Are Non-Profits Doomed to Fail in Haiti?

With the 3rd anniversary of Haiti's Earthquake upon us, I asked Kona Shen, Founder and Director of GOALS Haiti, for her perspective.  Kona has a long-standing passion for Haiti and has lived there for the past 3 years. She's seen what has and hasn't worked with the aid that has flowed into the country. This is Kona's second post here and third mention.  Her insights give us pause to think, especially about 'social' enterprises.
____________________________________________

It’s hard to know anything in Haiti. Take the unemployment rate: it may be 52%, it may be 70%, or it may be higher. Like everything in this country, it depends whom you ask, and why.

This lesson is one of the first I learned in Haiti. I began volunteering in Haiti in 2007, and moved to Léogane in 2010 to begin my work with GOALS. The more time I spend here, the less I know. This is especially true following the January 12, 2010 earthquake that killed 230,000-300,000 people.

The earthquake was one the largest natural disasters in modern history. About half of American households donated, and aid poured into Haiti, determined to do good (New York Daily News). This year, the media marked the three-year anniversary with a review of aid efforts. The Independent published, “Haiti: the graveyard of hope,” while TIME published, “Haiti Three Years After the Quake: There’s Good News, Too.” Clearly, there is a wide range of opinion. And if there’s something Haiti has plenty of, it’s opinions.

Parts of Haiti have achieved remarkable progress in their recovery since 2010. In Léogane, where I live, streets are now paved, there are more public wells, and new businesses have opened their doors. The town is starting to look more and more like its pre-earthquake self: poor, but bustling with entrepreneurial activity.

Foreign aid is complicated everywhere, but perhaps especially so in Haiti. Historically, Haiti was fiercely independent. In 1804, a thirteen-year slave rebellion was won and Haiti became the world’s first black republic. In the following decades, Haitians successfully fended off foreign invasions while simultaneously succumbing to a long cycle of internal upheavals.

Today, Haiti is infamous for deep-seated aid dependency and its heavy reliance on remittances from abroad. Throughout Haiti’s history, people have survived slavery, dictators, and disasters. As with everything else, foreign aid has become another opportunity for families to strategize new ways to create better lives for themselves and their children.

Knowing all of this, what role do non-profits have in Haiti?

There are an estimated 3,000 non-governmental organizations (NGOs) working in Haiti. In 2005, only 343 were registered with the government (Schuller). Today, the number is still under 600. Granted, it’s not an easy process to register; GOALS has not yet completed it, and our application is currently being reviewed by the Haitian government. But there is a systematic reluctance for non-profits to recognize a need to play by the rules in Haiti. The wasted funds, the sloppy results, and the lost opportunity to “build back better” – if it ever existed – are closely tied to this disregard.

Compounding the problem is a poor allocation of the resources that do exist. A study published in the Fall 2010 edition of The Journal of Haitian Studies showed that “it is 125 times more likely for someone outside of metropolitan Port-au-Prince to be in need for water, food, medicine, clothing or tents,” but that only 4% of NGOs focused outside of the Port-au-Prince area. Too often, foreign aid becomes oriented around donor’s preferences and opinions, and not real needs on the ground.

A recent article in The Wall Street Journal (“Why Charity Hasn’t Done Much for Haiti”) argues that non-profits disrupt market economics because freely distributed resources reduce pressures on politicians to enact needed reforms. Foreign donors, of course, have their own agendas. Of every $100 of Haiti reconstruction contracts awarded by the American government, $98.40 went back to American companies (National Public Radio).

On the ground, the story is more nuanced. Non-profits that hire locally, buy locally, and build locally are injecting funds from foreign donors to boost local economies. It is a tertiary effect – beyond direct and indirect social impacts – but an important one. These programs not only provide services, but pay salaries and increase local business, too. Ultimately, non-profits can be stakeholders if they deliver results, partner with governments, and stay committed.

There are no easy answers to solve Haiti’s problems. Non-profits do have the information needed, though, to adopt recommended practices to better serve those in need. We must recognize the role of the Haitian government. We must create services based on real needs, not perceived ones, when such information is available. We must support local economies. We must be realistic. Real change is often slow, long-term, and riddled with failures along the way.

Most of all, we must keep an open mind. There is rarely one right answer, and solutions come in many guises. Haiti has taught me many lessons, but this tops the list: the less you’re sure you know, the better.

Intrapreneurship in "Social" Business

I'm again privileged to have an incredible "kid" share his wisdom on the role of intrapreneurship in social business. It's becoming more accepted in 'regular' business so let's apply it to social as well.  Allen Kramer, Brown '13, is going to change the world - so listen, learn, apply, iterate. 
         _____________________________________________________

Allen Kramer:  Reflection: Work with Assured Labor

I am passionate about giving low-income workers in Latin America access to jobs.  A powerful way to do this, called mobile recruitment uses text messaging (SMS: Short Message Service) to allow workers to find jobs. Having lived in and with off-the-grid communities in Latin America, in Nicaragua and Colombia, I had seen and felt the impact of low Internet and basic telecommunications access, especially when it comes to communicating with potential employers. Mobile recruitment bridges this gap in regions where access to mobile is on average 3 times greater than the Internet.

