AGNT

Issue 4 April 2010

fostering change through organization

Taking it toRoad The Open nual Our An of your t r o Rep ations Organiz

se the How to u and t, e rn inte port keep sup

Why AID is a Hurting Afric

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AGNT Issue 2 2010

AGNT { agent } is a collaberative effort dedicated to fostering change through organization. We are concerned with all thing non profit. Within AGNT you will find advice, insight and hopefully some inspiration to keep you and your organization going strong. We are her to serve you, and inturn here for the people, animals, earth that you serve.

Executive Editor James Ryan

Technology Editor

Brittany Gerny

Production Director John Taylor

Web Developers

Aaron Bromirski Josh Ariza Jessica Griner

Customer service Rep Katie Jones

General Manager Patty Turnier

Circulation Director

Joyce McRenold

Office Administrator Ben Sasso

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AGNT Issue 2 2010

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CONTRIBUTORS

28 STAFF WRITERS

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WHY FORIEGN AID IS HURTING AFRICA

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NP ANNUAL REPORT

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HOW TO USE THE WORLD WIDE WEB

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ON THE OPEN ROAD

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BOOK REVIEW

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MICRO LOANS FOR AMERICANS?

man services

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NON PROFIT CAREER

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PRO BONO WORK

Dambisa Mojo

Staff

Daniel Khabie

Seth Williams

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Tom Durso

Jeffrey M. O’Brien

Lisa Gutierrez

Joe Ippolito

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AGNT Issue 2 2010

Money from rich countries has trapped many African nations in a cycle of corruption, slower economic growth and poverty. Cutting off the flow would be far more beneficial, says Dambisa Moyo.

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AGNT Issue 2 2010

Evidence overwhelmingly demonstrates that aid to Africa has made the poor poorer, and the growth slower. The insidious aid culture has left African countries more debt-laden, more inflation-prone, more vulnerable to the vagaries of the currency markets and more unattractive to higher-quality investment.

A month ago I visited Kibera, the largest slum in Africa. This suburb of Nairobi, the capital of Kenya, is home to more than one million people, who eke out a living in an area of about one square mile -- roughly 75% the size of New York’s Central Park. It is a sea of aluminum and cardboard shacks that forgotten families call home. The idea of a slum conjures up an image of children playing amidst piles of garbage, with no running water and the rank, rife stench of sewage. Kibera does not disappoint.

What is incredibly disappointing is the fact that just a few yards from Kibera stands the headquarters of the United Nations’ agency for human settlements which, with an annual budget of millions of dollars, is mandated to “promote socially and environmentally sustainable towns and cities with the goal of providing adequate shelter for all.”

Kibera festers in Kenya, a country that has one of the highest ratios of development workers per capita. This is also the country where in 2004, British envoy Sir Edward Clay apologized for underestimating the scale of government corruption and failing to speak out earlier.

Giving alms to Africa remains one of the biggest ideas of our time -- millions march for it, governments are judged by it, celebrities proselytize the need for it. Calls for

more aid to Africa are growing louder, with advocates pushing for doubling the roughly $50 billion of international assistance that already goes to Africa each year.

Yet evidence overwhelmingly demonstrates that aid to Africa has made the poor poorer, and the growth slower. The insidious aid culture has left African countries more debt-laden, more inflation-prone, more vulnerable to the vagaries of the currency markets and more unattractive to higherquality investment. It’s increased the risk of civil conflict and unrest (the fact that over 60% of sub-Saharan Africa’s population is under the age of 24 with few economic prospects is a cause for worry). Aid is an unmitigated political, economic and humanitarian disaster.

Few will deny that there is a clear moral imperative for humanitarian and charitybased aid to step in when necessary, such as during the 2004 tsunami in Asia. Nevertheless, it’s worth reminding ourselves what emergency and charity-based aid can and cannot do. Aid-supported scholarships have certainly helped send African girls to school (never mind that they won’t be able to find a job in their own countries once they have graduated). This kind of aid can provide band-aid solutions to alleviate immediate suffering, but by its very nature

cannot be the platform for long-term sustainable growth.

Whatever its strengths and weaknesses, such charity-based aid is relatively small beer when compared to the sea of money that floods Africa each year in government to government aid or aid from large development institutions such as the World Bank.

