World Views
4:25 pm
Fri August 30, 2013

Shut Up And Give? Oklahomans Rethinking International Development And Philanthropy

Chad Jordan volunteered in Haiti after the 2010 earthquake, but seeing the state of infrastructure, sanitation conditions, and the lack of financial services after decades and billions of dollars of humanitarian aid affected him even more than the temblor’s destruction.

“It’s really been used for projects that are corrupt,” Jordan says. “It doesn’t really go toward projects that are really sustaining people and focusing on business.”

Listen to Suzette Grillot's conversation with Chad and Tara Jordan.

The native Oklahoman is the author of Shut Up and Give? Eradicating Global Poverty By Breaking the Cycle of Dependency We Created. He founded the consulting firm Cornerstone International to try to teach businesses and entrepreneurs how to provide humanitarian aid more effectively.

“Foreign aid often creates dependency,” Jordan says. “When people are used to getting handouts and they’re used to having everything arrive on a big shipment, you kind of become used to it. Who wouldn’t? I would be the same way if I was always waiting on the next shipment of food or t-shirts or shoes.”

Credit Chad Jordan / Cornerstone International

Jordan’s sister Tara serves as the firm’s Managing Director. She says many of their projects involve financial inclusion, and giving people in poverty access to services that may not be available through traditional means.

“Banks that operate in underserved countries usually have very limited access for the upper echelon of people,” Tara Jordan says. “So we’re really trying to open that up, and financial inclusion includes savings, different types of loans, [and] microlending for people to grow their businesses.”

Part of rethinking these giving strategies is encouraging and incentivizing businesses to invest in the developing world.

In the last half-decade, the microfinance organization Grameen Bank has partnered with both Veolia Water and the Groupe Danone (the French food products corporation that distributes Dannon yogurt in the United States) to provide drinking water and healthy nutrition to the poorest people in Bangladesh.

“I think they’re having great success,” Tara Jordan says. “It’s kind of been trial and error, but you do see a lot of larger corporations starting to think outside the box and think of more creative ways to still have your bottom line of profit, but you’re adding that second bottom line of social good and social responsibility.”

INTERVIEW HIGHLIGHTS:

Tara Jordan on how foreign aid for disaster and extreme poverty relief can be abused and exploited

You see those sorts of practices going beyond disaster relief and being used as a strategy for foreign aid from developed economies. That's what we're trying to get away from in terms of... If you're going to go on a mission trip, if you're going to donate money, if you're going to do all these things that the average person wants to be involved with, let's think about it in a different way. Rather than sending over all of our things we don't want. T-shirts from developed nations. OK, is that going to hurt anyone on the ground? Thinking about the impact that our donations will have and really just thinking through the process of "OK, if I'm going to give my dollars, where can I send it that's going to have the largest possible impact over the longest period of time?" So really thinking through your giving strategies.

Chad Jordan on the idea of Corporate Social Responsibility

I think it's a phenomenal concept. I don't think it goes far enough in really being able to invest in developing communities. Oftentimes when you get CSR it's corporations that invest in the communities in which maybe they act. Which is great, but it doesn't take it nearly far enough in really investing in outside communities that are in developing countries. So we use a term called CSI, which is Corporate Social Investment. It's a term that's used quite a bit in South Africa, but it really is the idea of going beyond social responsibility. It's part of CSR, but it really takes it to the next level and the corporations are choosing to invest in communities that maybe they don't have an invested stake in, but it really is going on and pouring - whether it's capital, or business training, or just other forms of support that they can use to be able to lift these communities up - which is also a great marketing tool to their consumers. Because it really shows that they are concerned with more than just the basic bottom line.

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FULL TRANSCRIPT:

SUZETTE GRILLOT, HOST: Tara Jordan, Chad Jordan, welcome to World Views.

TARA JORDAN: Thank you for having us.

CHAD JORDAN: Thank you.

