The following is a conversation between Donella Rapier, President & CEO of BRAC USA,  and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.

Denver: The largest non-governmental organization in the world– with well over 100,000 employees– is BRAC, and the NGO Advisor which ranks these organizations, has placed BRAC at the very top of the heap, rated number one for two years in a row. So, if you’re not familiar with them, this is a splendid opportunity to become so, and we’ll do that now courtesy of Donella Rapier, the President and CEO of BRAC USA.

Good evening, Donella, and welcome to The Business of Giving.

Donella: Good evening. Thank you so much for having me, Denver.

Denver: BRAC was founded in Bangladesh in 1972. Tell us about the organization and of its mission and purpose.

Donella: Sure.  Nick Kristof from the New York Times once described BRAC as the best aid organization that you’ve never heard of. So, I’m delighted to have the opportunity to tell you a little bit more about us.

BRAC is a global development and humanitarian organization. We’re one of the largest in the world. Our programs reach over 120 million people worldwide. We’re unusual in that we’re the only NGO of our scale that was founded in the global south, in a poor country, as opposed to being founded in the wealthier north– in the US or UK or Europe. Our work currently spans about 11 countries including Bangladesh where BRAC was founded and where our programs reach across the entire country.

Denver: As for BRAC USA, how do you relate to the international organization, and what is your specific charge?

Donella: BRAC USA is the North American affiliate for BRAC. We were founded when BRAC decided to go international and when it decided to go beyond the borders of Bangladesh and began working in Afghanistan and in Pakistan, and now in places like Liberia, Sierra Leone, and others.  BRAC USA was founded in order to really spread the word about BRAC and also to help mobilize resources to support the programs. There’s also a BRAC UK which is located in London that covers the UK and Europe.

Denver: How is poverty defined by the international organization such as the United Nations or the World Bank? Where is that line?  And what kind of progress is the global community making in lifting people out of poverty?

Donella: It’s an interesting statistic because many, many people believe that poverty has actually gotten worse and that all of the work that’s being done by poverty-fighting organizations like BRAC, that they haven’t been making a difference, but it’s actually quite the opposite. When you look at the statistics, this is the first time ever that the number of people who are in extreme poverty is below 10% in the world.

Poverty is defined as $1.90 a day, which is a very low amount. Now, that’s still 700 million people. We have to address the fact that 700 million people in the world are living on less than $1.90 a day, and even that misstates what is happening because a lot of these people, they make all of their money just once a year at the harvest, and they have to live off of that all year round. So, it’s not like they’re getting $1.90 every single day. When you’re living in poverty, your money comes in very lumpy, and so it makes their financial lives really, really difficult.

…microfinance really is financial services for poor people.

Denver: That’s very interesting. One of the ways these people have been lifted out of poverty has been through microfinance, and you certainly are familiar with microfinance, not only with your work at BRAC, but with Accion… where you were before you came to BRAC.

First, give us a brief description of what microfinance is, and then of its impact. It has many many advocates, but there are a few detractors as well, as to its effectiveness.

Donella: Microfinance has made a huge difference. One of the things I often say to people when they are trying to understand microfinance is, there isn’t a developed economy in the world that doesn’t have a financial system underlying it. So, microfinance really is financial services for poor people. The reason that it’s so difficult to do is because even in this country, in the US, the banks, in order to be efficient, they tend to lend money in big chunks.

Whereas, people who are living in poverty, the average loans are something like $100. It’s also very labor-intensive because a loan officer has to reach people who don’t have access to financial service like we do here. It is hard to believe when you’re sitting here in a country where there is a bank on every corner and an ATM everywhere, and you have five credit card offers a month showing up in your mailbox. But a huge amount of people in the world, something like 2 billion people, have no access to a bank. They have no way to save money in a bank. They have no way to borrow money for any kind of equipment for their business or buying in bulk for their businesses to save on cost. So, microfinance actually provides a really, really important service for people living in poverty.

It’s designed to graduate from extreme poverty into a sustainable livelihood.

Denver: BRAC has taken a very disruptive approach to the plight of poverty, and your unique response has led to the creation of something called the “graduation approach”. Walk us through that, Donella, if you would.

Donella: Sure. The graduation program was created because after years and years of doing microfinance and seeing the benefits that it brought to people, BRAC realized that it wasn’t reaching the very, very poorest because there is a level of people who a small loan is just not going to be enough to help them pull themselves out of poverty.