Over the past 60 years at least $1 trillion of development-related aid has been transferred from rich countries to Africa.

Yet real per-capita income today is lower than it was in the 1970s, and more than 50% of the population, over 350 million people, live on less than a dollar a day, a figure that has nearly doubled in two decades.

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Who Make

Employs Mosquito Net Maker

Mosquito Nets // x5oo per week

Mosquito Net Maker employees // 10 and Who Provide For

Mosquito Net Maker employees reletives // 150

Even after the very aggressive debt-relief campaigns in the 1990s, African countries still pay close to $20 billion in debt repayments per annum, a stark reminder that aid is not free. In order to keep the system going, debt is repaid at the expense of African education and health care. Well-meaning calls to cancel debt mean little when the cancellation is met with the fresh infusion of aid, and the vicious cycle starts up once again.

In 2005, just weeks ahead of a G8 conference that had Africa at the top of its agenda, the International Monetary Fund published a report entitled “Aid Will Not Lift Growth in Africa.” The report cautioned that governments, donors and campaigners should be more modest in their claims that increased aid will solve Africa’s problems.

Despite such comments, no serious efforts have been made to wean Africa off this debilitating drug.

The most obvious criticism of aid is its links to rampant corruption. Aid flows destined to help the average African end up supporting bloated bureaucracies in the form of the poor-country governments and donorfunded non-governmental organizations. In a hearing before the U.S. Senate Committee on Foreign Relations in May 2004, Jeffrey Winters, a professor at Northwestern

University, argued that the World Bank had participated in the corruption of roughly $100 billion of its loan funds intended for development.

As recently as 2002, the African Union, an organization of African nations, estimated that corruption was costing the continent $150 billion a year, as international donors were apparently turning a blind eye to the simple fact that aid money was inadvertently fueling graft. With few or no strings attached, it has been all too easy for the funds to be used for anything, save the developmental purpose for which they were intended.

In Zaire -- known today as the Democratic Republic of Congo -- Irwin Blumenthal (whom the IMF had appointed to a post in the country’s central bank) warned in 1978 that the system was so corrupt that there was “no (repeat, no) prospect for Zaire’s creditors to get their money back.” Still, the IMF soon gave the country the largest loan it had ever given an African nation.

According to corruption watchdog agency Transparency International, Mobutu Sese Seko, Zaire’s president from 1965 to 1997, is reputed to have stolen at least $5 billion from the country.

It’s scarcely better today. A month ago, Malawi’s former President Bakili Muluzi

Say there is a mosquito-net maker in small-town Africa.

Say he employs 10 people who together manufacture 500 nets a week. Typically, these 10 employees support upward of 15 relatives each.

A Western governmentinspired program generously supplies the affected region with 100,000 free mosquito nets. This promptly puts the mosquito net manufacturer out of business, and now his 10 employees can no longer support their 150 dependents. In a couple of years, most of the donated nets will be torn and useless, but now there is no mosquito net maker to go to. They’ll have to get more aid. And African governments once again get to abdicate their responsibilities.

was charged with embezzling aid money worth $12 million. Zambia’s former President Frederick Chiluba (a development darling during his 1991 to 2001 tenure) remains embroiled in a court case that has revealed millions of dollars frittered away from health, education and infrastructure toward his personal cash dispenser. Yet the aid keeps on coming.

A nascent economy needs a transparent and accountable government and an efficient civil service to help meet social needs. Its people need jobs and a belief in their country’s future. A surfeit of aid has been shown to be unable to help achieve these goals.

A constant stream of “free” money is a perfect way to keep an inefficient or simply bad government in power. As aid flows in, there is nothing more for the government to do -- it doesn’t need to raise taxes, and as long as it pays the army, it doesn’t have to take account of its disgruntled citizens. No matter that its citizens are disenfranchised (as with no taxation there can be no representation). All the government really needs to do is to court and cater to its foreign donors to stay in power.

