Rupert Scofield is president and CEO of FINCA International. Under his leadership, FINCA has grown from 60,000 clients and a loan portfolio of $5 million to more than 750,000 clients and a loan portfolio of more than $300 million. An agricultural economist, Scofield has 30 years’ experience as a social entrepreneur in Africa, Latin America, Eurasia, and the Middle East.

THE SOCIAL ENTREPRENEUR'S HANDBOOK

How to Start, Build, and Run a Business That Improves the World

The McGraw-Hill Companies, Inc.

Contents

Excerpt

CHAPTER 1

IDENTIFYING YOUR CONSTITUENCY AND ARRANGING YOUR APPRENTICESHIP

The world abounds with noble causes, and there is one that is just right foryou. If you're reading this book, you have taken the first step in thatdiscovery process.

As a second step, identify your constituency, a group of people who are gettinga raw deal. Most people have an innate sense of justice and are offended, evenoutraged, when they see people less fortunate than they being exploited or takenadvantage of. But to really help them, you have to get to know them, walk intheir shoes. You would be surprised at the number of organizations that espousethis or that noble cause in which the personnel seem only dimly acquainted withthe facts on the ground. Many large, publicly funded development agencies arecriticized, and rightly so, because they are populated by "experts" who havenever known poverty themselves, nor immersed themselves in the world in whichfour billion people survive on less than four dollars per day. These agenciesmay be well meaning and full of brilliant people, but unless they close this"empathy gap" their work will forever be hobbled by a fundamental lack ofunderstanding of what their constituents need and desire.

Groups like the Peace Corps (international) or AmeriCorps (U.S. based) are idealfor this purpose of experiencing, firsthand, the lives of your identifiedconstituency. You live on the level of the people you are trying to help. Youlose your fear of poor people. You learn to speak their language and communicatewith them in terms they can understand. You identify with their problems.

Think that the Peace Corps or AmeriCorps is exclusively for newly minted collegegraduates? Think again. Five percent, or 350 of the 7,700 Peace Corpsvolunteers, are over the age of fifty. AmeriCorps has ten times as manyvolunteers and no upper age limit.

Just because you are accepted into the Peace Corps or AmeriCorps does not meanyour mission will be gift wrapped and handed to you upon arrival. Someassignments are more appropriate for finding your mission than others. Try toget involved with a privately funded nongovernmental organization (NGO) ratherthan a government agency. The NGO will make much better use of you and yourtalents, while providing the possibility of offering you a "real" job when yourvoluntary assignment ends, if you've proven yourself useful. A governmentagency, on the other hand, may not know what to do with you.

Government jobs, especially in developing countries, are often the creations ofpolitical patronage. They pay poorly and often don't address real needs.Moreover, they tend to be at a loss as to what to do with another body, howeverwilling and able. A great many Peace Corps volunteers end up teaching English,which is a real job, but not necessarily great for finding your mission. Still,your formal job description doesn't need to prevent you from finding somethingelse useful to do in the community during your abundant spare time. You need totake matters into your own hands and not think the Peace Corps or even aninternational NGO will have a junior executive training program waiting for you.Read the swag box "From Zero to Hero" to see how I found my mission as a youngPeace Corps volunteer in the highlands of Guatemala.

* * *

From Zero to Hero

In my case, I had what sounded like a real job as a Peace Corps volunteer:credit officer for an agricultural cooperative in the highlands of Guatemala.The problem was, having been born and raised in Levittown, New York, I didn'tbring a deep knowledge of agriculture to the table. Two months of technicaltraining in growing corn and beans in Costa Rica rendered me more of a threat tothe Mayan Indian farmers' crops; I was not the Second Coming of Dr. Norman E.Borlaug. In retrospect, my Guatemalan counterpart, Edgar, could be forgiven forhis reluctance to introduce me to the co-op members. He and I had weeklymeetings at the co-op office in Chimaltenango, and at each meeting he would tellme to wait for him the following day so we could ride together out to thecountryside to see the clients. But when the appointed time would arrive, noEdgar. This went on for two months, and I couldn't figure out why.

Then one morning I came out the door of my house to see him stealthily drivinghis jeep down the main street of my pueblo, headed out to the countryside. Ikept watch on the street all afternoon. When I saw him returning, I plantedmyself in the middle of the calle and flagged him down. He sheepishlyrolled down the window.

"Look, Edgar, if you don't want to work with me, that's fine. But I'm not goingto sit on my ass for the next two years and do nothing. Introduce me to the co-opmembers, and I will figure out what to do for them."

"Come on, gringo. Let's have a drink."