So, BRAC pioneered a program that is, as you say, called the graduation program. It’s designed to graduate from extreme poverty into a sustainable livelihood. So many of these people would still be living in what we would consider to be poverty, but they have a way to sustain their life, and they’re no longer destitute. So, the program is multidimensional program designed just for people in that situation.

It starts with some very basic things like healthcare, nutrition training, a consumption stipend so that all of their – anything that they’re doing doesn’t go to consumption, and then the transfer of some sort of a protective asset, something like a cow or goats or chickens. Over a two-year period, they’re coached on how to build a business around that asset. They also get training in financial literacy and in running the business and in different kinds of livelihoods. In order to graduate from the program, you need to meet certain criteria. So, you need to have multiple sources of income, eat at least twice a day, your children being in school; you have sanitation facilities available to you. So, there are a number of criteria they have to meet.

This program, 1.7 million households have gone through it to date. So, that’s reached a tremendous number of people. The amazing thing is that even when you go back seven or eight years later, you find that the women are still on a positive, upward economic trajectory. So, it’s been a very durable program as well.

Denver: Yeah and remarkably holistic. I was really struck by the coaching and understanding that a lot of these women have low self-esteem and really need to work through it. You’ve really looked at this from a multi-faceted perspective.

Donella: It’s an interesting thing when you meet with the women who’ve gone through the program. When you ask them things like, “What’s the most important change this has made for you?” A lot of them will say things like, “I get invited to parties now. I’m suddenly part of the community, where I wasn’t before. I get invited to birthday parties and weddings.” It’s hard to imagine that before that… even in places like these… they were almost ostracized from their communities.

Denver: It they have no money, then probably people thought they were going to be asked to give them something. So, they were just not included, and they had very friendships as a result.

Give us an overview of BRAC’s social enterprise efforts and the role they play in supporting the mission of the organization.

Donella: This is another area where I think BRAC is really quite unique. BRAC self-generates about three-quarters of its own budget, which is about a billion dollars, and as you can imagine, a billion dollars in the places we work goes really far. The social businesses are each designed around a particular problem of poverty but is designed to be self-sustainable, and in many cases, even kick off a profit.

So, for example, after years of microfinance, there were a number of women in the rural areas who had a little bit more wealth. They had healthier cows. The cows were producing excess milk. They had nowhere to sell it. So, our founder, Sir Abed, he looked at this problem and said, “Gee, they’re selling milk for really very little in the rural areas, and they don’t have a market for it. In Dhaka, in the capital city, I’m paying a lot more. Why don’t we set up a dairy in between?” So, the dairy was set up, and it buys milk from these poor women farmers, and set up these chilling plants all over the country, and then sells now a range of dairy products into Dhaka.

What’s been interesting is, not only has the dairy been successful and actually generates a very nice profit, it’s actually driven a demand for dairy products; and now there’s a lot of competition in dairy in Bangladesh. So, it’s actually been a really positive thing for the country and for the women.

Similarly, we have a retail chain called Aarong, and it’s our most successful social enterprise and similarly, we source all of the product from women who live in the rural parts of the country or other parts where they’re much more in poverty. Again, where they have no market for selling their products. So, we buy from women artisans, and they sell saris and some beautiful handbags and blankets and crafts. Anything that you could want. Everybody that goes to Dhaka goes to Aarong.

Denver: They have made a mark in the fashion industry, and I think another wonderful thing that BRAC does here is that you pay these artisans and producers upon delivery. They don’t have to wait until the sale. That makes a big difference in somebody trying to run their households.

Donella: Yes. So many of them otherwise have to sell on consignment and only get their money late. That is a huge advantage for selling your products to Aarong.

…we’ve always taken a very business-minded approach and have really focused on trying something out in a small pilot to begin with, and pilot-drive the cost down, figure out the best way to do it, really do research and understand how it is working and then scaling it up… “Small is beautiful, but scale is necessary.”

Denver: Being a pioneer in this realm of social enterprise, I know how hard it is. This is not easy stuff.

What are the keys to doing it right?

Donella: I think some of the keys are; probably the most important one is looking for those market gaps and really figuring out what the right solution is. And as with everything else that BRAC does, we’ve always taken a very business-minded approach and have really focused on trying something out in a small pilot to begin with, and pilot-drive the cost down, figure out the best way to do it, really do research and understand how it is working and then scaling it up big. Our founder often says, “Small is beautiful,but scale is necessary.”  So, we’re very focused on taking these and really scaling them up. But I think taking that hard-edged, business-minded approach has been really helpful for BRAC.

