42 minute read
Soul enterprise
Feel guilt about success?
Should businesspeople feel guilty if they are successful?
Not at all, says one businessman I know, adding that there’s nothing wrong with making a decent profit. But some businesspeople I have spoken to say they get the impression from their churches that they should feel bad if they make money — that there’s something wrong with making a healthy profit.
Now, we’re not talking about salaries in the tens of millions of dollars here, like the CEOs of some huge companies. But we are talking about making more money than average. However, while some businesspeople have a better than average income, they also have much larger than average debts and obligations — the amount of money some of them owe would take your breath away. Says one businessman: “When people look at me, they see the factory, my 200 employees, my vacation to the south each winter. They think I must be incredibly rich. And I am — on paper. But the truth is that I’ve never been in such debt in my whole life.” He adds that to buy his business, he had to sign over everything he owned to the bank to secure the loan — house, car, pension. “If my business went under, I’d lose everything,” he says. “And I could lose it all tomorrow — we’re always just a few bad decisions or the loss of a couple of key customers away from being in big trouble.” When it comes to success in business for Christians, the rest of us seem to have ambivalent feelings. On the one hand, we admire them, but on the other we seem to resent them for it. At the very least, we seem to expect them to assuage their guilt at becoming successful by driving older cars, living in modest houses and never talking about their vacations. All that, plus making large contributions to worthy causes. Sometimes it seems the highest tribute we can give businesspeople would be the one seen in the headline of a Christian magazine: “He gave away a fortune to follow Christ.” What about all those who keep their fortunes, but also follow Christ? Contrast this to how we feel about artists, musicians or authors. When they reach the pinnacles of their careers, with successful shows, concerts or books, we celebrate their success. Articles are written about them in church periodicals, and they are often also asked to share at churches and conferences. We want to know: How do they integrate their faith and art? How do they use their gifts for God? This rarely happens to successful businesspeople. Why the difference? I think one reason is the amount of money involved. The fact is that businesspeople usually make more money than most artists, musicians and authors — fields where lack of money is often viewed as the hair shirt that validates the end product. But lots of successful businesspeople were also once living on the edge, putting in 16 hours a day, seven days a week, when they were starting out. They can also talk a lot about sacrifice. They can talk about the things they gave up and the prices they paid to produce their “art” — in this case, their businesses. They can also talk about how they integrate their faith and life and use their gifts for God. Should businesspeople feel guilty for being successful? No more than the successful artist, musician or author. Everyone has to answer to God about how we used the resources we received in the course of our life’s work. Some people just have more money to be accountable for. — John Longhurst
Making it work
“Making a business work is incredibly satisfying and exciting. Even when a business fails, a resilient entrepreneur gets up and goes at it again having learned from their first experience. Business is an incredible process where creativity, tenacity, risk and hard work can bring financial fruit and a broad impact.
“God instructs us in Genesis 1 to be fruitful and multiply, to work the land, to create and increase. I believe business falls under this mandate — and what an amazing process to be involved in!” — Mark Plummer, a coffee trader who works with Thai growers to get their high quality but unknown coffee onto the world market
So All May Eat
Paying the SAME
Here’s an unusual way to run a business — let the customer decide if, and how much, to pay.
Members of the Colorado MEDA Chapter enjoyed a unique dining experience when they met at the SAME Café in Denver. The eatery (whose acronym means So All May Eat) aims to “build a healthy community by providing a basic need of food in a respectful and dignified manner to anyone who walks through the door.” It is unique in its lack of a set menu as well as set prices.
“Daily selections are made using fresh, organic ingredients, and funded by the donations of patrons,” says the restaurant’s website. “Instead of a cash register, a donation box is available for one to pay what they felt their meal was worth, or to leave a little more and help out someone less fortunate. If a diner does not have sufficient money to leave, they are encouraged to exchange an hour of service. Our philosophy is that everyone, regardless of economic status, deserves the chance to eat healthy food while being treated with dignity.”
For more information, go to www.soallmayeat.org
One man’s philosophy
In a seminar at MEDA’s Calgary convention (see report, pages 12-15) Myrl Nofziger offered a quick summary of the business philosophy that has guided him through 43 years in the real estate industry: • Work long, hard hours, but work smart. • Be in control of your schedule. • Maintain healthy cash reserves; do not over-borrow. • Always make payments on time or ahead of schedule. • Maintain good relations with those you do business with. • Full disclosure in all activities; do not railroad people in any fashion. • If there is a discrepancy, always err on the side of the employee or client.
Overheard:
Bubbly devotion
Far be it from us to present strong drink as an enterprise of the soul, but we were intrigued by a report in Christian Century on the origins of high-end bubbly. It seems that the French beverage known as champagne was created by a teetotaling Benedictine monk named Dom Pierre Perignon. Through a combination of severe pruning and sparingly fertilizing his vines, he developed a grape that yielded less juice but produced a highly concentrated wine with distinctive properties. “Although he didn’t imbibe himself,” the magazine says, “he was fanatical about producing the best wine, seeing his work as an expression of his devotion to God.”
