A Conversation with Heifer International on Climate Change, Agriculture and Nonprofit Management

Posted on 16 February 2010 | No responses

By Rahim Kanani

The Humanitarian & Development NGOs Domain of the Hauser Center for Nonprofit Organizations hosted alumna Jo Luck HKSEE 1979, President of Heifer International, and her senior leadership team, at an event on February 4^th where they engaged with students and faculty on issues ranging from climate change, to agriculture, to nonprofit management.

Heifer International, which is dedicated to relieving global hunger and poverty through livestock and training, aims to empower communities by giving families a hand-up, and not just a hand-out. With special attention paid to gender, Heifer primarily focuses on women, who produce 70 percent of the food in the third world. Accompanying Luck was Vice President of Advocacy Constance Neely; Director of Gender Equity Advocacy Martha Hirpa; and Senior Director of Heifer Village Jim Rollings.

The group discussed the evolution of Heifer International and the scaling up of their impact, moving from a replication and growth model to impact through policy change.

“Until you affect the decision-makers of the world, you’re not going to make a significant difference, thus you must engage in advocacy,” emphasized Luck. “We don’t have the privilege of burying our heads in the sand. We know things that work, and it’s our responsibility to share that, and that’s why we’re pushing for more formalized advocacy. Our interest is to affect those decision-makers and to educate them with the realization that you can’t show results in a year, not in education nor in development.”

In a strategic set of partnerships formed at the Clinton Global Initiative last fall, Heifer is ramping up its analytic capabilities and harnessing the programs it already operates around the world to capture the wealth of knowledge within these systems.  In a global nonprofit such as Heifer International, Luck said balancing advocacy, fundraising and staying true to your core principles is no easy task.

“When you take a stand on an issue, you sometimes lose donors, but we’re about our mission and we’re not donor-driven,” she said.

A number of other issues were discussed by the group, including Heifer International’s response to a report issued by the Food and Agriculture Organization (FAO) in 2006 titled Livestock’s Long Shadow: Environmental Issues and Options. Neely argued that the report failed to disaggregate data among different kinds of livestock in different parts of the world, and thus mischaracterizes the livestock industry at large as one damaging to the environment.  According to the FAO, livestock are responsible for 18 percent of greenhouse gas emissions, a bigger share than that of transport.  The report also noted that the livestock sector’s potential contribution to solving environmental problems is equally large. 

With climate change in mind, and given that Heifer International’s entire enterprise is designed around the use of livestock and the donation of offspring from one family to another, such analysis requires a closer look.

“Agriculture is going to be one of the keys in both mitigation and adaption to the effects of climate change, and farmers and livestock keepers are going to help us lead the way towards solutions,” said Neely. “We’ve got a fight on our hands, and we really have to help people understand the benefits of agriculture.”

Responding to the FAO report, Heifer International, in collaboration with farmers and researchers, carried out a study on farming systems that combine livestock, agriculture, and better grazing practices. In a report issued in 2009, they identified farming systems that contributed to enhanced livelihoods and productivity, biodiversity, carbon sequestration and adaptation capacity.  Indeed, studies showed that such practices produced a net sequestration of carbon. 

When discussions moved to leadership and growth, Luck had no shortage of insight to share.  Her advice to nonprofit leaders and the watchdogs who measure their performance centered around two themes: risk and impact. Joining Heifer International with a budget of $7 million some 20 years ago, Luck transformed the organization to one with a budget of $130 million, although that has slightly declined as a consequence of the economic crisis.

According to Luck, one of the keys to the organization’s success was the way in which, in the early years, they reinvested monies raised from fundraising efforts back into fundraising itself, rather than into programmatic efforts. Understanding development as a process, Luck recognized that the organization’s local capacities needed to be built in order to successfully absorb a large injection of funding, and therefore decided to continue raising capital while local programs developed enough to effectively use more resources. With regard to measuring impact, Luck was eager to see watchdogs understand how to evaluate true impact, rather than use measures like overhead ratios as proxies for efficiency.

Rahim Kanani is a Research Associate at the Hauser Center for Nonprofit Organizations at Harvard University and a graduate student in religion, ethics and politics at Harvard Divinity School.

A Fresh Take on Ministry

Posted on 8 February 2010 | 1 response

By Julia Martin

In the midst of conducting research on the role of faith-based organizations (FBOs) in the nonprofit sector, I had the privilege of interviewing the inspirational Rev. Dr. Robert V. Lee, III, Chairman and CEO of Fresh Ministries, during his visit to the Hauser Center for Nonprofit Organizations at Harvard University.

