Breakfast with Muhammad Yunus

Recently a number of On Purpose Associates attended a breakfast talk by Muhammad Yunus, popularly known as the father of microcredit. It was an inspiring talk (available here), and he offered a wealth of insightful perspectives. Yunus spoke of his moral indignation at the unnecessary plight of the Bangladeshi poor, whom he saw as a lecturer in the 1970s, and how an entire family of Grameen (or village) organisations has emerged to give poor people the tools and opportunity to tackle their own situation. Beyond Grameen Bank, the Grameen approach has been applied to a number of situations with partnerships, including organisations as diverse as Intel and Danone.

Show me the money?

Yunus implored all of those attending to “revolutionise the system,” to find more and more new ways to apply the social business principle to all manner of the world’s problems, from youth unemployment in Glasgow to malnutrition in Bangladesh. But he added a warning that I found peculiar: social business should not make a profit. Why? Because that would be to profit from the poor. Yunus does think it’s ok for companies to make a surplus, as long as it’s reinvested into the business, or distributed exclusively to the poor. Whilst I agree with Yunus’ broad sentiment, I’m convinced that social businesses should actually make a profit. Taking Yunus’ acceptable distribution of surplus one step further, if surpluses can be made whilst doing business socially, then extending the possibility for some return to investors and shareholders could attract new investment and encourage more businesses to tackle similar social problems.

Profit you can believe in…

Today, many social businesses are actually registered as charities. It’s hard for these social businesses to get loans because of their charitable status, and many charities don’t even want loans because it’s ‘risky,’ and any loans would mean profit for the lenders. Such businesses can struggle to get the strategic input from investors who demand at least some level of financial return. This can impact social businesses' ability to scale and deter others from launching social businesses. So perhaps Yunus might accept a bit of profit for people who aren’t poor, provided it’s just one part of revolutionising the system, helping to motivate people to tackle social problems over the long term?

ICT in the Social Sector

Since beginning my placement with Comic Relief's Future Media and Technology (FM&T) team in January, every day I discover more about the essential role that information and communications technology (ICT) now plays in the social sector. Whether it is charities adopting online fundraising tools to empower their supporters to raise money for them, or social enterprises directly engaging with customers and the general public through use of social media tools like Facebook and Twitter, the message is clear: in the twenty-first century social sector organisations must get on the ICT bandwagon if they want to be sustainable. A plethora of research reports and case studies all point to the fact that strategic use of ICT tools can help organisations lower costs; raise brand awareness; attract, directly engage and retain supporters or customers, thereby raising or earning more money; and in some cases, reach more beneficiaries. For a couple of examples, check out CAF's report on new media fundraising and NCVO's ICT Foresights.

Comic Relief provides an excellent case study of an organisation (technically a charity but arguably also a social enterprise) that is seizing every opportunity to adopt, adapt, and develop new technology to continuously innovate their campaigns (their IT team is called Future Media and Technology, after all!). For Red Nose Day 2009 Comic Relief spearheaded a deal with mobile phone operators so that it could retain 100% of text donations. For this year's Red Nose Day, Comic Relief made a ground-breaking deal with Apple to be able to raise funds through its own iphone app. These and other examples of how Comic Relief is using technology strategically can be found Race Online 2012's Casebook for Charity Sustainability through Technology.

Information and communications technology is being used in the social sector to not only help organisations deliver their own solutions to whatever social problem they're targeting, but also to connect innovators, entrepreneurs and other creative thinkers to search for and develop new solutions to social problems. One example that I find incredibly exciting is Open IDEO, an online platform that enables people anywhere in the world to collaborate in order to inspire one another, develop concepts, evaluate these concepts, and design promising solutions to real social challenges. A challenge that I've recently been following is 'How might we better connect food production and consumption?' The aim is to better connect rural food production and urban food consumption to improve producer livelihoods, improve consumer health, enhance sustainability in food production, and even minimise waste and other environmental problems associated with the production, transportation and disposal of food. If you're interested click here to keep an eye on this challenge.