“There are people in the world so hungry that God cannot appear to them except in the form of bread.” — Mahatma Gandhi
Microcredit: The vigor endures
While some press reports have played up failures in India, the heart of the industry remains strong
Diego Treminio leans back in his rocking chair and gestures to the expansive patio that looks out onto the Nicaraguan hills. Whenever he makes money he invests in one of three things — his house, his farm or his children’s education.
On all three scores he has done well. Besides the patio, he has added several rooms to his house. He has tripled the size of his farm to 65 acres. Several children have graduated from university.
This, he says, is because of help from MEDA — both its sesame project that operated for several years, and its microfinance program, MiCredito, of which Treminio is a client.
He can’t say enough good about MiCredito and the way affordable credit can transform a small farm. He knows there are other microfinance institutions (MFIs) in Nicaragua, but he wants nothing to do with them. “They abuse the producer,” he says bluntly, “and they charge higher interest.”
On the other side of
the world, microfinance is not garnering quite so much praise. Media reports in late fall painted a grim picture of certain MFIs in the Indian state of Andhra Pradesh.
One of the more extreme reports claimed that a number of microfinance clients had committed suicide after being hounded by lenders for loan repayments. Later reports noted that the blame was seriously misplaced, and that those who killed themselves had much greater problems. The mother of one victim, for example, acknowledged that her son was in deep hawk to loan sharks, not the microlender to whom he owed a pittance.
More reasoned accounts acknowledged that rapid growth had over-heated the industry as lenders let their guard down. There were clear cases of overindebtedness as borrowers had taken out loans for consumer goods (rather than to build their tiny businesses, as the industry intends). Some clients had gone from one agency to the next, larding their debt with one loan after another. Without formal credit bureaus, they managed to get away with it — for a while. Other reports laid some blame on sexism. “Anything that empowers women or gives them some control over the financial tools is likely to be resented by some parts of a conservative rural population,” said one industry advisor. Some observers blamed the backlash against the microlending industry on government bureaucrats whose own programs have not matched the private sector’s ability to help the poor. In yet another scenario, the success of microfinance itself may have sparked problems. Some envious loan sharks reportedly disguised themselves as MFIs and gave the whole industry a bad name when they resorted to strong-arm collection tactics. MFIs know better than that, realizing that developing a close relation-
Microloan client Diego Treminio and one of his daughters stand before the patio he built with increased income from his farm. At right, Veronica Herrera, CEO of MiCredito, MEDA’s microfinance program in Nicaragua.
ship with clients serves everyone best in the long run.
In any event, as the problems mounted the local microfinance industry spun into crisis. Many borrowers simply stopped making their payments, in effect going on strike. Funding for new loans dried up.
Microfinance leaders in other parts of the world chafed at the reckless reporting and the innuendo it created. Feeling the sting of guilt by association, they hastened to reassure their own constituencies that in most cases, microfinance remains a highly effective tool to lift people out of poverty. MEDA folk were among those who felt unjustly slandered.
MEDA didn’t invent microfinance, but it has been in the game for a long time, even longer than the vaunted Grameen Bank. Like every MFI, MEDA has gone through its own learning curve. When mistakes were made, it learned from them and fashioned a sound approach to financial services that would be mimicked by others. As someone has said, “What MEDA does today, the rest of the development industry does tomorrow.”
As far back as the 1980s, MEDA was repeating the mantra that microfinance was not to be seen as a panacea, given the multidimensional nature of poverty. Affordable credit will not in itself lift people out of poverty. But it is a highly effective tool when done in tandem with market access and training.
While MEDA is not directly involved in any of the problem areas in India, staff have responded to some of the chief areas of concern.
Interest rates
An MFI’s interest rate is a direct reflection of local administration costs, which can vary depending on location. In many areas rates can be 36 percent, not much above what North Americans pay on their credit cards. Village money lenders (loan sharks) charge up to three times more. The seemingly high microfinance interest reflects the fact that it is expensive to deliver and collect loans weekly in rural areas. Clients, however, don’t think it is
Protecting the client
MiCredito, MEDA’s microfinance agency in Nicaragua, maintains six principles to protect clients: 1. Guard against clients borrowing more than they need or can afford; 2. Disclose interest rates so clients know how much they are charged; 3. Utilize proper collection practices; 4. Ensure ethical behavior by staff; 5. Employ an open method to handle complaints or concerns; 6. Maintain privacy of client information. high because they earn far more when they put the loans to work to grow their tiny businesses.
Microcredit needs to be profitable enough to be sustainable, explains Julie Redfern, MEDA’s vice-president of financial services. “MEDA does not support organizations that charge usurious rates,” she says. “We endorse rates (about 36 percent) that are competitive within the local market context No self-respecting and are fair to clients. I would compare MFI wants clients to rates in our industry to local, unsecured borrow more than credit card rates, rather than Amerithey need, or can can payday loans or sub-prime mortgages.”comfortably repay In India, a government program offered loans that purported to charge less interest, but many clients complained that this didn’t include the necessary bribes, which ended up pushing the actual cost much higher.