Fresh Ministries is a multi-faith humanitarian organization.  It began as a local FBO in Jacksonville, Florida and grew into an international nonprofit known as Be the Change International.  Fresh Ministries employs and aids people of all faiths, and works to meet the United Nations’ Millennium Development Goals (MDG).

JM: What provoked the transition from being a domestic nonprofit to working internationally?

RL: The international work was a natural outgrowth of our domestic work.  We’ve been doing Millennium Development Goal work since before the UN called it the Millennium Development Goals (MDG).  We understand real change as holistic, and within a defined geographic area.  Usually it’s centered on children and education: raising a generation of children who have an equal chance to live healthy, happy, and productive lives.  But in order to do that they need a good education, which requires suitable schools and a stable environment.  Parents need realistic work opportunities, reliable health systems, safety in their communities, and strong family values.  For the core city neighborhoods, such as in Jacksonville, FL, this had been our focus.  Just by word of mouth and sharing practice models in Florida, things began to take shape.  Then, when President G.W. Bush started PEPFAR we were asked to get involved internationally.  We were doing some other things internationally already, but not on the MDG side.  So, we began with health-related issues, and just grew from there.

JM: What were some of the new challenges you faced in the transition from domestic to international?

RL: We realized we needed to pay attention to the context in which we were working.  Sure, you can say poverty’s poverty and you’re trying to eliminate poverty, but each people have a unique set of circumstances.  The challenge is listening, ascertaining what the problems are in that area, and redefining how you address them.  For example, in some cases gender equality is a key issue.  One MDG project we’ve started begins by building a school.  The parents know that school provides the most opportunity for their children, and will do whatever they can for them.  Our deal is if their children attend our school, parents must treat their sons and daughters equally; parents cannot pull their daughters out of school after so many years.  This is just one example; you have to pay attention to any obstacles impeding the program.  But the big challenge is simply understanding the people and combining your resources to form viable solutions.

JM: Could you explain the Fresh Ministries’ emphasis on its multi-faith quality, given its Episcopalian origins?

RL: I’m an Episcopalian priest and there are other Episcopalians that are involved in the organization.  In addition, we’ve partnered with the Anglican Communion because of its infrastructure, which is a great resource.  Some of us are affiliated with the Church, but we are very intentional about living in a multi-faith community.  We use that to springboard to a higher level, and embrace all people whoever they are.  To some people God looks like one thing, and to others another – and we respect that.  What we all have in common is a passion to help others.

JM: How is faith reflected in the Fresh Ministries community?

RL: Well, for example, we have staff of all faiths.  Within each of these faiths, we have people ranging from low key practitioners to the outspoken, who’ve just learned to respect and love each other, regardless of faith.  The common passion is helping people, and it plays out in different ways.  On Wednesdays, we get together and have services to reflect people’s spiritualities.  Sometimes it’s Episcopalian, Jewish, Quaker, or the like.  Other times it’s nondenominational or incorporates multiple faiths.

JM: What are the biggest challenges and opportunities for Fresh Ministries over the next five to ten years?

RL: The mainline faith-groups are having different conflicts.  In the Anglican Communion, people are getting caught up in issues like human sexuality.  You see a lot of people, particularly young people, who aren’t going to Church to hear more arguments.  These are the people who really care about what’s going on in the world.  They seem to appreciate and understand the interconnected nature of our global community, and they’re willing to go serve in a clinic or outreach program in Haiti or Africa in a heartbeat.  What we’re trying to do is figure out how to take advantage of this global mood to get involved, making use of our resources.  In the past we’ve worked with the President of the United States, the Archbishop of Canterbury, and major institutions.  So, the questions are, how do you triage what needs to be done, and how do you build up and ramp up the next generation to take this on?  We’re a brave band of aging preachers really, who’ve done a lot of things.  But the challenge is finding and enabling interested young people to be the people they were created to be with their own ideas and genius.  Enabling them, growing the organization, creating sustainable and efficacious partnerships, and keeping focus on what we’re already doing are our key priorities.  We’re trying to figure out how to line up all the assets and resources we have to identify and meet the challenges that are out there, and bring in young people to be the wave of tomorrow.

JM: As the founding CEO of Fresh Ministries, and in light of the economic crisis, what are you most concerned about and what are you proudest of?

