Comments on: The Pocantico Declaration http://www.seattlemicrofinance.org/the-pocantico-declaration/2010/02/08 Connecting the Microfinance Community Tue, 07 Feb 2012 08:15:03 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Salah Boukadoum http://www.seattlemicrofinance.org/the-pocantico-declaration/2010/02/08/comment-page-1#comment-1662 Salah Boukadoum Sun, 21 Feb 2010 03:06:32 +0000 http://www.seattlemicrofinance.org/?p=2272#comment-1662 Thanks Ryan, our particular business model doesn't require much in the way of investment (online body care product sales - all Internet based and good inventory management results in vendors financing most of the growth) - the little additional required capital is funded by the founders who have had some success in the past. In the broader model, we intend to define exactly how profits must be invested - for example we may specify that no dollar may be paid as a dividend until it has spent a year in an MFI - so eventually every dollar of profit will end up doing a year of service. The model has been quite successful so far - in our 13 months in business revenue growth is over 45% month over month, and a substantial percentage of customers are acquired by word of mouth from other customers who are moved by the mission. Thanks Ryan, our particular business model doesn’t require much in the way of investment (online body care product sales – all Internet based and good inventory management results in vendors financing most of the growth) – the little additional required capital is funded by the founders who have had some success in the past. In the broader model, we intend to define exactly how profits must be invested – for example we may specify that no dollar may be paid as a dividend until it has spent a year in an MFI – so eventually every dollar of profit will end up doing a year of service.

The model has been quite successful so far – in our 13 months in business revenue growth is over 45% month over month, and a substantial percentage of customers are acquired by word of mouth from other customers who are moved by the mission.

]]> By: Ryan Calkins http://www.seattlemicrofinance.org/the-pocantico-declaration/2010/02/08/comment-page-1#comment-1652 Ryan Calkins Wed, 17 Feb 2010 13:19:36 +0000 http://www.seattlemicrofinance.org/?p=2272#comment-1652 Salah, I like the model you're employing--and the idea of creating a wall between for-profit and non-profit. As someone who runs a small business, I wonder how sustainable it is to turn 100% of profits over to charity each year. Don't you need to reinvest most of those profits in the business for it to be sustainable? Ryan Salah,
I like the model you’re employing–and the idea of creating a wall between for-profit and non-profit. As someone who runs a small business, I wonder how sustainable it is to turn 100% of profits over to charity each year. Don’t you need to reinvest most of those profits in the business for it to be sustainable?
Ryan

]]> By: Salah Boukadoum http://www.seattlemicrofinance.org/the-pocantico-declaration/2010/02/08/comment-page-1#comment-1638 Salah Boukadoum Mon, 08 Feb 2010 22:11:28 +0000 http://www.seattlemicrofinance.org/?p=2272#comment-1638 Thank you for this writing. I also am very concerned about the interest rates borne by MFI clients. I believe one of the best ways to reduce rates is to increase the capital pool available to responsible non-profit MFIs. My own contribution to this problem is the Good Returns model, under which a for-profit business invests its annual profits into non-profit MFIs each year for a period of a year. You can see my blog about a vision to create one billion dollars for nonprofit MFIs over a 10-year period: http://bit.ly/8guExv I believe it is critical to build a structural wall between for-profits (which should serve those who have resources and can morally maximize profits among those clients) and non-profits (which should serve those who are resource-poor and where profit should only be a consideration in terms of creating sustainability for the organization). Good Returns is one model for maintaining this wall. I am sure other methods will develop. I thank you for your thoughts. Salah Boukadoum Founder, Soap Hope Thank you for this writing. I also am very concerned about the interest rates borne by MFI clients. I believe one of the best ways to reduce rates is to increase the capital pool available to responsible non-profit MFIs.

My own contribution to this problem is the Good Returns model, under which a for-profit business invests its annual profits into non-profit MFIs each year for a period of a year. You can see my blog about a vision to create one billion dollars for nonprofit MFIs over a 10-year period: http://bit.ly/8guExv

I believe it is critical to build a structural wall between for-profits (which should serve those who have resources and can morally maximize profits among those clients) and non-profits (which should serve those who are resource-poor and where profit should only be a consideration in terms of creating sustainability for the organization). Good Returns is one model for maintaining this wall. I am sure other methods will develop.

I thank you for your thoughts.

Salah Boukadoum
Founder, Soap Hope

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