Second Annual Open Enterprise Solutions to Poverty Request for Proposals

Initial Letters of Interest due October 15, 2009

Cambridge, MA – June 22, 2009 - The SEVEN Fund today published its second annual open “Enterprise-based Solutions to Poverty” request for proposals (RFP). The competition will award up to two (2) research grants of no more than $100,000 each. Submission deadline for the Initial Letters of Interest (LOIs) is October 15, 2009.

Quick Links:
• Background
• Goals
• About SEVEN
• Questions & Answers

Background

Foreign economic aid and government programs have spent billions of dollars during the past five decades to alleviate the high number of people living in poverty. No country has been lifted out of poverty as a result of these efforts, but the mindset remains the same: aid programs are the key to poverty alleviation.

Entrepreneurship, as a solution to eradicate poverty (i.e. a focus on wealth creation rather than poverty reduction via re-distribution), remains controversial because it goes against the prevailing mindset that solutions to public problems are created by the government, rather than from the private sector. The notion of creating wealth is often stigmatized, and businesspeople in developing nations are sometimes regarded as too self-interested to be a force for positive social change.

There are efforts by international organizations and personalities that aim to correct this, but these efforts often turn into “top-down” and “social engineering” solutions, or into calls for philanthropic donations and handouts, rather than focusing on economic integration, improved productivity, and growth. The prevalent mindset in trying to “solve” the problem of poverty focuses too little on the opportunity these new, vast markets represent as a way to create producers and consumers, and to connect all people to networks of productivity and exchange..

At the core of the approach to poverty alleviation is the basic question: Are individual persons, no matter where they live, able to determine their own future? Does positive change come from the ingenuity of the individual or does a group of us (well-educated Westerners, primarily) have to tell the rest what to do? The answer to these questions goes to the core of our view of how we see the person, as fatalistic or self-determined and it determines whether our proposed solution to an issue like poverty involves a “top-down” approach or a “bottom-up” solution. Indeed, to what extent do we rest the locus of responsibility for a person’s future on him or her or on others, out of their beneficence?

The aim of SEVEN Fund sponsored research is to challenge the prevailing state of mind in this field. We want to answer the question of whether wealth-creation may be the most effective solution to alleviate poverty. We invest our efforts and resources to find, research, and document examples where entrepreneurial success is shown to have led to poverty alleviation. In the process, we will seek to inspire entrepreneurs in developing countries with advice, investments, role models, and services.

At SEVEN, we believe that enterprise solutions to poverty already exist, but are not sufficiently studied, analyzed, and exhibited as examples. There are specific questions that have no formulated answers – it is our aim to sponsor research to explore and find these answers. For example:

1. What are the most significant qualities of a successful entrepreneur, especially in the uncertain environment of a developing economy?
2. Can entrepreneurship be taught, inspired, and diffused through a society?
3. Could support for the entrepreneurial spirit serve as role models of sustainable solutions to poverty?
4. What is the relationship between prosperity and progressive human values?
5. How can enterprises contribute to making stronger societies?

Questions like these lie at the heart of enterprise-based solutions to poverty, and at the foundation of our understanding of how to help an economy grow and, ultimately, help bring about a high and rising standard of living for the vast majority of citizens. Answers to these questions will have implications for governments, multilateral donors, corporations, financial institutions, investors, and citizens in general.

A key aspect of SEVEN’s approach is that we believe that entrepreneurs and their companies can be competitive and profitable, while providing a positive impact on society. In fact, we believe that this is the only sustainable business platform. There are four different constituents to any business model: consumers, owners, workers, and future generations. All business models serve the purchasers, or the business model wouldn’t exist. Most serve the shareholders or the business model wouldn’t exist for long. Fewer still serve the employees of the world; and in fact, there are only a handful of countries where employees regularly participate in the value created in a business model. Even in these few countries, there is precious little thought given to future generations. We call this focus on Customers, Owners, Workers and the Future the COW-F approach. With this integral view, businesses are the key contributors to sustainable economic growth and prosperity.

The prevailing approach is to focus on top-down projects with government-led conceptual frameworks, rather than on the less defined and often interdisciplinary methods required to develop and encourage entrepreneurial approaches to wealth creation and poverty reduction.

In addition to curtailing the potential for massive poverty reduction, this mode of thinking greatly diminishes the excitement and meaning of entrepreneurship in the public consciousness.

SEVEN encourages rigorous researchers to tackle the questions and the potential of enterprise-based solutions to poverty head-on and we are committed to promoting and diffusing the answers found.

