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Samasource and the Business of Alleviating Poverty

Mary Catherine O'Connor | Wednesday May 26th, 2010 | 0 Comments

We’ve covered the inspiring work of Samasource before. But we felt we’d be remiss for wrapping up our series on the social side of sustainability without including another look at this innovative effort.  Though it is a non-profit, Samasource works as a bridge between profit-based, socially-responsible companies, and marginalized people in countries such as Africa and throughout Asia, linking them with Internet-based work for firms in Bay Area. Samasource screens and then provides training and project management tools to small businesses and nonprofit training centers in the poorest parts of the world.

We got on the horn with Samasource founder Leila Chirayath Janah, to talk about the changing face of business and the challenges Samasource faces in its mission to alleviate poverty.

Triple Pundit: What kinds of tools do socially-minded businesses need? How can they shape the economy?

Leila Janah: I think there are some inherent challenges in that our tax code was developed a long time ago, and companies that want to put social and environmental causes at the top of their agenda don’t have a clear way to do that. We need smart regulation to incentive the right kind of behavior among businesses. There’s a group called B Corporation that is basically trying to get companies to endogenize social and environmental costs, and then get them tax credit for doing that. So, that will basically accommodate companies that are somewhere between for-profit corporations and that also have programs for social or environmental benefit, as most non-profits do, in what I call the semi-profit space. What’s so exciting about social businesses is that I think we really do have the power to tap businesses to create social and environmental change.

[Looking at] the model of the mega-corporation that has emerged over the last 200 years, I think we’ve really learned how to scale for-profit businesses, and I think we can apply those same lessons to solving social and environmental concerns. So I guess that’s the way that we see social business shaping the new economy.

3p: What sorts of business models are the most effective for social entrepreneurs?

LJ: We were evaluating whether to be a for-profit or non-profit early on and we decided to go on the non-profit route, because we wanted to be uncompromising in our commitment to our social mission. I never wanted to have investors tell me “we’d love for you to work with these refugees; however, it’s not really that profitable, because they cost more to work with.” While there’s a lot of talk about social investing, ultimately investors who are in the for-profit space have to measure their performance on the returns that they’re getting. That’s starting to change a little bit, but for the most part that’s what you see in the for-profit sector.

Non-profits have to run a fundraising business and the service they are trying to provide. Fundraising is about finding the right donors, providing marketing collateral and refining your pitch. I think that’s much more burdensome than what for-profits have to do because you’re selling a mission and a vision to people who are not going to get any return on an investment in your organization. And Samasource is actually running three operations.

We’re trying to meet the needs of the people—women, youth, and refugees living in poverty—who we are trying to help, and that business is about getting as many of those people earning as much as possible. The second business is an outsourcing company that’s trying to provide high-quality services to our clients in the Bay Area, and that has very little to do with how equitably we distribute the work—and in fact the two are often directly in conflict.

If we want to offer the highest quality services then we want to work with the most well-off people in the countries that we tap because they are likely to be the most well trained and  experience. And then the last thing is running the fundraising business. So it’s an incredibly challenging space to be in and it’s really easy to get burned out and frustrated because there is just so little precedent for what we are doing.

3p: Do you think you’ll move to a for-profit model since the corporate world is starting to change, with, as you mentioned, models such as B Corp?

LJ: I am committed to one thing and one thing only and that’s to alleviate poverty, and so we’ll do anything it takes to reach that mission, and right now the structure to do that is really the non-profit structure. But I think if we see evidence that a for-profit might help us move faster, then we might look at it that way.

3p: What have been your biggest challenging to reaching your mission?

LJ: We’re working in a refugee camp in Dadaab, Kenya, which is really one of our flagship programs in terms of social issues. But because of security issues in Dabaab in the last few months, we haven’t been able to send any staffers there. In fact, our head of operations in Nairobi can’t go there and even CARE International, the non-profit that is running the camp, can’t send its own staff into the camps, because they are so likely to get kidnapped by Somali pirates. So political and infrastructure issues in the places we work are often our biggest challenge. [Ed Note 5/28: Leila let us know that’s not the case, CARE is, in fact, still in the camps.]

3p: Do you ever think about expanding your operations domestically, to places, say, like New Orleans, or are you committed only to working in less developed countries?

LJ: We’ve been looking at a couple different models for expanding in the US. Obviously, it’s something that we want to be thoughtful about. It’s different in that the work we would be outsourcing in the US would be higher margin and higher paid. People in refugee camps don’t need a living wage of $9/hour because the living wages there are much lower. So we’re still evaluating where we might expand in the US but it’s likely that we’ll do that this year and to figure out which places we’ll go into we’re using census data and poverty maps of the country. So some of the areas we’ve been looking at include Detroit and the Delta region of Mississippi.


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