Fredericks Foundation in the Telegraph
Whether you are New Labour or Coalition, "Third Way" or "Big Society", social justice focuses the British mind.
How it does that and, more importantly, what private initiatives enable government to do differently, is the new story. Count how many times you hear someone say during a week, "What should the Government do about . . .?" The frequency is set to decline dramatically this decade.
The business of "doing good" has radically changed due to the emergence of mega-social entrepreneurship, new technologies, business models, and a recognition that the world desperately needs the best business brains focused on eradicating some of the world's worst issues. All of this happened before the election ushered in budget cuts, which will change the face of government problems irreversibly.
Private equity pioneer Ronald Cohen founded Bridges Ventures in 2002, which backs social enterprise and has helped to make it a fundable category. Hampshire-based Fredericks Foundation, the UK's largest micro-finance organisation, led by Paul Barry-Walsh, is a social enterprise aimed at helping young people who have made bad decisions get back on track.
Barry-Walsh, a UK entrepreneur and founder of SafetyNet, now Guardian IT, has given more than 700 loans worth £3m this past decade. Conservatively, the Fredericks Foundation estimates that it has saved the UK Government £15m.
The genius of what Paul and the Fredericks team are doing is that they move people who are a cost to society into a taxable entity as they become micro-entrepreneurs.
Fredericks is now taking over non-functioning local and regional authorities throughout south-west England through its Hub network structure. Can someone please put this man in charge of solving all of the UK's unemployment problems?
How "giving" could go mass-market was the problem that Polly Gowers set about solving.
When Gowers, founder and CEO of Everyclick, set up her business five years ago, she may have thought she was on to something big. But today it's clear that her "give as you live" technology has captured the modern zeitgeist.
"Give as you live" enables brands such as Microsoft, Yahoo!, eBay or lastminute.com to share a portion of the value of the purchase or search with a cause of their choosing – the economics are shared and the individual is "doing good" while going about their life.
Everyclick's soon to be released Give As You Live app is a mass-market version of what Bono is doing with JoinRed – which raises money for the Global Fund, which is trying to reduce Aids in Africa by hiving off a portion of the sale of every Starbucks coffee, every Nike shoe, and other participating brands.
What makes Everyclick's technology a game-changer is the move from a club of brands that is generating revenue for charity to an unlimited number of activities and transactions generating income for a cause. Bono has been a key evangelist for the campaign to rebuild Africa and prevent Aids, but Gowers will be the "industrialist" who makes it an everyday phenomenon.
Imagine that you have an idea for a new cause, but don't know how you're going to fund-raise for your charity. Now imagine that you register with Give as You Live, and through the distribution power of millions of people online directing a small percentage of their searches and purchases towards interest areas, you find yourself in funds, giving you the ability to just focus on the good that you want to achieve, rather than the circle of small charity fund-raising.
Verstergaard Frandsen, a Swiss company and recipient of The Economist Innovation Award, has created a unique new Humanitarian Entrepreneurship business model. This "profit for a purpose" approach has turned corporate social responsibility into its core business of creating life-saving products for the world's most vulnerable. The company has played a major role in eradicating the guinea worm with its water filters and greatly reduced the death and suffering caused by malaria with its mosquito nets.
Verstergaard Frandsen will do more good than non-governmental organisations (NGOs) because it has the discipline and accountability of a corporate board and shareholders. Its profitability is an engine which can take aim and fire incredibly effectively where well-meaning but underfunded charities have stalled.
Verstergaard Frandsen, JoinRed and Everyclick's successes lessen the need for government to raise tax to give as aid internationally or through welfare programmes. Giving is directed by the giver. The transparency of Give as You Live to the individual reassures people who want to see the difference their giving makes. Overall volumes of giving increase. More and more thorny problems get tackled.
The role of government in solving society's problems decreases as social entrepreneurs, capitalists and industrialists arrive. Government can thus focus on restoring its own balance sheet and undertaking those things that only governments can do, such as providing safe cities and international security.
Medikidz, founded by Kate Hersov and Kim Chilman-Blair, two New Zealand doctors, is a new media firm which has created a series of superheroes who explain disease to children. Through this education, children not only learn what is wrong with them, but they are able to live a happier life and to share their feelings with others. This is an offering which the NHS would surely love to offer if they had infinite funds, but it took blue-chip investors such as Dermot Desmond, John Taysom (an early investor in Yahoo!) and Rob Hersov to join forces with the founders in order to deliver it.
I'm glad Medikidz decided to become a social enterprise with a foundation running alongside. Many social enterprises toy with the idea of becoming not-for-profit ventures. However, the business of doing good should be just that – a business.
It shouldn't be left to the government, the part-time or volunteer sector, or NGOs. There is no fundamental conflict between making money in order to live and give well. If you're going to set up a business, you won't attract the best talent unless it is well-funded, and profits are the best way to ensure sustainability.
The bigger the state grows, the weaker the people become – big government creates dependency. Barry-Walsh, Gowers, Cohen, Hersov and Chilman-Blair demonstrate that ordinary citizens will step in with their business acumen, new technologies, management skills and focus on sustainability through profitability and do a better job at creating and reforming society than the state will.
It's time to lead with that, rather than continuing to ask, "What should the Government do about...?"
Many thanks to Julie Meyer CEO of Ariadne Capitol for allowing us to reproduce her article featuring Paul Barry Walsh and the Fredericks Foundation, which was written for the Telegraph and published 14th August 2010.