RL: Given the economic crisis, a lot of nonprofits around the world are suffering.  My feeling has always been that if you’re doing the job well, there are resources out there because the job still needs to be done.  If we find ways to partner with other people for resources, and keep our focus on what we’re doing, then we will get the job done.  What I’m really proud of is that we’ve been able to do a lot of good things and help a lot of people.  It’s really gratifying when you see a family turn the key in the door of a new home, or hear about somebody who’s just gotten a job through a hospitality institute, and how it’s changed their lives.  They thank you, although you know it’s them that did it and you’re very proud of them.  Those are very gratifying moments.  I think what I’m most proud of, though, are the people who work with us.  We have a really passionate group of people who are dedicated to our mission.  My biggest concern is figuring out how to transition this into the future.  How do we find more people, and get their creativity and genius in doing all of this?  How do you promote that kind of thinking and passion?

JM: Given the recent crisis in Haiti, how has Fresh Ministries responded to the new challenges and what advice might you give to other NGOs present or on the way?

RL: Our international outreach NGO, Be The Change International, has been working for the past year to implement our youth HIV/AIDS prevention education curriculum in the 254 Haitian schools supported by the Episcopal Church, serving more than 80,000 children of all faiths.   Our five year strategic plan for Haiti included founding an in-country NGO, Be The Change Haiti, that would be managed by Haitian nationals and directly partner and support other in-country NGOs working toward the MDGs in Haiti.  The tragic earthquake mandated immediate expansion of our original strategic plan to include both emergency relief and long term rebuilding efforts. We have launched Be The Change Haiti, and are now fully engaged in partnerships and outreach programs to meet Haiti’s immediate needs and long-range challenges.   Only through partnering with other like-minded in-country NGOs, the Haitian government, and the Haitian people, can we truly realize a self-sustaining Haiti. The complexities of the Haitian culture and the high level of need make it impossible for one entity to make substantial change on its own. We must all work together to empower the people of Haiti with the life skills, job skills, education, entrepreneurial programs and microloans, and numerous other support programs the Haitian people need to rebuild their own country. We feel there is a huge difference between enabling aid and empowering assistance. It is the old “give a man a fish and feed him for a day — teach a man to fish and feed him for life” philosophy.  It is the responsibility of all NGOs to cooperate with one another in an effort to empower, not enable, the people of Haiti. The future of Haiti depends on it.

Julia Martin is a second year student in the Master of Theological Studies (MTS) program at the Harvard Divinity School.

NGOs and the Puzzle of Legitimacy and Accountability

Posted on 2 February 2010 | No responses

The next session of the NGOs & Development study group will meet at 4 pm on Tuesday, February 9 at Weil Town Hall (Belfer L1) at the Harvard Kennedy School.  The topic of the discussion, led by Professor L. David Brown, will be “NGOs and the Puzzle of Legitimacy and Accountability”.

Professor Brown, who recently retired from the Harvard Kennedy School faculty, has done pioneering work in the field of NGO accountability and legitimacy, and was involved in the creation of the INGO Accountability Charter. Professor Brown will frame the discussion with some perspectives on:

• how thinking and practice re accountability has been evolving in the NGO world
• what some promising approaches are – and what can be learned from them
• what some of the most persistent issues still are

This session will be a chance to participate in an active discussion and candid exchange about key issues related to NGO accountability and legitimacy.

MORE ABOUT L. DAVID BROWN

L. David Brown is a Senior Research Fellow at the Hauser Center for Nonprofit Organizations. He recently retired from the faculty of the Harvard Kennedy School. Prior to coming to Harvard, Professor Brown was President of the Institute for Development Research, a nonprofit center for development research, and Professor of Organizational Behavior at Boston University. His research and consulting has focused on institution building, particularly for civil society organizations and networks, that fosters sustainable development and social transformation. He has written or edited Creating Credibility: Legitimacy and Accountability for Transnational Civil Society, Transnational Civil Society: An Introduction (with Srilatha Batliwala), The Struggle for Accountability: NGOs, Social Movements and the World Bank (with Jonathan Fox) and Managing Conflict at Organizational Interfaces. Professor Brown has been a Fulbright Lecturer in India and a Peace Corps community organizer in Ethiopia.  He currently serves on the Board of Directors of Oxfam America.

Building Back Better: Revisiting the Roles of Government, Donors and INGOs in Haiti’s Reconstruction

Posted on 31 January 2010 | 2 responses

By Steven Lawry

It is well known that international NGOs had a huge presence in Haiti before the devastating earthquake of January 12th. Upwards of 8,000 NGOs were working in nearly every developmental and humanitarian assistance sector.  The greater portion of foreign assistance was channeled not to the Haitian government, but directly to NGOs.  Prime Minister Jean-Max Bellerive in an interview on CNN with Christiane Amanpour on January 23rd estimated that 80 percent of all development assistance to Haiti before the earthquake went to NGOs.  He added that 90 percent of US official assistance goes to NGOs. 