While working in Manizales, Colombia for Grameen Caldas (an affiliate to Nobel Peace Prize winning Grameen Bank in Bangladesh), the entrepreneur’s bug bit me and I finally decided I wanted to launch my own mobile recruitment service.  Like many “would-love-to-be” young entrepreneurs, I quickly realized just how much I didn’t know.  I did what most entrepreneurs do: I talked about my idea to anyone and everyone who would listen. Fortunately, I stumbled upon several people who took more than just a passing interest in what I was thinking about. I was directed to two companies already working in this market, Baba Jobs in India and Assured Labor in Latin America. Because of the regional interest, I contacted the CEO of Assured Labor, David Reich, to pitch my ideas.

When we met in January 2012, my idealist entrepreneurial dreams hit pavement as David shared their years of market experience in mobile recruitment while managing a large and rapidly growing team in over four countries. I knew little about developing mobile interface software or, when I admitted it to myself, how to build a business from the ground up. So I temporarily swallowed my entrepreneurial dreams and offered to work for the company to help them expand in key areas.

Over the course of the past year, there have been three distinct lessons that have stuck with me: 1) consumer insights can truly shape and determine a business’ success; 2) intrapreneurs play a vital role in (social) enterprise; and 3) being mission-driven is critical in deciding your own path.

First, some thoughts on consumer insights
The number of times I’ve heard people in social entrepreneurship communities off-handedly state ‘you have to know your beneficiaries’ is astounding. On the surface, this is a good thing – in fact, the point I am about to make is that you do have to have a profound knowledge of your target users in order to be successful.  But many of these people rarely dig deeper into understanding the real needs, circumstances and constraints.  Calling these people ‘beneficiaries’ instead of users or customers sums it up.

For instance, there is a company sells SMS to employers only to schedule interviews, not recruit. Less than 10% of the workers show up to interviews and many have dropped the service. Why? Employers send a SMS with little information about where and when the interview is to the workers’ cell phones with no tracking of receipt.  Why would a worker spend their scarce cash on a bus, with doubtful success of employment, to an unfamiliar area in a dangerous city like Bogotá from an unknown employer?

At Assured Labor, I tested the adoption of new products into new markets to understand product-market fit. My first step, a lá Four Steps to the Epiphany, was understanding workers’ pain points in trying to find a job. This customer discovery process let me identify the forces acting on a worker. What do they see when they wake up in the morning and walk out of their home? Where do the unemployed go to look for work? How do they learn where to go to find work? How do they pay for the bus to get there? What are the consequences of not finding a job? Who do they trust as reliable sources of information on employment opportunities?

This understanding lets me predict, sometimes simply better than asking directly, what a workers’ behavioral responses will be when they receive an SMS with a job opportunity, given a range of message content. Our investment in understanding answers to these questions has allowed Assured Labor to build viable solutions to the difficulties workers face while searching for jobs.

Intrapreneurship can drive organizational growth
I broadly define intrapreneurship as any role within an existing company that is largely self-directed and risky, forging out ahead of the status quo. Intrapreneurship has interesting power both to create opportunities for young people, such as myself, that are launching themselves into the social enterprise sector, as well as to spur significant innovation and growth within startups and existing larger companies. This power has gotten intrapreneurship featured recently in publications like Forbes.

My first experience with intrapreneurship was at Assured Labor.  I took responsibility, as well as the risk of my time and effort, to lay the groundwork for expansion to a new market. While the country had been on Assured Labor’s longer-term radar, I brought the bandwidth to actually take the first steps and identify its potential for short and medium-term company growth.

What does being an intrapreneur mean to the university student doing an internship or recent graduate? No more coffee runs or busy-work paper filing but the opportunity to flex your innovative muscles; the chance for independent learning-by-doing, while also taking advantage of the accumulated institutional knowledge and (hopefully) top-notch team of an existing company.

Intrapreneurship is a great way to prove your worth to the company when you do not have the credentials of years of work experience under your belt. This is especially true if you take on the financial risk of ‘bootstrapping’ your own intrapreneurial experience: take the personal and financial risk to do something new, get it done or have some good lessons from failure. You then have a better chance at creating a more permanent place for yourself within the team. Think of the job offer at the end as the ‘up-side’ to the initial investment. Obviously, most university students have scant savings to actually do this bootstrapping. Instead of using savings, there are a couple of alternatives. The first – which is the route that I took – is to apply to fellowships or grants that can provide some financial cushion. The second is to take a traditional paid or stipend internship and carve out an intrapreneurial role within it.

From the company’s perspective, fostering a culture of intrapreneurship brings significant advantages. First is the bandwidth to test out new ideas and to maintain a constant stream of innovation. As young companies move towards establishing their business models, rarely does a lack of ideas keep them from innovating.  It’s usually the limited capacity to test and iterate to find the best ideas and the best implementations. Recruiting motivated intrapreneurs can move this innovation forward. Second is the ability to create a recruiting pipeline of top talent and a team always thinking five steps out – especially when these intrapreneurs are students or young professionals where no long-term commitment is assumed at the outset. This just requires the management team’s dedication to cultivate internal leaders and to invest in them professionally.

Be mission-driven
Social entrepreneurship is facing a serious problem of ego. Too frequently, I have seen friends launch new nonprofits or social enterprises that largely duplicate the work of existing organizations and never scale, creating limited social impact. Two principal motivations seem to drive this duplication: 1) the desire to have complete ownership of the organization that is founded, with the sexiness that ownership confers; and 2) a genuine frustration with current existing solutions. Then, of course, there are just some bad ideas and stale social enterprise models.

Good social entrepreneurship should be driven by passion for achieving the social mission – everything else is just a vehicle to do so. So, if you are passionate about a social or economic issue – unemployment, to take a salient example – the best first step is to explore the structural causes of the issue and next examine what solutions have been developed. Learn from the past success and failures.

For sure, I have fallen trap to the ‘solution excitement’ on numerous occasions. Ultimately, what I have found is that there is a significant amount of existing momentum in ‘social enterprises’ that can be guided towards greater social gains. Assured Labor is growing close to 500,000 workers registered. One of the questions I have been helping answer at Assured Labor is how we can always make and keep the SMS jobs platform relevant for the lowest income brackets so the next 500,000 workers and the million after that; how can we disrupt hiring in Latin America and make it more equitable? Had I gone on to found my own company, the chances are slim I could have grown it to a user base of that size in so little time. Now, I’ve had the opportunity to inject ideas and growth opportunities that do positively affect a huge market of job seekers. So, part of being mission driven is also being intrapreneurial.

Sometimes it really is too hard to alter existing institutions and change needs to be driven from the outside. We need to be more analytical about founding of nonprofits and social enterprises. If you are thinking about doing so, first look at what organizations, companies, and other forms of innovations already exist in order to find opportunities to create changes from within. Lastly, if you want an opportunity to build an organization or company from the ground up because of the excitement, go for it – just steer clear of marketing yourself as the bleeding heart type, because you can muddle what is going to create impact in this world. 

The Risk of Not Taking Risks

My friend, Doug Sundheim’s new book, Taking Smart Risks, is an early winner for 2013 Must Reads.   Before I get to how great the book is, the story of how Doug and I met starts with taking a smart risk!  Doug had read a post of mine about my wonderful client, Menasha Packaging and asked if I would be willing to introduce him to them for a book he was writing.  Of course, I did a bit of due diligence into this Doug guy and said yes.  I’m so glad I did!

Part of the problem with risk today is how it’s defined and ingrained in our society.  Take the definition, “exposing oneself to the possibility of loss or injury.”  The definition talks about what can happen as a direct result of risk – the ‘output’ of risk but definitely not the outcome, which is what Doug eloquently supplies – “exposing oneself to the possibility of loss or injury in the hopes of achieving a gain or reward.”  For many people, though, “the emotional cost of not risking and having to live with that regret [is] much greater …than any career or financials … costs.”

By reframing the definition of risk, Doug shows the power of smart risk taking.  We rarely look at the risk of NOT doing, of NOT innovating, of NOT trying.  In essence, it a different perspective of opportunity costs – the opportunity cost of NOT doing something.  I see this everyday in my work – organizations that see innovation as a risk instead of seeing not innovating as a bigger risk.  Doug makes the costs of playing it safe very clear: we don’t grow, win, create and we lose confidence and bluntly, don’t feel alive and meaningful.  If we can get this to change, imagine the positive power that can be unleashed.

Which gets to another key point in Doug’s book – the paralysis of security.  We create an illusion of security around us today, one that is heavily dependent upon our other illusion of control.  The issue isn’t going from security to insecurity.  We’re already not secure in terms of ‘stuff’ whether we recognize it or not.  We’re already not in control of our circumstances whether we recognize it or not.  However, we can be secure in who we are and what we stand for and in how we control our own reactions to life. A key to smart risk taking is, as Doug says, the ability to “increase our tolerance for uncertain circumstances.” If we are secure in who we are, what we stand for and how we will react, we can welcome uncertainty for the opportunity it really is.   That is why I truly believe that entrepreneurs, for instance, are not more risk-o-philic but fundamentally define risk like Doug does.

The book’s practical wisdom, advice, and tools for how to take smart risks are critical.  This is uncharted territory for many and Doug’s practical guidance will make it easier for us to learn how to and actually take smart risks.   This is particularly important for some of the hardest areas of smart risk taking – our own ego and our ability to communicate.  Through stories about humble leaders and constant communicators, like Mike Waite, Doug demonstrates how critical the ‘soft’ skills are in successfully taking smart risks…and in the payoffs.  These are truly fundamental to taking risk. 

It’s been almost exactly 1 year since Doug and I met for breakfast in NYC and talked about his book and how I could help.  That was the start of our friendship!  I introduced him to the incredible leaders at Menasha Packaging and Thogus, my 21^st Century manufacturing client.  The result of Doug’s taking the risk to “ask”?  He got some very real and powerful stories of leaders we can emulate and learn from, I got two of my fabulous clients in his book, and we all now have a field-guide for the New Year and beyond to help us take smart risks.  I look forward to seeing the great things that will happen because of it!