Journalism As Social Business?

What a month--nothing but travel and work, work, work. Now I am in Laguna Beach, California, working with a team of four authors on their business book. (Never worked with four authors on a single project before--quite a job to reconcile all their different viewpoints and styles. I've more or less decided that the solution is to let them fight everything out among themselves and then pick up the pieces.)

Anyway, this is a moment of lull while the group of us eat leftover Chinese food and read my draft of chapter 2, so I thought I would catch up on a little of my long-overdue blogging. Here's an item I've been meaning to write about for the longest time. After discussing how much trouble newspapers have been having making a profit in recent years, Ezra Klein writes:

. . . the news, like other things in life, should not be seen as a straight commodity. It is not there to turn a profit. It is there to keep our democracy healthy and our public informed. If that means it can't be appropriately subsidized through advertising, and needs public subsidies in a blind trust, or some sort of philanthropic revenue scheme, then so be it. Other countries do this, and do it well. But either the way, the bottom line should be that if it turns out that responsible news reporting isn't profitable, then we should sacrifice the profitability, not the responsible news reporting.

I think this is about right. In fact, I've saved this passage to quote because it ties in with a pet idea of mine, which is that executives in the newspaper business ought to be looking at Muhammad Yunus's social business as a financial model.

The idea behind social business, as you may know, is that a company could be run so as to be self-supporting, generating enough income to cover costs and support expansion (if any), but not throwing off profits. Being set up in this fashion reduces the financial pressure on social business managers and allows them to focus on their primary mission, which is to provide some product or service that benefits society. (In the case of newspapers, that service would, of course, be providing honest information about local, national, and world events that helps readers be better and more powerful citizens.)

If implemented properly, this business model also frees managers from the different pressures they'd be under if they were running a traditional NGO or charity--especially the pressure of raising funds through donations, foundations grants, and the like.

In our book Creating a World Without Poverty, Yunus assumes that the primary purpose of social business would be help the poor--the purpose, of course, for which his Grameen Bank (itself a kind of social business) was founded. But it seems clear to me that honest journalism also offers a social benefit that deserves and needs to get out from under the burden of profit-making. I'd love to see someone with the power to implement this idea starting to think about it.

Yunus Spreads The Word

A promising message on Huffington Post from blogger Vivian Norris de Montaigu at Davos. She writes about how Bill Gates and Muhammad Yunus have connected there and are drawing Gates's rich and powerful friends into the concept of social business:

With two such influential people as Gates and Yunus focusing on innovation, capital-driven change-making and the world economy, there is nothing to stop the social business model from snowballing into a worldwide movement, which can indeed eliminate poverty. That Davos, the meeting place of the truly wealthy and powerful, should now come to include themes that were often spoken of at Porto Alegre and conferences, populated more by NGOs than executives means that the war has indeed been won. The words being used by Yunus are being spoken by someone who has seen both what great wealth can do, and what it could potentially do if harnessed in a more evolved way to help all the people of the planet.

Of course, she is going too far when she says "the war has indeed been won." Perhaps the most we can say is that a declaration of war is at least being drawn up. But it's a huge step in the right direction.

Meanwhile, I've just gotten word that Yunus's new book Creating a World Without Poverty will debut on the New York Times bestseller list at #18 on February third. This is the "extended" list, which appears online, though not in the printed newspaper. A good start!

What's Wrong With Microfinance? It Doesn't Create Billionaires

A little reporting on Muhammad Yunus's current book tour from The Houston Chronicle:

The model of loaning small sums to the working poor has been duplicated across the globe by for-profit and nonprofit organizations. That global contagion of microloans helped lead to Yunus and the Grameen Bank winning the 2006 Nobel Peace Prize.

But the microcredit movement has its critics.

"The biggest myth about this is that it goes to start a business," said Thomas Dichter, the co-editor of What's Wrong With Microfinance?

Borrowers use the money to survive, by earning a few pennies a day, selling bags of rice or cups of tea, he said.

"Let's not make the mistake that these are mini-entrepreneurs or future Bill Gateses. They are not," said Dichter, an international development consultant. "They are just trying to get by."

I wrote about Dichter's attacks on microcredit recently, and here he goes again. But this attack is pretty transparent, isn't it? Poor people in Bangladesh who borrow money from Grameen Bank may indeed "get by" by "selling bags of rice or cups of tea." That is the kind of stuff you sell if you own a store in a village in Bangladesh. It happens to be a pretty good way to feed and clothe your family, which I consider definitely preferable to letting them go hungry or naked.