Stuck in an aid world of no incentives, there is no reason for governments to seek other, better, more transparent ways of raising

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AGNT Issue 2 2010

In Ethiopia, where aid constitutes more than 90% of the government budget, a mere 2% of the country’s population has access to mobile phones. (The African country average is around 30%.) Might it not be preferable for the government to earn money by selling its mobile phone license, thereby generating much-needed development income and also providing its citizens with telephone service that could, in turn, spur economic activity?

development finance (such as accessing the bond market, despite how hard that might be). The aid system encourages poorcountry governments to pick up the phone and ask the donor agencies for next capital infusion. It is no wonder that across Africa, over 70% of the public purse comes from foreign aid.

Look what has happened in Ghana, a country where after decades of military rule brought about by a coup, a pro-market government has yielded encouraging developments. Farmers and fishermen now use mobile phones to communicate with their agents and customers across the country to find out where prices are most competitive.

This translates into numerous opportunities for self-sustainability and income generation -- which, with encouragement, could be easily replicated across the continent.

To advance a country’s economic prospects, governments need efficient civil service.

But civil service is naturally prone to bureaucracy, and there is always the incipient danger of self-serving cronyism and the desire to bind citizens in endless, timeconsuming red tape. What aid does is to make that danger a grim reality. This helps to explain why doing business across much of Africa is a nightmare. In Cameroon, it takes a potential investor around 426 days

to perform 15 procedures to gain a business license. What entrepreneur wants to spend 119 days filling out forms to start a business in Angola? He’s much more likely to consider the U.S. (40 days and 19 procedures) or South Korea (17 days and 10 procedures).

Even what may appear as a benign intervention on the surface can have damning consequences. In a similar vein has been the approach to food aid, which historically has done little to support African farmers.

Under the auspices of the U.S. Food for Peace program, each year millions of dollars are used to buy American-grown food that has to then be shipped across oceans. One wonders how a system of flooding foreign markets with American food, which puts local farmers out of business, actually helps better Africa. A better strategy would be to use aid money to buy food from farmers within the country, and then distribute that food to the local citizens in need.

Then there is the issue of “Dutch disease,” a term that describes how large inflows of money can kill off a country’s export sector, by driving up home prices and thus making their goods too expensive for export. Aid has the same effect. Large dollar-denominated aid windfalls that envelop fragile developing economies cause the domestic currency to strengthen against foreign

currencies. This is catastrophic for jobs in the poor country where people’s livelihoods depend on being relatively competitive in the global market.

One watchdog group estimates that former Zairean President Mobutu Sese Seko, above in 1995, took billions from the country.

To fight aid-induced inflation, countries have to issue bonds to soak up the subsequent glut of money swamping the economy. In 2005, for example, Uganda was forced to issue such bonds to mop up excess liquidity to the tune of $700 million.

The interest payments alone on this were a staggering $110 million, to be paid annually.

The stigma associated with countries relying on aid should also not be underestimated or ignored. It is the rare investor that wants to risk money in a country that is unable to stand on its own feet and manage its own affairs in a sustainable way.

Africa remains the most unstable continent in the world, beset by civil strife and war. Since 1996, 11 countries have been embroiled in civil wars. According to the Stockholm International Peace Research Institute, in the 1990s, Africa had more wars than the rest of the world combined. Although my country, Zambia, has not had the unfortunate experience of an outright civil war, growing up I experienced first-hand the

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The aid

Proponents of aid are quick to argue that the $13

advocates

billion ($100 billion in today’s terms) aid of the

skirt over the

post-World War II Marshall Plan helped pull back a broken Europe from the brink of

point that the Marshall

an economic abyss, and that aid

Plan interventions were short, sharp and finite, unlike

could work, and would work, if

the open-ended commitments,

Africa had a good policy

which imbue governments with a sense

environment.

of entitlement rather than encouraging innovation. And aid supporters spend little time addressing the mystery of why a country in good working order would seek aid rather than other, better forms of financing. No country has ever achieved economic success by depending on aid to the degree that many African countries do.

discomfort of living under curfew (where everyone had to be in their homes between 6 p.m. and 6 a.m., which meant racing from work and school) and faced the fear of the uncertain outcomes of an attempted coup in 1991 -- sadly, experiences not uncommon to many Africans.

Civil clashes are often motivated by the knowledge that by seizing the seat of power, the victor gains virtually unfettered access to the package of aid that comes with it. In the last few months alone, there have been at least three political upheavals across the continent, in Mauritania, Guinea and Guinea Bissau (each of which remains reliant on foreign aid). Madagascar’s government was just overthrown in a coup this past week.