While some NGO recipient organizations are locally-led and governed, and international NGOs employ large numbers of Haitian staff, Haiti’s development sector is largely led and managed—effectively controlled—by international NGOs and their donors.

The important question of accountability goes a long way toward explaining how this state of affairs came to pass. International donors have lacked confidence in the ability of the Haitian government to manage development assistance in an effective, efficient and corruption-free manner.  Donors believe their funds are more likely to be used for agreed purposes and will reach intended beneficiaries if the money goes to international NGOs and contractors directly accountable to donor governments.  But Prime Minister Bellerive went on in the CNN interview to raise a fair question: how can Haiti’s government be called to account for the management of development assistance when 80 percent of funding goes directly to international organizations that are not accountable to the Haitian government itself?

While international NGOs have contributed significantly to the well-being of Haitians over the years, the near complete control they exercise over Haiti’s development sector is not without its problems.  The lack of accountability to Haiti’s government, which I have noted, is among them. Another is the missed opportunity for donors to work closely with Haitian institutions in developing Haitian capacity to manage development programs (including exercising some measure of authority over the work of international NGOs and contractors) in ways that are free of corruption and which give Haitians valuable leadership, policy and management experience. 

Harvard professor Paul Farmer and co-founder of Partners in Health, a health and human rights organization that has worked in Haiti for 20 years, spoke to the need to change the relationship among donors, the Haitian government and international NGOs in testimony before the US Senate Committee on Foreign Relations on January 27th:  “The aid machinery currently at work in Haiti keeps too much overhead for its operations and still relies overmuch on NGOs or contractors who do not observe the ground rules we would need to follow to build Haiti back better.  The fact that there are more NGOs per capita in Haiti than any other country in the hemisphere is in part a reflection of the need, but also in part a reflection of the overreliance on NGOs divorced from the public health and education sectors.”
Sentiments similar to Farmer’s have been expressed by many public figures in recent days. 

“Building back better” has become a frequently used term in the past three weeks. A return to the pre-earthquake status quo of ineffective official authority and “the Republic of NGOs” in the development sector is not acceptable. Many advocate, and I agree, that Haitians must take principal responsibility for Haiti’s reconstruction, with official aid agencies and international NGOs playing strong supporting roles.

Let’s consider for a moment the attributes of a post-earthquake reconstruction and development era that Haitians would be proud of and the international community would have confidence in.
Clare Lockhart is executive director of the Institute for State Effectiveness, an organization based in Washington, D.C. that specializes in the study of failing or failed states.  The Institute’s research has drawn out important lessons from the experience of recently failing or failed states that have put themselves on a path toward legitimacy, effectiveness and accountability.  In an extended interview on BBC radio on January 23rd, Lockhart shared four lessons learned from studies of  Mozambique’s and Rwanda’s recovery from failed-state status that she thought Haitian leaders, donors and international NGOs might consider carefully. These are:

•  A broadly unified and inclusive national political leadership
•  Zero-tolerance for corruption
•  Investment in human capital development, particularly in education and health
•  Heavy investment in local economic growth and especially the growth of indigenous businesses and enterprises. (Here Lockhart noted the likely enduring value to the Haitian economy of reconstruction money for roads and other infrastructure being directed to local firms as opposed to large international contractors.)

To “build Haiti back better” is in the first instance a reform agenda, requiring fundamental changes in how the Haitian government, donors and international NGOs understand their appropriate roles and their collective responsibilities to the citizens of Haiti. Lockhart’s list of lessons learned from failed states recovering from terrible traumas provides useful guideposts toward shaping that agenda.

Steven Lawry, Senior Research Fellow at the Hauser Center for Nonprofit Organizations, is currently based in Juba, Southern Sudan, where he heads a USAID-funded project assisting the Government of Southern Sudan to develop a new land policy.

Poverty, Hunger and Climate Change: Addressing New Challenges in Agricultural Development

Posted on 26 January 2010 | No responses

As part of its NGO Leaders Seminar Series, the Humanitarian & Development NGOs Domain at the Hauser Center for Nonprofit Organizations will host a senior leadership team from Heifer International on Thursday, February 4.  Led by Jo Luck, President of Heifer International, the team will conduct a seminar that explores new challenges in agricultural development, against the backdrop of poverty, hunger and climate change. 