But apparently in the view of Thomas Dichter, an oh-so-serious serious development expert, this is unsatisfactory. Instead, the often illiterate women who are clients of Grameen Bank ought to be striving to become "future Bill Gateses." Someone should tell them to get cracking on developing new computer operating systems. They can sell the software out of their tin-roofed roadside shops.

Grameen Bank Responds To Cyclone Sidr

By now, you are surely aware of the devastation suffered by southwestern Bangladesh in the wake of Cyclone Sidr. Hundreds of thousands of poor people have lost their homes, and millions more have lost their livelihoods due to the destruction of farms, fish ponds, roads, and other basic infrastructure. The death toll, currently less than 5,000, is expected to rise to close to 10,000 once all the damage has been accounted for.

You may be wondering how you can help. International agencies such as CARE have been providing immediate assistance to the survivors, delivering food, potable water, medicines, clothing, and short-term shelter. Episcopal Relief and Development is also on the scene, working, as they usually do, with local churches and humanitarian organizations to provide assistance. Aid organizations like these are always in need of support and would surely appreciate your help at this time.

I've also heard directly from Muhammad Yunus of Grameen Bank regarding his organization's response to the disaster:

Sorry for the delay in responding. I was visiting the worst affected areas and meeting the people who are the victims of this terrible disaster.

I wanted to follow up [you] with regarding the actions that Grameen Bank has taken in wake of the cyclone. As you know, Grameen Bank has already started to work with those affected. Around 675,000 Grameen Bank members have been affected by the cyclone in the affected areas of Barisal, Patuakhali, Borguna and Pirojpur. All our loan repayments have been suspended until 30 June 2008 for the areas that were hit by the cyclone.

We have also sent out 6-8 medical teams, each headed by graduate doctors, and supported by paramedics. These teams are handing out essential medicines. Local arrangements have been made for the vaccination and treatment of the affected livestock.

Our Branch Offices have taken the responsibility of distributing dry food, saline, alum and medical supplies. We are donating clothes, especially warm clothes, to the affected people as winter sets in. We are also distributing vegetable seeds to compensate for the loss of crops, rebuilding all damaged center houses that members use for Grameen Bank activities. We are also paying for exam entry fees and buying school supplies of children affected by the cyclone.

Grameen Bank has launched a massive housing loan program. These loans will be interest free. While the rebuilding is going on, we are planning on setting up temporary housing for the victims in order to provide some shelter from the cold weather that is setting in. Grameen Bank is giving out loans to compensate business capital losses.

Information about emergency response of Grameen Bank is on our website, http://www.grameen.com/. The emergency activities are being carried out from our own funds.

However, recognizing the need for providing people with long-term and sustainable solutions, we are offering the possibility for our friends around the world to partner for future disaster preparedness through the following long term rebuilding activities:

Hospitals: Each hospital will cost approximately US$ 1 million. The hospitals will be run as social businesses, that is, non loss non dividend companies to provide medical treatment to the vulnerable population in the cyclone prone area at the lowest possible cost that will enable the hospitals to be run on a sustainable basis.

Cyclone shelters: Bangladesh has about an estimated 1,500 cyclone shelters. Grameen Bank can undertake to build cyclone shelters in the areas hit by Cyclone Sidr. Each cyclone shelter will cost US$ 130,000 and will hold up to 2,000 people. Bangladesh needs an additional 2,500 new cyclone shelters. We will shortly putt up pictures of cyclone shelters and design on our website.

Life saving Coastal Embankments: Coastal areas must have solid life protecting embankments to save lives. This has already proved to be a very reliable life saving device for human beings and animals, and also protecting the crops.

Rebuilding Homes: Each home will cost US$ 150 to build in the areas worst hit. People from around the world can contribute to building houses for people who lost their homes.

Scholarships for Children of Cyclone-Affected Families: A US$ 1,000 scholarship fund will enable each child from a cyclone affected to get through school. The scholarship would cover the costs of tuition, books, supplies and stationery, school uniforms for all the remaining years of school for the child.

Solar & Bio Gas Plants: Solar and biogas plants can bring electricity in the homes which do not have access to grid electricity.

Afforestation: Afforestation, along the embankment will reduce the windspeed of cyclones and protect the people from heavy on-rush of water.

As you can see, Grameen Bank is trying to develop a long-term strategy to protect residents of the disaster-prone portions of Bangladesh. This is a big endeavor that will take time and significant resources.

You can read more about this ambitious program by following this link. If you happen to have access to potential funding--for example, through your church or synogogue, or through a connection with a corporation or foundation that makes charitable donations--you might consider offering your support.