The ongoing political volatility across the continent serves as a reminder that aidfinanced efforts to force-feed democracy to economies facing ever-growing poverty and difficult economic prospects remain, at best, precariously vulnerable. Long-term political success can only be achieved once a solid economic trajectory has been established.

“The 1970s were an exciting time to be African. Many of our nations had just achieved independence, and with that came a deep sense of dignity, self-respect and hope for the future.” Read an excerpt from “Dead Aid: Why Aid Is Not Working and How

There Is a Better Way for Africa” The good news is we know what works; what delivers growth and reduces poverty.

We know that economies that rely on openended commitments of aid almost universally fail, and those that do not depend on aid succeed. The latter is true for economically successful countries such as China and India, and even closer to home, in South Africa and Botswana. Their strategy of development finance emphasizes the important role of entrepreneurship and markets over a staid aid-system of development that preaches hand-outs.

African countries could start by issuing bonds to raise cash. To be sure, the traditional capital markets of the U.S. and Europe remain challenging. However, African countries could explore opportunities to raise capital in more non-traditional markets such as the Middle East and China (whose foreign exchange reserves are more than $4 trillion). Moreover, the current market malaise provides an opening for African countries to focus on acquiring credit ratings (a prerequisite to accessing the bond markets), and preparing themselves for the time when the capital markets return to some semblance of normalcy.

Governments need to attract more foreign direct investment by creating attractive tax

structures and reducing the red tape and complex regulations for businesses. African nations should also focus on increasing trade; China is one promising partner. And Western countries can help by cutting off the cycle of giving something for nothing.

It’s time for a change.

AGNT Issue 2 2010

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2 We have done it again.

This is our take on the data. We are not trying to be the wacthdog here, or even choose sides; We just want to give you a better grasp on the numbers that affect your day to day business.

Whether its understanding where your organization fits in, or just gaining a broader sence of the non profit universe, we think there something in here for everyone. Don’t like what you see? Then lets work together to fix it.

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organization stands in relation to other nonprofits.The lines connecting each section, refer to their specific nonprofit sector and are sized according to their percentage of all nonprofits. The web cleary shows the relationship that each sector has with another; although we may be working towards our own goals, we are all in this together.

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AGNT Issue 2 2010

Kentucky // 30 North Dakota // 29

Lowest Giving Per State // Per Capita { dollars }

Percent of Population Volunteering // 26.7 Average hours per volunteer // 207

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West Virginia // 30

South Carolina // 29 Mississippi // 33

Distribution of Average Volunteer Time

14.2 %

20.6 %

Travel

Administrative Social and Support Service and Care

17.8 %

5.7 %

6.9 %

10.6 %

0.9 %

0.3 %

22.9 %

Maintenance building and cleanups

Performance and Cultural Activities

Meetings Conferences and Training

Public Health and Safety

Waiting

Other

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AGNT Issue 2 2010

Invisible Children has been using networking technology to create an incredible and reliable audience for years.

Here is your guide on how to use the internet and network technology, in five steps, to get your organization connected with the people who can support it.

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AGNT Issue 2 2010

The site is their primary voice and the provision of a one-stop-shop for information.

So how can our organization keep up with our audience the way I.C. does?

Who? What?

Why? words // Daniel Khabie

In the spring of 2003, three filmmakers from Southern California flew to Africa in search of a story that would change the world.

During their travels, they encountered a disturbing situation in Northern Uganda, where children are the weapons and victims of a 20-year-long war. The filmmakers produced a film titled Invisible Children: Rough Cut, and after realizing the impact of their film worldwide, they eventually founded San Diego based Invisible Children, Inc., an organization dedicated to providing financial resources to invisible children by documenting their true, untold stories in a creative and relevant way, resulting in positive changes.

Although the film kicked off their journey, Invisible Children still needed an outlet to promote the film and to extend its message to a broader audience. To enhance the effectiveness of its campaign, the organization collaborated with our digital marketing and technology firm, Digitaria, to develop a brand and website that would engage and inspire the millennial generation to join the movement and take action.

