McDonalds, Apple and Capital Good Fund

I recently wrote in the Stanford Social Innovation Review (SSIR) about the importance of considering competitive advantage in the non-profit space.  My argument there was that, unlike conventional wisdom, non-profits do compete: for funding, for clients, for partnerships and for the tone of public discourse.   That line of thinking has been transformational for Capital Good Fund (CGF), both in terms of the products and services we offer, as well as how we offer them.  For instance, we now market our one-on-one Financial Coaching service as a benefit that employers can offer to employees and schools can provide to parents; in so doing, we are able to secure fee-for-service contracts that are significant sources of revenue for the organization.

Yet for all the good stuff going on at CGF, as well as in the social sector as a whole, we still have a fundamental problem: 1 out of 3 Americans is either in poverty or perilously close to it (there are numerous other social and environmental challenges, of course).  This is despite the fact that there are over 1.5 million nonprofits in the US (including charities, foundations, chambers of commerce, etc.).  Unfortunately, there does not seem to be a relation between the growth in the number of charitable organizations and a decrease in the social/environmental problems they seek to alleviate.

Climate Change & Poverty

As hard as I work every day to come up with new and creative approaches to tackling poverty in America, I can't help but keep a wary eye on climate change.  It isn't just that recent storms have been unusually strong and destructive, or that 2012 was the hottest year on record.  No, what bothers me most is that climate change will only serve to strengthen the divide between rich and poor while threatening the natural resources upon which we depend for biological and emotional sustenance. As I talked about in my masters thesis, the poor pay more of their income, as a percentage, for energy than the non-poor; they are more likely to live in houses and neighborhoods with high levels of indoor and outdoor air pollution; they are less likely to be able to evacuate and/or relocate during and after a storm; and, in short, they are far more vulnerable to environmental damage than others.

Now a new report put out by the National Climate Assessment Development Advisory Committee once again highlights the severity of the crisis.  For instance, the report (which is still a draft, awaiting public comment) notes that "Many impacts associated with [the effects of climate change] are important to Americans’ health and livelihoods and the ecosystems that sustain us...The impacts are often most significant for communities that already face economic or health-related challenges, and for species and habitats that are already facing other pressures."

Educational Inequality and Financial Coaching + Schools

In this blog we've already looked at the link between poverty and health and how our Financial Coaching program can help to improve health outcomes for the poor.  Unfortunately, a recent study by the UMass Boston Center for Social Policy only served to reinforce this pernicious paradigm: the study found that the children of low-wage workers are "Far more likely to drop out of school than are higher income youth, are more likely to be among the one in five American teens who are obese, and are far more likely to become parents in their teen years."

On the heels of these sad reports comes an article in the New York times titled 'For Many Poor Students, Lead to College Ends in a Hard Fall.'  Here are some of the more troubling quotes:

Financial Coaching + Health, Pt. 2: The Plan

Yesterday I talked about why there is a need for a health module within our Financial Coaching program.  Today, I'd like to talk about how we plan on implementing that module and what it will mean for our overall social impact.

First, a little background: when I first started seeing health issues coming up with many of our Coaching clients, I wasn't sure how to handle it.  After all, health can seem tangential to the financial coaching, free tax preparation and small loans that we provide.  What's more, I had no idea how to go about tackling health within our Coaching--I have no background in health and neither do any of my board members or employees.  Still, I've never been one to shy away from a challenging problem, provided that it's worth solving. So I decided to reach out to Partners in Health, one of the best non-profits in the world and whose co-founder, Paul Farmer, is a hero of mine (I highly recommend three of his books: Pathologies of Power: Health, Human Rights and the New War on the Poor; Mountains beyond Mountains; and Haiti After the Earthquake).

Financial Coaching + Health, Pt. 1: The Need

Let's face it, poverty in America is a complex, multifaceted problem: financial services, health, education, housing, jobs, public benefits, environmental degradation--these are all issue areas that play a part in preventing a poverty-free nation.  Given that our mission is to end poverty in the lives of our clients, we are constantly looking at ways of expanding the breadth and depth of our products and services without straying from our core competency of offering financial services to the poor.  

Not long after we launched our one-on-one Financial Coaching program, we began to see that we could leverage the relationship developed between client and coach to identify a wide range of life goals and work together with our clients to achieve them.  It didn't take long to see that health issues were a significant barrier to success: half of bankruptcies are due to medical debt, and many of our clients cite health issues, such as diabetes, hypertension, obesity and anxiety, as significant challenges in their lives.  And when looked at from a macroeconomic point of view, America is facing health crisis; in fact, according to a recent article in the Stanford Social Innovation Review (SSIR),

Today, heart disease, stroke, diabetes, asthma, and other chronic diseases account for about 70% of all deaths in the United States and restrict daily living activities for 25 million people.  They also impose huge costs on families and economy, gobbling up an estimated 75% of the money Americans spend on health care.

Our Strategy For Growth: 4 Competitive Advantages

We find it unfortunate that non-profits tend not to think about competitive advantage as it relates to social impact and growth: far too many social change organizations view competition as something reserved for the unseemly, for-profit world.  Yet it doesn't take long to see that this way of thinking doesn't make sense.  Non-profits like us compete for clients, who have the option of getting their financial needs met by credit card companies, payday lenders, rent-to-own stores, etc.  We also compete for funding and, lastly, for ideas.  Yes, ideas!  After all, lots of people have thoughts on how to tackle poverty (and even more people don't think about it at all), and so we are in a kind of market place where the good we are selling is opportunity and an approach to fostering a more equitable American society and economy, and our customers are policy makers, business leaders and the general public.

So once we start thinking in terms of competitive advantage, the next step is to identify what, exactly, ours is!  I believe that we have four (4) qualities as an organization that will set us apart and propel us to becoming a national organization that makes a significant dent in American poverty.  These traits are: 1) Products and services; 2) Beautiful design; 3) Culture; 4) Data mining.  What follows is a description of what each of these mean, how we will carry them out and why they are so crucial.

Large-Scale Renewable Energy - A Conundrum?

Photo Credits: Jamey Stillings

This photo is of a solar thermal power plant that, once fully operational in 2013, will be able to power 140,000 homes.  Solar thermal plants generate energy from the sun by using thousands of heliostats (basically, curved mirrors) to concentrate sunlight onto a central tower (seen in the center of the circle on the photo) so as to generate steam.  The steam is used to spin a turbine, which generates electricity--all without the use of fossil fuels.  What's more, through the use of molten salt, the heat can be stored and released at night, generating power 24/7.

The problem is that this project, and most large-scale renewable power plants, use a lot of land...land that is often untouched and home to endangered flora and fauna.  Below is a photo of the land on which this power plant was built before work began: