Framing social impact financing model for Finance Fund, Ohio, USA

1. Post World War 2 America:
   a. Despite the robust economy of the 1950s many Americans continued to live in poverty throughout the 1950s, especially older               people and African Americans.
   b. At the end of WW2 (1947) 60% of the families in poverty were black and 23% were white
   c. The obsession for consumer goods drove the growth in the middle class .
   d. With 12 million returning veteran, labour strikes, racial tension, women who took the place of men in the workforce being replaced         by returning soldiers, low wage standard (30% of blue-collar workers in poverty) , and a dominant rural populations disparity of             access to basic resources was and unacknowledged issue.
   e. 1968 23% of black families and 9% of white families lived in poverty.
2. Based on the continuing trends in income distribution in the 1970-80, the response of local communities recognizing the barriers          that stagnated local economies was to address the problem in the places they knew.
   a. The community development movement in the US began in the 1960s primarily in church basements.
   b. Foundation based on the lack of access to housing, jobs, education, health care and basic services by segments of the                         population.
   c. Spawned the locally based charitable organizations, i.e. community housing, economic development, homeless shelter, food                pantries, etc.
3. In 1987 the Ohio Community Development Finance Fund (Finance Fund) was established.
   a. The primary purpose was to focus on addressing basic system problems, rather than symptoms caused by the dysfunctional                  system. The strategy was to use normal capital market tools to incent investment in dysfunctional local communities.
   b. The first financial model used was a “linked deposit”
       i. An interest rate risk approach that used benevolent bank deposits to lower the interest rates for loans made in distressed                      communities. (rates in 1990s were move downward from the double-digit rates of the 1980s but were still in the 8%-10% range)
      ii. It worked well until rates dropped and the market (banks) were offer lower rates and became direct competitors.

   c. The second model was a direct loan model. FF operated much like a bank, investing in projects that met certain underwriting                 standards. Because of the source of capital that fund our loans we were able to show some flexibility in the underwriting                       standards, flexibility in terms, and post loan engagement with customers. Because there was never an overabundance of                        benevolent investors to our revolving loan fund model it never reached a scale that was sustainable.
   d. It was eventually converted to an SBA direct loan program, which is still operational.
   e. The third model deployed was the result of intensive public policy work done in the late 1990s that resulted in a federal statute,             The New Markets Tax Credit program was established in 2000.
        i. The model provides federal tax credits to investors in qualified local organizations (community development entities – CDE). In               the US a tax credit is an amount taken directly off of taxes owed to the US Treasury.
        ii. Using the investment CDEs have to make investment directly into blighted communities that are specifically defined by census              tract.
        iii. At this point the model gets a little complicated as it attempts to enhance the tax benefit to the investor while increasing the                  capital available to invest in local projects. It uses a bifurcated model.
        iv. Since 2003 NMTC has received $23B from the US Treasury, leveraged $75B in nearly 5,000 projects, creating 750,000 jobs in               the most depressed communities in America.
        v. FF has received nearly $500MM. leveraged $1.5B, and nearly 16,000 direct jobs.
        f. Ancillary grant products: through a partnership with state and local governments.
 

Oxford University Press

1. Mahesh Joshi and I were Oxford alumni friends both part of the same cohort in 2014.
2. Mahesh was producing an internet radio program on Voice America (Global Business) reaching around 180 countries.
3. We had spent many hours, along with other Oxford friend (Josef included) talking about the shape and impact of leadership in a             world that is changing at a phenomenal rate.

4. I help produce a season of his program and was a guest a dozen times or so.
5. As we went through the process, we began to realize that the content we were accumulating had a value beyond what we were             perceiving. That and at the urging of the VA people we decided to put some of the content into a book format.
6. We began producing the manuscript and talked about where to publish. During the writing time we spent 2 weeks at Oxford Said          Egrove. The time was well spent as we were able to gain council from Lalit, Dean Tufano, and others about what our goals were,            what did we want to accomplish, and where did we want to publish.
7. During that time we gained an introduction to a Commissioning Editor at OUP. It was an unexpectedly good meeting, as our                  expectations were rather low.
8. We were invited to submit a Book Proposal to OUP. That was an exciting time as we were farther ahead on the book project than             most book proposals. The contract that comes from a proposal usually involves an advance against revenues during the time of            writing the manuscript.
9. OUP process is to send the proposal out to 5 or more reviewers that advise as to the established criteria for viability and validity of         the book being published. We were fortunate to be able to have some input in this part as we were invited to recommend                       individuals that might be reviewers.
10. We were pleasantly surprised to be offered a contract and as the manuscript was nearly finished submit our work shortly after that.
11. Contracts provide a revenue % based on books sales. The OUP model of distribution is to sell directly to distributors. (60% of                pricing, OUP 40% of the 60%, royalties (a % of the 40%) % is negotiated with high numbers going to proven sales authors. (2-              15%)
12. The usual time from the time the manuscript is submitted, and it is ready to release is quoted as 18 months. It was only through            the perseverance of my co-author, Mahesh, that we were able to cut about six months of the schedule.
    a. The pre-publishing process can be challenging as it involves a third party editing of the manuscript with very specific inquiries               around content and form. It involves thinking even more about what our content was saying and doing some re-writing and                   engaging in some apologetics on the content.
    b. Then we move through the process of table of contents, structure change suggestions, indexing, book introduction, book forward,         fly leaves, cover, endorsements, and all the details we had never thought about before.
    c. After it was decided what would be in the book and what it would look like,

    d. Like the topic of the book Global Business, OUP is global in its operation and as expected many if not most of the steps in the               process were done in different parts of the world through the wonders of technology.
13. The book was release everywhere except the US in August of 2018. Our process with OUP start to finish was a little less than a            year.