Invisible Children has used a mix of offline and online marketing efforts to promote the organization. For example, when Invisible Children staged its “Global Night Commute” earlier this year, SMS text messaging was used to help inspire more than 80,000 people to engage in a silent protest to attract attention for the organization by sleeping outdoors just like the children in Uganda do nightly.

Offline marketing efforts for the same event included a cross-country trek of recreational vehicles to stage screenings of Invisible Children: Rough Cut. Following screenings, organizers directed viewers online to register and obtain all pertinent details regarding the organization. Invisible Children also uses online postings and promotional emails to expand the distribution of the film.

Although both online and offline activities have proven successful, Invisible Children leverages its website to conduct the majority of its communication with supporters. The site is their primary voice and the provision of a one-stop-shop for information. To engage users with the Invisible Children brand, integrated rich media such as

QuickTime and flash movies have been used throughout the site. In addition, viral marketing and email marketing tactics were implemented to increase repeat visitors and educate users on the cause.

As a result of these marketing efforts, www. invisiblechildren.com is now the number one vehicle for people to submit donations that help support Invisible Children throughout the world. This is clearly taking advantage of the internet’s global reach. For the past eight months, the Invisible Children website has received more than $8,000 in donations per week. Donations range from $.31 to $10,000 and are donors whose ages and incomes range from children with lemonade stands to established business people. In addition, Invisiblechildren.com has experienced more than 155 million hits since January 2006.

With the help of the more than 77,000 supporters who have registered online to date, Invisible Children currently employs more than 175 people in the war-torn area of Northern Uganda and is putting 500 kids through school. As Invisible Children now knows, internet marketing is not only important, it’s becoming vital.

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Communicate your cause clearly To capture interest in the fickle online arena, it is important that the end user can decipher the message and mission of your cause quickly.

Establish the goals of your website Establish the goals of your website Are you trying to collect donations? Sell merchandise? Gather personal data? Whether you have one goal or many, you must identify what they are and prioritize them.

Diversify information distribution Evaluate what resources are available, or can be created, to help communicate your message (i.e. podcasts, video, audio, etc).

Engage the user by offering choices. Let them experience your message through a medium they can identify with.

Build a desirable neighborhood Entice users with an interactive element that promotes fresh content and information that they can contribute to. Blogs, forums and event calendars give a sense of community and ownership to your users.

Keep in touch

Reach out to your users by asking them to provide information about themselves. Use this information to send information including updates and newsletters. Keeping them informed retains their interest in your cause and gives you additional opportunities for a call to action.

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AGNT Issue 2 2010

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THE NEW FACE OF THE NON PROFIT TOUR Without support and a faithful audience it is nearly impossible for any organization to achieve itís goals.

Getting support and keeping it have been an issue within the non profit arena since the beginning. Now with a few years of experience touring, Seth Williams sheds some light on how a tour can spread your mission and gather support. { friends }

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AGNT Issue 2 2010

When we told other organizations about this idea they told us that we were crazy to be planning something that would aim to reach tens of thousands of people in only a few months. Many told us we would fail - it seemed financially unviable and logistically impossible.

As someone who is currently on his fourth non-profit tour, I am writing not necessarily to advise that this become a new model of non-profit organizations, but to explain the importance of wrapping normal functions of a non-profit (fund-raising, awareness-raising, network-building) around a root of personal relationships. The first national tour I was part of was one that I helped plan for a nonprofit organization called Invisible Children.

The idea was to put a bunch of American 20-somethings into a van together and have them show Invisible Children’s media at high schools and colleges to encourage action and an end to apathy. If anyone were to educate the youth of America about a war older than them going on in a small country in east Africa, it would have to be people who could relate to their audience.

When we told other organizations about this idea they told us that we were crazy to be planning something that would aim to reach tens of thousands of people in only a few months. Many told us we would fail - it seemed financially unviable and logistically impossible for an organization as young as Invisible Children at the time. And at that time Invisible Children had just begun it’s

The idea was to put a bunch of American 20-somethings into a van together

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and raising money is not enough. To really change lives there must be friendship, and the presenters must always set an example of what they are preaching.

Strictly adhering to these rules is education program and first micro-economic

what dictates a successful tour.

program in northern Uganda, so everything hung in the balance of this national tour.