Denver: As you mentioned a few moments ago, BRAC works in 11 countries with a breadth of things that you would do. But in order to bring this home, let’s focus on just one if we could. And that would be the roughly 700,000 Myanmar nationals that have entered into Bangladesh since late summer.

What’s the present situation?  And what is BRAC doing to help address this crisis?

Donella: It’s just a horrific situation what the Rohingya people have gone through in Myanmar. This is not a new problem, but the level of atrocities is really horrible. This is not a new situation. Either there were already roughly about 300,000 Rohingya living as refugees in Bangladesh which is where there is a very small border between the two countries, but they’ve come across the border. There were already a number of people living there, and then another close to 700,000 have come across since. It’s about a million people who are there in a community of only about 300,000 people of the Bangladeshis.

I was just there in late January. I have seen poverty before, and I’ve seen pretty destitute places, and this really… it takes your breath away just how dense it is. It’s a hilly area. It’s like half of them are children. When we got out of our cars, there were hundreds of children… just no parents anywhere around… running around, and what they’ve gone through is really terrible.

What BRAC is doing there now is: we have done everything from drilling wells for clean water. We’ve set up sanitation facilities. We have child-friendly spaces. We work a lot with adolescent girls, and the women refugee areas are places where human trafficking is often targeted, so we’re really focused on protection, particularly for the children and the young girls. We deliver healthcare as well. So, we’re doing quite a lot there. As a Bangladeshi organization, of course, we’re easily the largest responding organization, and of course we’ll be there for the long-haul because we feel that this problem is not an easy one to solve.

Denver: That’s a tragic humanitarian crisis for sure.

Much of the funding for humanitarian and development work has traditionally come from donor agencies in the US, in the UK, in Australia, but some of that funding is now going elsewhere as these donors are targeting it for more strategic purposes.

What kind of things is BRAC doing to remain financially sustainable while also keeping your eye on the mission and purpose of the organization?

Donella: It’s a very good question, and it’s a very interesting time for BRAC. We’ve been very successful in Bangladesh, and Bangladesh itself has been very successful. So, it’s actually achieving middle income status, though it’s still at the low end of that echelon. But it’s done quite well for itself, much better than many of the countries who were also founded around the same time. Many in Africa, if you look at the human indicators, many of the countries that were founded roughly 50+  years ago still fare far worse off than Bangladesh. In spite of Bangladesh still dealing with a lot of the challenges of its geography, its size; I think people don’t realize just how populous it is. It’s the eighth most populous country in the world. But it’s tiny. Geographically, it’s very small. So, it’s like taking half of the population of the United States and putting them all in the state of Louisiana. It’s something of that nature.

Largely, I think BRAC has played a huge role in how well it’s done for its poor people. As a result, the donor organizations are turning their attention elsewhere to other places that are in deeper poverty… understandably. So, BRAC has been very focused on making sure that we take that 75% self-sustaining to internally generate it to a higher number. So, we’re looking at a lot of the programs that we currently have traditionally run that in a lot of cases, the government now is able to provide for.

We have about a million children in our primary schools in Bangladesh and in our other countries. Because for a long time, the government wasn’t able to get out to the rural areas, so BRAC really filled the gap there for poor rural areas. But now, the government is actually able to get out there. The government has adopted BRAC’s model in many ways. That’s something that we’ll be doing less of as the government picks up more of that. So, we’re looking more and more at ways to generate funding from other sources and make our programs more self-sustaining, like the education program or healthcare, where now that people have more disposable income, they actually are able to pay a little bit for school fees, or they are able to pay a little bit for their healthcare. We’re doing a lot of that with just our core programs– thinking about: Are there ways that we can make them not profit-driving, but self-sustaining?

Denver: A bit of a paradigm shift when you take your recipients and you turn some of them into customers.

Donella: Exactly. That’s exactly right.

Donella Rapier and Denver Frederick inside the studio

Denver: Development used to be more of a wholesale industry, but because of organizations like BRAC, it’s becoming more retail, much more customer-centric. I think your graduation program would be evidence of that.

In that regard, how is digital technology changing the way that BRAC goes about doing its work?

