Micro Enterprise Summit Breakout - Micro Enterprise and Philanthropy

Panelists: Jack Litzenburg (Charles Stewart Mott Foundation), Terry Bell (Rockwell Fund), Tracy Kartye (Anne E. Casey Foundation)

Comments from Jack Litzenburg

Mott Foundation - national funder
- Early entry into the ME market
- Helped build equity in early ME funds
- Documented lessons in ME
- Today the foundation has turned it's attention to:

Started ME Funders Group

operated through the Aspen Institute. See document created to educate funders. They created a series of funder guides

Funded "Micro Test" collects data to identify best practices
Building scale in US M.E.

Interested to see what the impact of building scale is on the community / organizations

- Tomorrow?

Micro Enterprise Leadership Academy
Develop entrepreneurial network for entrepreneurs

Cost of money is a big deal in the emerging world. In our economy the major hurdle is getting to market, competing with the big guys.
Ex. creation of brand name speciality foods from Appalachia that helps bring products to larger markets (Cracker Barrel Restaurants) (ACENET?)

Community Colleges have a role to play

connection between economic ed, developmental ed, adult ed

- If we are to be competitive in the world market, we must help our low income people engage in the economy

Comments from Tracy Kartye (Anne E. Casey Foundation)

Mission - to build better futures for disadvantaged children and their families

- $100m endowment for social investment

Expect market rate investment

Outcomes for Business Investments

Economic Development
Job Creation
Income patching

Comments from Terry Bell (Rockwell Fund)

- We don't really do micro credit / loaning in the US. We just can charge enough interest (in India they charge 60% interest)
- Philanthropy makes up the difference between what we can charge vs. overhead to run a program. Bell contends that overhead can't be covered by interest alone.
- Groups like Accion helps mitigate losses through relationships
- Why are philanthropists (foundations) good partners

they have time (don't report quarterly)
they have flexibility
can help mitigate risk
misconception: we're easy. there is a move in philanthropy to be more demanding, have more accountability

What do philanthropists look for in projects?

Bottom line
Measurable success
Begin with the end in sight
See that things work

Q and A with Panel:

Q. How to achieve scale?

J.L. - Most ME lending isn't so much a dollar and cents transaction these days, it's one of education. Don't underestimate the true cost of education.

Q. Will scale cost?

T.B. - Perhaps, cited example of Midwest company who were bought out and lost personal touch. Micro businesses need attention

Q. Consolidation in the ME industry:

J.L. YES! He's love to see one loan pool per city with different underwriters applying to. Having separate loan pools is suicidal. One pool would be most effective and efficient.

Accion: Has developed a common loan pool and management of loan portfolio. Check with Aspen Institute.

Q. What forces would drive that?

J.L. Perhaps by the founders for more efficient use of loan funds.

How can corporate partnerships help us (other than banks)?

Procurement (supplies)
Understanding the demand side of the labor markets
How to enter the global markets

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