The seminar will discuss the context that Heifer International faces in developing countries – especially in rural communities that are dependent on agriculture and livestock – and how that context will increasingly be shaped by the threat of climate change and increasing food insecurity.  How does as an NGO like Heifer deal with these challenges?  How do programs respond to such challenges?  How are the policy and institutional dimensions of these challenges addressed by advocacy efforts?  How are Heifer’s education efforts trying to enhance awareness and mobilize action among the American public?

Jo Luck will frame and lead the seminar. Constance Neely, Vice President for Advocacy at Heifer International, will speak to the policy and advocacy dimensions of the issue. Martha Hirpa, Director of Gender Equity Advocacy, will discuss how gender and social inequities intersect with these issues. Jim Rollings, Senior Director of Heifer Village, will speak to the public education aspect of the topic.

This seminar promises to bring together multiple angles of how a leading international NGO advances its own distinctive approach to poverty, hunger and climate change.  A substantial block of time will be devoted to Q&A and discussion. 

EVENT DETAILS

The seminar will take place 11.30 am – 1.00 pm on Thursday, February 4 at Weil Town Hall (Belfer L1) at the Harvard Kennedy School.  It is open to the public – light refreshments will be available.

MORE ABOUT HEIFER INTERNATIONAL

Heifer International’s mission is to work with communities to end hunger and poverty while caring for the earth.  Its philosophy is that by giving families and communities a hand-up, rather than a hand-out, Heifer empowers its beneficiaries to turn lives of hunger and poverty into self-reliance and hope.  With gifts of livestock and training, Heifer helps families and communities improve their nutrition and generate income in sustainable ways.  Heifer is also unique in its “Passing on the Gift” practice: the animals, referred to as “living loans,” are given to families on the condition that they in turn agree to give one of the animal’s offspring to another family in need.  This practice – the cornerstone of Heifer’s mission – creates an ever-expanding network of hope and peace.

Is Humanitarianism in Decline Among Large NGOs?

Posted on 23 January 2010 | No responses

By Peter D. Bell

Following on the heels of the catastrophic earthquake in Haiti, the editorial in The Lancet of January 23 is headlined “Growth of aid and the decline of humanitarianism”.  It acknowledges that aid agencies and humanitarian organizations “do exceptional work in difficult circumstances”.  But the editorial also asserts that the aid sector, now “an industry in its own right”, has “largely escaped public scrutiny”. 

The Lancet goes on to state that large aid organizations, in particular, have taken on the “unsavory characteristics” of many big corporations.  They can be “polluted” with internal power politics, “obsessed” with raising money, and pursue media coverage as an “end in itself”.  Worst of all, the editorial claims that relief efforts in the field are “sometimes competitive” to the detriment of collaboration that could better serve people in need.

While The Lancet offers no specific evidence for any of these allegations, I suspect that one could find instances in which all organizations of any appreciable size lose their way and need to be exposed and reprimanded.  Humanitarian NGOs should be scrutinized by outsiders, who have a right to expect them to be driven first and foremost to save lives and relieve suffering and to pursue those purposes in accord with such humanitarian principles as independence and impartiality. 

Like The Lancet, I find the competitiveness among some NGOs for the media limelight and donor contributions in the midst of humanitarian crises to be unsavory.  But The Lancet and other watch dogs need to understand that NGOs must raise money to pay for their life-saving services.  And media access has helped NGOs to transmit messages about the importance of donors giving cash rather than used clothes and other supplies that clog airports.  Media access has also helped NGOs to inform the public about the special vulnerability of poor people to so-called “natural” disasters and the need ultimately to reduce poverty if the human toll of earthquakes, hurricanes, and tsunamis is to be reduced.

Whether or not the allegations in The Lancet are well founded, I would be delighted if the response to the Haitian disaster prompted some soul-searching among NGOs that leads to serious exploration in the U.S. of a joint inter-agency appeal for private fundraising for major emergencies (in the spirit of the Disasters Emergency Committee, better known as the DEC, in the U.K.).  When a major emergency strikes, it should be easier for people who are not already donors to a particular NGO to give with confidence, without having to sort through a multitude of organizations with shared missions. 

Even more crucial, it is past time for NGOs with overlapping missions to engage in more collaborative programming in vulnerable countries not only to respond to humanitarian emergencies, as they often do, but also to prevent them. 

Peter D. Bell is a Senior Research Fellow at the Hauser Center for Nonprofit Organizations at Harvard University.

