Students and U.S. Microfinance Final Report by raven clawer

2010

How can Student Microfinance Clubs Help Scale Microfinance in the U.S. through Partnerships with Microenterprise Development Organizations such as ACCION USA? Report to ACCION USA

Linda Peng Faculty Advisor: Dr. Lori Leachman August 2010

Linda Peng – August 2010 (edited September 2010) Table of Contents Acknowledgments ......................................................................................................................................... 4 Summary of Summer Internship Tasks.......................................................................................................... 4 I.

Preface .................................................................................................................................................. 5

II.

Research Methodology ......................................................................................................................... 6

III.

Background: U.S. Microenterprise Facts and Figures ....................................................................... 7

IV.

Market Research Findings ............................................................................................................... 11

Student Microfinance Initiative Types ................................................................................................ 11 A) Completely student-led, university-recognized student clubs ............................................................ 11 Category A ........................................................................................................................................... 11 B) Organizations that operate “off-campus” as non-university recognized student-led non-profits ..... 12 Category B ........................................................................................................................................... 12 C)

Organizations that are primarily student-led but guided by full-time faculty advisors. ................. 13 Category C ........................................................................................................................................... 13

B. Summary of Student Microfinance Initiative Achievements .................................................................. 14 (1)

Students as Service Providers to Local Entrepreneurs ............................................................... 14

(2) Students as Fund Raisers ................................................................................................................... 19 (3) Students Supporting Entrepreneurs Abroad ..................................................................................... 20 SNAPSHOT – Students Supporting Microentrepreneurs Abroad ....................................................... 20 (4) Students Consulting MFIs or non-profits........................................................................................... 21 (5) Students Hosting Conferences on Campus ....................................................................................... 21 III. ACCION USA-Student Club Partnership Potential Discussion ................................................................ 22 V.

The Challenges of Engagement ........................................................................................................... 23

VI.

Summary of Market Research Findings .......................................................................................... 24

VII.

Findings from Survey....................................................................................................................... 25

Student Demographics................................................................................................................ 26

Student Commitment to Clubs ................................................................................................... 28

Student Motivation ..................................................................................................................... 28

Club Activities.............................................................................................................................. 30

Needs and Values........................................................................................................................ 31

Potential for Engagement ........................................................................................................... 33 Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng â&#x20AC;&#x201C; August 2010 (edited September 2010) Summary of Survey Findings ................................................................................................................... 34 VIII. How can Students Help Scale Microfinance in the U.S. through partnerships with MDOs such as ACCION USA? .............................................................................................................................................. 35 Conclusions and Recommendations to ACCION USA for Engagement ....................................................... 35 The ACCION USA-Student Partnership Model ........................................................................................ 37 A.

The Website ................................................................................................................................ 39

The Campaigns ............................................................................................................................ 40

Summary of Potential Values Added by Partnership Program ....................................................... 44

Recommended Partnerships with Non-Student Organizations ...................................................... 45 a.

Campus Kiva ................................................................................................................................ 45

MoreMarbles.com ...................................................................................................................... 45

MFIConnect ................................................................................................................................. 45

Gumball Capital ........................................................................................................................... 45

$2 Dollar Challenge ..................................................................................................................... 45

ACCION International .................................................................................................................. 45

Catchafire .................................................................................................................................... 45

VI. A.

LearnVest Ambassador Program ................................................................................................ 46

DoSomething.org ........................................................................................................................ 46

Grameen U .................................................................................................................................. 46

The One Campaign ...................................................................................................................... 47

VII.

Best Practices from Other Student Programs ............................................................................. 46

Final Table of Findings and Recommendations .......................................................................... 47

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010)

Acknowledgments Thanks go to the Sanford School of Public Policy at Duke University and the corresponding individuals within it – Professor Alma Blount, first, for invoking within all of us in her Spring 2010 seminar questions of “border crossing” – and to Dr. Lori Leachman, who began advising me on this project in the Spring and has continued to be a source of motivation and wisdom for me this summer. Thanks also go to Professor David Guy at Sanford for wisely and patiently responding to all my “letters home,” and to Alejandro Martinez – my contact person at the Duke IRB – who helped me put together a good first standardized research proposal in May. My summer experience would not have been possible without the welcome from the staff at ACCION USA. My gratitude goes especially to Erica Dorn for her enthusiasm and her patience; to Jim Moore, Elizabeth Garlow, Paul Quinteros, Elenor Denkor, Laura Kozien, and Ashley Wessier for their time and expertise; and to my fellow interns at ACCION USA (Annie, Amelie, Cesar, Keith, Andrea, Philip, Jill, Jackie, Collette, Natalie, Nancy!) whose camaraderie made my summer. To the Student Partnerships Project team at the Microfinance Council (Erica, John, Suzanne, Erin, Devin, Igor, Annie, Jim, Amelie) - you rock! Thank you for the experience of brainstorming with me through the implementation of this project. Here in this report is a significant part of the market research. I apologize for the delay. Finally, I applaud the students and faculty members who have taken the potential for engagement within the microfinance sphere and made it their own. Thank you for being so inspiring.

Summary of Summer Internship Tasks  Electronically surveyed 86 individuals involved in 28 different student microfinance organizations  Interviewed one manager of a small business, representatives from 13 student organizations, and representatives from 4 potential partner organizations for ACCION USA’s student program  Observed operations with clients at The Elmseed Enterprise Fund (Yale) and The Intersect Fund (Rutgers)  Attended the Microfinance USA 2010 conference in San Francisco in May and wrote up an eleven-page summary of takeaway points  Met with the Microfinance Council and designed an internal Google site for Microfinance Council members and interns to collaborate on the work to launch ACCION USA’s student partnerships project  Designed the first look of ACCION USA’s website for students, which features multimedia pulled from YouTube and slideshare, a forum, areas for ACCION USA to upload documents about its student campaigns, and a clear way for students to get involved. The website can be found at www.studentsforaccion.org.  Wrote a final report to ACCION USA that summarized my findings and included final recommendations for engaging students in U.S. microfinance

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010)

I. Preface "The synergies seem natural—students have a local presence, talented training pools, resources, and the ability to raise awareness both on and off campus settings, while many professional microenterprise development organizations have experience and capacity in areas such as lending and servicing. What will incentivize both students and MDOs to work in concert rather than in parallel? The first step is better awareness of this alliance of student groups among microenterprise development organizations, and an articulation of the benefits the student groups bring to the table. The second will be finding opportunities where both sides can have their needs met." - Luz Gomez and Elaine Edgcomb, October 20091 Much of the inspiration for ACCION USA’s student partnership explorations comes from Elaine Edgcomb and Luz Gomez's June 2009 FIELD paper: "Can Student-run Microfinance Organizations Help Address Issues of Scale and Sustainability in the U.S. Domestic Microenterprise Industry?" Edgcomb and Gomez visited The Intersect Fund near Rutgers and The Elmseed Enterprise Fund near Yale, interviewed representatives of five additional programs, and electronically surveyed another 16. They followed up their research paper with a conference in October 2009, which brought eight student microfinance organizations together for a conference hosted at Rutgers University. Edgcomb and Gomez’s main findings included the following: 

 

Student organizations' capacity to deliver training and technical assistance is high due to easy access to talent and to university and community resources, and is higher than their capacity to lend. Students' potential for mobilizing student engagement and community involvement is high. “New student initiatives are informally learning from earlier efforts and innovating. Several have voiced an interest in a more formal exchange, and in the possibility of a hub to provide services to support other similar programs regionally or nationally, providing a common infrastructure and professional leadership.” (Edgcomb and Luz 2009)

When I initially approached Erica Dorn at ACCION USA about completing a community-based research project in microfinance, I had no idea that I was about to embark on a research project about students. It was not immediately obvious to me that this research topic could be viewed as “border crossing” work, a theme emphasized by my Service Opportunities in Learning class that was providing me with my research grant. In addition, I was a little worried about the inherent risk involved in designing a research project around students over the summer: students are often abroad, busy with internships, and potentially not checking their school e-mail accounts. Both anxieties, fortunately, proved to be unfounded. Thanks to the wonders of technology (i.e. Google, Facebook stalking, and the MFIConnect.org forum), I ended up scheduling interviews and 1

Edgcomb, E. and Gomez, L. (2009). “Can Student-run Microfinance Organizations Help Address Issues of Scale and Sustainability in the U.S. Domestic Microenterprise Industry?” Microenterprise Fund for Innovation, Effectiveness, and Dissemination (FIELD).

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) receiving comments from students and faculty members working across the field in both domestic and international microfinance. I believe that my success in getting more responses than I had expected can be attributed not so much to the wording of my unsolicited e-mails (though having the backing of an official IRB-approved format certainly helped), but to the direct passion and generosity of the individuals who were intrigued by my research – and curious about each other. My job, I thought initially, was to assess the “opportunities and challenges” for student-led microfinance initiatives on campuses in the United States. My research question evolved, however, after I discovered the incredible potential of students who were already freely volunteering their time to support microfinance. I wondered: how could their energy be channeled to support the domestic microenterprise industry in specific, and what are the potential values added to both players in an ACCION USA-student partnership program? Mid-June, I changed the focus of my research question to reflect the larger one posed in the title of this paper.

II. Research Methodology I began my community-based research project by attending the Microfinance USA 2010 Conference in San Francisco in May. I listened closely to the panel on student-led microfinance initiatives and talked informally with some students about their involvement in microfinance. The conference was very much a learning experience, introducing me to the emerging innovations and challenges of the domestic microenterprise field. In June, I conducted two site visits: one at The Intersect Fund in New Brunswick, NJ and the other at The Elmseed Enterprise Fund in New Haven, CT. I observed operations at each site and interviewed managers of the program there.2 In July, I started focusing heavily on obtaining responses to my survey3 to past and present members of student microfinance clubs. In my e-mails, I explained my research and the opportunity for four randomly selected participants from the first pool of 100 respondents to win one of two MP3 players (donated by Erica Dorn, ACCION USA Manager of Volunteer Partnerships) or two $15 gift cards from amazon.com. 4 Ultimately, I was able to canvass 86 responses from 28 schools. Throughout July and August, I also focused on scheduling interviews with representatives from different organizations. In addition to my interviews with The Intersect Fund and The Elmseed Enterprise Fund, I interviewed one manager of a small business, 13 student microfinance club leaders, two CEO/Founders of online platforms that utilize student volunteers, and four faculty-advised student 2

At The Intersect Fund, I spoke to one of the co-founders of the organization (a recent graduate). At The Elmseed Enterprise Fund, I spoke to Elmseed’s first summer manager (a student). 3

The actual survey can still be found online at http://www.tinyurl.com/studentmicrofinancemembers.

