Category Archives: Community

Chinese rural farmers are a worry for centralized government control

The New York Times is running an interesting series of articles on how the Chinese government is working to accelerate urbanization, by moving rural farmers off of their land and into apartment blocks in new cities. The first one is titled Pitfalls Abound in China’s Push from From to City.

On the right we have a rural small plot farmer. A little rough and the edges, but independent. On the left we have a city-dwelling family, fully under government control.

On the right we have a rural small plot farmer. A little rough around the edges, but independent. On the left we have a polished-looking city family, fully under government control.

The stated intent of this move is to drive the Chinese economy and to improve the standard of living for rural Chinese. There are so many problems with this in terms of sustainability that I don’t even know where to start, although I’ll try anyhow.

The New York Times article points out several of the challenges that the residents themselves are facing, such as no jobs in these new cities, and no money to pay for the electricity in their fancy new apartments. And of course there’s a the very valid perspective that these are not really optional relocations, but rather something that the government is pushing people into. It’s enough to make me want to reread the US Constitution, especially the Fifth Amendment and the Second Amendment, especially now that we know that the US government outright lies to us, supposedly for our own protection. Thanks.

I see some serious problems with China’s plan:

This is about government gaining unhealthy power over people.

  • A city dweller needs the government badly, or they’ll starve.
  • A rural farmer who can feed themselves doesn’t need the government.

City people are rough on the environment.

  • A city dweller lives high on resources from “elsewhere” and is disconnected from the impact they’re having on the world.
  • A small plot rural farmer uses few resources to live (because they don’t have money to throw around) and takes care of their land so it keeps producing over the long haul.

City people survive on the whims of international trade.

  • A city dweller–and indeed a nation of city dwellers–is intimately tied to the fortunes of mass market farming operations that are often very far away.
  • A rural farmer doesn’t care about the whims of other countries, international spats, farming policy in far off continents. They just grow food locally, and set aside for lean years.

City living requires huge inputs of energy, that are already waning.

  • City dwellers live based on the flow of oil, gas, coal that fuels their unsustainable lifestyles. They are living in a way that will not be possible in a matter of decades.
  • Rural farmers know how to live based on what they have available, without needing these inputs. Having said that, recent years and creature comforts have likely made them somewhat reliant on fossil fuels however they are miles closer to knowing how to live with the land than a city person is.

Bottom line: the rural farmer, in spite of being less comfortable, controls their destiny, as long as the government stays the heck out of the way. The city dweller is a cog in a larger machine, in which they have very little say. No wonder the Chinese government wants a country of city people.

I can see why China would have a motivation to do away with small plot rural farmers. Looks to me like “Cultural Revolution Light, run in reverse.” I bet this road is also paved up and down with good intentions–too bad it’s a fully unsustainable path.

My favorite resources for post-fossil fuel living

I was recently at an inspiring “unconference” in the Bay Area on the topic of sustainability, and I met many fascinating people with good questions. From those conversations, I decided to put together a list of the resources that I’ve found the most relevant when thinking about what living in a world with dramatically less fossil fuel use.

My top 3 recommended resources

1. Here’s the book that “changed everything” for me around sustainability. It is well written, makes a lot of sense, and doesn’t preach. Greer pretty much lays out what he sees, and lets you decide what you think. A provoking concept here is “if technology doesn’t bail us out yet again, THEN what happens?” http://www.amazon.com/The-Long-Descent-Users-Industrial/dp/0865716099/

2. This is a fascinating book on the Soviet Union’s collapse experience. Since it happened relatively recently, it’s a great way to consider “what might it look like here.” I couldn’t put this down once I started reading it, because it’s not speculation, it’s a recording of what happened. He does a wonderful job of showing how the USSR had several structural things going for it that softened the cushion of collapse. These include most housing being state owned (so nobody got evicted or foreclosed on) and all housing being mass transit accessible (so people could get around without cars). I highly recommend this book.
http://www.amazon.com/Reinventing-Collapse-Experience-Prospects-ebook/dp/B004XOZ89M

3. Here’s a collection of post-peak short stories that Greer edited. There’s a great variety of future visions in here, and all are well thought-out:
http://www.amazon.com/After-Oil-Visions-Post-Petroleum-ebook/dp/B00A323CPU

Fiction, albeit well thought-through and grounded

More resources

 

Look for Next San Mateo County Presidential Visit in 2092

Was just reading an article in the local community paper about President Obama’s visit last night to Redwood City, which is about 10 minutes south of where I live. Although I wasn’t there, I heard about the event on the radio, along the lines of “all the streets are closed! avoid Redwood City!” So I learn from the San Mateo Daily Journal that this is indeed a rare visit:

Obama is the first sitting president to spend any significant time in San Mateo County since Herbert Hoover came to town back in 1932.