Donella: Digital has changed things a fair amount, not as much as I expect will happen over the next 5 to 10 years. BRAC has the largest mobile money application; actually, there are two really large players in this. M-Pesa which is in Kenya, Tanzania, some other places now, and BRAC which is bKash, and bKash is a mobile money platform, and it’s been highly successful.

It makes it much easier for people in  basically transferring money over their phones, so that they don’t have to leave their business, close up for the day and go down to the bank to pay their loan payment. It saves them time and effort. That technology, in fact, I was surprised to see that even in the refugee camps, there already are bKash in there; it’s amazing since it’s only grown so much since last August. That technology has changed the way people’s lives are in Bangladesh.

There’s still a number of things like that we can do in our other countries. The microfinance programs in our other countries aren’t yet as digital as they are in Bangladesh or in other places, so I think that’s still to come. Similarly, our education programs, we know that there’s a lot that we could do with technology and education, but that’s only just now beginning.

Denver: BRAC doesn’t do all of this alone. You do it through collaborations and partnerships with governments and other NGOs and donors.

Do you have an overarching philosophy that guides these collaborations?

Donella: I don’t know whether we have an overarching philosophy so much as it’s more of  – we partner with a number of organizations, and in fact, working with governments is actually core to what we do because it’s only really governments that can really, truly do things at scale and can take programs and make sure that they can be common throughout the countries. So, we work particularly in the countries that we’re working in, in Africa, in other parts of Asia, we work very very closely with the governments.

In Bangladesh, it’s really at a high point I think in terms of the relationship between BRAC and the government. Particularly, since we founded BRAC University that has a very strong relationship with the government, the government sends a number of their civil servants through the program. So, in terms of other partners, we partner with other NGOs; certainly the donor agencies that have been our biggest partners lately have been the UK government, DFID, and Australian Aid, which is now called DFAT;  they are huge partners for us, and they have provided a considerable amount of funding, and they have been fabulous in giving BRAC discretion in ways in order to do some of the innovations and make sure that the programs can be long term.

There’s a really big focus on measuring what works, measuring what’s being done, and seeing what works and finding ways to be doing continuous improvement.

Denver: That’s great. You guys have a very well-earned reputation of being an exceptionally well-managed organization. In fact, there are case studies about BRAC at the Harvard Business School, an institution that I know that you are most familiar with.

One of those areas where BRAC truly shines is in the science of delivery– the efficient delivery of services to people in need. How do you do that so well?

Donella: I think it’s the philosophy that imbues the entire organization in terms of the service delivery being focused, first and foremost in all ways, on the beneficiary. And as you said, increasingly, they are becoming customers, clients. I think there’s a really big focus on that. There’s a really big focus on measuring what works, measuring what’s being done and seeing what works, and finding ways to be doing continuous improvement.

Denver: Tell us a little bit about your personal journey, Donella, to becoming the CEO of BRAC USA. What are proving to be some of the more valuable experiences you’ve had that are helping you now in your current role?

Donella: I’d say if you look at my history, I started out in Accounting and Finance, and I would never at that time have imagined that I would be in a role like this. After six years at Price Waterhouse, I had decided to go to business school. I was fortunate enough to be a recipient of a scholarship program of Price Waterhouse. So, they essentially put me through Harvard Business School, and then I was an indentured servant for a few years after that when I then decided to go work at HBS. I became the CFO there. After about five years there, the dean of the school basically asked me to go from the expense side to the revenue side, and he had seen that I’d always really enjoyed working with the alums and doing the presentations about our finances and getting to know them. So, he asked me to take on the fundraising for the school. So, I ran the first-ever HBS campaign which was an enormous success.

A lot of things came together between the dean’s vision, the senior associate dean, who was the road warrior, the gift getter, Howard Stevenson, and then me managing the group, that it all really came together. It was so successful that then President Larry Summers asked me to move over to the university side, and I became the Vice President for Alumni Affairs and Development. I did that for several years. After he left Harvard, I decided that I really wanted to do something really impactful and really focused on poverty. I’d always been really interested in that.  And it was fortunate that Partners In Health, Dr. Paul Farmer’s organization, made the bold move of hiring me, because coming from the wealthiest nonprofit in the world– except maybe for the Vatican–to going to a scrappy NGO like Partners In Health was a big change. But it was exactly what I was looking for.