Goals

This SEVEN Fund RFP has four goals:

1. To expand scientific inquiry to include disciplines fundamental to a deep understanding of entrepreneurship and economic development that are currently unsupported by conventional grant sources. This includes the broad topic area of research that we encourage, as well as the inclusion of qualified “researchers” from various fields and backgrounds that other institutions would not fund. Our goal is to introduce fresh thinking and new directions into the discourse of poverty reduction and sustainable economic development;
2. To forge and maintain useful collaborations between researchers and on-the-ground actors of Enterprise-based Solutions to Poverty;
3. To provide the public with a deeper understanding in this area, and its potential implications;
4. To find, research and analyze role-model entrepreneurs and companies whose lesson may inspire others.

RFP funding therefore favors research that has two characterisics. First it aims at supporting research that is foundational, with potentially significant and broad implications for our understanding of how entrepreneurs lift people out of poverty. Second, this unconventional view will enable research that, because of its speculative, non-mainstream, or high-risk nature, would otherwise go unrealized due to lack of funding. SEVEN especially welcomes proposals that are integrative, and recommends that interested researchers see “That’s My Duck: The Case for Integration” by Michael Fairbanks, in "In the River They Swim: Essays on Enterprise Solutions to Poverty from Around the Globe" for more perspective on the importance of integration across domains to inform innovative approaches to poverty.

About SEVEN

SEVEN (Social Equity Venture Fund) is a virtual non-profit entity run by entrepreneurs whose strategy is to markedly increase the rate of innovation and diffusion of Enterprise-based Solutions to Poverty. It does this by targeted investment that fosters thought leadership through books, films and websites supporting role models - whether they are entrepreneurs or innovative firms - in developing nations and shaping a new discourse in government, the press and the academy around private sector innovation, prosperity and progressive human values.

Questions & Answers

Does SEVEN have a preferred philosophical or scientific agenda?
We see a number of experts who opine about poverty and prosperity: i.e., macroeconomists, businessmen, educators, political scientists, social scientists, etc. We rarely see enough integration, where the experts of one domain borrow insights from another, and attempt to create an even more robust intellectual framework. We intend to foster this kind of integration at the level of thought leader and practitioner.

Who might receive SEVEN grants?
Anyone may submit an Initial Proposal in order to compete for a SEVEN RFP grant as long as the proposal reflects the scope and guidelines stated in the call for RFPs. The winning parties will be required to enter into a contract with SEVEN prior to final award. We expect applicants to be Think-Tanks, Economists, Professors from Business Schools as well as other departments, Researchers, Entrepreneurs, Business Experts, Strategy Experts, Graduate and Post-Graduate Student Researchers, Economic Development Experts, Business Strategists, Non-Governmental Organizations, etc.

How and when do we apply?
You enter into the RFP competition by completing an Initial Proposal of no more than three pages, with the PI’s (Principal Investigator’s) CV attached. Submission deadline for this RFP (Initial Proposals) is October 15, 2009.

What kinds of programs and requests are eligible for funding?
The RFP competition focuses on academic and scientific research in the field of Enterprise-based Solutions to Poverty. We intend to award up to two grants for a cumulative $200,000 and duration of no more than twelve months. There is no geographic or other limitation on who may compete for these funds – anyone may compete for these funds.

What is your policy on overheads?
The highest allowed overhead rate is 20%.

How will proposals be judged?
After screening of the Initial Proposal, applicants may be asked to submit a Full Proposal. All Full Proposals will undergo a competitive process of a confidential jury peer review. An expert panel of jurors from various fields will evaluate and rank the proposals according to the criteria described in Evaluation Criteria & Project Eligibility. The winning parties will be required to enter into a contract with SEVEN prior to final award.

Is there a fixed amount of funding?
The grants under this RFP call shall not exceed $100,000 to be used during a period of no longer than twelve months.

Can you give me any guidance on my research proposal, and on whether or not our project fits within the funding vision?
Occasionally, SEVEN may provide feedback on Initial Proposals invited for a Full Proposal, and also limited advice during the preparation of the Full Proposal. Please keep in mind that however positive SEVEN may be about a proposal at any stage, it may still be turned down for funding after peer review. However, please do not contact SEVEN seeking guidance on crafting your Initial Proposal.

Can I submit multiple proposals?
We will consider multiple Initial Proposals from the same PI. However, we will invite at most one Full Proposal from each PI or closely associated group of applicants.

