael Fairbanks went to Africa as a U.S. Peace Corps teacher in 1979. He is the author of “In The River They Swim”. (www.sevenfund.org)

 

How the e-newsletter company Constant Contact works with their nonprofit bookstore neighbor More Than Words

 

By: Bob Nicoson and Sue LaChance*

 

 

More than Words provides empowering leadership and supportive employment opportunities for youth who are in foster care, court-involved, homeless, or out of school to prepare them for self-sufficiency as they transition to adulthood. Waltham-based Constant Contact, a leading provider of email marketing and online surveys for small organizations, has a long-standing relationship with More than Words, both as a service provider and as an ardent supporter.

 

While More than Words is a customer of Constant Contact’s email marketing tools, the relationship between the two organizations extends much deeper:

 

·       Constant Contact has hosted More than Words youth at its the Waltham headquarters to give them a glimpse of what a “day in the life” of the company, featuring some of the real world attributes of life in the corporate workforce. 

·       The company has initiated book drives and holiday-themed giving trees with donated items to benefit youth members in the More than Words program.

·       Most recently, the company participated in a day-long offsite for its leadership team who helped to put together office furniture for the second More Than Words bookstore slated to open in October.

 

Details on the leadership team service initiative:

 

In an effort to ensure that Constant Contact remains a great place to work, the leadership team is guided by two principles: developing and nurturing great managers and giving back to the communities in which it does business. The leadership team, which includes anyone who manages at least one staffer, has grown to more than 100 people. When searching for options for this particular leadership offsite, the human resources team organizing the offsite eliminated most of the traditional “team building” exercises and looked instead for something more meaningful. The goals of the offsite were to get leaders thinking about what skills, experiences, attributes and outlooks they could bring to the company table and how to leverage those for the greater good through an unusual team building exercise.

 

The company team asked More than Words what they needed most, which turned out to be office furniture for the new storefront. A team from the company and a group of More Than Words kids rented a large truck, gathered their lists, and went to the local IKEA to purchase the required items.  They also ferried the unassembled furniture to the offsite location where the leadership team was tasked with assembling all of the furniture, as a team and with the participation of every company leader from CEO Gail Goodman to the greenest manager. The goal was to get people to focus on their strengths and apply them in a team setting.

 

In the middle of the day the bookstore’s founder and Teen LEEP director Jodi Rosenbaum Tillinger came to speak, alongside Rolgems Alphonse, one of the More than Words success stories. Both Jodi and Rolgems told their stories of leadership, followed by an appreciation of the organization by Gail Goodman. All of the speakers focused on the questions “What can you be the best at?” “What are you passionate about?” and “What drives your economic engine?” By sharing their individual stories, they encouraged others to think about their own strengths and ambitions.

 

The value from the offsite was both individual and collective. More than one-third of the Constant Contact participants signed up to do additional work with More than Words on an individual basis and the company has offered to continue working with the organization to address its needs. When the furniture was delivered at the More than Words location, the program participants were thrilled to see its arrival and begin to feel the unfolding reality of the second bookstore. For Constant Contact the satisfaction of accomplishing its goals for the offsite meeting was as palpable as the energy generated by giving back to a great community organization.

 

 

* Bob Nicoson, is Chief Human Resources Officer and Sue LaChance is Director, Organizational and Leadership Development at Constant Contact.

 

$350,000 grant to produce comprehensive strategy for reducing hunger and malnutrition

 

PITTSBURGH – The H. J. Heinz Company Foundation announced today that it will sponsor a nutrition-mapping project conducted by the World Food Program (WFP) in Bangladesh, which will result in a comprehensive strategy for addressing that country’s nutritional deficiencies in an efficient and sustainable manner.

 

The H. J. Heinz Company Foundation is supporting the project in the first year with a grant of $350,000, as well as in-kind technical assistance.

 

Although significant progress has been made in recent years, under nutrition remains one of the most chronic and pressing public health issues in Bangladesh. Young children and women are particularly at-risk, as nearly 40 percent of both groups are underweight, and almost half of children under five suffer from stunted growth.

 

According to multiple data sources, most Bangladeshis are also deficient in vitamins and minerals, especially iron, vitamin A and zinc, resulting in cognitive impairment, anemia and blindness, among other conditions.

 

“In Bangladesh, Heinz is helping WFP identify the most vulnerable populations and formulate strategies to improve their access to food and their nutritional intake. The goal is to create a model for helping to build a healthier, more productive and self-reliant society from the ground up,” said Tammy Aupperle, Director of the H. J. Heinz Company Foundation.

 

WFP is the world’s largest humanitarian organization, fighting hunger worldwide both through emergency response and long-term projects, which improve people’s lives.

 

This year, WFP was aiming to feed 5 million hungry people in Bangladesh, who have been seriously affected by high food prices and the downturn in the global economy – including many who were affected by last year’s Cyclone Sidr.  Due to major funding shortfalls, however, WFP can now only reach 1.4 million – or around one quarter of the original caseload. In Bangladesh, WFP distributes wheat flour, biscuits and blended food, all fortified with essential micronutrients. It also distributes micronutrient powders, which can be added to food, to targeted groups.

 

“The World Food Program is thrilled to be partnering with the H. J. Heinz Company Foundation on a unique project to comprehensively map the nutritional status and needs of Bangladesh, and then develop with other key stakeholders a sustainable strategy for eradicating hunger and micronutrient malnutrition in this nation,” said John Aylieff, WFP Bangladesh Representative.

 

The H. J. Heinz Company Foundation is dedicated to helping reduce global malnutrition through its signature program, the Heinz Micronutrient Campaign (HMC).

