Philanthropy is Risky Business

A Risk-Tolerant Funder Amplifies Untested Social Franchising Model

Written by Tifany Boyles and Julia Pettengill (below)

Does risk still exist in philanthropy? Street Business School (SBS) and the Schooner Foundation share their journey—from 2015 to the present and still unfolding—in which a proven enterprise development program initiated in Kampala, Uganda took a chance and expanded to 13 countries through 75 franchise partners, scaling women’s economic development across Africa. In the philanthropic sector, funders and implementers are seeking proven strategies to scale solutions. This is the story of how a funder’s willingness to take a risk and an implementer’s ambition led to trailblazing a social franchise model.

The Vision
By 2015, SBS had been delivering business training to women living in poverty for 11 years. On average,  a woman increased her income from $1.35 a day to $4.19 a day within two years of graduating the six-month SBS training. Graduates were lifting themselves and their families above the global poverty line. Grounded in a focus on increasing a women’s self-worth and confidence, these outcomes and their implications were powerful. SBS Founder and CEO, Devin Hibbard, recognized they had something special and urgently wanted to scale to reach more women. The goal—train 1 million women as SBS entrepreneurs by 2027.

SBS had a vision for scaling, but not by the traditional, self-replication model of opening new hubs in new communities or by open sourcing the curriculum. The model is known as social franchising. SBS would franchise its training model through other NGOs that would lead implementation in the country that they already knew and served. These grassroots partners would then customize the SBS business training curriculum for the local community and use it as a tool to further their goals, whether in children’s education, healthcare, anti-human trafficking, or other issue areas.

In 2015, SBS launched a capital campaign to fund the pilot, and 25 donors contributed most of the $1.3 M raised to fund the initial vision, including the Schooner Foundation. In 2015, when this vision was first shared with the Schooner Foundation leadership—Boston-based business leader, Vin Ryan, and his renowned activist daughter, Cynthia Ryan—scaling was an exciting prospect. The idea borrowed two pages from the private sector—entrepreneurship and franchising—and leveraged them to help people help themselves. The model also reduced duplication of efforts among NGOs while generating revenue for SBS.

Until that time, however, social franchising had largely been used in hospitals and for producers of items such as solar panels.  Although untested in this context, SBS was committed to franchise business skills training through NGO partners to empower women. The Ryans, known for Schooner Capital, and their philanthropic arm, the Schooner Foundation, took a risk and made a three-year pledge to help fund the pilot. The Schooner Foundation believes when you invest in a woman, she becomes a catalyst for advances in education, nutrition, health, economic progress, and social justice.

Although untested in this context, SBS was committed to franchise business skills training through NGO partners to empower women.

The Pilot
During the pilot there was a flurry of research, rapid prototyping, and strategic planning. The plan was to train nine NGOs and learn from these early adopters how to best transfer the concept to new geographies. Initially, the intention was to include NGOs from Africa, Asia, and Latin America. Vin Ryan responded to this proposal with valuable advice: “Introduce new factors slowly. Consider starting with just one region to best understand what works and what doesn’t. Test. Iterate. Scale.”

The first immersion workshop in September 2016 was limited to East African NGOs. To acquire certification, two program staff from each NGO paid to receive training and a full suite of co-branded tools over an immersive, eight-day course. Upon graduation, these certified coaches received ongoing counsel and worked with SBS to customize and implement the program within six months. The CEO of one SBS-certified partner, Bicycles Against Poverty, explained, “Our Operations Director, Brian Fassett, was previously the Director of Training and Development for a major credit union in the United States. He attended SBS and was incredibly impressed and grateful for the training. He said it was ‘world class material.’ We’re excited to implement [SBS] in Gulu!”

By the end of the pilot in 2017, 14 Africa-based NGOs were trained and SBS-certified. Early data measuring the income increase through partner implementation was collected to confirm that SBS had the expected outcome: tripling a woman’s income and rising above the global poverty line through its franchisees. Participating NGO leaders—focused on a variety of issue areas—were acutely aware how increasing women’s income could address many systemic injustices.

Among the NGOs trained, 78 percent went on to implement SBS in their local community. The average class size was 38 and cohorts ranged from two-to-three groups graduating per year per partner. Impact grew from hundreds of women graduating per year through direct implementation to thousands of women graduating as SBS entrepreneurs annually across Africa. Encouraged by the early results, Cynthia Ryan observed, “With the best partnerships, there is learning happening on both sides. That has certainly been true here. We trust there will be new challenges and new opportunities at every stage. The Schooner Foundation values this collaboration with SBS because of the transparency and tenacity in which we face obstacles together.”

Going Global
As exciting as the pilot results were, the implications were also daunting. SBS would need to raise three times the earned and philanthropic income annually to implement its plan for scaling in Phase II. Additionally, SBS would need to enroll and train 86 NGOs in the next three years compared to the goal of nine NGOs trained within the three-year pilot. Reflecting on the decision, Hibbard did not hesitate, saying, “We knew it was our job to be ambitious and reach as many women as we could through this proven model.”

The Ryans saw the outcomes of the pilot and the remaining need to pursue scale. While there was still risk due to remaining unknown factors, the outcomes continued to show promise of an innovative model to lift women and children out of poverty.  The results offered a marriage of private and philanthropic sector ideas that don’t create dependency on aid but build resiliency and independence among those society has traditionally overlooked. This vision encouraged collaboration among NGOs rather than competition and stretched one gift into a benefit for many. In terms of social return on investment, the net was a no-brainer. The Schooner Foundation responded to the findings of the pilot by tripling their initial philanthropic investment for Phase II.

Looking Ahead
While SBS still has a year remaining of Phase II, it has already franchised through 75 NGOs consisting of 163 SBS-certified Lead Coaches in 13 countries. In October, SBS partnered with its second large-scale NGO and expanded into Latin America for the first time. SBS’ goal is to pilot expansion to Asia this year with three anchor partners. Then, as Ryan advised—test, iterate, and scale.

Recognizing the path ahead, the Schooner Foundation is committed to helping SBS identify like-minded funders and NGOs as they continue to grow and expand their reach. Both partners agree, the greatest lesson learned was that philanthropy is an opportunity to take risk and innovate. With aligned partners, new ideas can take root and create sustainable change.


 

Co-Author Julia Pettengill

Julia is the Executive Director of the Schooner Foundation, a Boston-based private foundation that seeks to advance human rights by leveraging funds where there is the greatest need and opportunity. In her role, she oversees the vision and execution of the Foundation’s strategic direction and grant-making activities, domestically and internationally. Julia comes from a diverse background in fundraising, international development consulting, and nonprofit work, all with a strong focus on rural Africa, where she grew up. She holds a Bachelor of Arts and Master of Education from the University of Cape Town, South Africa and currently serves as a member of the National Cancer Institute’s Pediatric Leukemia and Lymphoma Steering Committee.

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