From the blog of Ted Chan:

When I decided to attend MIT Sloan, one of my explicit goals was to get hands-on experience working in other countries and different environments. I wanted to push myself outside of my comfort zone, and learn from people with different experience and backgrounds. MIT as a whole, and the Sloan School are committed to this and put the funding into making this happen (MIT has funded or partially funded trips for me to China, London, Montreal, India, Philippines and Tanzania). This IAP was both a great test of what I’ve learned, and an experience in and of itself.

I have been in Tanzania since December 22nd, spending most of the time with folks from Sloan. First, I trekked Kilimanjaro, then went on safari. Then, through MIT’s Global Entrepreneurship Lab, I spent three weeks in Dar es Salaam with a local NGO that helps victims of domestic violence and sexual assault. The program I was specifically in focus on Global Health Delivery is the brainchild of Sloan professors Anjali Sastry and Simon Johnson (former Chief Economist of the IMF). After that, I went to Zanzibar for a week with seven other Sloan folks and got scuba certified.

I’ll focus this post primarily on the G-Lab experience. First off, I had a bit of an atypical experience. While many Sloanies choose to work on project teams with other MBAs, I wanted to take a risk and work on a different team. As such, I chose to be on a team with three Sloan Fellows. Sloan Fellows are are one year Executive MBAs, and they really add a lot to the MIT Sloan community when they are not busy with their families with the jobs. We had a senior level Nigerian banker with a cynical sense of humor, an Indian PhD who is the Chief Scientist of Johnson and Johnson’s neurosurgery division, and a remarkable medical doctor on our team from the Sloan Fellows program. Our team was rounded out by a PhD in the MIT Science and Technology Studies program, which is near and dear to my heart, since the program is virtually identical to my Swarthmore Honors studies focused on history of technology. This PhD also happens to have master’s in fiber science and textile preservation for museums, which took our trips to the fabric markets in Dar es Salaam one of the most shopping experiences in my life. Our team functioned amazingly well in a mentally, emotionally and physically demanding environment. We often spent hours discussing and evolving our perspectives to agree on what a wise course of action would be.

 Our project was with the Mass Development Association of Dar es Salaam, aka MAdeA. MAdeA focuses helping victims of domestic violence and sexual assault. In some respects, this was an oddball choice in the G-Lab program. The five of us agreed we wanted an experience working with poor people in their communities. Many of the other projects sounded interested, but involved being in an office or hospital setting. This wasn’t that appealing to any of us – as a consultant in the past, present and future, I’d like to avoid the traditional office setting as much as possible. And so did our Sloan Fellows, who had spent plenty of time in both cubicles and clinics. So MAdeA it was.

The environment MAdeA operates in is fraught with challenges. First off, in Tanzaniaalone there are 5,000 NGOs. There is probably enough funding for 50, and not very many of those would likely to be community based organizations (CBOs) like MAdeA. CBOs serve a strange function in Tanzania. Government, partially due to lack of funding (the country only collects 60% of the tax revenue it is due, and only 3% of overall mining revenues – i.e. it is dirt poor) and partially due to bureaucracy does very little for those at the bottom of the pyramid. By the time government officials have taken their cut, and Chinese contractors have made their profits building road, little trickles down to the very poorest. Safety nets don’t exist. This is where CBOs like MAdeA step in. MAdeA is essentially an all volunteer organization that operates on a budget of less than $10,000 per year. I couldn’t help but think that the airfare alone was about that much to send the five member MIT team there. Yet, as evidenced by the fact that on a Monday morning in January, the five of us were in the MAdeA office bright and early, ready to work, this small CBO has a resourcefulness that has enabled them to help their community without any source of persistent funding.

