Making money from doing good.

I really like and believe in what Mr. Noam Kostucki (Co-founder of Seeducation) says at TEDx. It only reinforces my belief that the sole purpose of making profit is for doing good. Period. Exactly the same point I mentioned in my ATTICUS paper.

Well, watch out. Companies who still don't realize this simple fact is bound to have larger problems later. Do Good or Die.

DO GOOD OR DIE

This is my second attempt at writing another ATTICUS paper. Do Good or Die is an attempt at understanding the paradigm shift from branding to service. The shift from making profits to being ethical and doing good to society and people. This paper explores how Return on Investment is making way for Return on Involvement. How Social Media and Social Responsibility is changing the way brands are marketed and its future impact on Earth and people living on the planet. How Social Media and Social Responsibility will help brands become more acceptable to people and society. It also explains how Sustainability will become the core focus of brand marketing in an era of increased globalization.

Do Good or Die

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Considered Design - The Next Wave

In the beginning of 2010, when I was writing my thesis paper on Sustainability and intelligent ways of using resources, how it is becoming the most important and critical factor is developing a global brand, seldom did I know that Nike was actively creating a Considered Index Calculator as part of their Environmental Apparel Design Tool. You should also check out their Corporate Responsibility and Sustainability report, one of the best data visualization report I've come across.

I was so happy to find out that Nike is playing a leadership role in this area and together with brands like Patagonia, Adidas, Espirit, Levi Strauss, JC Penny, Walmart, H&M, M&S, Target, Timberland along with Outdoor Industry Association, Duke University, Environmental Defense Fund and US Environmental Protection Agency and many others in creating the first Sustainable Apparel Coalition. The new Sustainable Apparel Coalition will establish a common index setting industry wide benchmarks for ecological credentials of clothing and footwear.

Am sure we'll see more companies, universities and govt. bodies coming together from across industries to create coalition indexes and benchmarks together. Personally I think in India, the telecom giants should come together to create an Index that delivers meaningful Value Added Service. I also think all the Life Insurance companies in India should come together to create a Claim Transparency Index. Its seems like a great proposal but the later is highly impossible given banking and transparency don't go together. But when you give it a serious thought, you will see, how deeply it can impact the lives of our people.

Do share your thoughts and comments.

Mashing up Micro-Credit, Economic Crisis, Social Media and everything in between – Part 1

In the last 15 days I’ve been working on a project about micro-credit. A client approached our agency and I’ve been entitled to handle the pitch. The subject is actually heavy and tiring and given it’s printemps out here and the weather is beautiful and I have to work late everyday while others are enjoying the sun, the cafés and the skimpy cladded Parisien women, concentration on subject matters like micro-credit becomes little difficult. Not that I don’t like the banking and financial category, it’s too complex for a non-economist poor planner like me. Obviously being as ignorant as I can be, I tried to read as much possible on micro-finance, micro-credit, the impact of economic crisis, world poverty, social media, social investment, civic banking, ethical economy, triple bottom line, corporate philanthropy, Grameen Bank, SKS Microfinance, Mohammed Yunus, Jonathan Morduch, Microplace etc. phew. Honestly too much information for my half-wit brain to process in such a short span of time.

I ended having lots of unanswered questions. So, I thought its better to put everything up here for discussion and someone among you might be able to enlighten me in the process.

The objective of micro-finance is to provide financial access to all people living on the edge of poverty and eventually eradicating poverty from the face of earth. Micro-credit (under micro-finance) helps build micro-entrepreneurs, generate employment for the poor and make them self-sustainable to handle difficult times of their lives. So, microcredit is a tool for socio-economic development.

However marco-banks (read Lehman Brothers, Merrill Lynch, UBS, AIG, Citi) have proved us how they can push the middle-class on the verge of poverty instead of eradicating it. The global financial crisis is slowly manifesting itself across the globe and the impact is becoming clearer by sweeping away firms, mines, jobs, revenues, and livelihoods. What an irony. The microfinance sector is trying to eradicate poverty while global banking segment is making us the people poorer. The recent economic crisis will leave more than 20 million jobless by the end of 2009 according to ILO. In a world inhabited by 9 billion, more than 1.4 billion people are already living under extreme poverty on the sidelines of the global economic crisis. By end of the year more gets added to that number.

Anyways. My concern at the moment is whether the banking segment re-invents itself? If yes, how? Is there a place for ethical economy in the world of finance and banking plagued with growth, gross product and greed? The more we invest in Micro-lending, the more individuals will be working toward bettering our economy as a whole. Will larger banks and corporations start looking at micro-finance seriously?

Forbes magazine said that "microfinance has become a buzzword of the decade, raising the provocative notion that even philanthropy aimed at alleviating poverty can be profitable to institutional and individual investors." There signs of things happening. Members Project from AmEx par exemple. So my first reaction is micro-finance is one very important segment that will indeed see growth and integration within the larger system.

Microfinance institutes benefits from these close ties with their local communities, from knowing their borrowers well, from having an ownership structure that includes shareholders with a strong interest in their well-being, from conforming to local financial regulations and from making good use of local savings. In India, the National Bank for Agriculture and Rural Development (NABARD) finances more than 500 banks that on-lend funds to self-help groups (SHGs). Nearly 1.4 million SHGs comprising approximately 20 million women now borrow from banks, which make the Indian SHG-Bank Linkage model the largest microfinance program in the world. Microfinancing also helps in the development of an economy by giving everyday people the chance to establish a sustainable means of income. Eventual increases in disposable income will lead to economic development and growth.

It’s a kind of offline version of Social Networking. And since big banks didn’t show much interest or help MFI, P2P based institutes like Kiva, Babyloan, Veecus, Microplace etc. gained prominence and started growing. Individual investors and common people understood the importance while banks kept showing their reluctance. Suddenly the whole world of banking got affected by so called Web 2.0, Social Networking, and Digital Media. The internet is now giving birth to new concepts like social investing, social finance, and social budgeting tool. Social Picks, Bull Poo, Green Sherpa, Geezeo. List is endless. Bankers better take noice.

Companies like Virgin Money, Globe Funders are changing the way banking is seen. Will the growing apathy of people towards our banking system force them to re-look at Ethical Economy seriously? I mean people are buying only ethical coffee so why not start focusing on ethical economy sooner. Will traditional banks adapt to these new changes? Yes, I am aware of the fact that this economic crisis will have a major impact of P2P lending platforms like Kiva, Babyloan etc. but I also have a feeling that individual investors driven by their passion of ‘doing good’ to society will keep recycling their money they have already put. And the numbers will grow by the end of this year. That’s because they will find micro-investment a less volatile investment option rather than just sitting on the money or taking up other high risk investment decisions. Micro entrepreneurs participate in micro economies, which are in part fueled by micro loans. This is one system that benefits all. Though it’s a lengthy process of return on investment but it is indeed a right step in the right direction.

I wanted to put these questions out there for discussion. Will small investors start looking at microcredit and micro-lending as a serious alternative to mutual funds, bonds and stocks? Who will social media influence people in social investments or social companies with micro entrepreneurs from poor regions of the world? How innovative do you think bankers will become and what new products can they launch? Will the banks drive these innovations through their social media platforms? Where do you think is the convergence point of social media and micro-credit? Do you think Social Banking is the new frontier?

Do write back with your comments and feedback. Maybe there is merit in what I am thinking, maybe its utter cow crap. Whatever. Would love to hear it from you.