Shaulablog

Most of my readers by now have likely made at least one donation to the Haitian relief efforts, help that is urgently needed. Many intermediaries have created compilations of non-governmental organizations (NGOs) with pre-earthquake operations in Haiti, my preference because they will have existing local knowledge and relationships to aid their own effectiveness.

Conversation has already turned to the question of a long-term solution, with a spicy kick-off from columnist David Brooks in the NYT comparing the Haitian earthquake to a San Franciscan one and asserting that this is “not a natural disaster story but a poverty story.” If Haiti were not so poor, the infrastructure would not be so shoddy and the resulting negative impact from the quake not so deadly.

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While researching Haitian charity, I discovered that GiveWell.net, a blog focused on non-profit effectiveness, has written a bunch on why they don’t like microfinance nonprofits, and don’t like Kiva and Grameen in particular. I’m sharing for your next idle moment that pairs with an urge to know more about microfinance as an industry!

The core criticism:
Too many organizations that lead with their financial metrics (loans made, repayment rates) over their social metrics (are clients actually better off? Is there good client satisfaction?) MixMarket, a MicroFinance Institution (MFI) research site lists 1,678 MFIs with financial data but according to GiveWell only 66 have filed social reports. They assert that profitability does not necessarily equal impact and I agree. That’s a core tenant of Social Impact investing!

http://blog.givewell.net/2009/12/25/where-we-stand-on-microfinance-charity/
Warning, this contains easily an hour’s worth of muddling around. But interesting stuff!

I attended the Seattle Economics Council’s December lunch at Ivars on the waterfront. I must say, these folks organize one of the best speaker series in town IMHO. This month they hosted Mark Costello, a lender relations specialist from the local SBA office. Mark’s talk was my first introduction to the SBA Office of Advocacy – a research group within the SBA. He pulled a fascinating array of data for us about the state of small business.

Some key myth busting – the business failure rate is not as dire as rumor would have it: 70% of businesses survive the first 2 years and 50% are still in business after 5 years. It was not clear how that number is impacted by businesses that are acquired, I’ll guess they show up as no longer in business. I read a paper in the past that made the point that this data only looks at who is still in business and that a closed business is not necessarily a failed business. Back to the data: small businesses have created 65% of new jobs since 1993 and employ 60.2 million people – 50% of total US employment.

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Wondering how to structure your social enterprise? Wonder what an L3C is and should you be for profit, nonprofit, a hybrid and if so which should own which? Spend a day noodling over such issues with a national tour organized by Criterion Ventures. I worked with Joy Anderson and Jackie Vanderbrug while at Good Capital and they’re definitely “right people”.

Structure Lab is an easy-to-engage, day-long process that helps social ventures take advantage of innovations in capital formation, revenue streams, corporate forms, and independent regulation to promote and protect values and mission.

With support from the David and Lucile Packard Foundation, Criterion designed Structure Lab to explore the range of legal structures available for your venture, whether it’s still on the drawing board or poised for growth. Come create the optimal legal structure for your social venture to thrive.

Check it out!

I went to my first corporate shareholder’s meeting today – for Microsoft in Bellevue. I never went while I was an employee, we used to joke that it was at 8 am specifically to dissuade programmers from attending. I checked with someone afterwards and the content of the meeting is public, in fact you can watch it in webcast from the shareholder information section of the website at www.microsoft.com/msft. It was, in many ways, smaller than I expected. Sections were short, simple and to the point. The entire meeting, including shareholder resolution presentations, a short discussion of the business from Steve Ballmer, plus Q&A, was only an hour. Attendance was maybe 400 people? I ran into someone I knew from working there afterwards and he said in the past meetings have been much larger.

Most of the attendees were older folks, I’ll hazard a guess that the average age was at least 65. In fact on my way out one gentleman was seated in a chair and being checked over by emergency personnel. The attendees seemed primarily like direct shareholders from their questions in the Q&A. Before and after there was a product fair with stations demoing flagship products of Bing, Windows 7, the phone, Zune HD, and maybe one other. I snagged a Bing pen and watched the Microsoft person help two foggy-voiced gentlemen who wanted to search for “1970 chevy engine rebuild”. He showed them how to play around with quotes or not quotes to better their results, and was patient when one seemed to need to be 2 inches from the screen to read it.

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I’m not generally a breaking-news blogger, but This Just In courtesy of David Smathers Moore, founder of the Teamworks Cooperative Network in San Francisco. Mondragon and the United Steelworkers union have signed an agreement to work together and develop hybrid union-cooperative process. Initially the unions will seek to implement Mondragon-style share ownership options when collective bargaining (as opposed to agreeing to ESOP structures), and Mondragon cooperatives will integrate the union collective bargaining structure into their governance structure. Baby steps, but very interesting ones!

Read it from the USW here!