Let's Talk about Creative Alternative Economies

Suzanne Stormon's Explorations of Creative Alternatives

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What Is Social Franchising And Why Is It Important?

Rather than starting with a technical definition, you can probably get a feel of what a social franchise is by looking at a few names of social franchise enterprises: Seniors Helping Seniors (U.S), Barka Foundation for Mutual Help (Poland), Co-Wheels Car Club (U.K)., Unjani Clinics (South Africa). These social franchises are increasingly addressing social and environmental problems throughout the world.

I recently came across an article in the Harvard Business Review which featured Education for Employment (EFE), a collection of training franchises that operates in many countries in the Middle East and Northern Africa (MENA). The article describes the model of social franchising used by the company and discusses why this business model works in times of uncertainty.

I define alternative business models as those which focus on meeting the needs of the people who work in them and who are served by them. Although there is a huge variety of social franchises, most of these fall within the above definition. We are used to charities and foundations that rely on grants using many of the scaling practices of franchising, but the idea of social franchising usually focuses on social enterprises and social cooperatives.

EFE is an international non-profit organization whose goal is to provide education for employment in the MENA region; where there is an average 25% unemployment rate for young people. The international EFE provides the materials, resources and some of the financial backing that help local educators set up training centers. These centers serve recent college graduates, underserved youth and women in many countries in the region. These local organizations provide job placement assistance, teach students job search skills, and/or help students create their own businesses.

In many Middle Eastern and North African countries, governmental run programs in employment education are non-existent or have been disrupted by political unrest. EFE centers have been able to stay open during uncertain times and are successful using scaling methods common to many franchises. I will be examining EFE in further blog articles, but for today I will focus on the definition of social franchising.

It is difficult to explain social franchising because it varies so much between different organizations. Sometimes the franchises are for-profit companies, sometimes non-profit, often they are similar to what we know as B-corporations. Social franchising differs from many other types of franchising in that it specifically focuses on the needs, cultures and particular characteristics of the locality of the franchise.

The European Social Franchising Network describes the six qualities they argue must be present for an organization to be considered a social franchise. These qualities are:

  • A social franchisor – the independent organization that replicates its social enterprise model
  • At least one social franchisee that has been established by the franchisor
  • A common brand under which the franchisees operate
  • Sharing of knowledge among the members
  • A plan for how the businesses will be sustained and the reciprocal rights and obligations between the parties.
  • Both the franchisor and the franchisees must be social enterprises and share the same values

In the next couple of articles, we’ll be looking at some exciting social franchises that are addressing social problems and social needs all over the world.

What are some of the social programs and organizations that you think would benefit people if they could be replicated in different parts of the U.S. or the world? How do you think they could operate and who would they benefit? Leave your comments. Let’s discuss this.

Alternative Places to Put Our Money

Big banks and the stock market aren’t the places for those of us who are looking to grow alternatives to the global corporate world that frankly has not been the best for the 99% of us.  Global banks intend to make money for their investors no matter what the cost and they’re are not investing in local businesses in our communities. Many of the corporations in the big stock exchanges are investing in ecologically unsound practices that benefit the rich while undercutting the economies of the poor and middle classes.  In both of these cases, they are cutting the link between the money people are putting in and the people receiving the money. Sure you can invest in specific companies and that may be a good idea if the company is a B corporation or engaging in social entrepreneurship. But for many big companies, lay-offs and cost cutting increase hardship for communities just to optimize profits for investors.

Putting our money into huge global banks is like feeding the machine that produced things like credit default swaps and sub-prime real estate loans with soaring rates. Why don’t we put money into independent local banks in our own towns? They invest in local businesses, make home loans and consumer loans to local people. These loans help to grow the local economy in areas like construction, car sales and other big-ticket items that are bought and maybe even produced locally. They also lend to small business in the community. This can help increase employment in the area and add to sales tax revenues.

In the Reno area, Heritage Bank,  is our only locally owned bank and has been mentioned by Dave Asher as a good place for Renoites to put their money.  I belong to a Nevada credit union which also keeps money in the state.

Bank deposits, even in local banks, don’t pay much interest on savings, but there are other ways of investing that don’t involve banks or stock markets. I’ve just been exploring peer-to-peer lending. I’m not a financial advisor or investor for that matter. I’m not recommending any investments, but I did find this company interesting. Lending Club is a lending community that has modernized the old style community loan clubs that used to exist in many ethnic communities in the US on a huge scale. You can actually pick who you are going to loan money to and/or the interest rate you are interested in. To me this sounds much more direct than putting your money in the bank and letting them invest it. Of course it’s not federally guaranteed so there is some risk but it looks like they have a pretty good rate of payment.

Research the banks in your area. Think about moving your money there. Let me know what you think about using your local banks and other alternative ways to invest money that doesn’t involve big banks or the big stock markets.  I love your comments.

What is Alternative Economics?

I’ve been telling everyone I’m changing the focus of my blog to alternative economics.  Most of my friends and co-workers give me a confused look then ask what the heck I mean by that. Often I have trouble defining it myself, so here’s my preliminary explanation.

Alternative to what? The way we produce and consume most of our goods and services today is through the use of money. We go into business or invest to make profits. Big corporations are forced to grow and cut costs to please stockholders. Often, this results in layoffs, pushing worker’s wages down and continually moving production to centers of lower labor costs. This can contribute to a greater gap between the rich and the rest of us and push many people into unemployment, underemployment and sometimes poverty.  Many of us are suffering some of the consequence of these trends today.

What do we do when the economy isn’t working for us? Sitting back, belt tightening and isolating ourselves usually doesn’t do us much good. Fortunately there are a lot of alternatives.  The ones I’ll be discussing are the ones that focus on ways of meeting our needs while keeping community building and social justice in mind. I would say that these activities are more concerned with relationships than money. As we learn to rely on each other we create different ways of meeting our needs.

Some examples of these alternatives are:

  • Buy local campaigns and networks
  • Alternative ways of marketing goods
  • Urban agriculture and community gardens
  • Community supported agriculture
  • Co-ops, such as food co-ops
  • Worker owned businesses
  • Barter and time-banks
  • Buying Fair Trade items
  • Sustainable energy
  • Non-profit organizations like food banks and health care networks
  • Microfinance
  • Creative global meetings on social issues by like-minded groups
  • Focus on environmental issues
  • Alternative policy meetings and discussions
  • Lobbying and building political power to change policies

We’ll be discussing these in more detail and looking at specific examples in coming blogs. I’m sure I’ve forgotten some of the categories of activities that fit into my first attempt at defining the term and starting the conversation. If you can think of any of these please let me know in the comments.  I’d also love to see some specific examples of these in the comments too. Please let me know where I can find out more about them if you can.

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