Wokai Adventures

What poverty allevation can learn from the environment in China

Courtney

Friend and long-time China resident Keith Clemenger recently sent me an interesting article by James Fallows, called China's Silver Lining, on China's environment situation . And yes, James brought up all the same jaw-dropping statistics that now seem like old news about China's environmental degredation:

• 16 of the 20 most polluted cities in the world are in China
• 750,000 Chinese die per year due to environmentally-related health problems
• 500,000,000 people lack access to safe drinking water (an amount equal to 1.5 times the total population of the United States)
• Only 1% of China's 600,000,000 urbanites breath air considered safe by the EU

But, what James didn't do was all the usual fingepointing and booing of the Chinese government that these articles normally do. In fact, James did quite the opposite. He actually found a silver lining: China is finally moving in the right direction, thanks to a united effort by the Chinese government, the private sector, non-government organizations, the international community, and the Chinese people themselves.

The Chinese government, in its announcement of the 11th Five-Year Plan on Environment Protection last November, acknowledged a lot of the enviornment problems that the World Bank and others have been pointing out for years.  (The World Bank's Cost of Pollution in China provides the best summary of these that I have seen.) They talked about the acid rain, black skies, polluted groundwater, drying up rivers, and dust storms and they also connected those problems to the health problems that the Chinese people have been experiencing. Are they doing anything to change it? Yes. Is it enough? No. But are they headed in the right direction? Yes. Five years ago an acknowledgement like this was unheard of.

The private sector is also taking a stab. But whats interesting here is that it is not just the big name international players like General Electric who are getting involved, its home-grown entrepreneurs as well. Take Mr. Tang, a 40-year old Tianjin native who has dedicated the better half of his life to making dirty, wasteful cement- factories less environmentally destructive. Most recently, he founded Dalian East Energy Development (DEED), a company that offers a cool peice of technology called a co-generation system that decreases the energy used by a coal plant by over 30%. And in a country that produces and consumes over half of the world's cement, that is a lot of energy.

In addition to private players, both international and local NGOs are helping to solve the problem. Joint US-China Cooperation on Clean Energy (JUCCE)  works to accelerate energy productivity and increase clean energy supply in China by incubating potential cutting edge technologies. The Global Environment Institute(GEI)  establishes pilot projects across China that promote biodiversity, sustainability and clean energy use.  GreenPeace holds campaigns and educational events throughout China to promote focus and awareness toward environmental degredation. And whats hard to believe is that in 1994, there was only one environmental NGO in China. Today there are over 3,000.

Individuals abroad are up in arms. Elizabeth Economy of the US Council on Foreign Relations wrote The River Runs Black about China's environmental woes in 2005. And we all know how much Tom Friedman loves to talk about China & Green. His most recent book, Hot, Flat and Crowded: Why We Need a Green Revolution and How It Can Renew America mentions China, while many of his daily articles focus on it. (My favorite being Bring in the Green Cat from 2006).

And so are people at home. Talking with a cab driver in early 2003 when I first landed in China, a comment about the pollution or the air quality never would have come up. But on my most recent stint ending in June 2007, it came up in every single conversation I had with cab drivers. Whether it be visual recognition of the black skies or knowledge spread by organizations like  Roots and Shoots - an NGO dedicated to environmental education in schools. The Chinese people know that things aren't good and are not happy about it. And 1.5million people - or at least the 600,000,000 that live in urban areas - not happy is a huge liability for the Chinese government.

So what does this mean? It means that we are at the brink of change. We have climbed the to the peak of the environmental degredation mountain and are about to find the safest most expedient path down off the mountain. With the many layers of domestic and international society involved - and equally affected by the outcome - there is no doubt in my mind that the best plan will be put forward. And with China taking center stage in August,  there is no doubt that China will have to put that plan into action sooner rather than later.

Taking off my environment hat and putting on my Wokai one, I can't help but wonder: What can the poverty alleviation sector learn from environmental protection movement in China? How can it obtain that same cohesion and push in the same direction? Presently, its far from that. The Chinese government, NGOs, the private sector and the people are not working together. And the international community is not touching the issue with a ten foot pole. As Jeffery Sachs said, there are bigger fish to fry - like Africa.