Overindebtedness
A bedrock principle of MEDA’s micro-lending has been to discourage clients from borrowing more than they need, or can comfortably repay. No one wants clients to get in over their heads. Borrowing too much, or double-dipping with other MFIs, will not help anyone. Nonetheless, people are prone to this, especially in consumer finance situations, whether in Canada or India. Also, the lack of a credit bureau (see below) makes overindebtedness a real possibility. Thankfully, more and more countries are establishing these.
Consumer lending
MEDA does not promote consumer lending, but rather productive lending. Its due diligence raises a red flag if more than 20 percent of an MFI’s portfolio is consumer rather than micro-enterprise lending. As governance in the large Indian MFIs weakened it became clear that much of the recent lending had become group consumer lending masquerading as microfinance.
“If the Indian MFIs had followed our impact investment values, they may not be in the trouble they are today,” says Gerhard Pries, president of MEDA’s investment company, Sarona Asset Management, Inc. “When MFIs become churners of loans, rather than seekers of positive social impact, they can be as rapacious as any other industry. Fortunately, not many MFIs are rapacious; 99 percent of them are excellent servers of the public good.”
Regulation
MEDA favors establishment of regulatory agencies, like credit bureaus. This brings a regulatory framework to the
industry and helps entrench microfinance in the formal economy. “Where there is no credit bureau there is increased risk for overindebtedness and the potential for clients to be less than transparent with their debt load,” says Redfern.
“The values that were absent in parts of the
Indian market were good governance, strong middle management, and attention to core business,” says Gil Crawford, CEO of MicroVest, a MEDA-related company that channels private investments into the microfinance industry. In its ongoing analysis of the global microfinance scene, MicroVest staff detected early warning signs that MFIs in India were straying from core principles and failing to oversee underwriting and collections procedures.
“Too much consumer lending, overaggressive lending practices and unconscionable loan recovery practices have and will always be bad business,” he says. “As a result MicroVest has been cautious about the Indian market for the last five years.”
The end result may still be good for the poor of India. “Out of this cycle of destruction we expect to see stronger institutions, better credit information bureaus, and increased regulation, either through the MF associations or through the government,” he adds.
According to Crawford, economic historians continue to show that markets, “with all their messiness,” have done more to reduce poverty in the last 50 years than at any other time in history. “My personal takeaway is that competitive microfinance markets continue to provide the most effective mechanism to lift the most people out of poverty,” he says. ◆
Here’s a woman fighting terrorism. With microloans.
A New York Times writer sings the praise of the Kashf Foundation, a longtime MEDA partner in Pakistan
by Nicholas D. Kristof
LAHORE, Pakistan — An old friend of mine here fights terrorists, but not the way you’re thinking. She could barely defeat a truculent child in hand-to-hand combat, and if she ever picked up an AK-47 — well, you’d pray it was unloaded.
Roshaneh Zafar is an American-educated banker who fights extremism with microfinance. She has dedicated her life to empowering some of Pakistan’s most impoverished women and giving them the tools to run businesses of their own. The United States should learn from warriors like her.
Bullets and drones
may kill terrorists, but Roshaneh creates jobs and educational opportunities for hundreds of thousands of people — draining the swamps that breed terrorists.
“Charity is limited, but capitalism isn’t,” Roshaneh said. “If you want to change the world, you need market-based solutions.” That’s the point of microfinance — typically, lending very poor people small amounts of money so that they can buy a rickshaw or raw materials and start a tiny business.
Roshaneh grew up in elite circles here in Lahore
and studied business at the Wharton School and economics at Yale. After a stint at the World Bank, she returned to Pakistan in 1996 to start her microfinance organization. She called it the Kashf Foundation.
Everybody thought Roshaneh was nuts. And at first
nothing went right. The poor refused to borrow. Or if they borrowed, they didn’t repay their loans.
But Roshaneh persisted, and today Kashf has 152 branches around the country. It has dispersed more than $200 million to more than 300,000 families. Now Roshaneh is moving into microsavings, to help the poor build assets, as well as programs to train the poor to run businesses more efficiently. She is even thinking of expanding into schools for the poor.
Microfinance is sometimes oversold as a silver bullet — which it’s not. Careful follow-up studies suggest that gains from microloans are often quite modest.
Parveen Baji, left, in front of the restaurant she started with a loan from the microfinance organization started by Roshaneh Zafar, right. Jobs and economic development can be a more effective way to fight extremism than firepower.
Some borrowers squander money or start businesses that fail. Some micro-lenders tarnish the field because they’re incompetent, and others because they rake in profits with sky-high loan rates. Microfinance has also generally been less successful in Africa than in South Asia.
Yet done right, microfinance can make a significant difference. An outside evaluation found that after four years, Kashf borrowers are more likely than many others to enjoy improved economic conditions — and that’s what I’ve seen over the years as I’ve visited Kashf borrowers.
