What Do You Get for a Day’s Labor in Haiti?

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Not much, since you’d only be earning one hundred and thirty two pennies. Yup, the average person in Haiti receives $1.32 for a day of labor.

Now, compare what they earn and what we spend on a daily basis, and you can see some real discrepancies in our standards of living. Refrain from thinking that goods in Haiti are a lot cheaper, because they’re not. Many are priced higher than in the US, and for a product of lesser quality, too.

When is the last time you had to go without one of the items below because you couldn’t afford it? Last month? Last year? Never? Imagine having to face the dilemma of trying to decide which necessities you’d go without every day. Which ones would you choose? 

daily wages

Source: U.S. Dept of Labor, U.S. Bureau of Labor Statistics, 2009

City of Dust

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A touching article from the New York Times about a Haitian police officer’s loss of his two daughters during the earthquake in Haiti nearly a year ago. Excerpt below, find the full article here:

The police chief pressed his hands against the wall to hold himself in place, even as the walls crumbled and calved, trying to avoid being thrown off the back of whatever large creature had come for vengeance. And when the building stopped spasming, and he knew himself to be alive, Termilus reflexively shouted, “Praise God.” He fell to his knees and crawled until he was free of the rubble, a regal man humbled by the overwhelming force of nature. Like the others who were caught out — at their offices or schools, in their cars or the market or returning to their families — like everyone who couldn’t know what was waiting for them beyond what they’d just survived, Frantz Termilus instinctively started walking home, his uniform powdered in a white chalk.

Wright Brothers & the Apollo Moon Missions

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How do you prepare for a new undertaking? Do you spell out every minute detail, contingency plan, backup strategy, and process before shipping? Or do you iterate, hoping for the best and making changes on the fly – with the knowledge that experiencing mistakes can lead to greater insights later on? 

The Wright Brothers were iterative. They tried something, failed. Tried again. Failed. They repeated this process over and over until they hit success. The approach worked well, because the outcome of a mistake (some minor injuries, perhaps) didn’t warrant the extra time it would have taken to avoid an accident in the first place. How many years later would we have seen the airplane if Orville and Wilbur were afraid of a broken arm?

wright bros

For the Apollo moon missions, a mistake would have been (and was) much more grave. Over-preparing isn’t a concept that would have applied well here. But how often does an project have to be so perfectly thought out, so carefully orchestrated, in order for it to succeed? Rarely. Last time I checked, none of my friends were astronauts, and you never see things happen quickly with a bunch of geeky guys poring over a slide rule.

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Are either of these approaches correct? In the right context, either one can be.  But I think that success lies in thinking more like the Wright Brothers: taking risks and never being afraid to crash once in a while. If you’re not adopting that mindset, someone else will, and they will be busy planning to meet tomorrow’s needs while you’re still stuck on yesterday’s plans.

A Lesson on Giving from Billionaires

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Harvard Business School has a wonderful post titled “How to Give Your Money Away More Effectively”. The text is below, or feel free to access the original article.

“No one gives away money as intelligently as they made it,” declared Andrew Tisch at a recent meeting of the Board of Advisers to the Harvard Business School Social Enterprise Initiative. That observation neatly encapsulates the biggest challenge facing the non-profit sector in the decade ahead.

FORTUNE magazine’s July 5, 2010, cover article describes how Warren Buffet and Bill and Melinda Gates are recruiting billionaires to take the Giving Pledge, a promise to give away at least half their net worth. If, however, too many of these donations are directed so that the donors and their family members can join prestigious Boards of Trustees or if the money gets widely dispersed to a myriad of under-performing local nonprofits, then society will not enjoy the full benefits from the funds expended and the sad truth of Andrew Tisch’s observation will be re-affirmed.

But if all the billionaires’ bequests were to be effectively deployed through charitable organizations committed to performance measurement and accountability for outcomes, this huge wave of philanthropy could transform large segments of society.