So what does this mean for microfinance? It means that the only way we can really have large impact on China is if the Chinese government works with NGOs, microfinance enthusiast and the people themselves to create a solution that is effective and sustainable for all.

So how do we do that? Look at the environment example above. Why are ALL those players involved? In a nut shell, environmental degredation affects the domestic and the world economy. So all we need to do is make China poverty get that same attention. We need to make it clear that China poverty affects both the domestic and world economy, more specifically the US economy. How does Wang LiPing in Inner Monglia surviving on less than a dollar a day affect Joe Smoe in Idaho? When we answer than question, we move closer to our goal.

Qifang's Calvin Chin

Casey

I had lunch today with Calvin Chin, Founder and CEO of Qifang. Qifang is a China-based P2P lending platform that provides a vehicle for students in China to access long-term, low-interest loans. Loans will range from five to ten years with annual interest rates of around 8 to 10 percent.

In China, where access to credit is so limited, this is a revolutionary idea with amazing potential. Xinhua news estimates that in 2007 alone, China has 25 million new college freshman. Your average college student here doesn't have access to the type of college loans that so many students in the US depend upon to pay their college tuitions. An average year's tuition and expenses add up to around $1,500. When you think that 300 million people are living on less than a dollar a day, a vast number of China's young population has no hope of ever affording college. Qifang provides a great model for addressing this problem. According to Calvin that "Qifang aims to target the population of highschool students for whom it wouldn't even occur that attending college could be a option."

Another unique aspect of Qifang is the loan term. The college loans currently available in China generally have a four-year loan term. That means that immediately after students finish college, they have no saved up income to make the lump sum repayment. China had a recent crisis where students who had taken out college loans defaulted on their loans when it was time to repay. Since the idea of credit history and the plague of bad credit still doesn't exist here, lenders had no leverage to use in tracking down delinquent borrowers. One reason for these high default rates may have been that loan products were designed in a way where students felt like they were had no realistic means of making their final payments. The crisis caused many here to doubt whether college students are a viable credit market. By creating 5-10 year loan terms, students have the time to work up the income necessary to repay their loans. This is not only a much better model from a business perspective, but also takes a weight off of the shoulders of the students taking out these loans. If Qifang takes off, it has the potential to change a lot of people's minds about the viability of college credit.

Create your own Jimmy Fund

Courtney

Yesterday I received an email from a China friend - Susie Chang. Susie emailed me to tell me about her friend Michelle Maykin who was diagnosed with Acute Myeloid Lukemia (AML) last February and who recently relapsed. The email was urging me to get involved in a bone marrow drive this weekend at the Cerrtios Farmers Market from 8am to 12noon.

Now most of us have heard this story before. Or if not this story a similar one. A friend of a friend lost everything in Hurricane Katrina, please give clothing. A relative of a friend in China was affected by the Sichuan earthquake, please give five dollars to help out. A friend's cousin has a brain tumor and can't afford to get the surgery, please give funds to make the surgery possible. The internet is an amazing tool that provides us with the means to reach out people - lots of them - on a direct and intimate basis to ask for help.

Michelle knows this. That is why she is taking her story beyond email and putting it directly on the web. On Project Michelle, Michelle makes 3-4 blog entries a week about her experience fighting AML. She posts videos and photos directly from the hospital (see below.) She also can send messages via text that posts directly to her blog. While technology has been of huge assistance, Michelle has also relied on a dedicated team of friends, family and volunteers to help her spread her message. Susie is one such example.

The goal of Project Michelle is to find a bone marrow transplant in about 6 weeks, which leaves only 2-3 more weeks left. In order to find a match in such a short time period, Team Michelle wants to hold lots of bone marrow drives. They are aiming at enrolling 15,000 Asian to get involved. With almost 40,000 hits on Project Michelle, I am sure that Michelle and team will have no problem meeting that goal.

What amazes me about Michelle's story is that it could not have been possible ten years ago. Back then, the only name we associated with cancer on a first name basis was Jimmy of the Jimmy Fund. The Jimmy Fund was started by chemotherapy pioneer Dr. Sidney Farber. In 1948, Dr. Farber spoke on a radio show broadcast directly from the room of his 12-year old patient, Jimmy. The broadcast received such widespread support that over $200,000 was raised. Dr.Farber aggregated the contributions and created the Jimmy Fund.

