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The Symptoms Of Global Poverty Economics Essay

Today Nourish International has more than 500 student members and has chapters at 25 major US Universities. It was founded in 2003 by Sindhura Citineni, a senior at the University of North Carolina (guide). Sindhura was trying to think of a way to assist malnourished children in Hyderabad, India. She settled on offering a cheap meal consisting of corn bread, beans, and rice to raise money for her project; she and a small group of students began by selling lunches on the University of North Carolina quad for $3 a plate. The concept became known as ‘Hunger Lunch’ and is the model upon which most Nourish chapters are based (Nourish Int Website). The Success of Hunger Lunch in Chapel Hill eventually led the hunger lunch group to enter the Carolina Challenge business plan competition (Ryan Tedx). The group got positive reviews and decided to establish chapters at North Carolina State and the University of Michigan in 2006. The group has a long-term goal of establishing 25 chapters with annual profits of $10,000, which will allow the movement to spread to more campuses. (guide)

Nourish International: A Model for Change

Nourish is a network of students and entrepreneurs that harnesses the collective power of enthusiastic college students and clever entrepreneurs from the developing world. Nourish members create and run small businesses called ventures at their local campuses during the school year (Nourish Int Website). Ventures are meant to connect students to the money they raise for projects and ensures that the source of project funding is not simply donations. Nourish shies away from the donate and forget mentality of many groups and instead focuses on creating consistent ventures that require real work by members. In many ways the ventures parallel the daily activities of many of the people living in poverty and serve to connect Nourish members with communities that may have seemed worlds away.

The funds raised by ventures are then used to fund a sustainable development project in a vulnerable community. During the summer, Nourish members pay their own travel expenses to help a community implement their project. Members stay with host organizations during their 2-3 weeks stay and assist with various parts of project implementation, ranging from bookkeeping to construction work. The project process creates lasting partnerships with nongovernmental organizations in the developing world. Many Nourish chapters return year after year to expand upon work completed during previous summers, a key to the selection of projects is their eventual scalability (Conner). Every year more Nourish members participate in development projects abroad and gain valuable real life development experiences.

The organization is based on the principle that conventional charity fails to have a significant impact on global poverty because at its core, it is a linear and impersonal process (Ryan Tedx). Donors and the communities involved in traditional charity often have little actual contact, and thus must operate in a very removed and non personal way. Nourish believes that a model which can truly connect young people with the communities they serve can change our world. Project selection entails a lengthy process of screening potential candidate partner organizations that takes more than 3 months. Communication between the chapter and the potential groups focuses on budget estimates, areas of interest, and availability to host students. The idea is that when students visit the community, they actually live and work in the community during their stay. All travel expenses of the participants are paid for by participating members. This ensures that the efforts to raise money go to the project and are not eaten up by travel expenses. The connection that is formed between Nourish Chapters and partner organizations is strengthened by the design of Nourish’s fund raising mechanism. Intense personal effort and the ability to perservere in the face of daily obstacles are keys to success. A critical task for Nourish chapters is contacting and establishing partnerships with groups that meet a number of criteria. (natalie) Community partners are contacted by chapters early in the semester to ensure partnerships are established well in advance of potential projects. Most chapters maintain contact with multiple potential candidates to ensure a good match can be found. Good projects must consider the following factors; a partner organization that is of the community and has the capacity and ability to host and utilize a student team, community ownership of the project plan that will be sustainable after students leave, and a project with roles for students. After determining a good match, Nourish chapters organize their own funding for travel expenses to implement the project.

Nourish projects have a central sustainability theme in an ecological sense, a community sense, and an organizational sense. Most projects tackle the issues of global poverty from an entrepreneurial standpoint and revolve around ecologically sustainable businesses. Past Nourish projects range from a small scale rooster coop operation in Tanzania, to an organic garden in El Salvador. In 2007, the Nourish International chapters of Duke University, Ohio State University, and UNC Chapel Hill implemented an international project in Tanga, Tanzania. The volunteers worked with local governments to build habitats for roosters. Five local families were surveyed and given a hut and hybrid roosters that produce a greater number of eggs than usual. Informational materials were presented to these families concerning the ways in which to use these chickens to their economic benefit. The main goal of this project was to provide financial relief to the families involved, and provide them with various tools to succeed in the future. (http://www.duke.edu/web/dukenourish/pastprojects.html) Nourish will work with FIPAH, a system of farmer cooperatives operating on the local, regional, and national levels committed to strengthening food security amongst the marginalized communities of Honduras. FIPAH seeks to do this while also preserving the environment. The key components to achieving these goals include:

farmer research for the breeding of hardy crop varieties

* enhanced seed supply through on farm conservation and seed banking

* building grain storage systems

By preserving biodiversity and simultaneously improving food security, FIPAH ensures food productivity for decades to come. (http://nourishinternational.org/nourish-projects/08-honduras)

