Funding relief efforts
credit financing
how do you get the money back/loans repaid
using peer pressure as repayment assurance
Kiva.org stats (fastest moving social network platform)
Just Cause (online platform and publication)
Knowledge is power
APIs to gather information on people devastated by natural disasters
Mashup between swivel based data gathered from federal agencies, with platform from prosper, zopa, kiva
Pledge bank
Focus on orgs that have access to technology and data
Might push orgs to switch from gaining access to funds to enabling and acquiring technology to hook into a global network which will get them money faster than they ever could on their own
Human to human and can help address non crisis issues
Would enable people who say they want to do something but feel impotent to act and give them tools to engage and change
Harnesses wisdom of crowds to fund many different projects with different priorities
A change in what investing means (from charity, paternalism to action and rescue)
Changes the model and more than that the result
The creation of dependancy, exploitation, corruption, cultural arrogance, is ended
There is accountability, expectation, empowerment
Community pressure in microcredit is critical
Microcedit creates assets owned by the community to create peer ownership and pressure
If community owns these assets, then the first in line feel pressure to repay so second in line has a chance at the financing next
Local control/capital
The concept of community has changed, there are less limits to what community can mean
We can create a community around anything we're interested in, more like-minded than geographic
More organic
This concept is key to create accountability
Just as important to receive as it is to give, so receivers are a part of the community and not just interchangeable pieces to feel sorry for.
The givers are considered investors in projects that change lives
"I seem to be a verb"
Community is a verb not a noun - transition to tribalism to a new tribalism which is opt in
We all know that those who opt in are more likely to engage
Notes from BL:
Credit Financing of International Relief and Development Projects
Michael
Shirley
William
Tammy
Pete
Bruce
Allegra
Precept:
Results of relief is an asset that can serve as collateral for a loan. As basic needs are better met, e.g. secure home for family after disaster, recipients of relief can be relied on to repay a loan that is managed through the local community. Increased capital formation for relief and development projects can be achieved through bringing together investors, recipients and relief/development projects into an expanded community relationship.
Notes:
(Following these notes is the statement read by Bruce LeBel at the Shelter Meeting 07a in
Studies of economic activity after disasters show the unequivocal benefits of rebuilding community, e.g. homes have economic benefit while temporary shelter doesn’t serve beyond triage. Stability > security > livelihoods.
If pilot projects can demonstrate the profitability of investments in relief and development then there would be potentially unlimited capital resources available to apply towards international development initiatives.
Micro-loans current structure is quite rigid. A different model that is community-focused and adapted to the context of the social- and cultural-milieu. Community-based loan management and peer pressure can ensure a high percentage of loan repayment success.
If the significant next objective is to define and create a pilot project, what are some of the elements and considerations that this group thinks should be brought in to the process?
William: see kiva.org and prosper.com as related on-line platforms. There is much infrastructure already in place for social lending, and also for socially-responsible investing. How to connect individuals with specific projects using on-line tools?
Tami: Online community resources for grass roots messaging, not top down - “Just Cause” publication, philanthropy, on-line. Connect people to the causes that they’re interested in. “ISayYouSay” on-line debate forum is another means to connect people to causes. Track > debate > participate
Bruce: Connect small-scale investors without relying on large investment vehicle: i.e. decentralize. Community scale projects and on-site presence for credibility and relationship; local trusted agent…
Michael: Investor pledges, matches? See “pledge bank” concept. “small groups on small groups.” Use contacts established with micro credit org’s.
Bruce: The relief process can get in the way of development. Once the triage phase is over, it is most productive to invest in reconstruction and development, not in extended relief. (Relief funds drain development resources; misuse of relief resources…)
Michael: Development is the “teaching to fish” metaphor. Localization of the development decisions creates buy-in. Catalyzing community coordination of loan management and local responsibility for repayment oversight. Find 2-3 showcase projects…
Bruce: World Shelters model includes working with established agencies in the community in support of their mission.
Michael: Suggestion – Investors can buy the local currency to help spur value. “Keep circle of prosperity rolling”.
William: see Hans Rosling on TED website re visual display of quantitative information, and making data available. Big value in having on-line connectivity associated with the development project. Parallels between GDP and internet access… Providing data can engender action.
Bruce: Satellite internet, long-distance wi-fi…; needs to be integral to each project. (Should Hughes DirectWay be approached as a donor?)
Bruce: The development projects are much greater percentage of overall need than the disaster relief projects. The disasters get news, and get donors attention. But if we’re focused on investors, then there’s no emphasis on the “spike” of the disaster. Focus on the pareto of need, greatest needs first even though they’re not in the news.
Tami: You could “Link Up” investors with projects. Social networking tool can fuse investors and $ with projects. (Make the visuals interesting; use pictures to build the case and communicate progress.)