Ready for Copenhagen!

Posted on 8 December 2009 | No responses

By Sherine Jayawickrama

A couple of months ago, I blogged about how much NGOs have changed in terms of their readiness and their capacity to engage in the policy arena.  In that post, I cited NGO advocacy and campaigning at the G-20 meeting in Pittsburgh as an example.  The climate change summit that began today in Copenhagen is an even better example. 

First, the combination of analysis, campaigning, marketing and social networking that NGOs are advancing reflects a savvy, confident approach.  Oxfam America’s Climate Action Hub is an excellent example.  Other NGOs have considered how climate change affects their core issue and underscored the case for why climate change needs to be addressed.  For example, Save the Children recently published Feeling the Heat: Child Survival in a Changing Climate, a report describing how children will be affected by climate-induced disasters and diseases.   

Second, in the run-up to the Copenhagen summit, advocacy coalitions and alliance-based campaigns have come brought diverse NGOs together to join forces and maximize public reach.  The Global Campaign for Climate Action’s Tck Tck Tck campaign is an exciting reflection of this.  By its own description, the campaign is “made up of leading international, national and local organizations addressing environment, development, poverty, human rights, health and humanitarian issues – it represents faith-based groups, youth groups, trade unions and individuals…”  Last time I looked, more than 10.5 million people had signed the campaign’s I Am Ready pledge, urging world leaders to make a bold climate deal in Copenhagen.  The campaign ran an open letter to world leaders in the Financial Times and International Herald Tribune today.

Finally, NGOs are drawing their credibility from their presence in communities already affected by climate change and are beginning to understand that their program strategies will need to be reshaped to address and take into account climate change.  InterAction, the coalition of U.S.-based international NGOs, recently embarked on an effort to develop NGO-wide principles for effective climate change adaptation.   Oxfam’s report on People-Centered Resilience explores the challenge of building farmers’ resilience to climate change.

Hundreds, if not thousands, of NGO staff are in Copenhagen now and the sheer size of their presence reflects a shift in the role of non-governmental and civil society groups in multilateral policy processes.  These groups are still not at the center of these gatherings and they have little official clout.  But it is clear that their positions and their capacity to mobilize concerted public action (a la the spectacular 350.org campaign which inspired 5200 events in 181 countries on October 24) cannot be cast aside. 

NGOs and civil society groups are becoming increasingly formidable players in the multilateral policy arena – and policy makers ignore them at their own peril.

Reflecting on Microfinance: The Problem of the “Missing Middle”

Posted on 24 November 2009 | 1 response

By Brian Williams

Most Westerners did not know anything about microfinance until Muhammad Yunus, an early initiator in the field, won the Nobel Prize in 2006. However, microfinance has been a tool for poverty alleviation since at least the 1970s, when the Self Employed Women’s Association (SEWA) in India, BRAC in Bangladesh, and ACCION in Latin America became non-profit microfinance institutions (MFIs) lending at low interest rates. 

The time has come to reflect on the successes and failures of microfinance. Has microfinance come of age? Is it the solution people thought it was? What challenges now face the sector? 

One could credibly argue that microfinance has come of age: though it is far from the panacea some may have thought it to be, it does offer equitable lending services to millions of people across the developing world. By 2007, BRAC had reached 7.37 million people with microfinance services in Bangladesh. According to CARE’s 2009 state of the sector report, the number of total borrowers from MFIs in Africa is nearly 6 million while the number of savers is well over 9 million. 

Some MFIs have become so profitable that private banks have bought majority shares in them. For example, Financiera EDYFICAR, an MFI founded by CARE in Peru eleven years ago, was bought in September by Banco Credito del Peru, which is Peru’s largest private bank.  CARE reports that the 200,000 women it has reached in Niger have collectively amassed $14 million ($70 per person) in a country where most people live on less than $2 per day.  BRAC states that its borrowers repay their loans at a rate of 99.5%.  CARE’s state of the sector report also notes overwhelming non-monetary benefits from microfinance to the women who participate.

Yet, despite these gains, why are so many people still eking out an existence at the bottom of the pyramid? Though many may be saved from pure survival living due to microfinance, the upswell of development many hoped for with microfinance has not been fully realized. Much recent discussion has converged around a central problem in development that microfinance is not addressing: the missing middle.

CARE reports that 20 to 30 percent of members in its village savings and loan cooperatives will likely want a greater array of financial services in the future as they grow their businesses.  CARE, like many other MFIs, cannot provide these services. However, neither can private banks. Microfinance is limited in the total value of loans it can give out because of capital constraints and the need to reach the millions of individually poor people in a given region.