Because there were only 86 participants in the end, only two MP3 players and one gift card were awarded.

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) microfinance initiatives. The majority of the interviews were conducted via phone or skype; a few of the comments I received were solely over e-mail. A master list of my sources can be found in Appendix C. 5

III. Background: U.S. Microenterprise Facts and Figures The microenterprise field in the United States is a relatively new industry, emerging only in the late 1980s when corporate downsizing, changing demographics, and an emerging interest in selfemployment combined to augment the number of microenterprises in the United States6. Since then, the number of microenterprise development organizations (MDOs) – or non-profits that typically provide business training and business loans under $35,000 to small enterprises with five or fewer employees – has risen as well. In 1992, MDOs were a force of 84 in number; by 2002, the force had grown to over 550.7 The importance of the existence of MDOs, in addition, is supported by studies done by trade associations such as the Association for Enterprise Opportunity (AEO) and the Microenterprise Fund for Innovation, Effectiveness, and Dissemination (FIELD). 17.9% of American jobs are in microenterprises8 -- and, according to a data sheet published by the AEO in 2008, microenterprises are estimated to make up 88% of all businesses in the United States. 9 According to a longitudinal study of microentrepreneurs in 1998, the majority of microentrepreneurs in the U.S. are comprised of women, are relatively well-educated, and are minorities. 10 MDOs typically come into play for low-to-moderate-income small business owners who – due to factors such as insufficient credit history due to their immigrant status, low credit scores, insufficient loan size requests, or young age of their businesses – look to MDOs to provide the financial services that traditional banks would not provide. In academic research, MDOs have been lauded for generating

Note: To see all graphs and comments produced from the survey, please see Appendix A (Parts I and II). For all survey data and access to the pivot table, please see Appendix B. 6

Microenterprises are defined as businesses that can benefit from a loan of under $35,000 and have five or fewer employees 7

Servon, Lisa .J. (2006). “Microenterprise Development in the United States: Current Challenges and New Directions.” 8

Berkman, Emily (2006). “Microloans as a community reinvestment act compliance strategy.” New York University Journal of Law. 9

Association for Enterprise Opportunity (2008). “Microenterprise Business Statistics in the United States.”

<http://aeoworks.org/images/uploads/pages/US-MEBS-2008(1).pdf> 10

Association for Enterprise Opportunity (2005), “Microenterprise development in the United States: an overview.” <http://aeoworks.org/images/uploads/pages/Fact_sheet_Overview%20of%20US%20micro.pdf>.

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) social capital through the networks that they create.11 In addition, academic studies have pointed to microenterprise development as an appropriate economic development strategy for many regions in the United States, with recommendations to policy makers to incorporate it more fully into their economic development plans.12 The interesting relationship that exists between many banks and non-profit microlending organizations in the United States is due in large part to the Community Reinvestment Act, which was enacted by Congress in 1977. The act stipulates that banks must provide adequate access to credit to the lower-income populations in the neighborhoods in which they operate. Many banks have opted to comply with this act by issuing low-interest loans to CDFI-certified intermediary non-profit lenders like ACCION USA, which then take on the risk of disbursing the money to the intended populations. Traditional banks’ reasons for not directly administering a microloan program are understandable. The high administrative costs of issuing a loan, coupled with the relatively low return on interest from the small loan sizes and the higher default risk of a lower-income clientele reduces the profitability potential of these engagements. Since the recent economic recession, however, anecdotes have pointed to the shortage of available credit for small businesses in the United States and the increasing need and importance of services offered by MDOs like ACCION USA.13 Even so, questions remain about the scalability of microenterprise in the United States. If estimates made by FIELD and AEO suggest that “10 million entrepreneurs and potential entrepreneurs face barriers to accessing mainstream capital and other business development services,” why are there only a few thousand loans being granted by microlenders in the industry every year?14 Scale, according to a FIELD publication in May 2010 called “Dollars for Dreams: Scaling Microfinance in the U.S.,” has always been a challenge of the domestic microenterprise industry. Defined simply as the goal of “serving large numbers of individuals,” scale necessitates the achievement of two key themes: (1) increased market penetration; and (2) economies in service delivery. The latter theme refers to the high administrative costs of servicing a microloan, or the traditional reasons that deter banks from becoming direct microlenders. The former theme refers to microlending organizations’ market penetration challenges:

Lyons, Thomas S. (2000). “Building social capital for sustainable enterprise development in country towns and regions: successful practices from the United States.” Center for Research on Entrepreneurship and Enterprise Development, University of Louisville. 12

Servon, Lisa J. and Doshna, Jeffrey P. (2000). “Microenterprise and the economic development toolkit: a small part of the big picture.” Journal of Developmental Entrepreneurship. 13

Shevory, Kristina (2010). “With squeeze on credit, microlending blossoms.” New York Times.

<http://www.nytimes.com/2010/07/29/business/smallbusiness/29sbiz.html>. 14

Edgcomb, E., Klein, J.A., and Gomez, L. (2010) “Dollars for Dreams: Scaling Microlending in the United States,” Microenterprise Fund for Innovation, Effectiveness, and Dissemination. <http://fieldus.org/Publications/DollarsForDreams.pdf>

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) “As microlenders have grown they have generally reached a plateau in their individual markets, either exhausting the easiest-to-reach entrepreneurs who may be geographically close, or who become aware of their services through proven outreach strategies (such as referral partnerships with local technical assistance organizations or local banks)” 10 ACCION USA, easily one of the largest MDOs in the United States, offers a variety of loan products between $500 and $50,000. It has lent over $119 million to over 19,000 small business owners nationwide since 1991and offered free financial education seminars and online webinars to 14,532 participants since the launch of its financial education program in 2002. According to recent survey data captured from 164 U.S. microlenders10, the median number of loans disbursed in the industry is 12 loans and $178,471 per year (FY2008). In 2008, ACCION USA disbursed 142 times as many loans the median number of loans captured by that survey, and eight times as many loans as the median number of loans disbursed by a sample of five “SCALE Academy” microlenders targeted by FIELD’s report on scaling microfinance.

Table 1. Cross-Comparison Median Lending Figures (FY2008) Organization # Loans Disbursed Dollars Disbursed ACCION USA* (n=1) 1,708 $11,355,818 SCALE Academy Microlenders 196 (Median) $1,665,472 (Median) (n=5)** Other Microlenders 12 (Median) $178,471 (Median) (n=134) (n=131) Source: Dollars for Dreams: Scaling Microlending in the U.S. * ACCION USA merged with ACCION New York in June 2008. This reported figure from ACCION USA takes into account ACCION New York’s portfolio in 2008. **FIELD’s “Scale Academy” microlenders identified by these numbers are ACCION USA, Opportunity Fund, Justine Peterson, Mountain Bizworks, and ACCION New Mexico-Arizona-Colorado. Like many of its peers, however, ACCION USA has suffered from understaffing challenges and the recent economic recession. In addition, high administrative costs and low returns on interest maintain the necessity of fundraising for sustainability. According to FY2008 figures, the average cost of administering a loan at ACCION USA – which can be calculated by dividing Program Costs by the Number of Loans Disbursed in that year – was $5753.57.15 ACCION USA’s lending numbers have also decreased since 2008, a decrease that can be attributed to the recent economic recession.

ACCION USA FY2008 Program Costs = $9,827,099. $9,827,099 ÷ 1,708 loans = $5735.57. These numbers come from ACCION USA’s Form 990.

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) Table 2. Figures (FY2005-FY2009) Year

Number of Loans Made

Total Amount Lent

Average Loan Size

2005 546

$2,734,479

$5,008

2006 934

$5,857,614

$6,272

2007 1,086

$7,567,751

$6,968

2008 1,708

$11,355,818

$6,649

2009 629

$4,295,167

$5,124

Source: ACCION USA website

In its “Dollars for Dreams” report, FIELD explains the impact of the economic recession on MDOs: “As the crises have worn on, lenders have experienced shifts in demand that are challenging. In some instances, demand from traditional constituencies has waned as entrepreneurs, who earlier might have been planning for growth, are now seeking strategies to survive the recession. Others chose not to start or continue their businesses in reaction to news about the economy. On the other hand, microlenders saw increased inquiries and applications from two sources: entrepreneurs who previously might have been able to secure bank financing, and individuals who had lost their jobs or were looking to create a secondary source of income. Although demand from these sources increased, some of these applicants suffered from deteriorating business cash-flows because of economic conditions or presented credit reports that showed patterns of risky consumer credit management. The effect on Academy microlenders has been that they have had to work harder to make good loans. Although inquiries are up, and applications increasing, finding new clients who can manage debt successfully has been a challenge.” 10 According to the FIELD report, however, the economic recession may have also positively helped create growing awareness of the importance of savings programs, alternative loan products and financial education. With efforts to expand its financial education program and test out new products such as the green loan, pre-paid credit cards, secured loans, and loans for women, ACCION USA is no exception to the MDO movement towards greater innovation. If students are to help address issues such as market penetration and high service delivery costs for the domestic microenterprise field, then clear expectations of their capacities to support microenterprise development must be discussed. The next section delves into a study of what student microfinance organizations are doing today. 10

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010)

IV. Market Research Findings A. Student Microfinance Initiative Types The youth of the student microfinance initiative movement in the United States is remarkable. Although the first microfinance club (The Elmseed Enterprise Fund at Yale) was founded in 2001, the majority of the student microfinance clubs in the United States seem to have been founded between 2007 and 2010 – or within the past three years. The accolades they’ve received in that short span of time, furthermore, have been impressive. Many of the student-led microfinance initiatives featured in this study have been recognized by the Clinton Global Leadership Institute. Others have been awarded grants from foundations and sponsorships from corporate donors. One recently founded student organization at Washington and Lee University was just granted a $10,000 prize from Davis Projects for Peace to establish a microfinance initiative with a partner MFI in Haiti. The activities that many of the student organizations typically participate in – activities such as fundraising, participating in the Gumball Challenge or $2 Per Day Challenge, and coaching microentrepreneurs – have also been prone to being profiled by local and university newspapers. According to my findings, student-led microfinance initiatives in the U.S. can be categorized in the following three ways: A) COMPLETELY STUDENT -LED, UNIVERSITY-RECOGNIZED STUDENT CLUBS; B) NON-UNIVERSITY - RECOGNIZED STUDENT -LED NON -PROFITS; AND C) FACULTY-GUIDED STUDENT -LED MICROFINANCE PROGRAMS.