Today, one does not need a leading specialist or a prime time radio show to garner support for one's cause. Michelle has proven that. Technology has made it possible for one every day Joe to make the Jimmy Fund possible. The interent has allowed people like Michelle to write their story, recruit volunteers, and organize blood drives. The web has empowered people to help themselves. Michelle is not laying down and accepting her diagnoses. Instead she is using the web to stand up and fight it. Way to go Michelle!

Wokai Summer Intern Season Begins

Casey

Two weeks ago our first round of summer interns arrived in Beijing. Belle, Brian, Jay, and Jordan are part of the University of Pennsylvania's PIBV program that sends Penn undergrads to do volunteering consulting projects at organizations around the world. The four of them are the first wave of PIBV students that will be working with Wokai this summer. A second group of five PBIV students will be with us from July through August.

The PIBV May group has broken up into two teams and have been developing our social networking, blog, customer communication, and website information architecture campaigns. It's been fascinating having them at Wokai. Their project is only three weeks long and, when they first arrived, I was pretty doubtful about how much they would be able to contribute in such a short amount of time. They've completely exceeded our expectations and have built sound and impressive strategies in all of their project areas.

Some interesting takebacks from this experience have been:

- E-generation gaps: How much a few years age difference translates in web-savyness.... All of us on the Wokai Beijing "staff" are between 23 and 27 years old. Which from a maturity and interest perspective, is not that far off from the PIBV team which are Freshmans to Juniors in college. All of their projects have been web-based.It's been fascinating to see that in internet spheres such as blogs, social networking, web 2.0, they are leagues ahead of anyone on the Wokai staff. On average, I spend about 13 hours a day in front of my computer, and 30-40% of my time on website stuff, but my knowledge of web 2.0 can't even begin to compare to these guys. The current trend in web development is focused around the idea of quick, short and agile, "iterations", mini-developments of components of a website. It seems like e-generations are following the same trends. Instead of generation gaps falling in 20 year periods, e-generations come and go in 24 month intervals.

- Group projects, short time-spans: The four PIBV members work in groups of two and then collaborate on their findings with the other group and with their Wokai staff group leaders, George and Chai. It's amazing to see how much more efficient they are working in a team than we are working individually on our own projects. In three weeks, two of them are able to do what would take one of us at least two months. They are really smart and driven kids, which definitely contributes to their effectiveness and efficiency. The competition and energy that comes from working in groups is great. Also, with them being here for such a brief time, they're able to dive in and don't have a chance to get hit by a case of the burn-out syndrome that comes from doing this for so long, facing failures, seeing the ambiguity in everything we're working on and the endless todo list. I wonder if they were here for three months or a year they could continue on with such a high level of performance? Maybe they could...

The May PIBV team leaves next week and we're going to be having eleven more interns coming in and out of our courtyard over the next three months. It is going to be fascinating to see the lessons each of them brings and watch how the effect and grow Wokai.

Sichuan Earthquake

Courtney

I have had several calls and emails from many of our Chapter Representatives asking about our Sichuan Field Partner and whether or not they were affeted by the earthquake. Fortunately, our Field Partner in Sichuan, ARDY, is located in Yilong County, which was far from the epicenter. As such, there were no injuries or major tragedies suffered by our clients or employees of the institution.

However, there were microfinance institutions that were affected. Casey is currently working with the major microfinance players in China on a initiative headed by Planet Finance to send relief to these organizations. We are brainstorming haivng our Chapters get involved through holding an impromptu fundraiser in their respective areas. As of right now, we are still working on the logisitcs of how to structure the aid package.

In the meantime, if anyone does want to individually contribute to the relief effort, please visit UNICEF to make a donation. If your wavering, take a look at some of the New York Times photos below before you make up your mind...

A rescue worker made his way through the debris of destroyed buildings in Beichuan County. The full extent of the calamity was still unfolding as rescuers began gaining access to towns closest to the epicenter. (Photo: Peter Parks/Agence France-Presse--Getty Images)

 

 

 

 

 

Chinese rescuers searched for survivors as bodies littered a collapsed building in Beichuan. (Photo: Agence Franci-Presse---Getty Images.)

