Financial Services for Social Justice
If you are interested in pursuing a career in finance or consulting, there are many finance/consulting organizations both in the private and not-for-profit sector working towards various social justice causes, particularly combating poverty. Utilizing financial services to fight global poverty has been a strategy since Muhammad Yunus started Grameen Bank in 1976 to offer microcredit to people with no existing line of credit. Since then, various not-for-profits and for-profits have created an entire subsector of the financial industry focusing on microfinance to help empower those living in poverty. On the consulting side, not-for-profit consulting has been growing as an industry in order to help maximize impact, efficiency, and budgets for non-profits. While many consulting firms have not-for-profit organizations as clients, some consulting firms, such as the Bridgespan Group, specialize solely in consulting for the not-for-profit sector. An overview of the work of financial services and consulting for social justice is below.
Overview of Financial Service Products to Fight Poverty:
Microcredit/Microfinance: Microcredit, which was designed as a means to empower people in poverty while protecting them from predatory lenders, works by building credit, capital, and stability. With this money, they can invest in creating their own businesses, education and nutrition for their children, or simply building assets and a credit history. Microcredit is generally targeted at empowering those who are the least likely candidates for traditional loans such as women or the unemployed. People build up their credit with microfinance starting with a first loan of generally under $100 and building up until they can secure loans from traditional banking institutions. Microfinance is not limited to just one sector. Various not-for-profit organizations, multinational banks, and local banks have microfinance programs.
Barclays: Banking on Change - Barclays led effort to promote microfinance worldwide.
Top Microfinance Programs - Listing and ranking of top not-for-profit organization with microfinance programs
BYU Journal of Microfinance - Journal of Microfinance published by Brigham Young University on news and trends from microfinance.
Microinsurance: Microinsurance, is taking hold as a new method of combating poverty. Microinsurance is focused on offering low-premium coverage to communities. The idea behind microinsurance is that even as people in the developing world accumulate assets, they still need to be protected against natural disasters, crop failure, or sickness. Without these protections, people could easily lose their investments and assets and go back into poverty overnight.
Leapfrog - Investment firm looking to maximize profit with a purpose to empower economic activity with microinsurance programs.
Micro Insurance Center - A global organization leading in research, advocacy, and development for market-led microinsurance.
Patient Capital: Patient capital is a term used by the Acumen Fund to invest in social ventures in the developing world. While it is similar to investment done within the developed world, it focuses on long-term rather than short-term returns, and also focuses on maximizing both profit and social change. It differs from microfinance because the investments are much larger ranging from $300,000 to $2,500,000.
TED Talks on Patient Capital - Jacqueline Novogratz shares stories of how "patient capital" can bring sustainable jobs, goods, services -- and dignity -- to the world's poorest.
Acumen Fund - An investment fund focused on “patient capital” to help empower entrepreneurs worldwide in making sustainable businesses that help create a positive social change.
Not-For-Profit Consulting: Not-for profit consulting is a branch within consulting focusing on not-for-profits. While many consulting firms have not-for-profit clients, others ,such as Bridgespan and Dewey Kaye, focus solely on the not-for-profit sector.
Working with these organizations, the tasks and responsibilities will be similar to consulting for other fields; however, some specialized services that not-for-profit consultants provide include helping secure and develop a Board of Directors, guiding the philanthropy for foundations, and planning fundraising drives and campaigns. Not-for-profit consulting provides the critical thinking required of consulting while also providing the chance to help not-for-profit organizations at any stage refine and optimize their services to the community. While many of the requirements and skills are transferable, some firms, such as Jacobson Consulting Applications, require knowledge of the not-for-profit industry as well as the tools that not-for-profits use (such as Raiser’s Edge, a fundraising program) from their consultants.
Below is a list of consulting firms specializing in helping not-for-profit organizations.
Investment Banking/Investing for Social Change:
TED Talks on Investment in Africa - South African investment banker Euvin Naidoo explains why investing in Africa can make great business sense.
TED Talks on Bottom Up Development - Iqbal Quadir tells how his experiences as a kid in poor Bangladesh, and later as a banker in New York, led him to start a mobile phone operator connecting 80 million rural Bangladeshi -- and to become a champion of bottom-up development.
Potential Jobs in the Field/Potential Projects:
Not-for-Profit Consultant - As a consultant working for a firm specializing in not-for-profit clients, you will be providing strategic consulting to the world's leading nonprofits and giving overall direction to the project team. Some results you may see working as a not-for-profit consultant include starting a $25 million campaign drive for a hospital’s endowment, helping create a Board of Directors for a new not-for-profit, or helping establish and maintain a donor database.
Acumen Fund Fellow – As an Global Fellow for Acumen Fund, you are placed with and provide critical strategic and management support aimed at building and scaling the organization. Some of the Fellows’ responsibilities include building and training a rural sales team for MicroDrip in Pakistan; developing a distribution plan for LED solar lights for D.Light in India; and developing standard operating processes for the scale up of the LifeSpring maternity hospital chain in India.