Let me be clear–I know this is a big country, and I don’t expect every president to visit annually. HOWEVER isn’t this interesting that it’s been EIGHTY YEARS, 8-0 years, since any US president has spent more than 15 minutes (I’m making up the number) in our county?

What does this tell me?

  • First off, Obama has been one to do things differently, and so I’m not surprised to see him be the first to visit in 80 years. Consider that his staff could have scheduled the appearance in the same-old same-old places, and didn’t.
  • The electoral college system has made California irrelevant–other than as a brief fundraising stop–in national politics. Perhaps on a related note, the political movement to do away with the electoral college and move to a direct vote for president is headquartered in Mountain View, CA.
  • This is a VERY BIG country, so big that it gets me thinking of the push back on centralized, distant, federal control that’s happened many times in human history. It may turn out to be the big thing that the “red” and “blue” leaning areas agree on, although of course nothing is ever that simple.

So folks, get your grand kids to pencil in the next visit for mid 2092. By that time the Fox Theater may be on water-front property. 🙂

For-profit, social benefit: oxymoron or smart choice?

Ten-dollar bill obverse/reverse

Profit and social benefit can go together.

Several years ago, a friend of mine came up with a very innovative way to motivate low-income kids to work hard on improving their vocabulary. Sounds like a great non-profit, right?

But here’s the surprise: he very intentionally formed his company as a for-profit. There are no deep pocketed donors, no fundraising drives. Rather the company is supported by government funding that goes to provide low-income kids with supplemental tutoring. Furthermore in many areas, his company gets paid for actual improvement of reading scores—results—rather than just delivery of service.

Taking a step back, if the societal goal is “raising highly literate kids”, beautiful things happen when a market is set up to pay for outcomes. That’s when entrepreneurs bring their creativity, talent, and energy to effectively meeting that need. And structuring as a for-profit gives him many advantages in serving this market.

Let’s consider the potential advantages of being a for-profit here, rather than a not-for-profit:

  • A for-profit can pay its staff competitive market rates, rather than the lower “nonprofit salaries” that are considered “appropriate.”
  • A for-profit can afford to hire a highly talented CEO with experience scaling services nationally, rather than someone less experienced.
  • A for-profit can avoid the criticism and scrutiny of the non-profit “overhead police” who don’t understand the connection between expenses and impact.
  • A for-profit is accountable to the market—in this case the kids and their reading scores—rather than simply needing to please donors to keep getting funding.
  • A for-profit doesn’t have to spend time on fundraising, and has much more control over future income.

I have to admit that when I first heard about my friend’s company, I just couldn’t understand why he turned away from the benefits of being a non-profit. But the more I learn about the field, and read books like Dan Pallotta’s Uncharitable, the more I see that there are real trade-offs to be had in structuring a social benefit organization.

One last thing: it’s worth noting that my friend is extremely committed to the cause of education. He’s not in it for the money. For many years he has put all of his earnings back into the growing company, so that he can reach more kids. For years, in spite of running a company that employs hundreds, he hasn’t owned a car. Clearly his motive is impact, not personal profit—which makes his choice of a for-profit structure all the more fascinating. Cases like this lead me to wonder if the assumptions behind “non-profit” are in fact a hindrance.

Why are so many non-profit salaries so low?

Homeless person, with shopping cart

a nonprofit mobile office?

Dan Pallotta’s book Uncharitable continues to move me; it is changing my views of where the nonprofit sector needs to go. In the first portion of the book, Pallotta delves into the origins of strongly held American beliefs about the nonprofit pay. He writes:

“In Puritan times, people gave directly to the needy, without using brokers. This is no longer possible on any meaningful scale. Charity is no longer an exchange between the non-needy and the needy. It is an exchange between the non-needy (donors) and the non-needy (the charity workforce) to provide services to the needy. Is an exchange between equals to help the needy. It is no different than the exchange between those who buy cars and those who make them. A law that was meant to provide an economic discount to the needy in face-to-face transactions is now improperly exploited to expect nonprofit sector workers to provide wage discounts to wealthy donors who are in essence buying a service from them, which they use their labor to provide. The donating public expects the nonprofit workforce to extend to it the law of mercy. But it was never intended that such a law be applied in this way.”