On this trip, I met a woman named Parveen
Baji, who says she never attended a day of school and until recently was completely illiterate. She had 14 children, but five died.
Ms. Parveen’s husband, who also never attended school, regularly beat her and spent the family savings on narcotics, she says. The family’s only possessions were four cots on which they slept, crammed three or four to a cot, in a rented apartment.
“One night all my children were hungry,” she remembered. “I sent my daughter to ask for food from a neighbor. And the neighbor said, ‘you’ve become a beggar,’ and refused.” “Microfinance has Then Ms. Parveen got a $70 loan from changed my life.” Kashf and started a jewelry and cosmetics business, buying in bulk and selling to local shops. Ms. Parveen couldn’t read the labels, but she memorized which bottle was which. As her business thrived, she began to struggle to learn reading and arithmetic — and proved herself an ace student. I fired math problems at her, and she dazzled me with her quick responses.
Ms. Parveen began to start new businesses, even building a laundry that she put her husband in charge of to keep him busy. He no longer beats her, she says, and when I interviewed him separately he seemed a little awed by her.
Eventually, Ms. Parveen started a restaurant
and catering business that now has eight employees, including some of her daughters. She bought a home and has put some of her children through high school — and a son, the brightest student, through college. She has just paid $5,800 for a permit for him to move to London to take a health sector job.
Ms. Parveen tried to look modest as she told me this, but she failed. She was beaming and shaking her head in wonder as she watched her son speak English with me, dazzled at the thought that she was dispatching her university-educated son to Europe. “Microfinance has changed my life,” she said simply.
That’s an unusual success story. But the larger message is universal: helping people start businesses, create jobs and support education is a potent way to undermine extremism.
We Americans overinvest in firepower to defeat extremism and underinvest in development, and so we could learn something useful from Roshaneh. The toolkit to fight terrorism includes not only missiles but also microfinance and economic opportunity.
The antonym of “militant” is often “job.” ◆
From The New York Times, Nov. 14, 2010. © 2010 The New York Times. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of the Material without express written permission is prohibited.
Fired
Losing my job turned the world upside down and taught me profound lessons
by D. Merrill Ewert
You know it’s not going to end well when your boss starts a conversation with, “This is the hardest thing I’ve ever had to do.”
My wife and I had two young kids, a mortgage we couldn’t afford and an idyllic life in the house of our dreams. I had recently left a well-paying job that took me away from home at a rate that had become destructive to our family life and accepted an administrative position at a well-known college.
And then it ended. The program I managed was cut back and my job eliminated. I was angry, terrified and embarrassed, thinking others would assume I was fired for incompetence. This was the worst moment of my life. And though I didn’t know it at the time, it was also one of the best moments because I was about to learn some profound lessons.
Lesson 1: Let it go. Angry and frustrated, I called a well-connected mentor and friend at another university and unloaded. I hoped she would offer me a job. Instead, she told me to get over it and hung up. Moving on is easier said than done.
Nights were the worst. I’d sleep for several hours and then toss and turn until morning. Sometimes I’d sit in the dark living room thinking about how unfair everything was. I’d pray and cry. When Saint John of the Cross wrote of “the dark night of the soul,” he wasn’t exaggerating.
I was at the end of my rope. Desperate, I prayed at 2:30 one morning: “Lord, I can’t do this anymore. I can’t get past my anger at the college for what has happened. I can’t wish away my fear. This burden is too heavy for me to carry. I can’t seem to let it go; you will have to take it away.”
I relaxed and a sense of peace like I’d never experienced before literally swept over me. The next thing I knew, it was 8 a.m. I had not slept that late in years. From that point on, I could sleep again. Though it didn’t change my circumstances, I learned I had to let go of everything — anger, fear, frustration — before I could experience God’s healing touch. The former was a conscious, rational choice; the latter was the powerful work of God. Lesson 2: Seize the moment. “You’re the luckiest man around,” said a pastor who listened to my story over dinner shortly after I lost my job. “How many people in their 40s get to start over and decide once again what they want to be and do?”
Frankly, I wasn’t feeling particularly lucky but was intrigued by his next question: “If you could choose absolutely anything, what would you really like to do next?” Without thinking, I blurted out that I wanted to teach, mentor graduate students and do research at a major university.
I quickly reminded him, however, that we were in a deep recession and universities were laying off professors and promoting early retirements — not hiring new faculty. On top of that, I had committed “professional suicide” a decade earlier when I left a faculty position at a research university to work for a mission organization. I asked the pastor, “What university would hire me now?” “That wasn’t my question,” he snapped, “I want to hear your dream.” He was neither very patient nor interested in hearing about the barriers to my dream. As we left the restaurant, this pastor promised to pray that I’d find a university teaching position where I could teach, work with graduate students and do research — but only if I prayed too. That was when I stopped worrying about simply finding a job and began thinking about how God might open new doors.