 

The government said a large aftershock in Li County, west of the epicenter in Wenchuan, had created additional landslides, burying cars, disrupting communication and making even more areas difficult for rescuers to reach. (Photo: Aly Song/Reuters)

 

 

 

 

 

 

 

Soldiers carried a wounded child out of a collapsed building in Beichuan County, Sichuan Province. (Photo: Guangquan/Reuters)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A picture of a missing couple was posted on a notice board displaying the names of earthquake survivors at a hospital in Deyang. (Photo: China Photos---Getty Images)

 

Wine Tasting for Asian Community Groups

Courtney

The San Francisco Wokai Chapter recently hosted a booth at the Community Affair event held by the National Association of Asian American Professionals (NAAAP). The event featured ten wineries and over 25 non-profits located in the Bay Area that are dedicated to various causes throughout Asia.

We sat next to one of my favorite organizations, Hyphen Magazine, a publication focused on issues of interest to the young Asian American community. Hyphen recently launched their online magazine. We at Wokai think it rocks!

The event was a great success. We received over 50 requests from people interested in beieng added to our E-Newsletter and ten of those individuals are interested in applying to become Wokai Representatives. It is exciting to see the Chapters grow over time, especially since we only started with 5 Chapter representatives nationwide back in September! A big shout of thanks to San Francisco Chapter Representatives Alice Wu, Ben Pruden, Virginia Zee, Jeremy Ho, Kathryn Tillett, Cathy Wang for making the event a reality.

Below is a picture from the event. From left to right, my mom Jackie McColgan, me, and SF Chapter Representative Ben Pruden. It was the first Wokai event that my mom has been a part of. It felt great to have that support. Thanks mom!

Microfinance brought to high school classrooms

Courtney

A recent Boston Globe article, Send Money, discusses MicroLoan Foundation USA's plans to make big changes in high schools and middle schools by teaching students about poverty and microlending. Microloan Foundation USA is a spin off of London-based Microloan Foundation, which provides small business loans and basic business training and services to groups of women in sub-Saharan Africa.

MicroLoan Foundation USA's program called Smalll Change, Big Change teaches students about poverty in Africa, development efforts in poor countries, and the use of microlending to create change. The program also encourages students to form microfinance clubs to raise money in their communities that will be sent abroad to serve as loan capital for microentrepreneurs.

This is an awesome idea and one that Wokai has already put on its "wish list." Back in November San Francisco Chapter Representative Kathryn Tillett put forth the idea to integrate Wokai into local schools. Quite visionary if you think about it. Since that time, we have been looking for a platform to facilitate this idea. About 3 months ago, I was put in contact with a wonderful woman named Dana Curran - Founder and CEO of  World Savvy. Dana's organization would provide the perfect platform for integrating microfinance into high school and middle schools. Wokai could facilitate the curriculum design and connection to microentrepreneurs, while World Savvy could facilitate execution and connections to schools. Unfortunately, we are just not there yet. We must keep our eyes on the prize - the website - and put the rest in our goodie bag for later. Dana and I will noddle on it in the meantime.

A big thank you to Amy Wang from the NYC Chapter for posting the Boston Globe article to Basecamp!

Wokai Family

Casey

Today I had one of my favorite Wokai days so far. Around eight this morning, while I was checking my emails, Wang Ayi our cleaner, house mover, and surrogate mom came to the office, decked out in Courtney and my hand-me-downs from when moved out of our old apartment a year ago. She originally came to clean the new office, but when I told her about the refinishing and outdoor furniture that we needed to get the place ready for our move-in, the two of us decided to hit the streets of Beijing to find the cheapest outdoor furniture and estimate in the city for the re-plastering, painting, wiring, and bathroom installation in Beijing.

At nine we headed over to the new office to map out the areas that needed remodeling and installations. After looking the place over a few times, we set out to find some second hand furniture to fill the courtyard. We scoured the hutongs, looking for three-wheel bicycling recycle men to find out where the hot second furniture markets are in the city. After about an hour, we’d pinned down a place past the north sixth ring road, twenty kilometers outside of the center of the city.