When non-profit tours are looked at in that sense, it becomes

I was part of planning this first tour during

slightly more challenging, but

my senior year of high school, and had every

much more worth it in the end.

intention of going on the next tour, if there

And anyone truly can do it - it just takes the

would be a next tour. By the end of the spring

right dedication. My third national tour was

we found that this one tour not only brought

not for Invisible Children, but for another

in enough money to expand Invisible

organization

Children’s programs in northern Uganda,

which deals with raising awareness about

but it also brought 80,000 Americans (the

child soldiers in the Democratic Republic

majority being high school and college-

of Congo. This tour was not planned by

aged students) out to a one-night event

an office full of people, and there were

created to raise the profile of the situation in

few resources available that I had to plan

northern Uganda to the US government. The

the previous tours. It was just me and two

plan had worked and Invisible Children’s

friends calling friends of friends in cities

second tour (the first tour I went on) was

across the southern United States. This

already in the works. The idea remained very

tour was to be done by bicycle. Though

similar with the exception of a few logistical

we had few opportunities to speak about

called

Falling

Whistles,

Falling Whistles, the impact of meeting

improvements and a new pitch: another of

a small group of guys riding their bikes

Invisible Children’s programs in northern

across the US for a cause generates interest

Uganda giving students in the US the

in that cause. And the little time we were

opportunity to fund-raise to rebuild schools

able to spend with people we met along

in northern Uganda. The focus remained

the way fostered relationships that not only

educating people about the war, teaching

produced more support for the cause, but

them to use their political and social voices

lifelong friendships with the representatives.

for effective change and, as I now learned, networking through personal experiences

After this bicycle tour I joined back up with

with Invisible Children’s “roadies.”

Invisible Children and now find myself on yet another tour. I’ve realized that it’s not just

Now that I was on tour I saw first hand that

about awareness and fundraising, though

it was not simply a model for monetary

those are important parts of these tours. But

expansion, but a movement of friendship.

it really is about making friends and creating

The thing that sets Invisible Children’s

a movement of people doing good, and

tours apart from motivational speakers and

having fun in the process.

touring film festivals is the relational aspect.

The presenters become friends of those who house them and set up their screenings.

They even become mentors to students affected by the cause. Simply educating

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AGNT Issue 2 2010

BOOK REVIEW

The Nonprofit Career Guide: How to Land a Job That Makes a Difference. words // Tom Durso

We hope the book is both inspirational and instructive, that it introduces people to the idea of a career in the nonprofit sector and tells them that it’s a viable career path. Nonprofits are paying more attention to benefits and compensation and management practices as they have to compete for talent.

Shelly Cryer has spent nearly 20 years in the nonprofit sector, and for much of that time she has served as a consultant to various organizations.

Cryer noticed that many of her clients were having trouble recruiting and retaining talent, and when she began teaching at Baruch College she discovered that one of the most valuable things she could offer students was the connections she had.

Shelly Cryer has spent nearly 20 years in the nonprofit sector, and for much of that time she has served as a consultant to various organizations. Cryer noticed that many of her clients were having trouble recruiting and retaining talent, and when she began teaching at Baruch College she discovered that one of the most valuable things she could offer students was the connections she had. Just as she found during her days at Duke, even at schools with strong nonprofit educational programs, career placement in the sector was a difficulty.

With support from the Forbes Fund and through collaboration with New York University’s Wagner Graduate School of Public Service, Cryer began researching college seniors’ perceptions of nonprofits and the difficulties the sector has in recruiting talent. She went on to found the Initiative for Nonprofit Sector Careers, a research and advocacy group now housed at American Humanics. Out of those efforts came her recently published book, The Nonprofit Career Guide: How to Land a Job That Makes a Difference.

“We tried to go into the types of jobs and the great diversity of work and what a dynamic sector it is — such a fastgrowing part of the U.S. economy,” Cryer told me recently. “We hope the book is both inspirational and instructive, that it introduces people to the idea of a career in the nonprofit sector and tells them that it’s a viable career path. Nonprofits are paying more attention to benefits and compensation and management practices

as they have to compete for talent. We hope the book helps career advisers who help students that come in, that they can do a better job coaching that young professional or student find the job he or she wants.”

Cryer pointed out that salary differentials between the nonprofit and for-profit sectors are more perception than reality; more specifically, they are based not on profit status but on the industry the organization is a part of. That said, challenges remain.