GRILLOT: So you do work in the international development sector. How do you get involved in that, and why? Considering here you are, both of you from Oklahoma, right? Tara, you're a graduate of the University of Oklahoma. Chad, you didn't go to OU. You went to George Washington, but anyway, you're from Oklahoma, and you're involved in international development work. You started your own development company, but tell us what that means - an international development company. What is it that you do? What are we supposed to understand about international development work?

CHAD JORDAN: One of the big focuses that we have is really working on the ground. In between undergrad and grad school I spent some time in Africa and Asia just working with some non-profits and some NGOs volunteering, helping with business plans, just basic things that I was really able to go and observe and listen and just really be there on the ground with the people, which really instilled in me that that was something I wanted to do and wanted to be involved in. So after I finished grad school I could've gone to work for a Deloitte or a larger consulting firm like that, but I really wanted to make sure that I focused on the ground, and really being able to work and empower people with that.

GRILLOT: So working on the ground in countries that would be considered poor country, right? So the kind of work then that's related is what, exactly? Helping them do what?

CHAD JORDAN: We do a lot in the realm of financial services, which can be working with microfinance, small and medium enterprises, developing business training, business plans, and things like that. I think it was sort-of by accident that that's happened, but it just seems to be that a lot of the projects we've gotten, and the people we've contacted and worked with have been in the financial services realm.

TARA JORDAN: We work a lot with financial inclusion, helping people gain access to financial services that are not available through traditional methods in their own countries. So microfinance is a huge part of that. Lending to small and medium-sized enterprises, as he mentioned. We also work a lot with people who are trying to come up with creative solutions to empowering people to lift themselves out of poverty. So whether that's volunteer tourism, setting a different sort of an NGO where you're training people in business practices and business strategies, how to save money, different healthcare services, things like that. So really just trying to empower people to the point where they can lift themselves out of poverty.

GRILLOT: Well, I want to get to that in a minute but just to be clear, microfinance obviously - small loans, directly to individuals, small amount of interest, the ability to help the average everyday citizen in an up-and-coming or a developing country open a bread shop, or some way to cut hair, a salon - but when you say financial inclusion is microlending a form of financial inclusion, or what is financial inclusion?

CHAD JORDAN: Microfinance is a huge part of that. When we talk about microfinance the involvement that we've had is beyond just the capital. It really is about savings. It's about insurance. It's about educational loans and things like that. So when we talk about financial inclusion, it's not just access to capital that you could use to start or grow a business. It really goes beyond that into things that the average person, like you mentioned, would not be able to access from a traditional lender in a lot of these nations. So it's really helping them gain access to these things that will allow them to move forward in a way that they're empowering and sustaining themselves and not so reliant on continued support.

TARA JORDAN: Such as having a savings account or having access to a construction loan to where they can build a newer and better home, or a sanitation system in their home. Having access to an educational loan for their children or for themselves so that they can begin to move forward and get out of that cycle of continual poverty. Banks that operate in underserved countries usually have very limited access for the upper echelon of people, so we're really trying to open that up, and financial inclusion includes savings, different types of loans, definitely microlending for people to grow their businesses as well. So it includes all of those aspects.

GRILLOT: So how does this differ then from what we would consider traditional approaches, or something like foreign aid? You've mentioned in some of your previous writings that you've noticed the failure of traditional approaches. Would that include foreign aid? Has foreign aid as we understand it - government-to-government aid - has that failed as a mechanism for development?

CHAD JORDAN: I would yes just because I think, in my experience, I lived in D.C. I have a lot of friends and colleagues who work at USAID. They have passion. They're very involved in what they do, but I just think that there's been an issue in the way that it's been done that has not proved effective. I was in Haiti after the earthquake in 2010. Haiti is one of the largest recipients of foreign aid and has been for the past 20 years, but the infrastructure that was there even in place before the earthquake was horrible. Very few people have access to sanitation. Very few people have access to financial services and things like that. To me, that really shows a failure in the billions and billions and billions of dollars that have been pumped into the country. It's really been used for projects that are corrupt and things like that. It doesn't really go toward projects that are really sustaining people and focusing on business. We've talked about it a little bit already, but one of our big, big issues is that we want to focus on business solutions. We really believe that poverty is going to be overcome when the intersection of business opportunity and social responsibility is really where we believe that poverty can be tackled.