A) Completely student-led, university-recognized student clubs Category A clubs’ most common activities include fundraising to support microentrepreneurs on KIVA and raising awareness of microfinance on campus by hosting conferences or panel events. The more ambitious ones are consulting for MFIs or non-profits, working directly with entrepreneurs abroad, or working directly with entrepreneurs in their local communities on small-scale coaching or lending projects. Examples: BR Microcapital (Cornell), Cambridge Microfinance Initiative (Harvard), Elon Microfinance Initiative, Microfinance Working Group (Columbia), Davidson Microfinance Club, Duke Microfinance Leadership Initiative, Goizeta Microfinance Club and Fund (Emory), Students 4 Sustainbility (George Washington University), Haverford Microfinance Club, Trockman Microfinance Initiative (Indiana University), Lehigh Microfinance Club, Messiah College Microfinance, NYU Microfinance Initiative, OWL Microfinance (Rice), Point Loma Nazarene University, Princeton University Microfinance Club, SEED (University of Virginia), MicrOlin (Washington University in St. Louis), University of Chicago Microfinance Initiative, University of Pennsylvania Microfinance Club, Soka University of America Microfinance Club Strengths of Type A Clubs: 11

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) 

Club achievement and entrepreneurial potential is high, since leadership is often changing and open to new ambitions and visions



Clubs often have access to campus space, student club funds, and faculty support

Challenges of Type A clubs: 

Constantly changing leaders means constantly changing visions and knowledge bases that are not passed on to new members



There are often legal issues associated with club investment of funds. (Are donations taxdeductible, and who pays the taxes for those investments?)

B) Organizations that operate “off-campus” as non-university recognized student-led non-profits Category B organizations are non-profits that are typically led by recent graduates comprised of a dedicated crew of part-time volunteers who dedicate more than a couple of hours each week to the organization. Type B organizations often have ambitions to scale, are more likely to know their target population very well, and more likely to launch innovative services that meet the needs of their clientele. Examples: The Intersect Fund (Rutgers), The Elmseed Enterprise Fund (Yale), Community Empowerment Fund (UNC), Global Youth Connection (Wooster College), Capital Good Fund (Brown) Strengths of Type B clubs: 

Student-led non-profits that offer extensive services to local microenterpreneurs enjoy the costcutting advantage of being able to recruit many quality part-time student volunteers from their alma maters. o



Ex. At the Intersect Fund, students can apply for positions such as “program director” and “public relations director,” positions which require an estimated time commitment of 15 hours per week. The Intersect Fund also offers temporary positions such as “tax preparer,” where students are expected to take a tax prep course, prepare tax returns for low income entrepreneurs, and commit at least 5 hours per week during tax season.

Leaders are very serious about their organizations’ missions and are willing to devote full time and energy to help the people they serve

Challenges of Type B clubs: 12

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) 

Challenges typical of those seen by regular non-profits. Collaboration and entrepreneurship is key to success.

C) Organizations that are primarily student-led but guided by full-time faculty advisors. Category C organizations are often incorporated into a professor’s program or course, and of the three categories, have the most longevity potential. The geographic focus of these programs vary, but the professors understand the continuity challenges involved in student engagement and combat it by recruiting through their course or program a new batch of participants every year. Professors often cite the student learning experience – rather than the impact of their work – as one of the core missions of their programs. Examples: CHOMI (Stetson University), GLOBE (St. John’s University), Notre Dame Microfinance Initiative, La Ceiba (University of Mary Washington), Bentley Microfinance Group, University of St. Thomas MicroCredit Program Strengths of Type C clubs: 

Continuity challenges are mitigated because of the full-time position of the professor(s)



Student volunteers not in leadership positions are likely to take the work more seriously because of grade incentives or the presence of an authority figure on the team

Challenges of Type C clubs: 

Although professors are long-term, student involvement will always be temporary. Project timelines are necessarily short – from one to two semesters



Programs are not very easily open to new ideas. A Type A club can be mobilized to participate in a new fundraising challenge, for example, but a similar idea cannot be formally introduced to a professor-led program because such activities lie may lie outside the original mission of the program.

Summary of Student-led Microfinance Organization Types

Count In This Study*

A) University-recognized student clubs

B) Non-university recognized student-led non-profits

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) C) Primarily faculty-guided student microfinance organizations

*See Appendix C for a complete list of the organizations observed or interviewed

B. Summary of Student Microfinance Initiative Achievements (1) PROVIDING SERVICES TO LOCAL ENTREPRENEURS IN THEIR COMMUNITIES (2) RAISING FUNDS TO LEND TO ENTREPRENEURS THROUGH KIVA OR PARTNER MFIS (3) SUPPORTING ENTREPRENEURS ABROAD (4) CONSULTING MFIS OR NON-PROFITS (5) INVITING ILLUSTRIOUS SPEAKERS TO COME SPEAK AT THE CONFERENCES THEY HOST ON CAMPUS

(1) Students as Service Providers to Local Entrepreneurs SNAPSHOT – Students as Service Providers to Local Entrepreneurs School

Status

Services

The Intersect Fund New Brunswick, NJ (Rutgers University)

501(c)(3), recent grad fulltime staff, supported by undergraduate and graduate students

Loans between $500 and $5000 (0% default rate so far), business training course, one-on-one mentorship with a MicroMentor professional, Quickbooks training, free business tax preparation (for those earning less than $50,000 a year), graphic and website design, semi-annual gala for clients and community partners, access to a computer lab

The Elmseed Enterprise Fund New Haven, CT (Yale University)

501(c)(3), one summer manager continued Elmseed activities for the first time over the summer in 2010, run by Yale undergraduates

Loans of $2000 (12% default rate so far), business training class (English and Spanish), one-on-one consulting, business plan writing program

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng â&#x20AC;&#x201C; August 2010 (edited September 2010) Big Red Microcapital (BRM) Johnston County, NY (Cornell Business School)

Graduate student organization under the Johnson School Center for Sustainable Global Enterprise at Cornell University

One-on-one coaching, loans from $5000 to $15,000

CHOMI Deland, FL (Stetson University)

Stetson University class taught by two faculty members; program (a component of the class) is executed by Stetson students

Workshops on business plan construction (integrated with class), loans of $1000 to $4000

Capital Good Fund New Providence, RI (Brown University)

501(c)(3), recent grad fulltime staff, Americorps staff, and Brown undergraduates

Business loans between $1000 and $5000 (1 loan default of 40 total), immigration loans of $875, and green loans of $200. Also offers business basics workshop.

Notre Dame Microfinance Initiative South Bend, Indiana (Notre Dame University)

Notre Dame undergraduates working in conjunction with a faculty-taught program under the Mendoza College of Business.

Business training workshops (to launch Fall 2010), faculty-advised student consulting teams

Community Empowerment Fund Orange County and Durham, NC (University of North Carolina)

501(c)(3), recent grad fulltime staff, undergraduates

6-week business training course, 10-week savings program, microloans, one-on-one coaching

Cambridge Microfinance Initiative Boston, MA (Harvard University)

Harvard undergraduates

Small business training and networking conference

Student-Led Domestic MF Initiatives Student-led organizations that provide services to local microentrepreneurs are involved in a variety of activities, from lending to coaching to offering savings programs and platforms for local microentrepreneurs to showcase and sell their wares. A few student-led organizations have ambitions to scale nationally, but most seem to be focused on targeting only their local communities. The former, however, are an interesting set;

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010)

Technology Smarts "The majority of our clients seem to need help with marketing and acquiring new customers. As such, working with them on how they can leverage the internet is often a logical place for us to help. We have talked to clients about things such as: how to optimize their website, how to increase traffic to their website, how to use Google Analytics, and how to use Facebook for marketing purposes." – Alessandra Zielinski, BRM Director

One of the competitive advantages that students seem to offer is their savviness with new technology. Formatting word and excel documents, writing business plans, writing marketing plans, and doing simple online research have been of great help to many of the clients served by student organizations. Students have also demonstrated the smart use of new technologies through their student organization websites. At both The Intersect Fund and The Capital Good Fund, volunteers apply for positions through a Wufoo form – a free application that offers websites professional style forms. To track all shared documents and all e-mails that were exchanged with clients throughout the history of the organization, The Intersect Fund and the Elmseed Enterprise Fund use the services of highrisehq.com and backpackit.com. The Intersect Fund also uses offers visitors to their website the opportunity to book free 30-minute one-on-one consulting sessions or 90-minute tax preparation sessions at The Intersect Fund’s office through an application from a website called bookfresh.com. At the Community Empowerment Fund, students use Google Spreadsheets to provide a valuable resource for other non-profits servicing the homeless population in their local communities. The embedded 16

