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|Articles - May 2014|
|Monday, April 28, 2014|
Page 4 of 5
IV. Silicon Valley humanitarians
Why do investors shy away from mission-driven businesses in the developing world? Ann Mei Chang doesn’t mince words. “You’re working in challenging environments with poor people,” she says. “It’s not a great equation for people who want to invest.”
A former senior engineering director at Google, Chang now holds the title of chief innovation officer at Mercy Corps, the well-regarded, Portland-based aid organization. Mercy Corps has a long history of working on what Chang refers to as “scalable” social ventures — such as microfinance operations that loan small amounts of money to people in poverty. Now Chang aims to bring her “business expertise, a crisper focus and more rigorous methodology” to these efforts.
Getting investors onboard is part of that project. Enter the Mercy Corps Venture Fund, a Chang-led initiative aimed at attracting early-stage funding to social ventures in the developing world. The fund is seeking a $10 million raise, with about a dozen projects currently under review. “The focus is about creating a business model that can be self-sustainable,” says Chang. “We want to be very rigorous about the projects that look most promising. Only after we prove the model can work can we look at investors.”
One possible candidate is MiCRO, a natural-catastrophe microinsurance startup Mercy Corps launched, along with a local microfinance institution, Fonkoze, and the global reinsurer Swiss Re. Following a pilot project in Haiti, the company plans to add hundreds of thousands of clients over the next five years, emerging with the first global- insurance product that can mitigate natural-disaster losses faced by the poor in Africa, Asia and Latin America.
The Mercy Corps Venture Fund capitalizes on two simultaneous trends: On the nonprofit side, there is growing concern about the limitations of the traditional grant model, in which aid programs receive large amounts of money but often serve a limited number of people. Meanwhile, a new crop of investors, especially in the tech sector, are looking for outside challenges and opportunities. Silicon Valley executives have amassed enormous fortunes, Chang observes. “They are starting to say, ‘I have more money than I need; how can I make the world a better place?’”
In recent years, tech leaders have taken a more aggressive stance on a range of public-policy issues, including immigration reform and government surveillance; in April, executives from Apple, Google and others collectively announced their opposition to the Keystone XL Pipeline. Silicon Valley entrepreneurs can be cynical about USAID projects, says Chang. But incubating a small business and taking it global — “that’s a language they understand.” And while Chang acknowledges some services will always require a subsidy — “the public good of having people vaccinated is high enough, you don’t want to rely on people actually paying” — she says other projects, like financial services and urban sanitation, are well suited to a market intervention.
Mercy Corps, which in April announced a new board member, Gisel Kordestani, former director of new business development at Google, is moving more formally into that space. Says Chang: “We want to figure out how to bring the best practices of Silicon Valley to the NGO sector.”
The problem: “Ninety-five percent of our assets sit in investment accounts, and only five percent are used to do grant work. That five percent doesn’t even come close to what we can do to enhance economic development.”
The solution: In January, the trust launched Invest Oregon, an initiative that will redirect a portion of MMT’s approximately $800 million “corpus” to investment vehicles. So far the fund has invested in the Portland Seed Fund and Ecotrust Forest Management.
The takeaway: “In the past we have focused on nonprofits, but we need to look at social outcomes that come from the for-profit side. There’s a great entrepreneurial environment out there, and we need to start interacting in that space.”
Friday, May 22, 2015
BY JACOB PALMER
A Power Lunch at Oswego Grill.
Wednesday, July 01, 2015
BY JACOB PALMER | DIGITAL NEWS EDITOR
There are more than 10 million former military members working in the United States.
Friday, May 22, 2015
BY ANNIE ELLISON
Portland tech veteran Ben Berry is leaving his post as Portland’s chief technology officer for a full-time role producing unmanned aerial vehicles (UAVs) aimed at first responders and the military. Berry’s AirShip Technologies Group is poised to be on the ground floor of an industry that will supply drones to as many as 100,000 police, fire and emergency agencies nationwide. He reveals the plan for takeoff.
Wednesday, May 20, 2015
BY KIM MOORE | RESEARCH EDITOR
An earthquake would completely destroy many Oregon businesses, highlighting the urgent need for the private and public sectors to collaborate on shoring up disaster preparedness, said panelists at an Oregon Business breakfast summit today.
Wednesday, May 27, 2015
PHOTOS BY JASON E. KAPLAN
Like all good journalists, OB editorial staff typically eschew freebies. But health care costs being what they are, digital news editor Jacob Palmer couldn't resist ZoomCare's offer of a three-in-one (cleaning, exam, whitening) dental office visit, guaranteed to take no more than 57 minutes.
Wednesday, June 03, 2015
As part of our green workplaces story, Oregon Business checked out a community service project undertaken by Portland Youth Builders, a nonprofit alternative high school. In partnership with Whole Foods, PYB built garden boxes for a Home Forward housing site. Home Forward is a government agency that provides housing for low income residents and people with disabilities.
Tuesday, June 09, 2015
The technology at the center of Oregon’s road usage fee reform.
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Tonkon Torp helps seed sustainability at Gunderson.
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One hundred years ago, the Willamette River might easily have been mistaken for a sewer. Unchecked industrial activity and decades of pollution made it unrecognizable compared to the clean river that now flows north for 187 miles from Eugene through the center of Portland.
3 Degrees Event Celebrates 5th Year Bringing Nonprofit and Business Professionals Together to Benefit Portland.
Bend energy leader brings passion for efficiency and renewable energy to the nonprofit.
Event in Forest Grove marks recognition of Global Food Safety Initiative Certification.