Wang Ayi, Zhang Sheng and I jumped in a taxi and about a half an hour later arrived at the “Old Furniture Market”. It turned out that the old furniture market was more of a mass of used plastic desks than a furniture market. In the mess of cubicles and lawn chairs, we found a cool meeting-table, Ma Jiang (China’s form of Dominos) table, and bulk of former restaurant chairs that were perfect for the place.
After Wang Ayi stepped in and handled our bargaining, the two tables, eight wooden chairs, taxi fare to the market, delivery van back to our office, Wang Ayi’s salary for the day and Zhang Sheng and my late lunch of noodles added up to $100. On the way back to the office, we dropped off Wang Ayi to look for house remodelers to fix up the place. Zhang Sheng and I moved in the furniture, got take-out from a nearby Muslim restaurant and had our first lunch in the Wokai courtyard. Zhang Sheng, who will not willingly drink a sip of alcohol, ran out to by a beer so that we could toast our new home.

While we sat there with our noodles, drinking Tsingtao beer out of paper cups, Zhang Sheng started talking about his vision for the place. The center area is an outdoor atrium that is surrounded by three stand-alone buildings; we have ¾ of one building and half of another. The front building is vacant. Its ceiling is caving and can’t be fixed until after the Olympics when the ban on street-side remodeling is lifted.
So, once the front building is redone and the family members that own the other vacant rooms return from abroad, we could conceivably rent the whole space and have enough room for our office, kitchen, separate meeting and training area, and a living space. Zhang Sheng painted the picture of how the front area would be a living space where our Field Partner staff could stay if we were inviting them to Beijing for capacity building training and volunteers could live in between finding housing in Beijing. The Eastern area could be used for educational series, trainings and meetings, and the northern space would be the office. He said the courtyard would be the perfect spot to raise the Wokai family.

As corny as it sounds, it’s a pretty cool dream and not that far from where we are at this point. Yesterday when I was sitting in the office chatting about life and the future with George. George said that it would be amazing if “the world were like Wokai where there was no money and instead people worked diligently for the mere goal of achieving something that they believe in and are passionate about.” All in all, we are almost one-hundred people at this point. Zhang Sheng and I are working full-time, George, Chai, Zach and Courtney are working around 25 hours a week, there are over fifty Reps in San Francisco, Seattle and New York, five people spread across North America working on fundraising and grant-writing, eight pro bono lawyers, four world class web-developers, working for less than $50 a day, ten executive, investment committee and advisory board members, and by the end of the summer we will have had over fifteen student interns come in and out of doors. Out of the 100 of us, Zhang Sheng is the only one that is actually being paid a salary.

It’s a special experience to live in the type of world that George described, where money basically does not exist and we are all joining together to create something out of our passion to make the world a better place. This is a phase, of course, no organization can be sustainable for ever without long-term paid staff, and eventually, when our website gets up and starts picking up traction, we’ll have the funds to hire staff, buy supplies like ink, etc. There are definitely downsides as well like dealing with constant volunteer turnover, but I feel really fortunate to have the opportunity to be a part of this experience. This experience won’t last forever and while I want to stay in the social venture sector, eventually I’ll return to the Real World where people can be harsh and competition for scare resources is king.

I just got back to the office and found this message on the whiteboard:
“ ‘Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only the that ever has.’
-Margaret Mead”

Wokai Chapters

Courtney

To develop our presence in the US, we have established the Wokai Chapter network. Wokai Chapters are responsible for spreading the word about Wokai and fundraising on behalf of Wokai operations. To accomplish these goals, Chapters hold events including educational activities, panel discussions, happy hours, house parties and informational talks. Wokai Chapters are maintained by Chapter Representatives who are 100% unpaid volunteers. To date, Wokai has established 3 US Chapters in the San Francisco, New York, and Seattle and recruited over 50 volunteers. As the organization grows, we intend to start more Chapters in other US cities.

Wokai Chapters are run by a steering committee of ten individuals including a Chapter President, Vice President of Business Strategy, Vice President of Internal Operations, Secretary, Finance Associate, Events Associate, Public Relations Associate, Intern Coordinator and Webmaster. Every month the team meets at its monthly Chapter meeting. The monthly meeting is an opportunity for the Chapter to brainstorm strategies for community outreach as well as discuss Q&A and obstacles faced. This meeting is supplemented with a monthly dial-in for the Wokai Chapter Presidents from each Chapter and the Director of US Operations. The dial-in allows all Chapters to discuss best practices, lessons learned, and future plans.