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) Google document, called the “Orange County Resource Database,” includes listings of all the possible resources that might be of help to their target clientele, listing local food banks and shelters as well as communication lines and employment networking offices. Education vs. Lending capacities The lending programs of student organizations seem to be relatively small-scale; the Elmseed offers flat loans of $2000, The Intersect Fund and The Capital Good Fund only offer loans up to $5000, and BR Microcapital offers loans between $5000 and $15,000. The Elmseed Fund has lent out $56,400 to more than 20 clients since its founding in 2002; the Capital Good Fund has lent out more than $46,000 to 40 entrepreneurs since its founding in 2008; BR Microcapital has not lent out any funds since its founding in 2009. However, many students seem to have proven themselves in their capacities to serve local microentrepreneurs beyond the loans. At the Cambridge Microfinance Initiative at Harvard, students have hosted free basic web development, marketing, presenting, and legal issues conferences for local entrepreneurs. Since the launch of its 8-week “Build Your Business” curriculum for entrepreneurs, The Intersect Fund has also offered free orientation classes for interested clients. In Fall 2010, the Elmseed Enterprise Fund is planning to host a day-long “Social Media, Marketing, & Low Cost Solutions for Small Businesses” conference on campus – and inviting professionals from ACCION USA, the SBA, and accounting and consulting firms to speak. Participants are often required to register online to attend, and the popularity of these workshops has been high. Earned Income “One simple check on the worth of training is whether participants will pay a small fee to attend. Another simple check is whether training is voluntary or mandatory.”16 - Jonathan Morduch and Mark Schreiner, from “Replicating microfinance in the United States: Opportunities and Challenges” (2001). A few of the student organizations profiled in this study seem to have passed these checks. The Intersect Fund offers its Build Your Business orientation courses for free, but charges either $100 or $250 for the complete 8-week, three-hour-each-week sessions (the fee depends on the income of the participant and the size of the household). Admission to this program is competitive, and participants (usually new entrepreneurs) go through a curriculum designed to teach them about crafting a mission statement, analyzing a business opportunity, sizing up the competition, cost structure development and 16

Morduch, Jonathan and Schreiner, Mark (2001). “Replicating microfinance in the United States: Opportunities and Challenges.” EconWPA. <http://www.nyu.edu/projects/morduch/documents/Morduch%20and%20Schreiner%20on%20MF%20in%20the%20US.PDF>

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) pricing strategies, finding the target consumer, registering a business, etc. The curriculum was developed by the founders of The Intersect Fund, has gone through several developments, and is continuously being improved. (Each live course as well as each potential instructor-in-training is videotaped, and an adult education professor from Rutgers University serves as an advisor.) The Intersect Fund also offers services such as graphics design and Quickbooks services to graduates of its Build Your Business program for a small fee. At The Elmseed Enterprise Fund and The Capital Good Fund, clients are also charged fees (usually between $25 and $30) for access to the business training classes and skills-building conferences hosted by the students. Innovations Finally, students have demonstrated remarkable willingness to change their program offerings to meet the needs of their clients. After requiring business plans from its loan clients for many years, for example, The Elmseed Enterprise Fund piloted its first business plan workshop this summer – and plans to offer it as a program in the fall. After noticing the importance of savings over simple access to credit, the Community Empowerment Fund launched a 10-week savings program that offers financial literacy education, mandates weekly deposits, and rewards participants with a 10% matching grant from CEF at the end of the program. At Big Red Microcapital, where MBA students can receive academic credit for coaching local entrepreneurs in the Johnston County, NY area, students are looking into developing ways to publicize local entrepreneurs by hosting client fairs and displaying client products on campus. In Providence, RI, the Capital Good Fund was honored by the Clinton Global Leadership Initiative for the launch of its citizenship loans. The organization also recently launched its DoubleGreen credit builder loan, a $200 loan for people with no or poor credit history which pays for the installation of a programmable thermostat that can help borrowers choose the heating settings and subsequently reduce the energy costs of their home. At The Intersect Fund, the organization is looking into developing a “mobile marketplace” with the goals of hosting 12 client showcases per year throughout greater New Brunswick, launching a buylocal campaign, and getting The Intersect Fund clients online and in local stores. A fundraising drive for the campaign is being matched by an Intersect Fund partner, the Catholic Campaign for Human Development, for up to $35,000. At the semi-annual galas already being hosted for clients by The Intersect Fund, clients routinely earn up to $1000 in sales per hour, according to The Intersect Fund website. Faculty-guided Domestic MF Initiatives - SNAPSHOT CHOMI At Stetson University, Dr. Neal Long and Dr. Thaver guide CHOMI, which has been integrated into a class at Stetson. The professors teach a course called “Poverty and Microcredit.” 18

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) “In the first half of the course, students study poverty in the US and around the world. Each student develops a business plan for a business they would run, if they were going to run a business. For most of the second half, we operate a workshop series (5 workshops) on business plan construction. We match up each student with one or two community participants. The students help the community participants to develop a business plan, since the students would have already been through the process. If someone wants to apply for a loan, they have to go through the workshop series.” The workshop series has been offered more than 14 times since its founding. Surprisingly, the majority of the community participants did not end up applying for a loan; they were only interested in getting the support to get started or to improve their existing business. To many of the community participants, the idea of a business plan was an innovative thing; many were learning for the first time what a business plan was. “The workshop series has served a community need separate from the need for a loan,” according to the faculty advisor I e-mailed. Notre Dame Microfinance Club Professor Melissa Paulsen designed a two-semester long class that connects students with entrepreneurs in the community. The first class is a very theoretical introduction to microfinance; the second class gets the students out in the field working in teams with a total of 8-10 local entrepreneurs. Student groups of four team members each are matched with an entrepreneur and sign a confidentiality form to be able to look at the entrepreneurs’ financial forms and taxes. Each student team meets with the professor once every two weeks. Students also meet with their clients twice per month. Dr. Paulsen’s microfinance class has served over 40 microentrepreneurs over the past few years. In Spring 2010, the Notre Dame Microfinance Initiative – with 15-19 members – were approved by the university to work in partnership with the local entrepreneurs already served by Dr. Paulsen’s classes. The Notre Dame Microfinance Initiative plans to contact local banks for sponsorship and host a large workshop in Fall 2010 on topics related to managing cashflow and debt, reading financial statements, and finding credit. Speakers may include students and professors.

(2) Students as Fund Raisers SNAPSHOT – Students as Fund Raisers School

Impact

MicrOlin

Received $300 unsolicited donation from a

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) (University of Washington at St. Louis)

fraternity; planning to use all funds towards loans

Gumball Capital (Stanford University)

Raised over $20,000 since its founding in 2007; current Executive Director now participating in a 7-continent marathon run to raise $125,000

University of St. Thomas MicroCredit Program (University of St. Thomas)

Distributed $13,275.00 in loans on Kiva since founding in Fall 2007

Goizeta Microfinance Club and Fund (Emory Business School)

Invested $40,000 in its first year in a loan fund to IMPRO

$2 Day Challenge Microfinance Abroad (Various Schools)

University of Mary Washington raised more than $6,750 for La Ceiba the first year for Challenge week. Other schools’ successes are not reported.

Princeton Microfinance Organization

Raised $2000 to for FINCA to establish a village bank

OWL Microfinance (Rice University)

Honored at the Clinton Global Initiative in 2009 for initiatives to support microfinance; goal of raising $10,000 reached the first year. Lends primarily on KIVA and Wokai.

(3) Students Supporting Entrepreneurs Abroad

SNAPSHOT – Students Supporting Microentrepreneurs Abroad School

Activities

GLOBE Daughters of Charity – various countries (St. John’s University)

Lending and consulting. Each team has a liasion person that communicates with a representative of the Daughters of Charity, GLOBE’s field partners, who operate in over 90 countries in the world, some 76 of which are classified as developing countries. Has raised over $60,000 since its founding in Spring 2009.

Global Microfinance Brigades Various locations in Honduras

7 days spent learning about the community,

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng â&#x20AC;&#x201C; August 2010 (edited September 2010) (Chapman University, University of Southern Cailforniaâ&#x20AC;Ś TBC)

investing funds into the community, and training local inhabitants on each trip. Funds invested in the two projects so far: $800 and $1600.

Microcredit Program at University of St. Thomas KIVA clients â&#x20AC;&#x201C; various countries; expanding locally (University of St. Thomas)

Lending, Consulting. Already operating in Yucatan, Pakistan, Chile, and Turkey. Exploring domestic program launches in New Orleans and New Mexico.

Students 4 Sustainability (George Washington University)

Selling merchandise made by entrepreneurs abroad on campus

La Ceiba Honduras (University of Mary Washington) The Zambia Project (Messiah College)

Selling handbags and pouches from women entrepreneurs in Honduras, lending, consulting Started two credit and savings associations in Zambia.

(4) Students Consulting MFIs or non-profits Consulting for non-profits is a popular trend amongst MBA students, who typically complete the projects in teams and under the supervision of a faculty advisor. The idea for Moremarbles.com, a forprofit website that connects student consultants (typically MBA or undergraduate business students advised by a faculty mentor) to non-profits and small companies, was founded by a recent MBA graduate who realized the potential of student consultants. At UVA, a student organization called SEED offers free consulting services to NGOs and social entrepreneurs with an emphasis on microfinance. Since its founding in 2008, it has worked with NGOs in 15 different countries. SEED members are placed in project teams of 10-15 people. The team communicates with the non-profit or MFI via skype, e-mail, or personal meetings throughout the semester - and with 550 members on its listserv and 150 active members, it is one of the larger student organizations at UVA. One of the domestic projects that SEED students have worked on is with the Hope Community Center, a non-profit that works with the homeless in Charlottesville, Virginia. SEED helped the Hope Community Center start a number of social businesses that employs the homeless.

