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By Root 267 0

Cafeterias, a largely Southern cafeteria chain, out of bankruptcy, saving almost six thousand jobs and creating more than five hundred new ones in fifteen states. Seventy-four percent of its communities are lower-income and underserved. Sixty-five percent of its employees, including 55 percent of those in management, are minorities. Yucaipa also bought Pathmark Supermarkets, which employs 26,000 people, half of them in underserved communities. Because of its purchase, Yucaipa may have saved many jobs because it did not sell off Pathmark’s assets, which would have displaced thousands of employees.

On April 26, 2007, the New York Times carried a story on the efforts of Amalgamated Bank to open branch banks in neighborhoods with many people who have never had a bank account. There are an estimated 28 million of them in the United States, keeping their extra money at home, cashing their paychecks at costly check-cashing businesses, never having a checking or savings account or an ATM card. Often they borrow against coming tax refunds or paychecks—refund anticipation and pay-stub loans—which can lead to fees and interest rates totaling 40 to 400 percent. People who live in an all-cash economy are not just at greater risk of financial ruin; they can’t establish a good credit rating or buy homes. The early returns on Amalgamated’s outreach to the underserved is encouraging. Its new customers like earning interest on their money and paying lower rates when they borrow. The bank’s president, Derrick Cephas, says he expects to turn a profit within a year. The article cited several examples of the benefits to first-time bankers. Jacqueline Williams, a telephone company employee, is relieved not to have to keep paying “thousands and thousands” of dollars to check-cashing businesses or to remember every place she stashed her money. Her ten-year-old son is excited that the $130 he saved will now earn interest. Sylvia Williams has used a check-cashing operation for twenty-seven years. She’s happy to have her first ATM card at much less cost. There are millions of people like Sylvia and Jacqueline all over America who work hard, save money, and still remain unbanked. It’s a market waiting to be developed, and its success will benefit all of us. This is a project readymade for community organizations, religious congregations, and innovative, socially responsible businesses.

ELEVEN

Nonprofit Markets Can Be Organized Too

THE SAME STRATEGIES businesses use to organize and expand markets that enhance the public good and empower their customers to do the same can be adopted by nongovernmental organizations involved in philanthropic work. By doing so, NGOs can help a lot more people and dramatically increase the impact of their donors’ time and money. I hope that describing some of my foundation’s efforts to organize markets will help you think of this as a new and different way of giving, and encourage you to support or start your own similar efforts, which may not require massive sums of money or time but can make a dramatic impact.

When I set up my foundation, I didn’t know that many of the good things we would accomplish in the last six years would result from the application of such strategies to everything from AIDS drugs, tests, and testing equipment; to Rwandan farmers’ fertilizer costs and microcredit interest rates; to the kinds of drinks and snacks available in American schools; and this year, I hope, to clean energy products on every continent.

After Nelson Mandela and I closed the World AIDS Conference in Barcelona in 2002, Prime Minister Denzil Douglas of St. Kitts and Nevis asked me to help the Caribbean nations establish and fund systems for the prevention, care, and treatment of HIV/AIDS. I agreed to do what I could, but with limited staffing in Harlem and Little Rock and an already crowded list of commitments, I needed some help. I called my friend Ira Magaziner, who had spearheaded our efforts in health care and e-commerce in the White House, and asked him to organize and lead the project.

I had known Ira since