That day, over much rotgut sugarcane alcohol, I broke the ice with Edgar, but itwasn't until another two months had passed that I found a way to make myselfuseful to the farmers. When I was learning Spanish in Mexico, our trainer made abig deal about something called confianza. It translated literally as"confidence," but really it means "trust." Until you earned the trust of thepeople you were trying to help, the trainer warned us, they would not admit youto their culture and whatever noble project you were trying to accomplish,however well intentioned, would come to grief. Unfortunately, our instructor wasnot too specific as to how one went about earning the confianza of thepeople. He gave us to understand it was a somewhat mysterious process, but wewould know when we succeeded.

And when we failed.

I will never forget the day I achieved my "confianza moment." The co-ophad promised to deliver credit in the form of fertilizer instead of cash, butthe head of the program had screwed up and ordered it too late. The rainsstarted, and the farmers were desperate to plant. Every day they came to myhouse asking, "Don Ruperto, dónde está el fertilizante"

The fertilizer finally arrived in the country, but then we had another problem.The dirt roads out to the aldeas (hamlets) where the Indians lived hadbeen turned to mud by the heavy rains. The branch manager in Chimaltenango toldme he could get the truckers to bring the fertilizer as far as my house in SanMartín Jilotepeque, but no one was willing to go out to the aldeas. Weekafter week, the fertilizer piled higher and higher in my house, and the Indianssent their delegations, asking me when I was going to make good on my commitmentto deliver it to their communities.

Finally, I took matters into my own hands. I went into Chimaltenango and found atrucker who, for ten centavos extra per bag, was willing to drive thefinal leg from my house to the aldeas. I paid him out of my own pocketfrom my meager $150 a month salary.

I still recall the looks of jubilation on the faces of the farmers when, coveredwith mud from head to toe after digging the truck out of one slippery morassafter another, we finally rolled into their communities with our truckload offertilizer.

For the first time in my life, I felt useful.

* * *

Aside from volunteering through the Peace Corps or AmeriCorps, you can alsooffer your services directly to an NGO. All foundations welcome volunteers as"force multipliers," a free resource, and this can be a great way to gain your"poverty experience." However, be forewarned: surprising as it may seem, not allnonprofit managers know how to use volunteers, and many actually avoid them,having learned that even free resources have a cost. Time is a preciouscommodity in nonprofits, and orienting and training volunteers so they become avalue-added resource rather than a burden requires an investment not allmanagers are willing to make. Volunteers can help by arriving at the doorstep ofthe foundation "field ready," meaning they have fully researched theorganization's mission, structure, and methodology and can provide a clearproposal for how they can contribute to its success.

Oh, and if your first words are "And I will fully cover all my costs, includingtravel and living expenses," this will dramatically increase your chances ofbeing accepted as a volunteer. The initial experience you gain as a volunteerwill prove to be invaluable in the future and, in the end, outweigh the expensesyou incur starting out.

What kind of money are we talking about? If you are willing to live on a levelwith the people, à la Peace Corps, then your monthly outlay, once you reach yourdestination, should not exceed a few hundred dollars. When I was a Peace Corpsvolunteer, back in 1971, I was paid the princely sum of $150 a month, and I wasable to save $100 of that each month, with my rent being $10 a month and my fooda dollar a day. Amazingly, since per capita income in the poor part of the worldhas changed little since then, your expenses should not be much more than that.The airfare, of course, is the wild card. It can be substantial, even if you manan oar in economy, but you can find bargains if you look hard enough.

So let's say, all in, you would need about $2,000 to live and between $1,000 and$3,000 for the roundtrip airfare. Where would you find such funding?

If you have been working for several years or more, you would hopefully havethis amount socked away. If not, you could budget for this expense monthly, andwhen you hit the critical mass, make your move. If you are a student, manyschools have funding for internships, both domestic and overseas. If your schooldoesn't offer such internships, or if you are just beginning your career, trypleading your case to your local church or service club. Consider finding a wayto finance your poverty experience a first test of your marketing and promotionabilities.

Failing those options, turn to the two people who are likely to believe in youmost: Mom and Dad. That's right, those same wonderful philanthropists whosupported you by financing everything from your First Communion to yourwardrobe; from braces to piano lessons; and even took out a second mortgage topay for your college education. Tell them they aren't done yet: you need thispoverty experience to understand how the rest of the world gets by on just adollar or two a day. Tell them your attitude toward money will never be thesame.

Once in the door of an NGO, figure out how to make yourself indispensable. Thebest way to do this is to get deep into the provision of services to theorganization's beneficiaries. Build a constituency that will raise hell with theorganization if they hear you're leaving. Make allies and supporters of yoursalaried counterparts who will testify on your behalf as to your value to theorganization. The Big Boss is probably too busy to have taken the time to evenrealize you've been working there. Six months after you've hit the ground,inform the boss that it's been fun and rewarding, but you have to get back tothe real world and earn a paycheck. Note with satisfaction the alarm on his faceas he says, "Where the hell are you going? You can't leave! Sit down, let'stalk."

