I think that one of the most important things for any social entrepreneur to ask him or herself--and, by extension, any social venture, be it non-profit or for-profit--is whether the work they are doing is additive or duplicative. There is no shortage of good-willed people, and organizations started by them, in this country; instead, what we lack are organizations that build upon the work of other players--governmental, for-profit, non-profit, community-based, faith-based, etc.--rather than duplicate that work. In our case, when we started thinking about how to tackle the $100 billion/year predatory lending industry, we realized that we could never replicate the brick-and-mortar infrastructure of payday lenders, check cashers, pawn shows, auto title lenders and the rest of the gaggle the preys on the poor.
After all, if you go into any low-income neighborhood in America, you are guaranteed to find these storefronts, all with bright signs enticing the financially marginalized to come in for a usurious loan or a service that should be free, but isn’t for them. So we could have developed a business model that depended on opening storefronts in low-income neighborhoods, but of course the cost would have been prohibitive. Instead, we started thinking about what other assets already exist in these communities, and we realized that there is a brick-and-mortar infrastructure that could be made to compete with ‘the bad guys.’ I’m talking about faith-based organizations, social service agencies and other non-profits, government agencies, libraries and civic associations.
What we realized was that if we layered our products and services on top of what is already offered at those other agencies, we would have a cost-effective and ready-made approach to scaling and competing with the predatory financial services industry. But then we took it a step further. We started thinking about how central financial services are to all socially responsible efforts. Take, for example, a job training program. Lots of money is poured into these programs, and many of them lead to job offers at the end. Unfortunately, in many cases barriers remain: the graduate cannot afford a vehicle, and thus cannot take a new job offer, or has unpaid fines on his or her license and therefore cannot drive, or the person gets the job but does not know how to budget and manage the new income stream.
That’s where we come in. We partner with all sorts of organizations--job training programs, faith-based organizations, adult literacy programs, homeless shelters, agencies that help immigrants, schools--and then tailor our products and services to meet the needs of their constituents. This has the triple benefit of lowering our customer acquisition costs, increasing social impact and making the money going to our partner agencies go farther than it would without the partnership. In other words, our model is additive as opposed to duplicative.
Probably the best example of our partnership-based model is our work with two agencies that help immigrants with immigration-related issues--from applying for a green card to becoming a US Citizen--the International Institute of Rhode Island and the Catholic Diocese of Providence. In both cases, our partners found that they had a problem: for free, they will evaluate a person’s situation to tell them if they are eligible for citizenship. Unfortunately, it costs ~$900 to apply for US citizenship, a barrier that prevented many of their clients from moving forward with the process. In this example, a financial barrier was reducing social impact and wasting people’s time. So instead of turning people away, they partnered with us to begin offering citizenship loans to their clients. Now, case workers fill out a simple, web-based form if a client wants to apply for a loan through us; we then handle the loan side, and send the client back to the partner agency for help with citizenship. To date, over 20 people have attained citizenship thanks to our loans and the fantastic partnership.
In short, if you are interested in social change, think about how your work adds value to existing structures and resources, and don’t ever duplicate for the sake of duplication. When it comes to social good, we all have to collaborate in an open-source, honest and transparent manner, lest we succumb to in-fighting and competition and fail to achieve our highest and fullest potential as a society and as human beings.