Lesson 3: Explore broadly. I read Richard Nelson Bolles’ book, What Color is Your Parachute? It forced me to reflect on my professional experience, evaluate my gifts and articulate personal goals. I took a test designed to
ascertain a person’s gifts and interests. What did it suggest to someone who enjoyed travel, relished intercultural experiences and spoke other languages? Become a flight attendant! After I stopped laughing, I realized this exercise did identify some themes that reflected my gifts and interests. This new self-understanding framed my ongoing search for a position in new and deeper ways.
Lesson 4: Walk with those who build you up.
When I shared the pain of losing my job with the interim pastor of my church, he explained that he had been removed from his position as a denominational executive several years earlier. He both understood how I felt and reminded me that the God who had brought me to this point had not abandoned me now. My Heavenly Father, he suggested, would lead me into something new and exciting if I opened myself up to him. As we parted, I felt ready to look for another job. My pastor stayed in touch, prayed for me and lifted my spirits.
Around the same time, I had lunch with an old friend who had lost his job several years earlier. He was still angry, bitter at his former employer, vindictive and unemployed. As I listened to him, I could feel the life being sucked right out of me. I learned later that potential employers considered my friend toxic; they didn’t want to contaminate their own workplaces with his anger and cynicism.
These dear friends taught me a very important lesson in two very different ways: Surround yourself with people who build you up and avoid those who would take you down with them. I learned to hang out with people who would encourage me and run from those who invited me to wallow with them in their own misery.
Lesson 5: Expect surprises. A faculty member met me in the stairwell one morning as I was finishing up my job. Our philosophical differences about the nature of higher education ran deep. We had often argued, leading me to conclude he had little use for my work or me. He was something of a curmudgeon, so I definitely didn’t want to talk with him that morning. Unfortunately, the stairwell was narrow so I couldn’t ignore him.
He stopped me, grabbed my arm, reached into his billfold, pulled out a tattered scrap of paper with a faded list of names and said, “That’s my prayer list.” Then he asked, “Do you see whose name is on top?” It was mine. “I pray for you every day,” he said. Without another word, he stuffed the paper into his wallet and continued down the stairs.
I’m glad he kept walking because I didn’t want him to see the tears rolling down my face. I thought I knew this man, but I didn’t know his heart. God uses the most unlikely people to walk alongside us during our hour of need.
Lesson 6: Don’t settle. I was desperate for a job when two friends each offered me a job. I lacked the requisite skills and passion for one of the positions and the other wasn’t a good fit, yet it was very hard to say “no.” In the midst of this, I remembered the words of that pastor: “Follow your heart. Don’t settle. Don’t jump at the first thing that comes your way!” I knew I wanted to teach at a research university, but it was hard to walk away from job offers.
Before the year was over, I was teaching at an Ivy League school, doing research and mentoring graduate students. I earned tenure and ultimately a senior leadership position. I clearly saw God’s hand in this.
Several months later one of my new colleagues asked if I understood why I got the job. They had received nearly a hundred other applications, so I was interested in hearing why my name had risen to the top. My colleague explained that what tipped the balance for the search committee was what they had learned about me through my friend — the one who had told me to “get over it” and hung up on me.
Lesson 7: Serve in your own area of need. Several years later, while visiting our former church, a man I didn’t know introduced himself to me. “I want to thank you for your letter,” he said. “It was an enormous encouragement to me.” I stared at him blankly; I had no idea who he was or what he was talking about.
He explained. After he lost his job the previous year, his brother sent him a copy of the letter I had written to this man (who had walked with me when I lost my job) when he had lost his job two years earlier. My friend was so encouraged by what I said in the letter that he saved it and sent copies to other people, including his brother.
Over the next few years the two brothers sent copies of that letter to a number of other people who had also lost jobs. Some of them, in turn, copied and circulated it further. God had used my own pain to encourage others walking the path I had traveled.
As a university administrator, I’ve been forced to lay off people, so I understand the pain they experience. Though I don’t know exactly how they feel, I know how it feels. And although every situation is unique, I know that God wants to carry our pain and will bless us with new joy. ◆
D. Merrill Ewert is president of Fresno (Calif.) Pacific University. Prior to this appointment, he was a professor and the director of Cooperative Extension at Cornell University. In his earlier years Ewert was a development worker in Africa. His article is reprinted with permission from the Christian Leader, the magazine of the U.S. Mennonite Brethren Church.
Steve Sugrim photo
Second chance led to Second Cup
Former down-and-outer wows MEDA audience with story of recovery and unleashed entrepreneurship
Frank O’Dea, co-founder of the Second Cup coffee chain, signs copies of his book, When All You Have Is Hope.
Compound progress
For Frank O’Dea, a second chance led to founding Second Cup, Canada’s first specialty coffee chain.