 

Through its sponsorships, the HMC has pioneered the development of micronutrient powders that can be added to staple foods in the developing world to combat anemia and other disorders related to micronutrient malnutrition.

 

“As one of the world’s leading producers of nutritious foods for infants and children, Heinz is dedicated to reaching those people who cannot access or afford our products with a low-cost solution to the serious global health challenge of micronutrient deficiency,” said William R. Johnson, Heinz Chairman, President and CEO.

 

To date, the HMC has reached approximately 3 million children with single-serve micronutrient sachets containing a culturally appropriate mix of vitamins and minerals, including iron, vitamin A, folic acid, zinc and other essential nutrients tailored to the needs of a specific population.

 

A regimen of 60 sachets administered over two months can meet the micronutrient needs of a child over the course of a year for a cost of about $1.50.

 

The HMC is currently sponsoring with the Chinese Ministry of Health a pilot program in China’s northern and western provinces aimed at reaching 500,000 children. Other projects are under development in Tanzania, India, the Philippines and Cambodia.

 

About the Nutrition Mapping Project for Bangladesh

 

For every project WFP undertakes it must first establish what type and quantity of food is needed to address the problem at hand, considering the local population’s cooking and eating habits.

 

WFP is working with corporate partners, universities, UN agencies and NGOs to develop and assess the effectiveness of innovative products, such as micronutrient powders, in preventing and treating malnutrition.

 

With this data in hand, a comprehensive strategy can then be devised to determine what nutritional support tools to utilize, with a focus on optimizing use of local ingredients and delivery mechanisms.

 

The project will produce a summary of what is known about the nutritional status and needs of different target groups based on age, sex, disease prevalence (i.e. malaria, tuberculosis, AIDS), urban vs. rural areas, and regional differences related to climate and local food production.

 

An assessment will also be conducted of existing programs, policies and structures that target nutrition and food security. This assessment will identify the main stakeholders for nutrition in government and the private sector.

 

Once this is complete a proposed country nutrition strategy will be created with a timeline for implementing short, medium and long-range goals. The strategy document will recommend the most suitable stakeholders from both the public, academic, NGO and private sectors for carrying out the strategy’s different elements.

 

About the World Food Programme

The World Food Programme is the world’s largest humanitarian agency, fighting hunger worldwide.  In 2009, WFP aims to feed 108 million people in 74 countries. Some 10,200 people work for the organization, most of them in remote areas, directly serving the hungry poor.  For more information, please visit www.wfp.org.

 

About the H. J. Heinz Company Foundation The H. J. Heinz Company Foundation was established in 1951 to make contributions to further the public welfare.  Funded each year by the H. J. Heinz Company, the H. J. Heinz Company Foundation is committed to promoting the health and nutritional needs of children and families, with priority given to programs in communities where Heinz operates.  The Foundation proactively donates funds to develop and strengthen organizations that are dedicated to nutrition and alleviating under nutrition, diversity, and fostering healthy communities.  The Foundation supports socially responsible endeavors and encourages Heinz employees to participate in voluntary activities in support of charitable organizations.

 

Foundations seen moving to boost journalism
Foundations are taking surprising steps to help address the crisis in the U.S. newspaper industry, and the CEO of the Knight Foundation believes several of the biggest U.S. foundations may “get into journalism funding in a significant way,” a new report says.

From Philanthropy Journal

A few thoughts from Sally Blinken, a former deputy NY State Attorney General who directed numerous public corruption and charity investigations and enforcement actions.  Ms. Blinken is now a litigation partner with Venable LLP in New York.

The Madoff investigations added a new wrinkle late last week as New York Attorney General Andrew Cuomo served subpoenas on 15 separate universities, family philanthropies and non-profit institutions that had been investors with Bernard Madoff’s asset management business.  Among those hit with document requests were Bard College, New York University and New York Law School.

Even though the organizations may have lost more than $100 million in the Ponzi fraud allegedly carried out by Mr. Madoff, questions of due diligence have been raised about relations between some of the non-profits and J. Ezra Merkin, whose own investment funds were active feeders into the Madoff funds.

Mr. Merkin, the former chairman of GMAC, served on the boards of several prominent NY institutions that invested substantially with Madoff, including Yeshiva University, where he was a trustee and headed its investment committee.

Some are wondering why the non-profits - some of whom are bringing their own civil lawsuits against Madoff - would be handed formal subpoenas.

“It seems clear that the Attorney General is taking a serious look at potential conflicts of interest between Mr. Merkin and the institutions he advised, especially those where he served as a director,” Ms. Blinken said.

“Prosecutors are probably trying to learn whether Merkin disclosed his ties with Madoff before actively placing investments on behalf of the foundations and other institutions - and to what degree those ties were known, or perhaps even ignored, by other directors and fiduciaries of those non-profits,” Ms. Blinken added.

She noted that investigators will likely take a close look at minutes of board meetings and other documents showing how investment decisions were made.   “That includes what information Merkin shared on management fees and also allocation figures showing what portion of their investment with Merkin’s three separate funds were being placed with Madoff,” Ms. Blinken noted.

“At the very least, the probe is casting a bright light on the investment policies and protocols in place at some of New York’s leading academic institutions and non-profits,” Ms. Blinken said.

During her seven-year tenure with the AG, Ms. Blinken served as special counsel in the Public Integrity Bureau under Mr. Cuomo.

Sally G. Blinken, a partner in the Commercial Litigation and Nonprofit Practice Groups of the New York office, has seven years experience working in the office of the New York State Attorney General and ten years as a commercial litigation associate specializing in trusts and estates litigation.