Cryer encourages nonprofits to reach out to donors and foundations to help fund more competitive compensation packages, and she believes they must work harder to reduce the exploitation of employees who are so eager to work for the mission they often don’t wish to say no.

“We still are talking about mission-driven organizations, and employers are still looking for employees that are very much committed to their mission and willing to go the extra mile,” she said. “Long days and tough work are still the fact, and burnout is still an issue. We have a ways to go on the work-life balance issue in the nonprofit sector.”

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When the economic downturn took hold last autumn, the management team at non-profit Kiva.org made a calculated bet to curb investment, anticipating that donors would slow the volume of small loans they make to entrepreneurs in the developing world.

That slowdown never came. Now, the non-profit site is racing to keep up with user demand even while planning to bring its unique form of charity to the U.S.

They’re signing on microfinance partners in the Bay Area and in the Northeast, and are targeting the 30 million or so Americans who don’t have bank accounts and the 18 million or so “micro-enterprises” that often rely on high-interest loans or payday advances to buy supplies -- in Shah’s words, “folks who don’t have a FICA score or a credit history, but run a small enterprise.

Nearly 500,000 users have lent almost $65 million, interest-free, to developing-world entrepreneurs through Kiva.org. The nearly four-year-old site received a major boost during its early days from a wave of media publicity (including FORTUNE’s The only non profit that matters) and the very public endorsement by former President Bill Clinton.

Media attention has waned in the last year or so, but growth has only accelerated due both to friend referrals and loyal users who repeatedly re-loan money rather than withdrawing it. The site distributed $3.5 million last month. “The good news is that we’re doing more loans than ever,” says Premal Shah, president of the San Francisco-based organization. “The flip side is that we under-estimated demand. [Our growth] rate exceeds the rate at which we can scale.”

Kiva takes no cut of the loans allocated for entrepreneurs. Instead, it solicits an optional 10% fee of every loan to help pay salaries and keep the lights on.

The organization uses microfinance institution partners to vet entrepreneurs before allowing them to solicit funding.

By asking a series of questions to assess roots in the community and the legitimacy of a business, Kiva is able to establish a risk profile for each entrepreneur. Before offering money to, say, the proprietor of a Dominican fruit stand, any lender can read the entrepreneur¹s profile, history of defaults, and a bit about the business.

Default rates are low -- 2% total -- and users can lend a minimum of $25 to any single

MICRO-LOANS FOR AMERICANS? words // Jeffrey M. O’Brien

person. Spreading loans across a series of entrepreneurs further lessens a lender’s exposure to risk, and gives more people an opportunity to put money into the system.

Lately, however, lenders are putting up more money than Kiva can distribute.

Several times in the last month, the site has displayed a message saying there were no entrepreneurs to lend money to. “This is pretty much a fault of management,” says Shah. “We assumed things were really going to fall off. We didn¹t sign up enough microfinance institutions. That turned out to not be the right assumption. There are plenty of poor people out there.”

Now, in addition to trying to keep pace in the developing world, Shah and CEO Matt Flannery plan to bring Kiva to the U.S. in the next few months. At least for the last year, we’ve been thinking, wealth is everywhere, poverty is everywhere. When I was out in West Africa, and I said ‘we plan to let you loan to someone in U.S.,’ they loved that idea, that money would flow both ways.”Shah is close to signing a partnership agreement with two microfinance institutions, but refuses to name them until the deal is official. The rules will be slightly different once the partners sign on.

An American entrepreneur will be able to seek as much as $10,000 (versus just $1,200 in the developing world). And while Kiva has done very well in Africa and elsewhere, Shah isn’t totally sure how the effort will fly domestically. “This is definitely a social experiment in the US. I don’t know if the secret sauce in Kiva is that $25 goes really far in Uganda,” he says.

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AGNT Issue 2 2010

NON PROFIT AS A CAREER words // Lisa Gutierrez

“I think a lot of people my age are looking for a career that is meaningful, that is perhaps more than just climbing the corporate ladder or working their way up,”

In her first job as a holiday temp at Harvesters Community Food Network five years ago, Jamie Roach entered donations of food into a computer database and sent thank you letters. Now she’s writing grants and raising money for the food bank as its manager of major gifts.

