Suburban Education Gap

A great new article in the Wall Street Journal came out today on the suburban education gap. A little snipet …

Compared with big urban centers, America’s affluent suburbs have roughly four times as many students performing at the academic level of their international peers in math. But when American suburbs are compared with two of the top school systems in the world—in Finland and Singapore—very few, such as Evanston, Ill., and Scarsdale, N.Y., outperform the international competition. Most of the other major suburban areas underperform the international competition. That includes the likes of Grosse Point, Mich., Montgomery County, Md., and Greenwich, Conn.

Highly recommended!   http://online.wsj.com/article/SB10000872396390444223104578041181255713360.html?mod=hp_opinion

 

The 2012 Commitment to Development Index

Here is a cool, interactive table displaying types of aid/support/trade by wealthy countries to various regions, worldwide. I expect quite a bit of conversation, which is already embedded in the link. Enjoy … http://www.cgdev.org/section/initiatives/_active/cdi/?utm_&&&

An Ode to Peru

A departure from the norm for this blog, I bring to you culinary, visual treats to wet your palate for Peruvian cuisine. The food in this Andean country is out of this world and thankfully they have really made inroads worldwide in virtually every major city from a restaurant perspective. Enjoy! (Click on each one for a larger, mouth-watering view)

Los Mejores Hospitales de America Latina

Recien encontre este sitio maravilloso – http://www.americaeconomia.com. Tiene un monton de estadisticas, encuestas, rankings, etc. Lo recomendaria a todos quienes residen o estan interesado en la region.

Aqui va los mejores hospitales en la region – http://rankings.americaeconomia.com/2011/clinicas/ranking.php

Straddling the Fence Between Business and Philanthropy

The Wall Street Journal had a fantastic article on the principal constraints U.S. philanthropies face regarding growth potential and long-run positive impact. The author, Dan Pallotta, peppered in some great figures as well. Americans today are the most generous contributors to “non-profit/philanthropic” causes. Roughly 2% of GDP, $300 billion is given each year, almost twice as much as the U.K., the next closest nation. Of those households earning $100,000 or less per year, 65% donate something. Those earning above $100,000 record almost near perfect numbers in giving. The average rounds out to $732 for every man, woman and child per year.

Pretty staggering numbers at first glance I must admit. Yet, Mr. Pallotta goes on to lay out in great detail the standards the American public holds for non-profit organizations, our vision and expectations of their “altruistic” operating procedures. It is precisely our (speaking for the U.S. citizen) desire for non-profits to operate as lean as possible thus ensuring maximum impact for intended beneficiaries that is undercutting growth potential and stiffling the industry as a whole.

• Two years ago, a group of senators raised questions about the compensation of the CEO of the Boys & Girls Clubs of America, which totaled $998,591 for 2008, nearly half of which consisted of catch-up obligations for her retirement. The critics ignored the fact that over the previous eight years, the CEO had tripled the Clubs’ network-wide revenue to $1.5 billion. Would the Clubs have been better off hiring a less talented CEO for $100,000 and leaving revenue stagnant, at a loss of $1 billion?

The CEO pay argument is an interesting one. It would appear from Mr. Pallotta’s example that in this instance supposed uproar over close to $1M in salary considering the performance of the organization was a bit unwarranted. Yet I would not feel 100% comfortable turning a blind eye to CEO compensation in the non-profit sector. I am not in favor of salary caps nor do I agree with predetermined ratios to apply to all non-profits based solely on staffing and overhead. But I do think a national clearinghouse of sorts, transparent and open to public critique, could do much in the way in understanding whether top talent warrants big $ if program goals are being met and program advancement is being registered.

• Advertising and marketing. In 2006, the consulting firm Changing Our World estimated that charities providing health care and human services spent about $1.5 billion on marketing, versus $729 billion for marketing in the rest of the economy. That translates into one message for health and human-services causes for every 479 messages for something else. This imbalance is a big part of the reason that charitable giving has remained constant in the U.S. at about 2% of GDP since we began measuring it in the 1970s. In 40 years, the nonprofit sector hasn’t been able to take market share away from the for-profit sector. But how can it if it isn’t allowed to market?

This is troublesome and a quandary I have run into working on marketing campaigns for NGOs. Budgets for this sort of activity are frankly laughable. And I am not even talking about running ads alongside Coke, Honda, Aflac, etc. on prime-time T.V. Making the case for non-profit program support is like anything else in society – you need to spark people’s attention. If you are strapped in this regard and pressured to be as lean as possible it is difficult to achieve a critical mass.

• The time frame during which nonprofits are supposed to produce results: immediately. Amazon.com went for six years without returning a dime to investors, who stood by the company because they understood its long-term goals. But nonprofits are expected to send every donation immediately to the needy. This demand is policed by tax forms that measure the amount spent on direct services every 12 months.

I have seen some wiggle-room in this area, but taking this concept at face value, if I am asked to give $75 per month and after 1 year I’m told the NGO will need another year or so (and my donation to of course continue) before they can potentially begin serving the intended population effectively, my patience would run thin. In this day and age, especially with direct online microlending initiatives for example, folks can see their charity at work in real time. This area will need some work.