It's now obvious that strategic use of ICT tools can strengthen social sector organisations, potentially improving their impact in the communities in which they operate, and also better connect people who strive to find new ways to address existing social problems. The ongoing challenge for social sector organisations and individuals is to keep up with the continuous, rapid advances in technology that are occurring almost every day. It will be a difficult and time-consuming task but well worth the effort and investment.

Non-profit consulting opportunity

MBA & Company have an opportunity to help a charity develop its business plan to go national and take advantage of some changing legislation.

The work would take about a month, is paid and would include: 

• Researching target “clients” of the charity to understand their needs through interviews
• Developing new services
• Providing a marketing plan with strategic recommendations
• Aligning all recommendations to the overall charity business plan,  supporting the charity’s aim of expanding nationally

If you're interested, please email contact@onpurpose.uk.com

What is the best way to spend charitable money?

This is a question frequently asked by grant-giving organisations or projects needing donations, meaning that the focus is concentrated on where and why to invest.


Some people though have started thinking differently, questioning how they can make charitable money work harder by making Social Investments. It all started with Ford and Taconic Foundations at the end the 1960s, who began providing much needed capital investment to black and minority owned businesses. In March 2010, the UK showed an increased level of sophistication in this area through a record deal of £5m between HCT Group and Bridges Venture, which involved a combination of quasi-equity and loan.


There is a wide range of products to choose from when talking about Social Investments and some questions that need answering before you invest.


The first question to answer is the objective of the investment: “are you looking for an investment that gives you a primarily financial or social return?”.


The second question you have to consider is what organisational need you want to address. You have to consider that organisations at different stages and with different business models might have different needs for capital or expenses.


The third consideration is how far you want your money to go. At one end of the spectrum, you have secured loans, where it is guaranteed you will get your money back. At the other end, you have equities where your investment is susceptible to the risk of the organisation (grants of course are riskier as your money does not generate any financial return, however the social impact is definitely there).


Venturesome, CAF’s social investment fund launched in 2002, is an example of how this choices actually work in practice. Paul Cheng, from Venturesome (who we had the privilege to have as an On Purpose guest speaker), explained to us their unique approach to Social Investment. They believe the most effective way of doing social investment is to provide access to capital for organisations. They see that lack of capital is a barrier to charities increasing their social impact. The implications of this, and strengthening their balance sheets is being prepared, as a social investor, to incur occasional losses and accept that not all funds will be generate positive financial returns. The reason behind social investment is ultimately to help charities/social enterprises with their financial capital needs - e.g. working capital and cashflow (NOT just project funding). “That is the crucial point which most people do not understand - we need to invest in charities - not just pay/donate to them just to do projects. Charities need investment like businesses.” says Paul.


Social Investment has evolved a lot so far, however it is still a young market. My belief is that we all can benefit from more investment in this area as we can not only recycle the money and help more beneficiaries, but also educate organisations on how best to manage charitable funds. It is important nevertheless to highlight that social investment is just one part of the landscape - of course, we still need grants, donations, secured bank loans etc. Those products will always be needed in our society, however the theory of diversification is expected also to benefit the charity world.

Welcome to the On Purpose Blog!

Hello and welcome to the On Purpose Blog! Here we hope to outline the most interesting parts of the pilot year, including updates on training as well as placements posted by the 5 Associates.


A bit of background on who we are...


On Purpose is a new leadership programme for the next generation of high-flyers who will use the power of business to make a difference in the world. Today’s talent are tomorrow’s leaders who will help solve society’s biggest problems. We believe that if we find the most inspiring people, provide them with the right experience and give them world-class training, then great things will happen.


We organise six-month, paid placements in some of the most respected purpose-driven enterprises, including (RED), Comic Relief and O2, providing real-life experience of large, small, established and start-up enterprises; corporations, not-for-profits and charities; all with a common purpose of operating for good.


We also believe that tomorrow’s leaders are entitled to world-class training. This is why On Purpose works with current and former professionals from prestigious organisations across all sectors to provide such training. We are proud that many exciting organisations will be involved in delivering our training programme.


We hope to see you here again soon,


The On Purpose Team