In her first job as a holiday temp at Harvesters Community Food Network five years ago, Jamie Roach entered donations of food into a computer database and sent thank you letters. Now she’s writing grants and raising money for the food bank as its manager of major gifts.

Roach is only 26, but she expects to spend he rest of her career in the nonprofit world.

And that made her one of the young people Shelly Cryer really wanted to get her hands on. Cryer’s new book is The Nonprofit Career Guide: How to Land a Job That Makes a Difference. She’s playing matchmaker. Roach’s generation, by many accounts, is showing big interest in nonprofit jobs, a response, some think, to the tragedies of both Sept. 11, 2001, and Hurricane Katrina.

That’s heartening news as nonprofits are hit with higher-than-ever turnover rates as older managers and leaders retire, creating a high demand for the next generation -- Roach’s generation -- to step in, and up.

“I am trying to educate and inspire new, young professionals who are interested in public service to choose nonprofit sector careers,” Cryer says.

Roach says Cryer is on to something. “I think a lot of people my age are looking for a career that is meaningful, that is perhaps more than just climbing the corporate ladder or working their way up,” says Roach, who is profiled in the book.

The scope of the sector and diversity of its jobs stunned Cryer as she spent two years working on the book. The 1.4 million

nonprofit organizations in the country range vastly in size and services.

The simplest definition of a nonprofit is that it doesn’t pay taxes and any gifts to it are tax-deductible. The government considers nonprofits “public charities.”

Cryer calls them missiondriven. Most arts, education, healthcare and human services groups fall into the category. The nonprofit world, Cryer says, “is not just a place to go to volunteer. There are adequately paying jobs that can lead to a life.”

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People want to help you. For free. With a little effort, you might find a way to expand your business while avoiding emptying your wallet by taking advantage of pro bono support—a wonderful term in any language.

There is occasionally some truth to the notion of “you get what you pay for.” However, I’d make the case that this applies with lessrespected organizations than those mentioned above. If your cousin knows a guy who knows a guy who can totally hook you up with an awesome accountant for free, you might want to think twice.

If, however, some of the world’s leading authorities in their respective fields are volunteering their skills, just say thank you.

You’ll often hear from entrepreneurs that starting a business is a difficult and expensive process. And while I can’t tell you that either of these things is untrue, if you know where to look, you’ll find a bunch of people willing to offer their help, for free.

One of the most useful of these organizations is SCORE. With nearly 400 chapters nationwide, SCORE offers free and confidential advice to small businesses.

One of SCORE’s major strengths is that they don’t believe in cookie-cutter solutions; your interactions will be tailored to your organization’s goals and challenges.

You’ll be able to find a counselor whose experience matches up with your interests, and take advantage of their expertise through face-to-face and online counseling.

Fellowships are also a wonderful door opener to pro bono assistance and networkbuilding. Echoing Green, Ashoka, Acumen Fund, and StartingBloc all have respected fellowship programs. And while each fellowship is different, they often provide partial funding, advice, technical assistance, and opportunities for further support from other organizations.

One of those organizations is the Lex Mundi Pro Bono Foundation, which helps match social entrepreneurs with needed legal help. While Lex Mundi only accepts pro bono clients who have been vetted through a partner organization, their list of these collaborators is fairly extensive. I cannot stress how beneficial free legal help is. Need help incorporating or applying for 501(c)3 status? You’ll need a lawyer. Have

PRO BONO WORK words // Joe Ippolito

intellectual property you want to protect?

You’ll need a lawyer. Want to start drawing up contracts for potential employees or investors? You get the idea.

Pro bono support is also available in more creative areas. For instance, IDEO, a global design consultancy (and GOOD collaborator), occasionally hosts social impact labs. Socially focused organizations are invited to attend one-hour sessions with the firm’s designers to help solve their business problems. According to Elizabeth Johansen in IDEO’s Boston office, “the hour can be spent looking at anything from really meaty technical challenges like designing an irrigation system to something more intangible like helping to create a movement around leadership development.” This brainstorming can take any number of forms. Johansen explains, “We’ve dedicated the time to things like design reviews, where someone has a design, but they want experts to pick it apart and ask questions.”