(5) Students Hosting Conferences on Campus 21

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) Examples of School s that have hosted conferences on campus:  Princeton Microfinance Organization  Duke University Microfinance Leadership Initiative  University of Pennsylvania Microfinance Club  SEED (UVA)  Trockman Microfinance Initiative (Indiana University)

Examples of invited speakers:

          

CGAP representatives FINCA representatives Morgan Stanley representatives Pro Mujer representatives Self-Help representatives ACCION International representatives Microcredit Summit Campaign BRAC USA founder KIVA founder Jessica Jackley Acumen Fund founder Ashoka fellows

III. ACCION USA-Student Club Partnership Potential Discussion According to the vision statements published on the websites of many student microfinance clubs, students are clearly interested in partnering with MFIs. One of Point Loma Nazarene University’s listed goals, for example, is to “establish a formal partnership with a current microfinance organization.” Although the focus was traditionally on international microfinance, interest in partnerships with domestic MDOs also seems to be on the rise. On the University of Chicago Microfinance Initiative Facebook page, students expressed interest in gaining hands-on field work experience by working with organizations such as “ACCION Chicago, Kiva, and Oekocredit USA.” The graduate student-led microfinance initiative at Emory University’s MBA Program stated on their website that they were “currently reaching out to an Atlanta-based microfinance organization and hope to share [their] business knowledge with local recipients of microfinance loans through club-held workshops.” The interest in partnerships does not come solely from students. In my interview with the manager of a small grocery store, she told me that the opportunity to be supported by a few student volunteers would be great. However, she warned me about the difference between a student “consultant” and a student volunteer: "Volunteering for small business owners is great, but that volunteering has to be in a capacity that isn’t just suggesting techniques or doing business plans for them, but that is also doing the grunt work (some not so fun tasks). Getting the grunt work done helps the student understand what the small business owner spends most of his/her time doing (and therefore, why they don’t have much time to plan things, usually). It’s also the most helpful way that the student can help the owner. "A business student is able to write a beautiful business plan, but if they haven’t worked in the business, been witness to the amount of grunt work involved in it, and all the challenges that aren’t taught in class, then the student isn’t able to write a realistic action plan. Business plans 22

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) need to be well-written in order to get funding, but they don’t need to be realistic. Action plans are needed to actually put things in place." The manager also identified for me some activities that she felt students could help with in particular:  Helping to create a Facebook page  Making spreadsheets in Excel  Putting profiles of the business up on Yelp or Facebook  Creating marketing plans that goes beyond the marketing idea and talks about realistic plans of action for flyer drop-off locations, most efficient routes, poster creation deadlines, etc.  Anything with new technology Student volunteers can probably be of the most help if they do not try to do a lot, but instead concentrate on short-term tasks, she advised. Finally, the manager recommended that the student and the microentrepreneur sit down for at least a couple of hours to identify the needs of the business and to finalize expectations of a project timeline.

V. The Challenges of Engagement Perhaps the reason there have not been more student-MFI partnerships are because of the liabilities involved with letting students get involved in providing services to the clients of the MFI. Students interested in consulting who volunteer their time with a client may be perceived as the face of the MFI, and the MFI must be careful not to have the client confuse the volunteerism of the student with the MFI’s professional capacities. A clear risk, according to a microfinance practitioner that I interviewed from ACCION Chicago, is that the client may feel that the student – and by extension the MFI – is checking up on their loan. Identities must be clearly defined before the any student-MFI consulting partnership. In addition, many of the students that I interviewed expressed many challenges facing their organizations. At some universities, the very act of starting up a club is a challenge; the university may require a faculty advisor and by-laws. According to one interviewee, it took a year for the student’s club to be founded because of the bureaucratic requirements. At the Microfinance USA conference, I met two students from Claremont McKenna College who talked about how difficult it was to find a faculty advisor for their club. Students of the newer clubs also expressed worries of potential challenges in fundraising and recruitment. How does one pull together a club with members with varying levels of interest in microfinance and with completely different expectations for engagement? Even if a club does have the infrastructure to offer ambitious services such as the provision of business training to local microentrepreneurs, there are challenges in asking students to target a local community. 23

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) As an anonymous student who had participated in providing business consulting to local microentrepreneurs advised: “The best way to get engaged students is to get engaging clients, which is the most challenging part of all. It's very hard to find people who are committed to coming to meetings, need help, and that we are able help. If you end up finding crackpots (no offense, but we've heard some crazy ideas in the years), your volunteers will not be happy, and will drop off when there isn't much work to do.”

In addition, many students have had to make sure that clients understand they cannot work wonders, and aren’t there to run the business for them. At BR Microcapital, students and clients sit down before the start of coaching sessions to verbally go through the terms and expectations for each partner. At the Cambridge Microfinance Initiative, clients can apply online to receive coaching services, but check off a disclaimer beforehand: “I understand that the Cambridge Microfinance Initiative is not a group of professionals or experts but rather an organization of student volunteers who have studied up on the basic aspects of starting and running a small business. I know they will not run my business with me but will only inform me of general 17 principles and help me find informational resources.”

Furthermore, one of the challenges that many student organizations encounter is institutional memory. To solve this problem, Elmseed - like the Intersect Fund – has invested in online services such as backpackit.com and highrisehq.com, websites which help organizations archive and manage their information and external contacts. A related challenge is the problem of continuity, which often limits student organizations’ abilities to manage client relationships for more than one or two years. For example, Elmseed’s ability to launch a long-term Spanish-language business workshop program is contingent upon its ability to maintain one or two leaders with the prerequisite language skills and passion for Elmseed’s mission every year. The recruitment of a talented pool of members from each graduating class, therefore, is essential to the longevity of the organization.

VI. Summary of Market Research Findings  A number of the most impressive student-led microfinance initiatives seem to be led by faculty advisors or truly dedicated founders who continue to work full time on their 501(c)(3) organizations after graduation. These types of organizations are less likely to face continuity challenges, and are more likely to be extremely innovative in terms of their program service offerings.

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010)

 Given the right motivation and a good understanding of the impact of the loan, student clubs can fundraise. Although KIVA is the top destination for most student lenders, there has been a shift towards finding a partner that can provide greater transparency and/or greater returns about the impact of a loan. More and more students are interested in finding their own MFI partners who can work with them directly to manage a loan fund.  Many small businesses may stand to benefit from the technology savvy of student volunteers. The challenge is in connecting entrepreneurs with these opportunities without the increasing the liability of the MFI.

Findings from Survey

Status in School Undergraduate Recent Alumni Graduate 25

# of % of Respondents Respondents 54 62.8% 24 27.9% 7 8.1% Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng â&#x20AC;&#x201C; August 2010 (edited September 2010) Faculty Advisor TOTAL

1 86

1.2% 100.0%

A. Student Demographics

Graduation Year 2008 2009 2010 2011 2012 2013 Other TOTAL

# of Respondents 5 1 18 23 28 10 1 86

% of Respondents 5.8% 1.2% 20.9% 26.7% 32.6% 11.6% 1.2% 100.0%

Findings encompass aggregate results from 87 students representating 28 schools. Of the respondents, 63% were current undergraduate students, 28% were recent graduates, 8% were graduate students, and one respondent turned out to be a faculty advisor. The majority of the respondents were juniors or seniors, intending to graduate in 2011 or 2012. A large percentage of the students â&#x20AC;&#x201C; almost 40% - are studying economics or business. More than 65% of the respondents also indicated that they had obtained a leadership position within the organization. In addition, 28% of the respondents reported that they were a founding member of their club.

List of Universities Chapman University Columbia University Duke University 26

# of Responses 2 1 6

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng â&#x20AC;&#x201C; August 2010 (edited September 2010) Elon University Emory University Georgetown University Harvard University Indiana University Lehigh University Messiah College Northeastern University University of Notre Dame Ohio Wesleyan University Princeton University Rice University Soka University of America University of Houston University of Illinois at Urbana-Champaign University of North Carolina at Chapel Hill UC San Diego UC Santa Cruz University of Chicago University of Virginia University of Washington University of Pennsylvania Washington and Lee University Washington University in St. Louis - Olin Business School Yale University Total

1 1 1 2 2 8 3 1 9 5 7 1 1 2 1 1 4 1 1 16 1 4 2 1 1 86

Students and U.S. Microfinance: Final Report to ACCION USA

B. Student Commitment to Clubs

55% of the respondents indicated that they devoted Â˝ hour to 2 hours per week to their microfinance clubs, 30% indicated that they spent anywhere from 3 hours to 6 hours on their clubs, and 13% indicated that they spent seven or more hours on their clubs. The results also indicate that microfinance is not the only extracurricular activity that most students commit their time to. 43% of the students indicated that they were involved in three or more other extracurricular activities, and 30% indicated that they were involved in two other extracurricular activities. The majority of the survey respondents are also relatively young club members. Close to 50% of the students were involved in their microfinance clubs for only one or two semesters. Around 34% of the students had been involved for three or four semesters. Around 10% stated that they had been involved in the club for more than two years.

C. Student Motivation

Linda Peng – August 2010 (edited September 2010) More than half of the students surveyed (58%) indicated that they became interested in microfinance because of a strong interest in “economic development.” 44% indicated that they had either read Muhummud Yunus’ Banker to the Poor or another book on microfinance; 35% said that they had heard about microfinance from a professor; and 29% had become interested after hearing about it at a student activities fair. Only 16% indicated that they became interested in microfinance after being recruited to join a microfinance club. Of the reasons given for joining a microfinance club, 81% cited “interest in the developing world” as a major factor, while “interest in economic development in the U.S.” received only 33% of the attention. The second most cited motivation, at 59%, was “exposure to issues in microfinance.” 40% of the students revealed that they were interested in microfinance as a “potential career” and 36% checked off “interest in getting into the business world” as a motivating factor. Surprisingly, however, only 24% admitted that they were “building their resumes” was a motivating factor. Only 14% of the respondents indicated that they were interested in starting their own small business.

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) D. Club Activities

More than 74% of the respondents indicated that one of their primary duties involved planning events or meetings for the club. 55% of the respondents noted “raising awareness of microfinance on campus” as a primary duty, and 37% noted “fundraising for the club” as a primary duty. When asked about the main focuses of their clubs, only 47% indicated that one of the club focuses was on microfinance U.S., while 83% indicated that one of the club focuses was on microfinance abroad. 42% of the respondents indicated that they were raising awareness of microfinance in the local community. Using Excel pivot tables, I was also able to identify the schools that had respondents indicating that they were focused on engaging communities through training, lending, sponsoring student interns, or consulting activities. A summary of the analysis is included in the table below.