William: You couldn’t have done this two years ago, but you can today. New tools; technology tipping point; easy accessibility.
Pete: There is a melding here of individual incentive and altruism.
Bruce: From the standpoint of the investor, it is now the individual recipient who is the real asset. There is a business relationship, with trust and commitment, supported by the local community context.
Tami: You can redefine “community” to include the virtual social network. Bring the individual investors into direct relationship with the local community and loan recipients.
Michael: The community can do more than assist with the micro-loan management. The community can own both the assets and the liabilities. Create local capital…
Bruce: The correlation of the social network and individual investors and community-based projects is a new structure: the virtual community including both individual lenders in direct relation with individual borrowers in the context of, and with oversight of, the local community… This a new means to define development projects with individuals in relationships through both local and virtual community.
Michael: “Community” is a verb; an on-going process. New-tribalism using the net.
Tami: Spot on.
Bruce: Great. Now we can start.
Epilogue: Fuller’s aphorism “Dare to be naïve.” …” the deliberately non-straight line”; …just start, and learn and correct course as you proceed.
* * *
Addendum:
Statement re credit financing of development projects from Shelter Meeting 07a,
To: Shelter Meeting 07a, Geneva Switzerland
From: Bruce LeBel, executive director, World Shelters
Re: Suggestion for increasing financial resources for shelter
May 30, 2007
I would like to advocate for new resources in the financing for emergency response and developmental relief shelter programming. Although shelter is acknowledged as an integral element to rebuilding stricken communities, I expect we would agree that the funding for shelter falls far short of what is needed. Funding for shelter is considered an expense. However as our emergency relief efforts evolve more towards developmental relief programming, including transitional shelter with a path towards permanent housing, each shelter is in fact an asset. In addition, having adequate shelter demonstrably enables communities, families and individuals to become more productive, to measurably increase the wealth of the community. This is well documented in the study “Economic Impact of Shelter After Disaster” available in the Shelter Centre Library. Our collective work in providing shelter is actually an investment with a high rate of return.
If providing shelter creates both these hard and soft assets, then I contend that it's an error to consider transitional shelter programs as an expense. Do any of us think that the shelters we provide are worth nothing as soon as they are erected? That’s the nature of an expense; money spent and gone. However, it is self-evident that the shelter itself has value and the community revitalization that derives from shelter has value. Given all this value, and with the assumption from experience that people are willing to work for a meaningful compensation, the provision of shelter should be fundable through credit financing. The channel could not be a local fund, for reasons elaborated in “Exploring key changes and developments in post-disaster settlement, shelter and housing, 1982 -2006”. Rather I suggest the funding come from a global- or regional-scale self-sustaining revolving loan fund.
Imagine regional equivalents to the Community Loan Funds now in place in
Design parameters would also shift. The built designs that convert the capital allocated into the highest valuation of the shelter achieved would become favored, rather than the least expensive or easiest to deliver.
There have been a number of financing programs over the years that could be learned from, for example USAID’s $15MM Housing Assistance Grant fund in Indonesia in the mid-90’s. To my mind the essential element is to suspend disbelief that individuals in afflicted regions would not pay back loans when there is paid work available, and to recognize that loans enable such obvious benefits for the individual, the family and the community. As with every loan fund, some would not get repaid. Maybe build on Cynthia’s summary this morning and call the program “Building Trust”. There’s a reason that a micro-loan program creator won the recent Nobel Prize in economics. This can work.
Perhaps a task group could evaluate an initiative on this issue, including possible sources of capital, organizational requirements, and coordination with NGOs better equipped to facilitate home business, building trades and other enterprises that are possible when transitional to permanent shelter is available. A pilot project funded by seed capital could prove the hypothesis and provide lessons to inform next steps.
A parallel issue is title to the land. When the land on which shelter is being erected is not certain for the long term, one of the functions of a managed Loan Fund can be to facilitate acquisition of the asset of suitable land for provision of transitional shelter and/or permanent housing, with resolved title that is appropriate for that community's context. If the long-term location for the initial shelter can be determined, then there is a clearer path to get beyond disaster relief and into a process where transitional shelter can realistically become housing.
Given that provision of shelter has demonstrable value in monetary terms, in addition to the humanitarian value, and after demonstrating that recipients of loans can in fact repay them, transitional to permanent shelter programs should be fundable through credit at whatever scale the value justifies. I propose this alternative financial resource for your consideration as one of the possible themes for the “embryonic Global Alliance", as Graham has framed it, for shelter that is currently gestating. This financing mechanism of a Shelter Community Loan Fund is a structure that can change the equation from expensed allocation of limited shelter resources, to enabling new means for disaster relief to serve as "developmental relief programming" and effectively rebuild communities.
Thank you for your consideration of this concept.