Nourish is about more than the development projects it runs. Over the Summer, Nourish invites leaders from each to chapter and founders of new chapters to meet and learn as a group at its annual Summer Institute. The Summer Institute allows collaboration between nourish chapters and fosters a network of future social entrepreneurs and nonprofit leaders (Nourish Int Website). Last summer, four University of Florida students travelled to Chapel Hill to participate in the conference and were treated with lectures from Robert Egger of the DC central kitchen. (Conner) Egger is famous for his work as an innovative entrepreneur, his kitchen employs people. Among the key lessons learned at the institute was the importance of Nourish as a community of social entrepreneurs and future changemakers (natalie). Oftentimes, chapters will collaborate on projects to increase the scale of possibilities. The summer institute provides new chapters with the contacts and resources to ensure the longterm success of their chapter.

A university of Florida Chapter was established this year after an extensive interview process that screened several candidates from schools around the country. Chapter founder Katie Conner had was inspired to establish a Nourish chapter after enrolling in Honors Introduction to Social Entrepreneurship, a UF course offered by professor Kristin Joos (Conner). The UF chapter began the year selling frozen popsicles and water to raise money for their development project. This venture eventually evolved into a successful business that provided a consistent source of funds during Florida Football season. Chapter leaders recognized the need to expand their ventures to include other parts of the Gainesville community and eventually developed a partnership with the Gainesville Civic Media Center. Nourish showed a film entitled ‘The End of Poverty’ to a crowd of roughly 40 attendees. The film looked at the root causes of poverty, including trade imbalance and poor decisions by major development organizations. The UF chapter continues to grow and spread awareness of global poverty in the Gainesville community and has seen increasing profitability from many of its ventures (morin).

Nourish International in a Global Context

Nourish Internatioanal is clearly a part of a much larger wave of social entrepreneurship. The concept became widespread due to Muhamad Yunnus work in the 1970s with microcredit. Yunnus took the preexisting notion of providing banking services to the poor who previously lacked access to credit and made it a scalable business. Before microcredit, the poor often had to deal with absurdly high interest rates from loan sharks. Conventional commercial banks simply did not see profitability in providing credit to people who in many cases lacked any collateral. Yunnus model works because it relies on women who ensure a larger percentage of funding goes towards the household. This is conjunction with using lending circles ensures a repayment rate comparable to most commercial banks. With the credit, those affected most by poverty are able to establish businesses, save for education, and ensure that money is available for emergency expenses. Today Grameen bank has loaned and has over participants.

In 2004 took hold of the microcredit idea and expanded it using the internet. Kiva connects millions of users with budding entrepreneurs in the developing world. Loans are made in increments of 25 dollars allowing almost anyone to help an entrepreneur living in poverty. Loans are repayed over the course of 3-24 months and users are free to reloan the funds to another entrepreneur. The cyclical nature of Kiva ensures its capital base is continually expanding and it is able to provide more funding to more entrepreneurs. The internet has heralded an era of increased global connectedness and Kiva is a good example of bridging the gap between disconnected communities. Online images and descriptions of potential businesses allow Kiva users to choose an entrepreneur with whom they feel a connection. The website also allows for contact between lenders and loan recipients.

William Easley argues that the west efforts to provide aid has worsened poverty in many instances.

The demand for this type of interconnectivity has spawned a number of similar initiatives to connect people in the developed world with those in some of the world’s poorest countries. The key attribute of many of these new organizations is their reluctance to simply give food or supplies in a linear fashion. This new breed of organizations instead forges connections between college students and the real people who deal with poverty daily and ensures a reciprocal experience. Communities gain the resources and manpower to initiate projects their community need, and students gain valuable experiences on their paths to becoming lifelong changemakers in the world.

Microfinance has been shown to be an effective instrument in the fight against poverty

and numerous successful microfinancial institutions can be found worldwide. Literature in the

field of microfinance points to the expansion of financial services to those in poverty as an

important step in meeting the United Nation’s Millennium Development Goals which seek to

alleviate the effects of extreme poverty (United Nations Millenium Development Goals)

(Littlefield, Morduch, & Hashemi, Is Microfinance An Effective Strategy to Reach the Millenium

Development Goals?, 2002). In Sengupta and Aubuchon’s overview of microfinance, they

write, ‘By providing small loans to the extremely poor, the Grameen Bank offers these

recipients the chance to become entrepreneurs and earn sufficiently high income to break

themselves free from the cycle of poverty’ (Sengupta & Aubuchon, 2008). The extension of

financial services to traditionally overlooked poor clients has propelled many poverty stricken

individuals to accumulate substantial savings and utilize their income to develop

microenterprises which can further increase household income (Wright G. A., 2000). When used

in conjunction with other developmental efforts, many scholars are optimistic that microfinance

institutions (MFIs) can assist millions of vulnerable Africans in their ascension from poverty.