At that time, Partners In Health was pretty small. So, I was there for the huge amount of growth at Partners In Health, which is an amazing healthcare organization. I was then convinced to move over to  Accion where I was for several years–which is a very large microfinance network– and got to know BRAC through that. I visited Bangladesh for a microfinance retreat and was so blown away by how amazing BRAC is. Fortunately, when I came back, an executive recruiter reached out to me, and she said, “You know, they’re looking for a CEO at BRAC USA.” It’s an amazing organization. It’s actually interesting how I often say that I call almost as much on what I know from my work at Harvard than at the other two NGOs that I’ve worked in… because BRAC is large and Harvard is large, and working across a large organization, it has a lot of similar elements.

Denver: Your founder is going to make you work at scale, no matter what.

Tell us a little bit about the corporate culture. You don’t become the most highly regarded NGO in the world without having an exceptional culture where people can get wonderful stuff done. Tell us about it.

Donella: BRAC US itself is a smallish team, relatively speaking. BRAC, we’re about 25 people, and it’s a really high-performing, high-energy, super motivated, talented group of people that are really – one of my challenges is to keep people from working too much because they are just so driven. We then work with all of the BRAC international countries, with the country heads directly and also with the leadership team in BRAC. I think BRAC itself is quite an interesting experience. It’s in a 20-story building that was put up when there was nothing there.

After that, the largest slum in all of Dhaka basically ended up being right nearby. So, you never forget who you’re working for because when you look out the window, you can see them. The culture there is also, I think, one of being very as much before, very business-minded, really trying to understand what works, why it works, and then trying to scale.

There also has been a huge movement around impact investing, where investors are interested not just in making returns, but they’re also interested in making the world a better place.

Denver: Let me close with this Donella. BRAC has had an extraordinary influence in this entire field of development, as I think we have spoken about. So many of the innovations that were pioneered by BRAC have now really been replicated by one organization or another.

With that being said, and perhaps in the context of some of the things you’re currently working on now, where do you see this field going and evolving over the course of the next 5 or 10 years?

Donella: It’s an interesting question, and it will be interesting to see what happens over the next 5 to 10 years. For sure, I think there will be more and more social enterprise initiatives; Harvard Business School, my alma mater, as you mentioned, actually has several case studies on BRAC. When I was a student there, there were no courses on doing business at the base of the pyramid and now, there are three full sections that are oversold every year. So, there’s a focus even at places like Harvard Business School, which has been dubbed the West Point of capitalism, where they’re actually focusing on: What are we doing for business at the base of the pyramid?  

There’s a tremendous amount of interest  I’m so impressed by the younger generation now. There’s so much energy around really trying to make this world a better place and really trying to eradicate poverty. I think that that business-mindedness and the social enterprises, I think, is definitely a current wave and will continue to be a growing wave in the future. There also has been a huge movement around impact investing, where investors are interested not just in making returns, but they’re also interested in making the world a better place.

So, that, I think, also is pushing in that direction of really seeing the world, seeing some of these countries, not just as places for aid, but seeing them as markets. It’s actually a huge failure of the capital markets that there are 2 billion people without financial services. There is a huge market potential there. I think those are some of the things.

I think aid… and I think we will probably see a continuing decline in the traditional kinds of aid. We’re seeing that already. Meanwhile, there is a whole new group of very wealthy individuals who are putting a lot of their attention on this, Bill and Melinda Gates being the poster children for this. There are many people like that, maybe not at that scale.. not now, but maybe later… that are really focused on this as well. I think that will be a continuing trend, that some of the innovation may be funded more by individuals than by the traditional aid agencies in the future. The other thing is that I think there’s been a real recognition recently that you need to strengthen the systems and the governments themselves, so partnerships with governments and strengthening governments– which is very hard to do– is, I think, something else that will continue as a trend in the future.

Denver: Lots to be done, but a very promising time at the same time.

Donella Rapier, the President and CEO of BRAC USA, I want to thank you so much for being here this evening. Tell us about your website and the kind of information visitors will  find if they should go there.

Donella: We have all the information about our programs and about all of the countries where we work. So, please do visit and support our work. We are aiming to mobilize resources to support the great work that’s being done in these countries. We would be most grateful for support.

Denver: Thanks, and it was a great pleasure to have you on the show.

Donella: Thank you.

Denver: I’ll be back with more of The Business of Giving right after this.

Denver Frederick and Donella Rapier


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