There is no substitute for this poverty experience. If you don't have it, youcan still work in a mission-driven organization, but you will always lack thatreal passion and understanding of the world the poor inhabit. Your solutionswill be more theoretical, less grounded in reality, and, as a result, lesseffective. If you get hired by a nonprofit without having had this seminalexperience, condition your acceptance of the job on getting into the field tomeet the constituents within the first ninety days of your employment. Offer topay for it yourself if necessary. Your boss will be so impressed she may tellyou to put in a voucher afterward to get reimbursed.

Big Pond, Little Pond, or Your Own Pond: On-the-Job Training and Becoming aSocial Entrepreneur

Once you have your poverty experience under your belt, there are two paths youcan take on the road to becoming a social entrepreneur. You can move immediatelytoward the creation of your own mission-driven organization, or you might wantto do what most people who eventually go into business for themselves do: learnthe basics of the trade you want to ply on someone else's dime. This would meanworking for a period of months or even years at a nonprofit before you strikeout on your own. The amount of time spent there depends on how long it takesbefore you feel comfortable going it alone. Alternatively, you could find anorganization where you believe you can rise to the top in a relatively shorttime frame and put your own stamp on it. In either case, you are spared the workand trouble of immediately having to create an organization from scratch.

Let's take a look at the overall landscape and what your options are to obtainthis kind of on-the-job training.

There are more than a million charities in the United States alone, and millionsmore overseas. Most participate in a local capacity and create a small impact.Some, however, have developed an innovative approach to solving a particularproblem, have managed to scale it up, and are improving the lives of millions ofpeople. In considering the size and overall impact of an organization, you needto ask yourself:

• Where do I want to work to gain my initial experience?

• Where will I best fit in?

• Do I want to be a big fish in a small pond or part of a large school of fishin a big pond?

• Where can I learn the most in the shortest time frame about what I need toknow?

• Do I already have my own Big Idea that I know will change the world and justneed a platform to launch it?

Each option has its advantages and disadvantages.

The Little Pond

The biggest plus of the "little pond" organization is that small, localfoundations make a huge difference in the lives of the individuals they serve.Examples include working at a shelter for the homeless or serving food at a soupkitchen. On the international level, a small organization could be one thatcares for war orphans in a conflict country. Your experience could be writ smallbut rich and satisfying nonetheless.

If you're good and display great aptitude and energy while producing valuableresults, you could rise quickly and easily to the top of a small organization.You might see potential for growth the current leadership doesn't, and figureout how to turn the little pond organization into a big pond one. See the swagbox "Crossover Craig: Going, Going, Going ... Green!" for an example of someonewho had worked all his life in the commercial sector and then, at the tender ageof fifty-five, crossed over to a small pond nonprofit, helped take it to scale,and found both job satisfaction and, ironically, greater financial reward thanin his previous career.

The biggest disadvantage of a small organization is that, unless it is luckyenough to have an endowment or the founder gets a spot on Oprah, it is likely tobe undercapitalized and living hand to mouth. If you join such a group, makesure you are willing to live with the prospect of the president coming into youroffice on payday with a long face, asking if you don't mind taking an I.O.U.this pay period.

Keep in mind that there may also be a good reason the organization is small: thefounder might like it that way. Beware of joining an organization that issomeone's personal ego trip or meal ticket. It may have the potential to growbut won't under the current leadership, either because the leaders don't havethe skills to take it to scale or they won't let someone more qualified run it.Several FINCA programs that disaffiliated in the first decade of our developmentdid so because the founding managers of the programs lacked the managerialskills or vision to grow the operation. To quote a former director of a FINCAprogram in Central America, the managers preferred to be "the head of a mouserather than the tail of a lion."

* * *

Crossover Craig: Going, Going, Going ... Green!

Craig is a perfect example of someone who crossed over from the private to thenonprofit sector, jumped into a small pond late in his career, and, catching iton the upswing, is today the number two man in a big pond that is still growinglarger.

Craig began his career in banking before moving on to work in real estate,insurance, systems integration, and architecture, always in the role of financeand operations manager. While all these opportunities appeared promisinginitially, none provided the job satisfaction or financial rewards he wasseeking. Age fifty and disenchanted, Craig returned to graduate school, earninga master of science degree in organizational development. It recharged hisbatteries. Through networking with one of his professors, Craig responded to ajob posting from an environmental firm. U.S. Green Building Council (USGBC) is anonprofit whose lofty mission is to "transform the way buildings and communitiesare designed, built, and operated, enabling an environmentally and sociallyresponsible, healthy, and prosperous environment that improves the quality oflife."

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(Continues...)Excerpted from THE SOCIAL ENTREPRENEUR'S HANDBOOK by RUPERT SCOFIELD. Copyright © 2011 by Rupert Scofield. Excerpted by permission of The McGraw-Hill Companies, Inc..
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