The Executive Secretary of MAdeA, Mr. Baltazar took us to meet the people they helped. MAdeA operates in the district of Temeke. Most of the people they work with make less than $1 per day. The percentage with HIV/AIDS is over 20%. Domestic violence and sexual assault is pervasive due to cultural issues related to male-female power dynamics. The first day made one thing very clear – the proposal that we were brought to evaluate likely would not work. MAdeA wanted to use a microfinance model (really charity couched as a “revolving fund” that had little chance of “revolving”.)

Governments and NGOs are selling microfinance as if it can cure all the ails in the developing world. I have some real concern about this. First off, economically there are some microfinance just cannot help. Very few microfinance models can help those who do not already have access to capital to start a business, since the most successful models manage risk in such a way that prevents those who do not have businesses. Unfortunately, this is a dangerous thought to have. These organizations like the required ability to run a program and do not have appropriate financing. Furthermore, MAdeA’s goal the poorest of the poor. This includes people with HIV who can work only intermittently or not at all, and people in areas where there is simply no local economy to start viable business that will survive the time it takes to pay back a loan. In order to offer these people a loan from a revolving fund, interest rates would have to be in the hundreds of percent . Remember, it is not the case that any credit is better than no credit. Give someone a really high interest loan and you are hurting them. Either that, or you are giving them a cash grant since there is no way they will pay it back.

Local NGOs in Africa are in the strange position in that they have to deal with almost everything. MAdeA’s focus was women victims of domestic violence and sexual assault. However, working in this poor area of Dar meant that they also had to deal with AIDS, lack of education, lack of jobs, tuberculosis, malaria and drug/alcohol abuse. However, these can all be linked to one overarching problem – poverty. Thus the microfinance thrust. However, the very bottom of the pyramid – the sick, the truly marginalized, cannot be empowered in this way without some very specific circumstances. A deep well of resources, a new market and resourceful management is needed at a minimum. MAdeA as a small CBO simply could not offer this. Walking them through the skills assessment and credit/risk management model was a challenge – they had spent a fair amount of time thinking about the idea and had grown somewhat attached to the idea that if they could raise the money, they could run such a program. We did not feel that it was fair to endorse a program that would leave them in the exact same position.

After considerable discussion and debate amongst the team, we decided the right course of action was threefold. First, we needed to make MAdeA more competitive in fundraising and networking. Secondly, we needed to provide them a funding usage strategy that would enable them to become a sustainable organization. Lastly, we needed to build their technical capacity and access to knowledge and key networks. In order to help them to be more competitive, I devised a training program focused on marketing. This is the actual slide deck that I used for the training.

I also created MAdeA a website (currently hosted at one of my startups). Another team member wrote up a project summary document, spending two hours sitting with Mr. Baltazar listening to him discuss each project in depth and creating a description of each. MAdeA could hardly articulate to us the good things they were doing in six weeks before we went to Dar – how could they hope to pitch themselves to funders with limited time? Another team member re-wrote their brochure, and yet another provided them with a focused list of potential funders that were a fit with their mission and small size. Next, we went out and used our networks to call on local NGOs, ranging from microfinance organizations (to partner with) to large funders to simply informational meetings that would help us all understand the situation better.

Then, we spent late nights developing a sustainability strategy focused on improved fundraising, a technical advisory board, and laser focus on a women’s center proposal that would fulfill a major community need that our research indicated was fundable. Lastly, we actually built MAdeA a technical advisory board, which our MD and PhD joined. We also added two strong local members, and a long time well-wisher from Canada. This board can provide MAdeA with some of the technical guidance in fundraising, global health and networking they were lacking.

We still have six more weeks of G-Lab class-time to polish up the materials and continue to work with them to move this strategy forward. However, I think many of us see this as something we can be involved with long-term. This really is the ultimate challenge – how do you help a passionate group of volunteers scale into an organization who can provide services to the many who need it? There are no easy solutions, but I’m glad MIT Sloan has put me in the position to be hammering away at it. I’ll keep everyone posted on our progress.

For more on social entrepreneurship, global health and international economics, check out my full blog at Ted Chan’s Blog for Social and Business Impact.