Club Focuses

# Schools (Total in Survey = 28)

% Schools

Lending through a partner organization like Kiva

71%

Lending through the student organization itself

36%

Offering financial education to local micro entrepreneurs

46%

Helping micro entrepreneurs develop their business plans

57%

Teaching classes to local micro entrepreneurs

36%

Mentoring micro entrepreneurs in smaller group settings

25%

Sponsoring student interns to work on microfinance abroad

50%

Sponsoring student interns to work on microfinance in the U.S.

36%

Raising awareness of microfinance on campus

86%

Raising awareness of microfinance in the local community

86%

Consulting for community organizations or businesses

46%

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010)

E. Needs and Values

When asked about the experiences or opportunities they have hoped to gain from being a part of a microfinance club, more than 92% indicated that gaining “a greater understanding of how microfinance works internationally” was of high or very high importance to them. In comparison, only 49% indicated that “gaining a greater understanding of how microfinance works in the U.S.” was of high or very high importance. More than 70% of the respondents also indicated that the opportunity to meet and speak to real microfinance practitioners or real microfinance clients would be high or very high importance. In addition, 61% indicated that having the opportunity to consult microfinance clients would be of high or extremely high importance. When asked about the resources that would be “moderately useful” or “very useful” to their microfinance clubs, 88% again reiterated “opportunities to speak to professionals working in the microfinance field.” 81% supported “a webinar roundtable with microfinance industry leaders,” and 78% supported an “annual roundtable with other student microfinance club members.” Other potential resources were also given high ratings; 71% indicated that “An online platform where clubs can collaborate to discuss best” would be “moderately” or “very” useful and 78% supported “guidance on measuring club impact.” In follow-up comments to question 13a18, respondents further emphasized their desire for collaboration with other clubs, guidance on how to make an impact through start-up kits, direct communication with professionals working in the field, and the ability to network with other clubs engaged in similar activities.

What resource would you find MOST useful to your club? – Highlighted Responses to Question 13b -

“Guidance from both professionals from the microfinance field and perhaps a start-up kit of sorts for new organizations to get off the ground. Discussing the world of microfinance with professionals would be most helpful. I would love to have more connection with other students working in a similar way. A network to share what we are doing and learn from others would be awesome. The existing platforms aren't too great to do this on. 18

“13a. How useful would the following resources be to your microfinance club?”

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng â&#x20AC;&#x201C; August 2010 (edited September 2010) It took our club about 2.5 years before we were working with grassroots microfinance clients in Zambia. This would not have been possible if it hadn't been for the support we got from Microfinance professionals and could have happened much quicker if we hadn't been re-inventing the wheel the whole time. Resources and collaboration are very important when starting a club and the more streamlined this can be the more scalable microfinance clubs in the U.S. can be. I feel like the biggest setback our organization has faced is our lack of direct communication with fellow collegiate microfinance programs and professionals in the field (with the exception of our advisors). It would be a tremendous asset to become a part of a consortium of like-minded clubs and professionals, effectively enabling the collegiate microfinance world to advance more rapidly and with greater unity. Rather than operating as a set of individual units we should work together to develop a model that can be used across the country. Collaboration with other student groups and microfinance institutions to determine the biggest needs and niches for student involvement would be fantastic. When trying to formulate a mission for the group it would have been very helpful to have had input from leaders in the field to determine in what areas students can have the most impact. Many of the club members at my university are interested more in learning rather than in going into the field and becoming a practitioner. Therefore, I find some academic resources to satisfy their academic curiosity very useful. Any tool that would help build the network of microfinance clubs across the US. Any tool that would help build the network between microfinance organizations/ practitioners and microfinance clubs. Currently we are focusing on microfinance projects abroad, however once we are established and have more funds we may work on more local projects. A start-up kit for new microfinance clubs-- or just a start-up kit for any club. Our club focuses heavily on fundraising by obtaining grants and donations from businesses, and a guide to help get us started on this would be very useful. As a lending and savings institution, we would greatly benefit from assistance in keeping our books consistently up to date. Having a start-up kit for new clubs would be FANTASTIC. Right now, we know what we want, its just hard to find all of the information all in one place. Also, when we asked about lending guidelines and how exactly ACCION USA works w/ the club we received an answer that was a little unclear. We would like to see the lending guidelines in hard copy and perhaps hear from another club what their experiences have been like so far lending w/ ACCION USA. Receiving clear examples of how they set up their guarantee fund and how they work w/ ACCION to lend to small businesses. That way we have a strong foundation to start from and can start our own path. (Right now we are a little unstable and unsure how we should continue forward w/ the guarantee fund etc.) Speaking w/ other clubs would be great too. That way we can ask each other how we organized certain club aspects and bounce ideas off of each other. Guidance on measuring club impact and e-learning course about the credit system in the U.S. Networking opportunities. The ability to easily communicate with other professionals from the micro-finance field to help assess where the greatest need for assistance is Guidance on measuring club impact Greater publicity on our campus would be helpful. 32

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) In our first two years, we loved being able to reach out to other like-minded student groups and school departments. Definitely was the most helpful resource.

”

F. Potential for Engagement

Around 52% of the respondents indicated that they were “very likely” to host a panel event on campus, and a similar percentage indicated that they were “very likely” to host microentrepreneurs from their local community on campus. 45% were very likely to fundraise to host speakers, and 44% were very likely to participate in coaching microenterpereneurs in activities with ideas for strategies in marketing, sales, etc. Relatively lower percentages, however, indicated that would be “very likely” to blog about microfinance, blockwalk in their local communities, or shoot and edit a video about an experience at an event. How likely would you be to participate in the following activities with your club? Blogging about microfinance Blockwalking in your local community Helping to design a website for a microentrepreneur Coaching microentrepreneurs with ideas for strategies in marketing, sales, etc. Hosting a panel event on campus Fundraising to host speakers on campus Hosting microentrepreneurs from your local community on campus Shooting or editing a short video about an experience at an event Raising awareness about microfinance through twitter, youtube, or facebook Broadcasting a microfinance simulcast course taught by a professor from another campus Attending online webinars to establish a greater knowledge base about microfinance

N/A or No Response* 12.8% 17.4% 12.8%

Not Likely 36.0% 31.4% 26.7%

Somewhat Likely 30.2% 33.7% 29.1%

Very Likely

10.5%

8.1%

37.2%

44.2%

10.5% 10.5% 10.5%

5.8% 9.3% 12.8%

31.4% 34.9% 26.7%

52.3% 45.3% 50.0%

9.3%

34.9%

29.1%

26.7%

12.8%

15.1%

31.4%

40.7%

12.8%

10.5%

39.5%

37.2%

9.3%

15.1%

30.2%

45.3%

20.9% 17.4% 31.4%

*There is a high percentage of N/A or “no responses” to this question because I added this question to the survey th a couple of days after the launch of the survey, after already receiving the 8 response.

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010)

The majority of the respondents also indicated that they do not go off campus very often. In follow-up comments to the survey, a few students have commented on how they were curious about what the survey results would lead to, and indicated their willingness to get involved in a student program run by ACCION USA. “This sounds exciting and should definitely be helpful (based on the 13th question in the survey). Motivational speakers from KIVA, ACCION, etc. would be very useful to generate interest on campus. It is difficult to keep the interest of students into something like microfinance where the money is going across the world. *…+ I hope you do come up with some good solutions and Ohio Wesleyan will probably be willing to be a part of something ACCION is doing (It's a club, so I can’t make decisions alone).”

- Pratyush Agarwal, 2009-2010 president of Ohio Wesleyan University’s microfinance club

Summary of Survey Findings  Students are very interested in supporting local MFIs, but lack information about how they can get best get involved  Collaboration is key. Students want to talk to real microfinance practitioners and each other about what’s happening in the field and the best practices in engagement.  It may be difficult for students to get transportation off-campus at some universities; towngown relationships are often not very close.

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010)

VII.

How can Students Help Scale Microfinance in the U.S. through partnerships with MDOs such as ACCION USA?

Conclusions and Recommendations to ACCION USA for Engagement “Microfinance is such a young, and rapidly growing industry that I feel, and others I know feel, [that we] can actually take part in its development.” - Anonymous student from Survey "In order to get students interested in domestic microfinance, there needs to be a good story/case presented for microfinance in the U.S. Domestic microfinance is not on everyone’s radar.” - Travis Kiefer, Executive Director of Gumball Capital The relative youth of the student microfinance initiative movement in the United States is remarkable. Although the first microfinance club (The Elmseed Enterprise Fund at Yale) was founded in 2001, the majority of the student microfinance clubs in the United States seem to have been founded between 2007 and 2010 – all within the past three years. The accolades they’ve received in that short span of time, furthermore, have been impressive. Many of the student-led microfinance initiatives featured in this study have been recognized by the Clinton Global Leadership Institute. Others have been awarded grants from foundations and sponsorships from corporate donors. One recently founded student organization at Washington and Lee University was just granted a $10,000 prize from Davis Projects for Peace to establish a microfinance initiative with a partner MFI in Haiti. The activities that many of the student organizations typically participate in – activities such as fundraising, participating in the Gumball Challenge or $2 Per Day Challenge, and coaching microentrepreneurs – have also been prone to being profiled by local and university newspapers. Based on findings from the interviews, the opportunity to engage Category (A) student organizations – or members of university-recognized microfinance clubs – are the greatest. Category (B) student organizations – or student-led non-profit initiatives – often have target populations and missions different from that of ACCION USA; partnerships with these types of organizations may be possible, but may need to be decided upon within a case-by-case basis. The final type of student organization – those initiatives guided heavily by faculty – are possible partner organizations for ACCION USA on a case-by-case basis as well, since many of the faculty-guided student organizations seem to be focused on integrating coursework with international microfinance rather than domestic microfinance. The exception to this general trend is the Microfinance Initiative at Notre Dame, where students are working in conjunction with Professor Melissa Paulsen’s yearlong microfinance class to engage in providing more services for local entrepreneurs.