The result of these constraints is that microfinance cannot facilitate the creation of small to medium sized enterprises (SMEs). SMEs are the “missing middle”. They are locally run enterprises that hire local people and operate with greater capacity and potential for scale than self-employed enterprises. Running a SME requires different skills than running a self-employed enterprise. Finding MFIs with the capital to make appropriate loans to SMEs, and locals who have the skills to run SMEs, are a rare combination.

Many MFIs and other organizations are now realizing the need to fill this gap. Such MFIs are becoming like micro-venture capitalist firms and offering less total loans than regular MFIs but greater capital in each individual loan. One example of this phenomenon is Root Capital, an MFI founded in 2000 and based in Cambridge, MA, that offers loans to SMEs in Central and Latin America worth an average of $182,000.  Courtney Rountree, a student at the Harvard Kennedy School proposed a similar vision of a social venture capital firm at a recent forum of the Harvard Social Enterprise Collaborative group.

More business training for local entrepreneurs, greater influxes of capital, and more conduits of that capital are just some of the prerequisites for establishing financial products appropriate for the missing middle.  What other factors will influence the future of MFIs? Certainly scalability and enabling micro-entrepreneurs to reach the point of becoming SMEs is important.

Muhammad Yunus’ recent book with Karl Weber addresses the concern that, within the MFI world, the original intention to keep interest rates on loans low to help the poor has deteriorated into cases where MFIs are charging interest rates akin to predatory lenders.  This is alarming in a sector that is largely unregulated (i.e. only 22 African nations have laws governing MFIs).  The buyout of CARE’s MFI start up in Peru is just one example of a private firm seeking profits through an MFI. The stakes are high for all involved in this industry: predatory MFIs could degrade people’s trust in legitimate MFIs, and donors may be more wary of funding MFIs if the sector remains unregulated.

Despite these concerns, microfinance has certainly had net benefits in terms of helping the poor along the path of development. Development is a long and complex process. The playing field is often unregulated and the problems are often difficult to define. Even though microfinance must continue to grow as a sector to meet new challenges, it has proven its worth as an essential part of the overall solutions to poverty.

Brian Williams is a Masters of Public Policy candidate at the Harvard Kennedy School. He formerly worked in development and relief in Morocco. He is now a military officer hoping to inform the military’s reconstruction efforts abroad with a greater understanding of development.

Leadership and Effectiveness of Transnational NGOs: Research Perspectives

Posted on 20 November 2009 | No responses

On December 1, from 11.30 am to 1.00 pm, Tosca Bruno VanVijfeijken and Hans Peter Schmitz from Syracuse University will lead a seminar on Leadership and Effectiveness of Transnational NGOs: Research Perspectives on Development, Human Rights and Environmental NGOs.  The seminar will be held at Weil Town Hall (Belfer L1) at the Harvard Kennedy School; it is hosted by the Humanitarian & Development NGOs domain at the Hauser Center for Nonprofit Organizations.

Hans Peter is Associate Professor of Political Science at the Maxwell School of Citizenship and Public Affairs at Syracuse University; he is also Director for Research at the Transnational NGO Initiative at the Moynihan Institute of Global Affairs, which is based at the Maxwell School.  Tosca is Director for Education and Practitioner Engagement in the Transnational NGO Initiative; she also teaches a graduate course on governance and global civil society at the Maxwell School.

In the past several years, the Transnational NGO Initiative has undertaken a data collection effort that involved interviewing leaders in more than 150 transnational NGOs registered in the United States.  The data gathered spans issues of leadership, governance, accountability, effectiveness, collaboration and communication. This interview study was funded by the National Science Foundation.

There are remarkably few data sets in existence that are broad enough to capture the diversity of transnational NGOs.  This makes the Syracuse data set – and the research and reflection it enables – unique and interesting.  The December 1 seminar will explore the leadership and effectiveness dimensions of the findings emerging from this research.  That said, the seminar will be open enough to engage questions and reflections on a range of issues related to transnational NGOs.

The Power to Lead: Examining an Approach to Build Girls’ Leadership

Posted on 29 October 2009 | No responses

By Laura Kavazanjian

In mid-October, I interviewed Stephanie Baric, Senior Technical Advisor in CARE USA‘s Basic & Girls Education Unit (and Program Manager for the Power to Lead Alliance).  I asked her about The Power to Lead: A Leadership Model for Adolescent Girls, a paper (launched today) which outlines an approach to developing leadership skills among young adolescent girls in developing nations. 