What if I am unable to submit my application electronically?
Only applications submitted online via our website will be accepted. That form can be accessed at www.sevenfund.org/submit-loi. If you encounter problems, please contact SEVEN at info@sevenfund.org.

What are the reporting requirements?
Grantees will be asked to submit brief monthly progress reports. Quarterly payments will be contingent on satisfactory demonstration in these reports that the supported research is progressing appropriately, and continues to be consistent with the spirit of the original proposal.

What are the qualifications for a Principal Investigator?
Since this is a program run by both practitioners and academics, SEVEN may be a bit more flexible than traditional funding agencies in the definition of a Principal Investigator. Thus, we may accept applications from non-academics as the PI or a co-investigator if his/her experience and background warrant it. (This is ultimately up to the jury).

My colleague(s) and I would like to apply as co-PIs? Can we do this?
At this time, the online application form only allows for one PI. Please choose one investigator to be the primary contact; on the application form, designate this individual as the "PI", and all other individuals as "co-investigators." Then, please include a sentence in your project summary specifying your wish for certain individuals to be officially considered as co-PIs.

I have a proposal for my usual, relatively mainstream research program that I may able to neatly repackage as an appropriate proposal for SEVEN. Sound OK?
SEVEN is very sensitive to the problem of "free money," the re-casting of an existing research program to make it appear to fit the overall thematic nature of this Request for Proposals. Such proposals will not be funded, nor renewed if funded initially.

How is SEVEN financed?
This call to RFP is supported initially by a grant from the John Templeton Foundation. SEVEN intends to run a version of this RFP competition annually.

What sort of legal organization is SEVEN?
SEVEN is a 501 (c) (3) non-profit corporation under the laws of the Commonwealth of Massachusetts.

Who is SEVEN? How is SEVEN administered and run?
SEVEN is primarily managed by two people, Andreas Widmer and Michael Fairbanks. They are co-directors with different experiences in the high-tech industry and development, respectively. They founded and ran the only venture-backed firm in the USA to focus on selling software and strategic consulting services to developing nations.

Important Dates

• Request for Proposals Publication: Date, June 22, 2009
• Deadline for Initial Proposal: Midnight Eastern Standard Time, October 15, 2009
• Invitation for Full Proposals: November 1, 2009
• Deadline for Full Proposals: Midnight Eastern Standard Time, December 15, 2009
• SEVEN Grant Award Announcement: Friday, February 19, 2010
• Earliest Start Date for SEVEN Grants: March 1, 2010
  

Evaluation Criteria & Project Eligibility
In this RFP competition, SEVEN will award grants of varying value (no single grant will exceed $100,000 and twelve months) to exceptional research proposals meeting the criteria. Researchers in academic and other institutions may apply for projects up to one year in duration, beginning October 15, 2009. Grant applications will be subject to a competitive process of confidential expert review similar to that employed by similar grant funding agencies.

Proposals will be evaluated according their relevance and impact.

• Relevance: Proposals should be topical, foundational, and innovative.
• Topical: This Request for Proposals is limited to research in economics, government policy and business strategy, insofar as the research bears directly on questions in enterprise-based solutions to poverty. Although the distribution of funds across subject areas will be driven in large part by the quality of proposals received, a goal of the review process will be to fund diverse research topics that span the small and the large, and range from the elementary to the complex.
• Foundational: This Request for Proposals is limited to research with potentially significant and broad implications for our understanding of Enterprise-based Solutions to Poverty.
• Innovative: This Request for Proposals is intended to fill a gap, not a shortfall, in conventional funding. We wish to enable research that, because of its speculative, non-mainstream, or high-risk nature, would otherwise go unperformed due to lack of available monies.
• Impact: Proposals will be rated according to their expected scientific impact per dollar, taking all relevant factors into account, such as:
  • Intrinsic intellectual merit, scientific rigor, and originality
  • Potential for significant contribution to the basic understanding relevant to the topic and a high likelihood for success and importance if successful (i.e., high-risk research can be supported as long as the potential payoff is also very high)
  • The likelihood of the research opening fruitful new lines of scientific inquiry
  • The feasibility of the research in the given time frame
  • The qualifications of the principal investigator and team with respect to the proposed topic
• Cost effectiveness: Tight budgeting is encouraged in order to maximize the research impact of the project as a whole, with emphasis on scientific return per dollar rather than per proposal

Acceptable use of grant funds include:

• Student or postdoctoral salary and benefits for part of the academic year
• Summer salary and teaching buyout for academics
• Support for specific projects during sabbaticals
• Assistance in writing or publishing books
• Modest allowance for justifiable equipment, computers, publication charges, and other supplies
• Modest travel allowance
• Development of workshops, conferences, or lecture series for professionals
• Justified overhead of at most 20%

Illustrative projects

To aid prospective applicants in determining whether their project is appropriate for SEVEN, we provide here a list of illustrative projects that are potentially able to receive funding according to the above criteria:

• Research that advances the understanding of the role that entrepreneurs play in creating sustainable economic progress in any given country, region or industry.
• The money (remittances) that the immigrant community in the U.S. sends back to Mexico and the rest of Latin America dwarfs the global total of Foreign Aid and Direct Foreign Investment to all poor nations. Most of this money is consumed, and not invested into enterprises back in the villages and small towns. We are interested in how remittances can be used to foster innovation and long-term prosperity for remote communities.
• The smallest nations of the Caribbean are overwhelmingly dependent on access to European markets and subsidies, especially in the sugar industry. These benefits are disappearing, and no alternatives are on the horizon. This has consequences for the entire Hemisphere. We are interested in how entrepreneurs who are properly stimulated and rewarded find ways to build complex strategic advantages on top of their natural resources.
• Africa is enjoying a boom in selling their natural resources to China, and many are convinced that the continent has turned the corner. Still, wages remain low, commodity markets are fickle, and the environment is being destroyed with no real sustainable advantages in sight. How can we use the spate of Chinese activities in Africa to build sustainable advantages?
• Most foreign advisors tell entrepreneurs in Afghanistan to find ways to sell things to Europe and America while their biggest markets, traditional relationships, and largest opportunities lie in Pakistan and India. Globalization can mean that poor economies sell to one another, but policies and formal advice do not foster this. How can we focus entrepreneurs in developing nations, and those who advise them, on the real markets, nearby?

Broadly speaking, we want to know more about the success factors in developing world entrepreneurs such as strategic choice, organizational structure, IT usage, information flow, control measurements, etc.; we are interested in the effect of entrepreneurship on governments, and how the benefits of entrepreneurship permeate through society.

For examples of projects that have previously been funded by the SEVEN Fund, see http://sevenfund.org/press-release-dec-2008-grant-awarded.php and http://sevenfund.org/contests/rfp-2008-contest.html.

Application Process
Applications will be accepted electronically through a standard form on our website, and evaluated in a two-part process, as follows:

Initial Proposal - Due October 15, 2009 - Must include:

• A 500-word project summary, explicitly addressing why it is topical, foundational and unconventional;
• A draft budget description not exceeding 200 words, including an approximate total cost over the life of the award and explanation of how funds would be spent;
• A Curriculum Vitae for the Principal Investigator, which MUST be in PDF format, including:
  • Education and employment history;
  • Full publication list.
• Four expert references on the PI or the project team as a whole.

SEVEN will screen each Initial Proposal according to the criteria listed above. Based on this preliminary assessment, the Principal Investigator (PI) may be invited to submit a Full Proposal, on or about November 1, 2009, perhaps with feedback from SEVEN on improving the proposal. Please keep in mind that however positive SEVEN may be about a proposal at any stage, it may still be turned down for funding after full jury review. All jury decisions are final decisions.

Full Proposal - Due December 15, 2009 – Examples of what it must include – full list will be made available to finalists:

• A 200-word project abstract, suitable for publication in an academic or professional journal;
• A project summary not exceeding 200 words, explaining the work and its significance to laypeople;
• A detailed description of the proposed research, not to exceed fifteen single-spaced 11-point pages;
• A detailed budget over the life of the award, with justification and utilization distribution;
• Evidence of tax-exempt status of grantee institution, or if it is not tax-exempt, a full description of the entity and its focus;
• Project timeline with clearly defined and objectively measurable quarterly deliverables;
• Curriculum Vitae for all project senior personnel, including:
  
  • Education and employment history;
  • A list of references of five previous publications relevant to the proposed research, and five additional representative publications;
  • Full publication list.

Completed Full Proposals will undergo a competitive process of external expert peer review, evaluated according to the criteria described in Evaluation Criteria & Project Eligibility above. A review panel of scientists in the relevant fields will be convened to produce a final rank ordering of the proposals, which will determine the grant winners, and make budgetary adjustments if necessary. Award announcements will be made on February 15, 2010.