Speaking to the annual convention of Mennonite Economic Development Associates (MEDA) in Calgary, Nov. 4-7, he said he had hit rock bottom on the streets of Toronto — a homeless panhandler begging for nickels and dimes to buy cheap wine or a night at a 50cent flophouse. Then he got a second chance at sobriety. His audience of 400 was transfixed by his story of unearthing hidden potential and “unleashing entrepreneurship,” the convention theme. O’Dea painted gritty images of having been a man without purpose, gulping bottles of plonk in grimy alleyways, to eventually finding himself on a red carpet in the Governor General’s mansion to receive the Order of Canada, the country’s most prestigious civilian honor. “How is that journey possible?” he asked. With the patient help of compassionate people, O’Dea was able to kick his addictions and discover the marketable skills that lay beneath. He found a job in sales, worked his way into ever-higher levels of responsibility, and eventually parlayed his mounting successes into the co-founding of Second Cup, which would grow into hundreds of coffee boutiques across Canada. He eventually sold his share in the lucrative company and “went out and bought all the toys,” but even that did not satisfy, O’Dea confessed. His pilgrimage Keynoter Frank O’Dea told the MEDA convention that his personal took him to a Jesuit retreat center where a daily checklist included four areas by which he could measure his cleric confronted him about his smoldering progress on making the world a better place: spiritual anger and kindled a new vision of • Growing relationships with friends and family. service that led him to establish organiza• Career: “Did I leave my workplace a little better than I found it?” tions like Street Kids International and the • Spirituality: “What’s my role in regard to God?” Canadian Landmines Foundation. • Personal health: “Did I make some wise healthy choices today?” “With a little hope, vision and action
He said he took stock every night to gauge progress in these four you can change the world,” he said. areas. Even small daily changes could make a difference, O’Dea said — “Like compound interest, it adds up.” ◆ Another keynoter, a global authority on faith and business, laid out
a framework for how the practice of Christian faith can unleash new dimensions of ethics and entrepreneurship in daily life.
“Can Christians still engage in the marketplace, with all the problems going on?” asked David Miller, a former international investment banker who now directs Princeton University’s Faith & Work Initiative. For him, a better question was “How can we as Christians not engage in the marketplace? Marketplace work, when done best, is holy work.”
Miller said his own brand of faith was Presbyterian, yet he regarded the MEDA audience as “my people.” He said when he was researching his latest book, God at Work: The History and Promise of the Faith at Work Movement, he kept encountering examples of Mennonites who knew how to operationalize robust marketplace Christianity.
“Pound for pound, you do more in the marketplace than any other denomination I know,” he said. “You are a special breed.”
He said many of the perpetrators of recent financial scandals were not irreligious people who woke up one day and decided to commit fraud on a large scale. Many of them claimed to be religious people but had failed to align their mission with something greater than profit and had dulled their spirits by making one compromise after another. A durable ethical witness in the marketplace meant more than simply developing statements of corporate social responsibility (CSR). “A lot of CSR, while well-intentioned, is window dressing, hypocrisy and just marketing,” he said. Miller asserted that “the corporate world can be a moral community,” and a good starting point was for firms to have a clear idea of their purpose and to see themselves as “producing goods and services for humanity to make this world a better place.” While western business had suffered greatly from greed and misbehavior, Miller said he was heartened by evidence that the younger generation of businesspeople “doesn’t want to play the game the way it has been played.” He encouraged businessfolk to “stay ethically fresh” and build “faith-friendly” companies, which he insisted was different than being a “faith-based” company. Being faith-friendly, he said, was to go beyond mere tolerance of other belief systems and recognize that “the spirit is part of the people we hire.” One evening of the convention was devoted to showing how MEDA seeks to unleash entrepreneurship among the world’s needy, particularly in Haiti and Ukraine. Haiti, where MEDA built the foundation of its microenterprise work, was one of the most challenging fields, especially given the devastation “The corporate world can be a moral com- of last year’s earthquake and a more munity,” said keynote speaker David Miller, recent onset of cholera. While MEDA director of Princeton University’s Faith & no longer had direct programming in Work Initiative. Haiti, it continues to maintain a pres-
Steve Sugrim photo
Natalia Zhigaltsova, MEDA project administrator in Melitopol, Ukraine, provided musical flavor on a traditional Ukrainian bandura.
ence there through its partner organization, Fonkoze, the beleaguered country’s leading microfinance provider. Anne Hastings, Fonkoze’s co-chief executive, described the organization’s long association with MEDA and its efforts to provide financial services, literacy and restoration services to thousands of earthquake victims.
“MEDA has been part of our lifeblood from the very beginning,” said Hastings, who has become an international aid celebrity and was a high-profile attendee at last fall’s Clinton Global Initiative conference in New York. “Post-earthquake, our relationship has gotten even closer as MEDA is helping us reach down to the ultra-poor.”
Much of the evening focused on MEDA’s efforts to restore horticultural vigor to historic Mennonite regions of Ukraine. A dinner of traditional foods from Ukraine was followed by an illustrated report from Winnipeg businessman Fred Wall describing his search for family roots and visits to the ancestral homes of his father and mother. Steve Wright, project field manager, reported how MEDA’s project is helping 5,000 small farmers — some tilling land once occupied by Mennonites — to achieve better production and access to higher value markets. Video clips further illustrated the project’s operation and its approach to women’s empowerment. The evening also featured a short address by Daniel Caron, Canada’s ambassador to Ukraine and a strong supporter of the project.