This is a big aha for me—over time two distinct dynamics have become confused as one. The first dynamic is the wealthy giving charity to the needy. The second dynamic is nonprofit employees (the non-needy but non-wealthy) working at below market rates, thus also giving charity to the needy. But in doing so, the nonprofit employees are in a way also giving charity to the *wealthy* as well, in the form of their under-priced labor. And this practice of low nonprofit wages is not just common, it’s widely considered to be the only acceptable situation.

I’ll never forget attending a mixer of the San Francisco chapter of YNPN and overhearing several discussions of nonprofit employees who have no health insurance. They were talking about where to go in the city to find free health clinics! These are smart, young, energetic people who could easily find work in the for-profit arena. They are living lives of poverty in order to work for nonprofits. It just doesn’t seem right to me, it doesn’t seem sustainable, and I absolutely can’t see this being good for the field. It doesn’t take much imagination to see many of these young people going and finding “real jobs” and only doing social benefit work on weekends. What a loss for the field.

So what’s going on here? My guess is that there are two factors in play.

One factor is that there are a few markets for the kinds of social benefit that nonprofits generate. These are organizations that are creating real value to society, but which society isn’t currently willing to pay for, at least not proactively. It’s a lot easier to get money to build prisons than it is to build programs that prevent the need for more prisons. I hope that over time as the underlying math and science of how societies work is better understood, the value of the right types of social investments will become obvious and uncontroversial.

The second factor is that there are huge discrepancies in the nonprofit world when it comes to pay—people at some organizations get paid extremely well, even if the impact isn’t clear. My guess is that this links to the relative lack of market mechanisms in the nonprofit world, where pay and impact can be worlds apart.

I wonder: if we can better understand and measure impact, and if we can create markets for that impact, can we find ways to fairly compensate talented individuals for the positive social impacts that they drive?

Donations, overhead, and the “feel good” factor

Do we really want to compete for donors on the basis of low overhead?

I had the good fortune at SOCAP 10 to meet Barty Jan Skorupa of Groundwork Opportunities. In the course of our conversation, he shared with me that when he does a fundraiser, 100% of proceeds go directly to programming. A few years ago I would have said “great!” but after hearing Dan Pallotta give a rousing “social benefit folks deserve to get paid, too” talk at the 2010 SEA Summit in San Francisco, I’ve started to actively wonder how nonprofit leaders can pay the rent when calls of “no overhead” carry the day.

What I took away from Dan’s talk is that overhead ratios are a poor measure of impact. And it makes sense, when you think about it: a smart for-profit company that is going to launch a critical new venture understands the value of investing properly and “doing it right,” and thus they raise big money in order to be as successful. Guess what—a lot of that money goes into infrastructure building and paying competitive wages to smart people, in other words to “overhead.”

But for-profit’s get it—they swing the big bats to get the big results. Dan made the point that the non-profit world often has a meek “spend as little as possible” attitude, based on the belief that “less is best” when it comes to overhead.

Now back to Barty. Here’s a smart guy who could be making good money as a consultant to for-profit companies, who runs this social benefit org “just because.” And I couldn’t help but ask him, “so how do you pay your rent?” because it just seemed unfair that he should have to scrape by. Fortunately for Barty he’s started to attract some grants and institutional money, but it’s still early, and even paying the rent is tight.

Then it occurred to me the next day: the question of whether or not 100% of all “event proceeds” go to programming is really a question for accountants. Let me explain.

Consider two $1M a year social benefit organizations that are totally equivalent in over way, except for this:

  • Org A says “20% of all money we take in, from funders and from events, goes to overhead. The other 80% goes to programs.” So that’s $200K a year to overhead, $800K to programs.
  • Org B says “100% of the money we take in from events goes to programs. And 100% of money we take in from funders goes to overhead.” Let’s say the funders are chipping in $200K a year, and the events raise $800K a year.

