EndPoverty Sand Box
Developing innovations to meet unmet Poverty Reduction Challenges. SVF is in the process of forming partnerships with a variety of NGO's, Universities, and Businesses to facilitate the implementation of several innovative programs that will meet pressing domestic and international poverty reduction challenges
Social and Micro Franchising
The “Bottom of the Pyramid” (BoP) was a groundbreaking early case study focused on changing the poverty reduction paradigm by engaging business. Subsequently, published studies concluded that it’s smarter to aim for smaller-scale, incremental sales opportunities at the BoP with an engineered channel focused on the “last mile” to minimize costs and maximize outcomes.
Microcredit, pioneered by Muhammad Yunus, has enabled thousands of the poor to start their own enterprises, but it leaves it up to the entrepreneur to identify the business, often producing an abundance of similar types of low wage/low tech enterprises such as small retail stands and handcrafts. Today MicroCredit has moved up the "risk-averse ladder" and is taking bets on businesses that have revenue track records exceeding 6 months making it even more challenging for the poor who make $1 to $3 a day to "jump-start" a business.
MicroFranchising is the flip side of MicroCredit, given that it is focused on underwriting proven business models that are sustainable and can be scaled. Marc Blumenthal, Executive Director of the SVF, initially presented his Micro Franchise model at the MIT Media Lab and at the Media Lab Asia in 2001. He was invited to present the model again as part of the Social Ventures Foundation at the “Bottom of the Pyramid Summit” (BoP) in New Delhi, India in April of 2018.
The Foundation's scalable MicroFranchise Business Model employs the poor to sustainably, deliver meaningful social impact for the poor.
To demonstrate its model the Foundation selected the poorest nation in the America's and one of the most difficult places to do business in the world, Haiti. The unmet challenge the Foundation undertook is a major health care crisis for the poor: vitamin and protein deficiency due to food insecurity. The Foundation MicroFranchise solution is "V'ice" a shaved ice cone with a vitaminized topping that can be customized to the vitamin deficiency needs of a developing nation.
Rural India is facing a technology challenge. It confronts big machines in terms of efficiency and standardization. Simple machines like a 'Handloom' or have become incompetent in generating livelihoods. Anything more complex requires power which is not available. The SVF has been approached by Drishtee, a business that has impacted over 1.5 million people in rural India, to redesign old technologies and develop new ones through technology innovation.
For example, by increasing the efficiency of simple machines by 30%, rural areas will be back in business due to lower supply chain and manpower costs. The SVF will begin working with social impact departments of American Universities, independent research organizations and business to facilitate this innovative Technology Research Initiative.
In the United States, food stamp recipients suffer some of the highest rates of obesity and diabetes. The SVF has developed an innovative model, Fresh Fit, a sustainable home delivery program for repurposed fresh food meals for food stamp recipients in exchange for food stamps. The program is under development with several NGO’s.
Lifting American Livelihoods
The Social Ventures Foundation is focused on enhancing community livelihoods in economically depressed areas of all fifty states. American wages have been flat for more than ten years. Many Americans are carrying two or even three jobs to make ends meet. Higher wages can be directly correlated to better jobs. Technology innovation helps to deliver those jobs and more since each new technology job creates 3 to 4 service jobs.
Innovation is the "crown jewel" of the American economy and innovative technology companies are the primary engines for America’s economic development, higher wages, and job creation. Technology innovation lifts American livelihoods. But technology is facing a catastrophic capital investment drought, "The Valley of Death", and it threatens our entire innovation economy.
Angels and Venture Capitalists have moved up the risk adverse ladder, no longer taking bets on pre revenue technology companies with proof of concept. Metaphorically, think of Research and Development for innovative technology ventures as "eggs". Than think of "chicks" as those pre-revenue enterprises or startups which have a "proof of concept" and are focused on commercialization. And finally think of revenue producing technology companies as chickens. The problem we are facing as a nation is that If no one is left to feed the chicks, quite simply we wont have any chickens
The Small Business Administration (SBA) mission is to “maintain and strengthen the nation’s economy by enabling the establishment and vitality of small businesses.” The SBA website clearly states: “If you are awarded a SBA 7(a) loan, the loan proceeds may be used to establish a new business…”. The reality is however that banks will not lend money to establish or commercialize pre-revenue technology businesses with proof of concept including Small Business Research and Innovation (SBIR) ventures whch have transitioned from eggs to "chicks" .Far too many SBIR "chicks" languish on the shelf awaiting commercialization. The 25 Billion dollar SBA 7(a) program has been discriminatorily consumed by real estate, equipment and receivables lending. Real Estate and equipment does not contribute to sustainable job creation.
The SBA has been unable to solve the nation’s most pressing funding gap, “the Valley of Death”, which threatens America’s innovation economy. StarTTech is a proposed pilot program, focused on helping the SBA to accomplish its mission by turning the "Valley of Death" into a fertile field of job creation and manufacturing in economically depressed areas of all fifty states. The Social Ventures Foundation is supporting this proposed pilot.