Currently our Chapters are working on building their contacts in the community. These contacts include 1.) non-profits or for-profits with similar missions 2.) potential sponsors 3.) organizations that are connected with populations of individuals that we think might be interested in visiting www.wokai.org. To network, Chapters are attending various event and reaching out to contacts. For example, San Francisco Chapter President Alice Wu attended a  conference in Los Angeles where she met YouTube Co-founder, Steve Chen, and Google China head Kai-fu Lee. She reached out to them about Wokai. And amazingly enough Kai-fu Lee had heard of us and Steve Chen wanted us to keep him tuned in for the website launch. Great job Alice!

Chapters are also involved in building internal Chapter structure and cohesion. Social events are widely encouraged. Last week, Seattle Chapter President Ketty Loeb visited the New York Wokai Chapter for a happy hour. Ketty and New York Chapter President Meghan Gill reported that it was an awesome experience to share thoughts and ideas in person. See pictures below.

Pictures (from top to bottom and left to right):

Picture 1 - Sandy Tung, Cindy Kwok, Karelis Barrios; Picture 2 - Marcy, Ketty Loeb, George Zang; Picture 3 - Lee Gao, Ji Li, Bill Louis; Picture 4 - George Zang, Meghan Gill, Lee Gao;

   

A new and improved Kiva?

Courtney

Last week I had drinks with Bhalchander Vishwanath of United Prosperity, a start-up non-profit focused on using technology to assist the growth of microfinance in the developing world. United Prosperity fits into the same mold as Kiva as a fundraising intermediary in the global microfinance sector.

The business model is unique. United Prosperity aims at raising funds to serve as a guarantee capital for microfinance institutions to obtain loans from banks. The process would work as follows:

1. Bank approves the microfinance institution for a $100,000 loan
2. United Prosperity raises half that amount of capital ($50,000) to guarantee the loan
3. Bank releases capital to the microfinance institution
4. Microfinance institution repays the bank $100,000 at the end of the loan period
5. United Prosperity returns raised guarantee capital to contributors

United Prosperity has unique capabilities:

• Impact. Every $1 dollar a contributor gives generates $2 dollars of impact, since United Prosperity only has to give loan guarantees for half the size of the loan.
• Returns. United Prosperity has the ability to utilize the guarantee capital for the lifetime of the loan. They can therefore use this large sum of capital to invest in other capital markets investments in order to obtain a return on capital to either 1.) generate income 2.) pay off overhead costs 3.) generate a return to investors 4.) re-invest the capital in infrastructure projects for the microfinance institution
• Costs. United Prosperity is not involved in a costly labor-intensive due diligence process to ensure that microfinance institutions are a good investment and a true reflection of their financial statements. The bank is responsible for this step as they are the one extending the loan. (This is quite different from Wokai that must be very hands-on with its partners as it is our organization that is liable if funds are misappropriated.)

United Prosperity needs to be aware of the following:

• P2P Model. People like to connect to people, not institutions. United Prosperity needs to ensure that it is able to weave a way to connect contributors with the end borrower obtaining their $1
• Marketing. Kiva has a first in on the space. That is both a good and a bad thing for United Prosperity. Good, Kiva made the US market familiar with microfinance and using technology to make contribution to microfinance borrowers. Also, Good for United Prosperity is that Kiva has been around now for over 2 years and users are prepared to try something new. Bad, Kiva has had huge media blitz and has really is a market leader. Kiva has established much credibility and also a connection with contributors that have watched the organization grow over time. United Prosperity needs a strong marketing strategy that will differentiate it from Kiva.
• Simplicity. United Prosperity has a much more complicated model. As we learned from Microplace, users do not like complication. Keep it simple, like Kiva did. Kiva left the grassroots field partner (a vital component in the process) completely out of its business model. United Prosperity needs to use this same business savvy to make the business model easily understandable.

United Prosperity could do a lot for the 2nd tier and 3rd tied microfinance institutions that are not taking part in global capital markets for fundraising. It offers an accessible local market alternative through banks. Unfortunately, the majority of China microfinance is not up to speed yet and will most likely be a late addition to the United Prosperity network. I am sure it will grow in Latin America and India first. It will be an exciting project to watch.