Now we have two equivalent organizations, right? Well, not really. Why? The psychological factor.

Here’s my take: Barty is playing it smart by saying “we have no overhead” because the typical individual donor thinks that’s a good thing, and likes the idea of all of their money going “directly to the cause,” even if people who run these organizations in fact need to eat, get medical car, and have a place to live. The casual donor doesn’t really care–from a psychological standpoint, they want the emotional gain from the “direct impact” they are having.

Thus by using the rallying cry of “all funds raised at the event go straight to programming” he can unlock funds that otherwise might not be donated if they went, even in part, to “overhead.” As much as I agree with Dan that social benefits folks also deserve to get paid, unfortunately I doubt we’ll see human nature change such that the average donor cares about infrastructure.

Having said that, I realize that whenever a friend brags about how their charity of choice “has less than 1% overhead” I engage them in a conversation about whether that’s true, and if so, what that would actually mean for the quality of the organization. I’m trying to do my part to get the people around me to think a bit deeper about these issues.

Nonetheless, consider—do you care how about how much overhead Starbucks has, or do you want a good coffee at a good price in a nice shop? If, when it comes to donors, social benefit organizations are at least partly in the business of delivering “feel good,” in return for donations, then a “100% goes to programs” strategy can be a good thing.

Note: since writing this article I finally sat down and read through Dan Pallota’s thought provoking book Uncharitable in which he goes into more detail on this phenomenon of overhead ratios and accounting tricks. He also describes the unsettling case where non-profits that don’t engage in these tricks can lose their funding because they appear to be “inefficient” when in fact the whole “minimize the overhead” frame is what’s actually at fault. It’s time to get out of the overhead game and focus on impact.

The Magic of BRAC—Amazing Social Impact

Fazle Hasan Abed, founder of BRAC

Fazle Abed of BRAC

Many people have heard of Grameen and Muhammad Yunus, but who knows about BRAC and Fazle Abed? Outside of the development world, hardly anyone, and it’s a shame because BRAC does amazing, transformative, unique work. I just finished reading a fantastic book about BRAC, Freedom from Want, which gives an engaging overview of how several of BRAC’s major initiatives have developed through the years.

What strikes me as particularly interesting about BRAC isn’t so much the areas that they have entered, such as primary education, tuberculosis treatment, and poultry farming, but rather the organizational habits that allowed them to experiment, learn, adjust and ultimately succeed in these areas.

A good idea and the initiative to enter is a good start, but to actually succeed it takes the ability to adapt, and from “Freedom from Want” I’ve learned that BRAC is excellent at adapting. Not surprisingly, this core strength at adaptation has enabled BRAC to enter several other countries such as Afghanistan and Tanzania, and have an unusual degree of success.

So what is the magic of BRAC, and how do they do it? It’s hard to know from reading a book, but here are my guesses at some of the key factors:

Leadership

Mr. Abed started BRAC in his late 30’s, well into his career. If you watch him in action on video, he comes across as extremely grounded while at the same time being very intellectually nimble. Combine this with humility and a deep desire to find solutions, and you get the key ingredients to seed the DNA of an organization with the ability to learn.

Persistence

Related to this ability to learn is having the stamina to stick with a challenging idea, and be able to see it through. For example BRAC over 10 years to start its bank, and the idea for the bank inevitably changed over time as BRAC dealt with the bureaucratic challenges in Bangladesh. But the organization seems to have had a powerful enough vision for the bank that they stuck with it, resulting in what today is a bank that helps a tremendous number of people start small enterprises.

Humility

The flip side of persistence is knowing when to pull out. BRAC has had its share of areas, such as silk cultivation, where it spent many years trying to get in, but ultimately determined that it couldn’t make it work. For an organization that emphasizes impact and learning, and means it, an unsuccessful venture can be canceled without it needing to “mean anything” about the organization itself. But for an organization that “is never wrong” and “can never fail”, an unsuccessful venture can become a black hole that pulls in more and more resources.

If you don’t know anything about Fazle Abed, I highly recommend watching one of the Ashoka videos about BRAC, which reveals much about Mr. Abed as a person, and about the ways of BRAC.

Whatever the reasons for BRAC’s success, the point is that this is an organization to watch. BRAC’s organizational culture has created an amazing track record of success, and looks poised to continue presenting and refining new ways of having scalable social impact.