Three days of attention to “unleashing entrepreneurship” concluded with a challenge to turn inward and find spiritual freedom to unleash even greater service in the world.
Pennsylvania pastor Jane Hoober Peifer noted in her Sunday message that entrepreneurs, at their best, mirrored “the creative, risk-taking, problem-solving, empowering and enabling characteristics of God.” But, she added, there was still more room to grow in spiritual stature, suggesting that the circumstances of business — like meagre profits and striving to satisfy regulators — could “tether” and “tie down” the energy, ingenuity and creativity of entrepreneurs.
Even the church could sometimes seem like a tether, she said. A long drawn-out process of church discernment, for example, “can singlehandedly suck the air out of an entrepreneur like nothing else. As an entrepreneur, I would guess that it is a challenge to know how to stay engaged in a long church process.... My observation is that most entrepreneurs are much more willing to get moving, and take a little risk, than most folks in a congregation.”
But, she went on, “there are always going to be things that crimp our style, that clip our wings, that seemingly keep us from being who God created us to be – that seemingly keep us from doing what God might be calling us to do.”
Hoober Peifer said Paul’s message in Galatians 5 held some clues to how entrepreneurs could be “at their best” so that more of the world could benefit from their gifts.
That passage pointed to a spiritual freedom by which entrepreneurs could “let go” of binding ropes.
“Don’t let yourself be tethered or held down by the things of this world, or by the power of your self-serving ego,” she said, “but tether yourself instead to love – to the Spirit of Christ, the presence and love of God. Tether yourself to that place within you where Christ meets you and has set you free, which will then empower you to serve one another, to become servants to one
A challenge to business: find the spiritual freedom to unleash even greater service in the world
another.
“I hear Paul saying: You are free in Christ, but don’t be reckless with your freedom,” Hoober Peifer said. “Don’t just ... take off willy nilly into the sky — flying high just because you can. Tether yourself instead to the wind — to the Spirit of God — and be guided by that Spirit.”
The convention also featured 30 seminars on
faith, work and development, as well as tours of local attractions, businesses, and a manufacturer of western boots and hats.
During the business session of the annual meeting, MEDA bid farewell to four board members who have served their maximum terms: Lee Friesen, Winnipeg, R. Clair Sauder, Lancaster, Pa., Dave Guenther, Winnipeg, and Mel Stjernholm, Denver. It also welcomed four new directors: Peter Dueck, Arborg, Man.; Tim Penner, Harper, Kan.; Pat Vendrely, Chicago; and Nelson Longenecker, Elizabethtown, Pa.
Next year’s MEDA convention will be held Nov. 3-6 in Lancaster, Pa. ◆
What better way to engage with MEDA than to pass on the vision to a younger generation. That’s what Aaron Klassen (left) did this year. The longtime MEDA supporter and real estate developer from Waterloo, Ont., encouraged his grandson, Nathan, to attend the Calgary convention. Nathan Klassen (right) works for a farming operation in southern Ontario after recently graduating in agriculture from the University of Guelph. He says he plans to attend again as his career develops.
MEDA’s “state of the union”
Photo by Steve Sugrim
Even in beleaguered Haiti, beset by a devastating earthquake and cholera epidemic, clients like this seller of flour and pasta are resuming their livelihoods through assistance brokered by MEDA.
Following is an abridged version of Allan Sauder’s presidential report to MEDA’s annual general meeting:
The past year has been very successful, despite ongoing uncertainty in the global economy. Most gratifying, we were able to help over 9.4 million families to live healthier, happier lives through 101 partners in 45 countries.
Donated funds unleashed matching funds by a 10-times ratio. Your $3 million contributions translated into nearly $33 million of programs. Every dollar you donated was able to do the work of 11.
On the investment side the multiplying effect was even more dramatic. MEDA’s investment equity of $6 million in the Sarona Risk Capital Fund was multiplied 36 times by investment from supporters and institutional partners, creating total assets under management of $219 million — assets that are working to create new solutions to poverty.
We firmly believe that unleashing entrepreneurship is the best way to alleviate poverty. We also believe we are called to live our faith in our own work settings. Our work is not done until it is proven to be sustainable, replicable, scalable and measureable.
For the past six years, MEDA has enjoyed unprecedented growth and innovation, reaching more of the world’s poor than ever before. Much of what we have done and learned is now part of mainstream development programming around the world.
As we set out to plan our next three years, we asked “Where are the new opportunities to serve the poor, to use our unique faith-business-development approach to create innovations that others can use?” We came up with eight strategic areas where MEDA has an opportunity to grow as a global leader.
Agriculture: With over 50% of households in the developing world still dependent on small-holder farming, and the need to double global food production in the next 50 years, MEDA will build on its experience to deliver market-driven solutions that enable millions of small farmers to compete profitably in local and global markets.