GRILLOT: So business solutions meaning getting smaller amounts of money directly to individuals, who are going to open businesses, create wealth for themselves or a greater opportunity in terms of a greater standard of living. But also perhaps creating jobs? I mean what kind of...

TARA JORDAN: Exactly.

GRILLOT: ...what kind of businesses? When you say business opportunities, business solutions, are you talking about...?

TARA JORDAN: Well, when you look at the opportunities for developed nations to invest in underserved economies where there are being jobs created for just the average person. For the bottom-of-the-pyramid populations in underserved countries in Africa, Latin America, Southeast Asia, wherever it might be. So it's not just helping them grow their businesses. That is a very large part of it whether it's through microlending or through lending to small- and medium-sized enterprises. It's also looking for opportunities to not just give a hand out, but to give a hand up. So saying "OK, where are we producing our goods now? Is there an opportunity for us to produce them in an area where we could employ some of the most impoverished people?" So really looking for business opportunities in creative new ways to harness the potential and really the labor forces of these underserved economies because they need jobs. They want to work. And that's not taking anything away from the developed nations either, but there are a lot of opportunities for business to really give a hand up rather than a hand out. That's kind of the idea of getting away from charity and moving toward using business and harnessing the potential of business to empower people.

GRILLOT: So this is what you mean by empowerment and enabling people to actually help themselves...

TARA JORDAN: Exactly.

GRILLOT: ...as opposed to being a recipient of aid and assistance, right?

CHAD JORDAN: Foreign aid often creates dependency. Meaning that when people are used to getting handouts and they're used to having everything arrive on a big shipment, you kind of become used to that. Who wouldn't? I would be the same way if I was always waiting on the next shipment of food or t-shirts or shoes or whatever...

GRILLOT: But sometimes this is necessary though, right? You need to have relief services, for example, after disasters...

TARA JORDAN: Disaster relief? Absolutely. Extreme poverty relief? Absolutely. But you see those sorts of practices going beyond disaster relief and being used as a strategy for foreign aid from developed economies. That's what we're trying to get away from in terms of... If you're going to go on a mission trip, if you're going to donate money, if you're going to do all these things that the average person wants to be involved with, let's think about it in a different way. Rather than sending over all of our things we don't want. T-shirts from developed nations. OK, is that going to hurt anyone on the ground? Thinking about the impact that our donations will have and really just thinking through the process of "OK, if I'm going to give my dollars, where can I send it that's going to have the largest possible impact over the longest period of time?" So really thinking through your giving strategies.

GRILLOT: So is part of this strategy trying to encourage or incentivize companies in the developed world to invest in the developing world and engage in some kind of social entrepreneurship model where they're earning money and making money as an entrepreneur would? But they're doing so in a socially responsible way. Is this part of this overall development strategy?

CHAD JORDAN: Absolutely. Entrepreneurship is a huge part. When I say business that really encompasses entrepreneurship as well. One of the things that we talk about and we deal with a lot is the idea of CSR. Corporate Social Responsibility. I think it's a phenomenal concept. I don't think it goes far enough in really being able to invest in developing communities. Oftentimes when you get CSR it's corporations that invest in the communities in which maybe they act. Which is great, but it doesn't take it nearly far enough in really investing in outside communities that are in developing countries. So we use a term called CSI, which is Corporate Social Investment. It's a term that's used quite a bit in South Africa, but it really is the idea of going beyond social responsibility. It's part of CSR, but it really takes it to the next level and the corporations are choosing to invest in communities that maybe they don't have an invested stake in, but it really is going on and pouring - whether it's capital, or business training, or just other forms of support that they can use to be able to lift these communities up - which is also a great marketing tool to their consumers. Because it really shows that they are concerned with more than just the basic bottom line.

