GLOBAL POVERTY One billion people live on less than a dollar a day. What does it mean to live on this little? According to Professor Jeffery Sachs, it means being “too ill, hungry, or destitute to do anything but attempt to survive each day.” Fighting global poverty is an enormous multi-faceted challenge, and thirty years ago, a young professor stumbled onto one successful strategy. THE $27 MICROFINANCE STORY In 1976, a young economics professor studying the effects of poverty and famine in Bangladesh visited the nearby village of Jobra and lent $27 to a group of 42 villagers, who used the money for informal businesses, such as selling handmade soap or woven baskets. This loan led the professor, Muhammad Yunnus, to start the Grameen Bank. Today, that microfinance institution has lent out over $6 billion to 7 million borrowers, with 98% repayment rate. STUDENT CAUSES College students are energetic and care about social causes. Several organizations have demonstrated that college students are a powerful source of fundraising. For example, Dance Marathons are held at 80 colleges nationwide and raise over $12 million annually to support philanthropic causes. OUR BELIEF We are optimistic that microfinance can continue to alleviate poverty around the world, and we know that students care about these issues and want to get involved. Muhammad Yunus once said that the answer to eliminating poverty is the “unleashing of energy and creativity in each human being.” Students certainly have a lot of both, and Gumball Capital has the ability to leverage both.
Gumball Capital offers a three-pronged value proposition to propel college students to engage in social entrepreneurship for the benefit of microfinance. 1. Experience – Students compete in our flagship microfinance-benefit competition, the Gumball Challenge. The goal is for competitors to use the $27 loan and gumballs we provide them as inspiration, working with limited resources to generate revenue while simultaneously raising awareness about microfinance. What they create is entirely up to them. At the end of the competition, 90% of the revenue that student teams generate is placed in the Gumball Fund. 2. Education – A strong learning component is critical to the success of our mission. In addition to providing teams with toolkits on microfinance and social entrepreneurship, we are in the process of building a free online portal called Gumball University. It will be a shared, open-source resource that includes materials from classes on social entrepreneurship. It will also serve as a springboard for student discussions on microfinance and social entrepreneurship. 3. Investment – 90% of all revenue generated by student-competitors in the Gumball Challenge is channeled into the Gumball Fund. The Gumball Fund is a pool of money that we use to fund microloans to developing-world entrepreneurs. Currently, that money is channeled through Kiva and Wokai. In the future, the Gumball Fund will distribute loans through Facebook applications and allow greater donor control over where money is allocated.
Just as Thomas Edison said genius is 1% inspiration and 99% perspiration, we believe that our execution is what sets us apart. We are comprised of a group of dedicated Stanford students with a commitment to social change and social innovation. Since 2008, Gumball Capital has doubled the number of Challenges that it runs each year and this year two of the Challenges raised more than all of the Challenges in our first two years combined. We have a total of fifty Challenges running this year. The individuals applying for this project are the key members who have iterated on the Gumball Challenge model to make it more successful every year. Our primary inspiration for this project has been a thorough analysis of the entrepreneurial community development in Silicon Valley. The development and growth of the news site TechCrunch has been a necessary contributor to the orchestrated maturity of the startup community. Entrepreneurs, venture capitalists, angel investors, and every imaginable stakeholder has used TechCrunch as a source of knowledge and understanding for how to move the field of entrepreneurship forward. Gumball Capital intends to fill that role for social entrepreneurship and poverty alleviation.