Health: The economies of many countries continue to be disrupted by endemic diseases that can be substantially reduced through improved availability of drugs and health services. MEDA has proven that effective private sector innovations can contribute significantly to this goal. Our insecticide treated mosquito net program in Tanzania now has more than 15 million nets in use and is saving over 90,000 lives every year — mostly children and pregnant women. We plan to diversify and grow beyond insecticide treated nets and add three new countries.
Women’s economic development: Women-headed households are among the world’s poorest, and we intend to increase programming in this area so that millions of women will become respected and valued participants in market systems. MEDA’s global leadership in this area was recently underscored by a U.S. government evaluation of our first project in Pakistan — helping homebound women sell better and more profitable hand-embroidered
fabrics to the markets in larger cities. The study found that over three years rural embroiderers and sales agents received almost $3 million in increased income, for a total project cost of only $600,000 — nearly a five-toone benefit cost ratio. Of eight projects in Pakistan that underwent this evaluation, ours was the only one to show a positive benefit/cost ratio.
Rural financial services: Access to rural financial services is vital to improved small-holder agriculture and for creating rural off-farm incomes, especially for women and youth. MEDA’s experience in providing financial services for micro, small and medium businesses in rural value chains is highly valued by partners eager to expand their services to rural clients and to develop financial services that meet their needs. One of those, IMON in Tajikistan, now has a vibrant rural, agriculture based portfolio of clients — in a country where it was said that farmers will not repay. In the first two years, 10,000 loans had a default rate of zero.
Youth and financial services: MEDA will build on its notable successes in developing financial services and entrepreneurial opportunities for a burgeoning and restless youth population in Egypt and Morocco, and will help
Strength amid schizophrenia
other financial service providers to recognize and respond to the potential of this market. We believe that building on the hopes and dreams of youth and giving them concrete opportunities for a better life will go a long way toward creating a more peaceful world. Deposit mobilization: Savings is critical to the economic sustainability of households, small businesses, and communities — especially for the poor who lack other social safety nets. MEDA will use its well-regarded expertise in this area to help microfinance partners develop deposit mobilization programs and transform into regulated banks. We have just signed contracts with the International Finance Corporation in Washington to provide this expertise to microfinance banks in Yemen and Syria. Small and Medium businesses: The next area of focus falls within what is called impact investing, led by Sarona Asset Management. Possibly the only positive effect of recent gyrations in the global financial markets is a new interest among investors in using their money to make a difference. Leading the way is a new fund which directly responds to our strategic interest in Small and Medium (SME) businesses. This sector is the missing or underdeveloped driver in many developing economies. MEDA has proved to the global investment community that the microfinance sector is an investible asset class. We now seek to do the same in the SME sector, where returns
While the global economy had suffered “schizophrenia,” to the poor and potentially to investors will MEDA’s financial picture in 2010 was “strong and grow- be even more significant. ing,” treasurer Tom Bishop told members at the Annual Last year we announced the creation of General Meeting. the Sarona Frontier Markets Fund, a fund
“In spite of continued high unemployment, mounting budget of funds that will invest with private equity deficits and fragile securities markets worldwide, MEDA’s growth and fund managers around the world who have funding contracts and donations increased substantially this past fis- proven they are capable of taking a risk with cal year,” he said. small and medium enterprises and getting
Revenues had increased 31 percent, contributions 22 percent, reasonable returns, and who share MEDA’s and grants and contracts 34 percent — “great financial results for values of investing to benefit the poor. these schizophrenic economic times.” The fund has already completed its first six
Bishop said “schizophrenic” was used deliberately because it investments in private equity funds, includsuggested “paranoia, anxiety, fear, irrationality, disillusion, disorgan- ing funds focused on SMEs in Mexico and ization and dysfunction.” Amid sluggish job formation and housing Africa; a renewable energy fund that invests starts and souring domestic equity investments, the middle class had in India and Philippines; and a fund that become choked with debt, foreclosures and job displacement while invests in agribusiness SMEs in India. the rich got richer at a faster pace, he said. A growing association: MEDA plans
Although few were spared the impact, “I am sure none of us to build on our association of supporters have experienced this more than the poorest of the economically by engaging more younger people, other active, whom we define as our MEDA clients,” said Bishop. Over the Christian denominations and business/ past year MEDA had provided “a helping hand to millions of families professional people in North America and thereby unleashing their own entrepreneurship to build themselves Europe. At this point we are reaching only and their families a better future.” five percent of Anabaptist households, our
He reassured supporters that MEDA’s global operations were primary base of potential supporters. carefully monitored. “This year 93 percent of the operations were We have set bold growth targets. We subject to independent external audit, and six of the remaining seven are looking for private contributions to reach percent of the operations were subject to our internal audit review,” $3.7 million, up 11 percent from this year, all Bishop said. ◆ of which will be significantly multiplied, allowing us to reach over 19 million families. ◆