TARA JORDAN: And we've seen that be successful in Bangladesh. Grameen-Veolia Water is one of the programs that we've seen success with, and also Grameen Danone, which is the Dannon yogurts that we know here in the United States, a French company. And they've really invested in Bangladesh over the last few years, and are booming. I think they're having great success. It's kind of been trial and error, but you do see a lot of larger corporations starting to think outside the box and think of more creative ways to still have your bottom line of profit, but you're adding that second bottom line of social good and social responsibility. Richard Branson speaks about this all the time - the idea of conscious capitalism. So it's kind of a trendy thing right now in the business world, and we're happy to see that coming about. We want it to really have an impact in terms of pure development as well, so hopefully people will take that strategy and move forward with it.

GRILLOT: So you wrote a book recently Chad, Shut Up and Give? Great title. Is this the bottom line here? Is that we should stop talking about development and putting it into poverty and actually give? And when you mean "give" what exactly do you mean? Give our money, or is there more we can give? Tell us, what is it that we need to do?

CHAD JORDAN: I think the whole premise, which is really what we're focused on with our consulting firm, is really just rethinking the way that we give. I'm in no way saying that we should stop giving. I think giving is absolutely a huge part of eliminating poverty. But I think that we need to be a little bit smarter in the way that we do it. As Tara was mentioning, not focusing just on charity and handouts that over time perpetuate dependency and create even more issues, but focusing on giving in a way that's really going to support business growth. National GDP growth. New jobs...

TARA JORDAN: Employment education.

CHAD JORDAN: Absolutely. I think that's really the bottom line. The focus of the book is really that, and delivering some solutions to poverty that we've seen work in a lot of our experience around the world. Some solutions such as microfinance and business training and social business and CSI and things like that we've been talking about here that we've seen in the field, and would really be effective.

TARA JORDAN: And the idea of the title overall is we've been told to just shut up and give and write a check for so long, but at the base of that we're not asking the right questions. So it's really about "OK, I'm told to shut up and give. Is that what I'm supposed to be doing? Am I supposed to just blindly write a check year after year for my year-end giving? Or should I really be asking the right questions?” And that's what we want to encourage the population-at-large and especially business owners and investors, to do in their giving.

GRILLOT: And to be able to see some results, right?

TARA JORDAN: Absolutely.

GRILLOT: I mean, I think that's the one thing that the data would show, is that people are more likely to give or to become involved if they can see the evidence, right? If they see the results of their investment. So these kinds of microfinance activities, how do we measure that outcome? Can we see it? Is it evident as the rich become richer and give more that the poor also become richer? What is this relationship between prosperity and poverty, if you will?

CHAD JORDAN: I think the relationship is that all boats can rise at the same time, but I think the caveat is that as boats rise in both the West and in some of the underserved nations there has to be an understanding that it's not just for me. It's for the greater good. So I think as the boat rises in the West, it really is focusing on philanthropy and giving back and making sure that you're not just hoarding the money to buy a ski lodge or whatever that looks like. But really being aware of what the rest of the world is like. I think maybe comes a little bit more naturally to the United States, because philanthropy and giving is very much a part of our society. But I think you have in some of these underserved countries when businesses grow and they hire more employees and their revenues increase, the philanthropy is not as established. That base of the idea of philanthropy is very new to a lot of people. So I think changing that mindset is going to be really important moving forward. As those boats rise, there needs to be an understanding of giving back, and that it's not just for you. It's for your community, and for your nation.

TARA JORDAN: And the sharing of capital is important, but the sharing of knowledge capital is equally important. So if you have a lot of developed companies here in the United States or in the United Kingdom, for example, who have expertise in a certain area, sharing their knowledge is just as valuable in some instances as sharing their own money capital. Whether it's communities or nations or countries in the underserved economy, whether it's Latin America, Africa, or wherever it may be.

GRILLOT: Well Chad and Tara, thank you so much for sharing your story with us today. It is clearly a challenging problem that we face - this issue of development. So we appreciate your work and sharing with us your perspective.

TARA JORDAN: Yeah, absolutely. We're glad to see the conversation rising up around the country.

CHAD JORDAN: Thanks for having us.

GRILLOT: Thank you.

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