Getting Better At Doing Good

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Michael Knight was one of the first 23 students to enroll. His goal: to bolster the credit union he had rescued in 1994 in a depressed local government-run housing project in Speke, a suburb of Liverpool. Even though the project is located near the city's busy airport and close to thriving auto and pharmaceutical industries, its tenants haven't shared in the prosperity. Many are unemployed. The last bank branch in Speke closed two years ago, and local residents who wanted money for a vacation or new household appliances often borrowed from licensed moneylenders at interest rates of up to 50%.

Knight had worked for a community-development office, but living in a poor area, he says, "you've got no one to assist you with your dream." In London, he was put in touch with managers of credit unions around Britain, and he brainstormed with other students and began analyzing loan profiles and working out a promotion scheme targeted at workers in nearby businesses. "We don't sell it as a poor man's bank," he says. "We say it doesn't make any economic sense to shop anywhere else." Over the past 48 months, Knight has increased the credit union's membership from 300 to 2,000, attracting members from nearby Jaguar and Eli Lilly plants. "The effect on the community has been empowering," he says. "It's the pound sterling in people's pockets--the Speke pound."

In the U.S., the teaching of social-entrepreneurial skills has become a staple at major business schools, and the results are starting to show. In 1994 six Stanford Graduate School of Business alumni launched a nonprofit called Start Up, dedicated to giving a helping hand to would-be entrepreneurs in the hardscrabble California neighborhood known as East Palo Alto. The city of 24,000 is cheek by jowl with the largest concentration of high-tech wealth in the world, but Silicon Valley's incredible success has completely passed it by, leaving the urban problems of poverty and drugs and one of the nation's highest murder rates. In a bid to reach the poor and unemployed, Start Up, now beginning its sixth year, gives 12-week sessions on how to run a small business. It also provides an array of technical assistance, consulting and legal services and mentoring to those who enroll. Says co-founder Greg Sands, 33, a venture capitalist: "We're part of a generation that has come to believe more and more in market-based solutions to society's ills."

The Start Up founders use their social networks to plug in people like Laverne Bryant, 38, who wanted to open an espresso-catering service. A Start Up board member arranged a job at a combination bakery and coffee shop, where she received hands-on experience. "If it weren't for the people at Start Up, I would have given up," says the mother of five, who works for an HMO. She didn't. Bryant now provides catering services and is preparing to open a coffee house on East Palo Alto's University Avenue--a first for her neighborhood.