into prominence during the 1970s with successful efforts of early banks including the Badan

Kredit Desa Village Bank in Indonesia and the Self-Employed Women’s Association Women’s

Cooperative Bank in India (Robinson 2001). Beginning in the 1980s microfinance began to be

seen as an important tool for lessening the suffering of the poor during the failures of structural

adjustment programs in many African nations. Corrupt elites and leaders abused governmental

budgets and exacerbated an already dire situation for those living near or below the poverty

line (Moseley, 2006). A drastic reduction in the provision of basic services by the state led to an

increased demand for the types of services provided by low income informal entrepreneurs and

thus increased the demand for financial services amongst those in poverty (Scott 1998). As

more economically active clients were loaned money, microenterprise in many countries

boomed. Today there are an estimated 500 million poor people running micro businesses and

the shortage in supply of loans to these entrepreneurs is said to be 250 million dollars

Debates within microfinancial literature about the merits of each approach have quieted

and most MFIs now favor a finacial systems approach that prioritizes sustainability. Today

most scholars agree that charging subsidized leads to undercapitalization of the poor financial

sector by commercial bankin institutions (Wright G. A., 2000) (Robinson, 2001). Even with the

higher than market rates required for MFIs to become sustainable, requests for financial

services will continue to vastly outweigh the volume of lending MFIs are capable of handling.

The market for MFIs worldwide remains open because of the commercial banking industry’s

failure to recognize that microfinance can be done profitably (Rosenberg, 1996). MFI clients

today have a repayment rate of 95% and existing MFIs in several countries are more profitable

than leading commercial banks (Robinson, 2001). Elizabeth Littlefield, CEO of CGAP

recommends transitioning ‘socially oriented financial institutions’ into commercial MFIs, a

noteworthy idea considering the large presence of non-financially viable SOFIs in several African

countries (Littlefield & Rosenberg, Microfinance and the Poor, 2004). Despite the evidence that

MFIs must become economically viable to reach the large numbers of people seeking lending

and saving services, a large percentage of African MFIs are reliant on government subsidies and

grants from donors (Bogan, 2008). While commercial microfinance has become competitive in

Bolivia and across South America, large scale sustainable commercial microfinance systems are

largely absent in Africa (Gupta, 2008).

The money that savers are able to accumulate is vital in the case of emergency medical

expenses (Rutherford, 2000). Important studies show the without the presence of credit

services, savings alone cannot quickly help MFI clients out of poverty (Morduch & Haley, 2002).

Savings can however eventually provide a source of collateral when it is needed for borrowing

from a variety of financial institutions. Morduch highlights in his analysis of microfinance that

savings first institutions provide chances for many poverty stricken people to form a lending

relationship with MFIs, yet their services fail to reach the poorest (Robinson, 2001).

‘Today, if you look at financial systems around the globe, more than half the

population of the world – out of six billion people, more than three billion – do not

qualify to take out a loan from a bank. ‘ -Muhammad Yunnus 2005

The provision of financial services to low income clients is an important service to improving

the lives of millions. With a large percentage of the world’s poorest citizens living on the African

continent, it is imperative that initiatives to develop MFIs on the continent succeed.

What to do better to succeed with mission . The UF chapter of Nourish must focus on growth and the attraction of new members. The organization completely turns over every 4 years so successful leadership transition and the retention of a dedicated member body are primary concerns. For more developed chapters, the expansion of existing ventures to increase the scale of projects they run is the primary concern. As the number of students involved and ventures run increases, so to does the profitability of a Nourish chapter. Part of the funds raised during the year go towards starting new chapters at other campuses. In this way some profits are reinvested in expanding the movement. The overall goal is to create a network of social entrepreneur students who may someday work to solve some of the planets most pressing issues.

A primary improvement the central leadership of nourish could make is to better assist their chapters with dealing with University authorities (Conner). Often regulations to serve food prevent chapters from raising money through Hunger lunches. In this way, chapters are sometimes forced to deal with many of the difficulties communities face abroad. By developing a more nationally recognizable name, Nourish would receive more support for their ventures. Time will be a critical componene tand as members continue on with their lives many will choose paths that relates to social entrepreneurship. The network will continue to grow and spread and just must be done right.

Me with kiva, classes in social entrepreneurship, diabetes, friend is director, helped out with activities and joined nourish. IT is a participatory process and everyone must undergo a transformation.

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