It’s not an impossible challenge. As we’ve described in a recent HBR article the Gates Foundation, for example, conducts due diligence and subsequent monitoring of the performance of the charitable organizations it supports just as any good investment manager would. That is why Warren Buffet directed that his own enormous bequest be deployed and administered through the strong processes already existing at the Gates Foundation.

Beyond the likes of the Gates Foundation, we see an emerging type of charitable organization modeled on venture capital funds, such as New Profit Inc. of Cambridge, Tipping Point Community and NewSchools Venture Fund in the San Francisco Bay Area, Venture Philanthropy Partners in Washington D.C., and Sea Change Capital in New York City. These funds pool large donations from contributors (tellingly referred to as “investors”) and distribute them to a relatively few nonprofits selected through a rigorous due diligence process that identifies organizations capable of delivering outstanding social outcomes on a wide scale. The funds offer their grantees large, multi-year commitments complemented with strong governance and active support for the nonprofit’s executive leadership team, board of directors, and operational management.

Thanks to these Venture Funds, several nonprofits are attracting sustainable funding for programs that have clearly demonstrated an ability to effectively address social problems long considered intractable. Take Youth Villages whose programs help young people, previously mired in bureaucratic state social service systems, achieve a productive life. Its programs have a success rate three times greater than those of state-run programs, achieved at one-third of the cost. It delivers this nine-fold advantage consistently across the seven states in which it operates.

But even with a recent $40 million grant from the Edna McConnell Clark Foundation, Growth Capital Aggregation Fund, Youth Villages receives substantially less than 1% of the $20 billion dispersed annually by philanthropists and governments on youth services despite offering demonstrably superior results than hundreds of similar but less effective deliverers of services to the same populations.

Youth Villages is not unique. Citizen Schools, an after-school program, Nurse Family Partnership, a health program for pregnant women, and Jumpstart, a program that raises the performance of kids in Head Start by an average of 30%, are but a few of the nonprofit organizations that could effectively deploy a great deal more money to extend the impact of their innovative programs.

As things stand, the CEOs of these high-performing nonprofits spend much of their time going cap-in-hand to raise money each year. Why aren’t the donors seeking these winners out? Society would surely be better served if the exemplary CEOs of these effective programs could spend much more of their time leading their organizations to deliver better services to more recipients.

Some people from the non-profit sector object to the financial market-inspired approaches that we espouse in our article on the grounds that the “spirit” of the capital markets somehow runs counter to the spirit of the nonprofit sector. But although the private sector is not perfect, as the global financial crisis has painfully revealed, many of its practices can be productively deployed to produce a far more effective and efficient voluntary sector.

The voluntary sector continually pleads for more funding to solve the nation’s long-standing social problems. Their case would be far stronger if the large sums of money already deployed to this sector year were better directed to organizations, such as Youth Villages, that consistently delivered the most value for the money.

The Coach and the Players

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I’ve blogged a bit about NGOs working in isolation. Since the knowledge pool and output capacity of a collective effort is far greater than any individual organization could achieve on its own, “team effort” is necessary for impact to truly be maximized. The ext337 blog has a great discussion around this.

I liken it to a basketball or baseball coaching taking out his key players and trying to play himself (baseball coaches used to do this, which is why they still where uniforms). Anyway, the point is that this is a need for both action (the basketball players), but also oversight and planning (the coach).

But I haven’t heard many organizations that focus on being the coach – after all, how do you get someone to support your work if you don’t do any of the action yourself? 

Thinking about abundance

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I strongly suggest reading the ext337 blog about a different paradigm in how non-profits should view the resources they have. Here is an excerpt:

As I think more about nonprofits-as-venues, as places where projects are performed (to push a metaphor just a tad too far), I think that thinking in terms of abundance rather than scarcity is one of the big changes that is necessary. We have to think not just in terms of what we can do, as individuals, within our organization, but we have to believe that the necessary skills are out there — we just need to find them.

Beth Kanter has some insightful responses at her own blog, under the post Why Should Nonprofits Choose Abundance (and Breathe).