The model outlined in this paper combines the role of primary school with structured extracurricular activities that build leadership skills for girls, such as voice/assertion, confidence, decision-making, organization and vision.  These skills must be multiplied, however, in order to have a real effect on girls’ leadership development, and this is where the importance of advocacy for girls’ rights, gender equality and the power of transforming gender dynamics comes into play.  The paper concludes that leadership development should be through formal structured activities, increased social networks and participation in civic action.     

LK:  How does this leadership model differ from other programs CARE has implemented that use leadership development?

SB:  This new initiative is different because it is targeting younger adolescents, ages 10-14, it places leadership within the context of education, and it advocates for the rights of girls.  Previously CARE did not necessarily have a holistic approach to leadership development; but this new approach is much more thoughtful, and is structured around what leadership means and will measure the development of leadership competencies. 

LK: The paper first does a literature review of what leadership means and what it entails.  What do you foresee as some of the problems occurring from transferring models of leadership from literature based on developed countries to a new context, the developing world?

SB: Currently, there is very little documented on leadership in developing countries.  While there are different issues between girls’ leadership in developed and developing countries, such as early marriage, there are also many issues that are cross cutting, such as self-esteem and early pregnancy.  This model builds off of a leadership model created by the Girl Scouts of the USA, but the leadership framework is loose enough for country offices to contextualize this framework based on that country’s culture.  For example, self-confidence has different meanings in different countries.  This model provides enough structure to allow for comparative analysis between the 6 countries implementing this program, but is flexible enough to take into account local context.  It looks at how leadership is defined within each country and enacts programs based around that definition of leadership.  However, the framework allows for comparison through monitoring and evaluation between countries.

LK: The paper talks about the importance for girls of critical reflections done in the presence of caring adults.  How is CARE helping to ensure that these caring/supportive adults are in place?

SB: CARE is working with local NGOs to help build capacity and ensure that supportive adults and safe spaces for girls to collaborate are in place.

LK:  This paper places leadership development within the context of primary school.  In many areas of the world, girls have limited access to formal schooling.  How will this approach help those girls?

SB:  CARE’s approach is to help get marginalized girls that are out of school into primary school or post-primary options.  CARE is running many programs in order to achieve this.  Once these girls have access to school, the first step, they then can simultaneously participate in leadership development.  However, the first step is to get these girls enrolled in primary education.  This leadership model helps highlight the importance of primary education for girls and works through this framework.

LK:   The paper talks about how opportunities for civic engagement are important to help motivate girls towards leadership.  What if citizenship is not an accepted cultural norm in the country where this model is being implemented?

SB:  Citizenship is broadly defined here.  We are introducing concepts of citizenship and aim to get girls involved in the development process and to enable them to think critically.  Participating in civic activities can mean girls working as a group to solve a common problem that is affecting them as a community.  It involves the concepts of critical thinking, defining issues, and thinking of creative ways to collectively solve these issues.  

LK:  How do you foresee this approach being implemented?  Please give an example of what this would look like on the ground in a developing country.

SB:  In Tanzania, it includes scouting.  In Malawi, it involves HIV/AIDS clubs and peer campaigns that raise awareness.  In Honduras, it includes the development of social networks where girls can talk about life challenges such as sexual abuse in a safe space.  Each country has developed its own unique approach based on cultural factors.

LK:  What do you foresee as some of the biggest challenges to successfully implementing this program?

SB:   The biggest issue is around mobility.  It is often hard for parents and communities to give girls the space to participate.  Girls have many constraints on their time and often have chores and responsibilities that they are expected to complete when they are not in school.  In many cultures, boys do not have these extra responsibilities, and communities do not have the same expectations or demands on their time.  Due to these extra responsibilities, it is often hard for parents to allow girls the space and time after school to participate in leadership activities.  A second challenge includes ensuring gender stereotypes are not reinforced.   A large portion of this framework includes leadership skills development through interactions with boys and the community at large.  It is expected that girls can build their leadership skills through diverse extracurricular activities and through participation in civic activities.  These require girls to work with boys, and in order to ensure that typical gender stereotypes are not reinforced, this program needs to assist boys in allowing girls to exhibit their leadership skills including challenging traditional gender norms and attitudes.  This is another challenge to this framework.

Laura Kavazanjian is a Masters Candidate in the International Education Policy program at the Harvard Graduate School of Education.

« newer posts — older posts »