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) Key Activities Identified for Student Microfinance Clubs: 1. Fundraising for domestic microfinance through participation in campaigns such as Microbike 2. Awareness raising in the local community of the loan products and online financial education webinar services offered by MDOs such as ACCION USA 3. Awareness raising of the meaning of domestic microfinance and the importance of financial education to other students on campus 4. Support of local microentrepreneurs (especially those less tech-savvy) via one-on-one “coaching” activities and business-related workshops held on campus

Students cannot be depended upon to know their communities well (an overwhelming percentage of the survey respondents revealed that they visited an local small business fewer than once per month), but students can be depended upon to do the tasks that they know the best – activities such as raising awareness on campus, creating marketing campaigns and brochures about local microentrepreneurs in their communities, and creating innovative ideas for fundraising (Owl Microfinance at Rice University hosted a “Mr. Rice Asian” pageant that raised over $1000 for KIVA, and Gumball Capital challenges students to return profits from a loan of $27 and 27 gumballs). Taking this point into consideration, I recommend that ACCION USA engage students through low-key, temporary time commitment activities such as fundraising, raising awareness, hosting conferences, and volunteering useful skills in web design and technology for potentially interested small business clients on a case-by-case basis. The first step and challenge in targeting the students in the afore-mentioned “Category A” organizations is to make sure that they are aware of the importance of domestic microfinance and the need to include it as a serious component of their clubs’ mission statements. Most “Category B” student organizations (e.g. The Intersect Fund, The Elmseed Enterprise Fund, Capital Good Fund, Community Empowerment Fund, etc.) are already focused primarily on domestic microfinance. Although these student organization types tend to be the more successful studentfounded establishments, their unique mission statements and unique clientele demographics means that partnerships with these types of organizations are best formed on an ad hoc basis. As my research has shown, regular Category A student organizations are highly interested in getting engaged with microfinance, but international microfinance is still the main focus amongst the majority of these initiatives – in part, perhaps, because it is easier to raise a few hundred dollars to lend to an international client on KIVA.

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) With ACCION USA’s new presence on KIVA and efforts to expand its financial education and green loan programs, however, the potential for the average environmentally conscious student to act as effective awareness raisers of the domestic microfinance movement – especially in a social media setting – is significant. Again, the next step is to figure out a workable partnership model that would limit the operational costs on ACCION USA’s side and increase the value that students get from participating in ACCION USA’s student program. The engagement of young people for social movements is not a new idea. As Wendy Kopp, founder of Teach for American and Nancy Lublin, founder of Dress for Success can attest, a young person may not have the work experience to know how the industry works – but their naiveté can often motivate them to go beyond what is initially thought to be possible. As Lublin explained in an interview, “when you are that age, you don't know that ‘there is a way things are done’ and so you work off instinct and data rather than tradition. You also don't have a mortgage or a family, so pulling all-nighters isn't a big deal.” 19

The ACCION USA-Student Partnership Model After much reflection and discussion with student interns in the office, Erica Dorn and the Microfinance Council volunteers, the ACCION USA Student Partnerships Project team agreed on the following model for engaging students in domestic microenterprise: 1. ACCION USA will launch a series of campaigns that revolve around fundraising, raising awareness of domestic microfinance on campus or in local communities, and supporting local microentrepreneurs. Students will have the freedom to sign up for the specific challenges by getting together a team, designating a leader, and filling out a short form on the website. 2. The Microfinance Council, a group of working professionals based in the NYC region, will work with the volunteers to execute the campaigns. 3.

ACCION USA will highlight the activities of the students through its blog and on its new website for students at www.studentsforaccion.org.

4. Students who sign up for the mailing list or participate in an ACCION USA student campaigns may get the chance to win prizes such as an ACCION USA t-shirt or other promotional material for their team members; regular updates about other clubs and U.S. microfinance in a monthly student e-newsletter; and the chance to have a speaker from ACCION USA come to their campus to talk about issues in domestic microfinance. 19

Price, Andrew. “Q&A: In Lean Times, Nonprofits Give the Business World Tips.” <http://www.good.is/post/q-ataking-money-saving-tricks-from-the-nonprofit-world-to-bigbusiness/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+good/lbvp+(GOOD+Main+RSS+Fe ed)>.

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng â&#x20AC;&#x201C; August 2010 (edited September 2010)

(1) Students form teams and sign up for an ACCION USA Student Campaign by filling out a short form on the website.

(2) The Manager of Volunteer Partnerships at ACCION USA receives the notice and forwards the e-mail to a volunteer from the Microfinance Council.

(3) The Microfinance Council volunteer e-mails the student team leader and works with the leader to execute the campaign.

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) A. The Website

Recommendations for the website: I.

A Forum where students can discuss issues in microfinance with other clubs

II. A “Why U.S. Microfinance?” page explaining the history and importance of domestic microenterprise III. Opportunities to Get Involved in an ACCION USA student campaign and view powerpoint “Action Guides” that list the point values20 of the campaigns and provide more information about the campaigns IV. Quick access ACCION USA’s Financial Education Materials and archive of webinars V. A page listing and promoting the activities of the Featured Student Organizations

The “point values” idea is inspired by the One Campaign, where campuses are awarded points for completing actions that can be as little as “leaving a comment on Facebook” to “getting people to sign petitions on campus.”

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010)

B. The Campaigns

Campaign Ideas

Description

*=new ideas

Microbike 2010 (400 initial points) + (# participants x 2) = Total Points Help an entrepreneur design a website (500 points)

Host an event on campus to raise awareness 40

Organize a biking event to “pedal against poverty.” This campaign is being managed by ACCION International. Students form a team on campus, plan a bike route, sign each participant up for $10, and get a free t-shirt for each participant. Many ACCION USA clients are in the process of putting their businesses online and have asked for help. At $49.95/year, Yola.com offers a domain name and an easy way to put a launch a business site online. Inperson meetings between clients, the loan consultants who recommended the clients, and students are ideal. Give students the freedom to plan creative ways to

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) about U.S. microfinance

raise awareness of domestic microfinance on campus

(300 points) *Host a fundraiser event on campus (250 points) + (Amount invested in ACCION USA or ACCION USA client x 4) = Total Points

*Lend to an ACCION USA client on KIVA (Amount lent x 4) = Total Points *Make a video (<1 minute) about why you support domestic microfinance and post it in reply to ACCION USA’s challenge video on Youtube. (300 points) + (ACCION USA t-shirt 1st place) + (Other ACCION USA swag 2nd place) = Total Value Become an ACCION USA field representative (1000 points) + (200 points per client referral) = Total Points

*Refer a client to ACCION USA (# clients referred x 250) = Total

*”Like” ACCION USA on Facebook (500 points for the campus with the most “likes,” 400 points for second place, and 300 points for third place) 41

Similar to the challenge above. Where the proceeds go are up to the students. Options include giving an unrestricted grant to ACCION USA to support its operating costs, setting up a loan fund** with ACCION USA, or lending to an ACCION USA client on KIVA. Any student group that already has a lending team on KIVA can do this. This campaign would be targeted at students interested in marketing, video production, and/or multimedia. Quality videos may help increase awareness of ACCION USA’s internet presence and help the student earn great resume leverage.

Individual students are trained on how to pre-package a loan and work closely with ACCION USA loan consultants to help advise potential clients on the loan process. These students must be responsible, have transportation to and from the client’s location, and be knowledgeable about ACCION USA’s lending requirements. Non-students are currently in the process of piloting ACCION USA’s field representatives program. These students, again, must be knowledgeable about ACCION USA’s lending process. Students might typically refer clients that they do not have the capacity to serve (in terms of lending) to ACCION USA. The ACCION USA Facebook feed is updated frequently with news about the organization and happenings in the field. After completing the action, each student can report the action by voting for their campus in a poll (Sample poll title: Which campus should win the

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) ACCION USA Student Campaigns Challenge?) on the ACCION USA Facebook page. Sign up for the ACCION USA monthly student e-newsletter (# students x 10) = Total Points

Organize a blockwalking event (500 points)

The monthly e-newsletter will report on student campaign progress and highlights. The e-newsletter will also highlight a student-team-of-the-month and share tips and best practices for effective ways to raise awareness about U.S. microfinance. This would only be cost-effective with a large number of people at locations close to ACCION USA’s offices and near campuses where students have a good relationship with the locals.

Further Recommendation 1: At the end of the first semester, the student team(s) from the campus that receives the most points will be awarded recognition and a speaker visit from a top ACCION USA representative. Second and third place campus team will receive ACCION USA promotional materials such as t-shirts, ACCION USA MP3 players, pens, or other swag. Representatives from the campus that has the most points by the end of the year will be awarded a trip to the annual Microfinance USA conference and their conference entrance fees waived. Further Recommendation 2: ACCION USA should quantify the impact of a dollar’s donation to ACCION USA. Below is a calculation using FY2008 figures.

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) ACCION USA Functional Expenses (FY2008)

Amount

% of Total

Program Services – Lending

$9,827,099

79%

Management and General

$1,836,106

15%

$765,485

$12,428,690

100%

Fundraising Total Source: ACCION USA Form 990

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010)

C. Summary of Potential Values Added by Partnership Program TO STUDENTS

TO ACCION USA

TO ENTREPRENEURS

Resume building opportunities (experiences in marketing, consulting, and fundraising)

Publicity about ACCION USA and U.S. microfinance online and in local communities

Flyering or online marketing strategy help from students

ACCION USA campaign swag (e.g. “Buy Local, Lend Local” tshirts)

Donations that can help cover operational costs

Sales and publicity from studenthosted events that raise awareness of the businesses of local entrepreneurs

Opportunity to speak to and get advice from microfinance professionals

Client referrals from student field representatives who meet a client that seems to satisfy ACCION USA’s pre-loan requirements

Opportunities to plug into the network of other entrepreneurs working with students and ACCION USA

Opportunity to speak to microfinance clients

Investments from student organizations to a loan fund

Publicity for the student organization from being featured by ACCION online at the student website or on ACCION USA’s blog

Investments to ACCION USA’s clients on KIVA

Internship opportunities in microfinance

Field representatives who advise the client on the loan process can save time for loan consultants, thereby reducing the cost of servicing a loan

Opportunity to use classroom theory in real life practices

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010)

D. Recommended Partnerships with Non-Student Organizations a. Campus Kiva Campus Kiva has over 50 university lending teams on KIVA already. It is co-hosting a national conference for students involved in microfinance in D.C. with MFIConnect in the Fall. We’ve talked to Campus Kiva about setting up a panel on U.S. microfinance at the conference and cross-referring to each other’s programs on our respective websites. b. MoreMarbles.com MoreMarbles.com connects university consulting teams mentor (often MBA students, though undergraduates are welcome) that are advised by a faculty. The teams work on 50-500 hour projects that take at most a semester to complete for companies that typically earn between $1 million and $50 million in sales. The CEO of MoreMarbles.com has talked to ACCION New Mexico about a loose partnership that would connect student consulting teams with potential ACCION New Mexico clients. c. MFIConnect MFIConnect is the site for students who want to connect to other students working on projects in microfinance. It is hosted on Ning.com, which means that there is an elaborate forum for viewers to post questions and add to discussions about microfinance. MFIConnect’s general focus, however, is only on international microfinance. d. Gumball Capital Gumball Capital is a Stanford University student-led non-profit that challenges students to be social entrepreneurs by raising as much money as they can with a loan of $27, 27 gumballs, Gumball Capital tshirts, and a timeline of 10 days. Since its founding in February 2007, Gumball Capital participants have raised over $20,000. e. $2 Dollar Challenge The $2 Dollar Challenge challenges students to live on $2 per day for five days and was founded by Professor Sean Humphrey of La Ceiba (a student-led microfinance initiative at the University of Mary Washington). The $2 Dollar Challenge currently recommends donations to go to Opportunity International, an international NGO. f. ACCION International ACCION International runs Microbike, a national fundraising campaign to raise awareness about microfinance. Student participants only pay $10 to organize their own event (dates are 10/1 and 10/3), and all participants receive free t-shirts as well. g. Catchafire Catchafire connects working professionals with skills-based volunteering projects for non-profits. Registrants can sign up to volunteer to create logo designs, print materials, promotional materials, develop brand identity, etc. for non-profits. 45

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010)

VI. Best Practices from Other Student Programs A. LearnVest Ambassador Program LearnVest ambassadors promote LearnVest on campus. They are responsible for creating and executing marketing strategies in accordance with their campuses’ university policies.

LearnVest.com Best Practice Takeaways  Highlight the benefits of participating in a campus program  Publicize the other schools that are involved in the initiative  Give students the challenge of designing and executing their own marketing plans

B. DoSomething.org DoSomething.org challenges people (targeting a mostly young demographic) to take on projects on any issue that matters to them. The non-profit provides monetary grants to clubs as well as action guides for project ideas. At the bottom of every action guide is a place where viewers can indicate their commitment to executing the project by typing in their e-mail address, e-mailing a friend about the project, or finding more about other causes.

DoSomething.org Best Practice Takeaways  Make it easy for students to sign up to get involved in a project  Keep track of student involvement  Publish short action guides on how to accomplish different campaigns or projects.

C. Grameen U “The Grameen U Challenge is a competition among Grameen U Groups in campuses to raise the largest amount of money in the most creative ways. The winning village will be showcased on our Grameen U blog, invited to visit our Grameen America headquarters in New York and will receive VIP passes for Grameen America Day.” “Remember that every $1,500 raised represents one loan to help a low-income family lift itself out of poverty. You may also register your groups and donate via our website.” “Campus Reps will report back to the Grameen U President through a monthly check-in call and will post on our Grameen U blog. This will serve to inspire all of Grameen U Clubs on different campuses with new ideas and creative ways to fight against poverty.”

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010)

Grameen U Best Practice Takeaways  Quantify the impact that a donation has. (E.g. “Every $1,500 raised represents one loan.”  Grameen U is recruiting for one student volunteer – a “Grameen U President” – to keep track of initiatives on different campuses. This title gives the student a lot of responsibility and ownership over the initiative. D. The One Campaign

ONE Campus Challenge counts points by asking students to “report their actions” by filling out a form that provides evidence that they completed the action. For example, a campus can win 50 points if a student becomes a fan of ONE on Facebook. ONE runs monthly challenges, and awards prizes such as ONE t-shirts and stickers, campus visits by ONE staff, trips to DC by selected representatives of the winning school(s), documentary screening rights, and speakers on campus.

The One Campaign Best Practice Takeaways  Every action taken by a student is measured, weighted, and quantified! Students can win points for their campus for actions as simple as putting a comment on Facebook.  The One Campaign has successfully mobilized students to make videos, blog, and run with creative ideas to spread awareness about ONE on their campuses by offering amazing end-of-the-year prizes such as trips to DC for a ONE conference and a trip to Africa for the top motivated students.

VII.

Final Table of Findings and Recommendations

Final List of Findings

Recommendations to ACCION USA (according to findings)

 Organizations like ACCION International (fundraising via Microbike), Campus Kiva (online lending), the $2 Per Day Challenge (fundraising), MoreMarbles.com (consulting), and the Gumball Challenge (fundraising and social entrepreneurship) are already popular amongst 47

 Rather than spend a lot of time focusing on the creation of new action guides for fundraising or awareness campaigns, ACCION USA can partner with organizations that are already managing enthusiastic networks of students who support microfinance. ACCION USA can make potential partnerships with these organizations public on its website and encourage students to indicate their interest in supporting ACCION USA after signing up for these challenges. Many of the student teams that participate in the $2 Per Day Challenge or Gumball Challenge fundraise for the purpose of raising loans for KIVA; to incentivize students to pay closer attention to domestic microfinance, ACCION USA can offer publicity on its student website for the student teams that are the

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) student networks that want to do something to support microfinance

most successful at lending to ACCION USA’s clients on KIVA.

Source: Interviews  Students are drawn to microfinance because they can see the direct impact of their fundraising efforts from their ability to get their money back.

 In order for non-loan funds to become popular, ACCION USA must make the case for the impact of an unrestricted grant. (See: Impact of $1 donation, or my attempt to quantify the impact)

 When most students hear “microfinance,” they automatically think “poverty alleviation” and “international microfinance.”

 In the messaging of its student partnerships program, ACCION USA should present a good story of the interesting history of domestic microfinance and its place in the context of international microfinance.

Source: Survey, Interviews  Students are savvy with technology and are comfortable with social media presences on Facebook, Twitter, and Youtube. Sources: interviews, direct observation of student club websites

Convincing students of the importance of domestic microfinance and the potential for students to make an impact must be done well on the student website.

 ACCION USA should challenge students to make Youtube videos about U.S. microfinance. An ACCION USA-run Youtube contest can generate great publicity for ACCION USA and domestic microfinance. ACCION USA should perhaps first issue a 1-minute challenge video and then ask students to enter the contest by “replying” to that video. Automatic prizes for students include recognition, publicity for the individual and the student organization, and a line on the resume. ACCION USA may also opt to award small prizes such as client merchandise or “Lend Local, Buy Local” t-shirts to the editors of the best videos.

 ACCION USA should utilize Facebook as much as possible for its student website. Many website forums suffer from the lack of being revisited. In order for the forum on www.studentsforaccion.org to take off, students must either have an incentive for visiting the website to check updates regularly, or have a stake in the success of the forum. Facebook is a great, easy-to-use tool for link sharing and communication. Given many students’ tendency to log in to Facebook frequently as a stress-reducing activity, ACCION USA might do well launch a Student for ACCION USA facebook page that, when

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) “liked,” can feed updates and links to the newsfeeds of its supporters. In addition, Facebook makes Facebook-website integrations easy with its social media plugins.

 There is potential in the idea of supporting small businesses by connecting web-savvy student volunteers with entrepreneurs who may not be as web-savvy. Liabilities issues, however, must be addressed. (See next bullet).

 There are liability issues involved with allowing students host a training workshop or “consult” microentrepeneurs using ACCION USA resources or the ACCION USA name Source: Interviews



“Collaboration with other student groups and microfinance institutions to determine the biggest needs and niches for student involvement would be fantastic. When trying to formulate a mission for the group it would have been very helpful to have had input from leaders in the field to determine in what areas students can have the most impact.”

 Instead of asking students to support microentrepreneurs through business consulting without direct supervision, ACCION USA can ask students to get involved with websites such as Moremarbles.com or another official organization whose focus is on consulting. ACCION USA may not have the time or the expertise to manage student volunteers who want to support microentrepreneurs directly. In the cases where an ACCION USA client could benefit from the services of a student volunteer (the creation of a Facebook profile for online marketing purposes, for example), ACCION USA might refer the client to a partner organization that could then decide whether or not it could help the client. This model relieves ACCION USA of the responsibility of vetting both clients and volunteers and making sure that clear expectations are laid out before the start of the project.

 ACCION USA may fill a true need by providing a space for students to network and interact with microfinance professionals and other student clubs. This space can be a forum or a website – or a forum on a website. An online catalog of the different organizations involved in supporting domestic microfinance and the best ways to contact them may be helpful as well.

Source: Survey  Students are interested in 49

 ACCION USA can challenge students to find potential

Students and U.S. Microfinance: Final Report to ACCION USA

Linda Peng – August 2010 (edited September 2010) meeting and speaking to microfinance clients. Source: Survey, Interviews  Students can be very innovative at fund raising, hosting events, and inviting speakers to campus

microfinance clients in their own communities by doing some market research on the financial resources available to microbusiness owners and  It is important that for the design of the student program, ACCION USA give students the freedom to be creative while acting within the parameters of ACCION USA’s program goals

Source: Interviews  There are liability issues involved with the “Guarantee Fund” idea Source: Interviews

 Instead of asking students to back up the loan through a “guarantee fund” and incurring liability risks in accepting a client whose ability to repay is risky, ACCION USA may think of simply asking students to refer eligible clients - without the strings of the guarantee fund

 Students want to speak to microfinance practitioners.

 Offer internships, webinars, and speaker engagements to students

Source: Survey, Interviews

Students and U.S. Microfinance: Final Report to ACCION USA