• The for-profit sector is allowed to pay investors a financial return to attract their capital. The nonprofit sector, by definition, cannot. So the for-profit sector monopolizes the multitrillion-dollar capital markets, and the nonprofit sector is starved for growth and risk capital. Why shouldn’t an investor be able to take a risk—and get a return—on an investment that allows a charity to double in size? And why wouldn’t we want to encourage it to do so.

This is another area that is changing, especially in the area of microfinance lending as well as new public, private, NGO initiatives such as social bonds. The greatest risk is mission-drift and program-drift with potential profits subsequently altering programming. Tight regulation and transparency to the “nth” degree would be critical.

But all in all, some interesting insight from Mr. Pallotta and food for NGO-thought moving forward.

Your Viz of the Day

Tableau Software puts out powerful products for presenting analytics on virtually anything in a super, interactive manner. I am sure you have all seen/tinkered with it before, if not, go here and mess around – http://www.tableausoftware.com/.

So now we have a plethora of folks putting out really interesting tableau visuals (viz’s) on everything from comparing the Obama & Ryan plans, inequality worldwide, where individual government revenue comes from to Metallica’s greatest hits. After reviewing the endless examples I have decided to bring to you via this inagural “viz of the day” what I feel to be an extremely important topic and one that always has everyone buzzing around the proverbial water-cooler … bigfoot. I know, you just short-circuited your laptop after morning beverage bathed your keyboard. Get to another computer fast and check this out …

http://www.tableausoftware.com/public/gallery/where-bigfoot

Ever Wonder Where U.S. Cities Rank Economically Worldwide

Ever wonder where cities, or in this case, metropolitan areas, the largest 20 in the United States, compare economically to cities and countries around the world? I do, and this chart is plain awesome! The city data is 2008 from a PriceWaterhouseCooper report and estimates of country GDP are 2010 from the World Bank.

My big takeaways are the following:

– Philadelphia over Moscow?

– Miami over all of Portugal?

– Minneapolis almost on par with all of Ireland?

– Detroit, folks, Detroit over all of New Zealand

 

Is the U.S. running low on Doctors?

I feel lately this issue is going to be front and center during the eventual presidential debates, especially if the economy improves. I personally do not feel 100% confident correlating the passage of the affordable care act to a subsequent decline in qualified medical professionals. There are just too many factors to consider plus the Olympics are on and I have a 14 month ball of energy waiting for me every night at 7. Not enough time in the day to do the extra analysis at this point.

But I thought I would lay out some of the principal talking points and link you all to some pertinent articles on the subject. First up, Annie Lowrey and Robert Pear at the New York Times posit that coverage might not translate into care. Rural areas in particular, according to the authors, will be hit the hardest. The problem has been aptly named the “invisible problem” by many in the field as patients will still receive care, but it will progressively become slower and more difficult. The article has some great stats, highly recommended.

Suzanne Sataline and Shirley S. Wang at the Wall Street Journal write that over the next 15 years the U.S. could face a shortage of as many as 150,000 doctors. Greatest in demand will be primary care physicians but every medical school graduate knows that by specializing they can make on average $3.5 million over the course of their careers as compared to primary care physicians. Interestingly this has stigmatized those pursuing the primary care route as less intelligent or talented. Now, incentives are being put in place to draw more folks back to primary care. This might work, similar to governments incentivizing bright college kids to study education and enter into the teaching profession. But I gather these will be steep and costly and in the end still might not achieve the desired break-even point. This same Wall Street Journal article has a nice graphic at the end showing the number of primary care physicians per 1,000 people. States like Nevada, Idaho, Utah, Texas, Oklahoma, Mississippi, Alabama and Georgia have fewer than 1.

Sarah Kliff at The Washington Post echoes the economics argument regarding doctor salaries. “A third of their class (primary care residents at Children’s National Medical Center) has more than $200,000 each in student loan debt. At the end of residency, they can stay in primary care and earn $29.58 an hour. Or they can specialize and make $74.45. Over a lifetime, a medical student who specializes can expect to earn $3.5 million more. The Obama administration — and, arguably, the American health-care system — desperately needs them to choose primary care.”

She goes on to mention … “Decades of research have confirmed that more specialists leads to more specialty care, which leads to a more expensive system. Now, with the passage of the Affordable Care Act, tens of millions of previously uninsured Americans will be looking for a primary-care doctor. It is no exaggeration to say that the success of the health-care law rests on young doctors choosing to do something that is not in their economic self-interest.”

But now for some good news. What about increasing the influx of Dr.´s from abroad? Dean Baker at Business Insider  points out that U.S. doctors earn on average twice as much as their equally trained counterparts in Canada and parts of Western Europe. Compared with doctors from the developing world, a whopping 5 to 10 times as much. Fast-tracking these folks to the U.S. could patch a huge shortfall. Now, I can already see a backlash from the brain-drain community and how this movement could fly directly in the face of U.S. policy to promote development in under-developed countries by ensuring their best and brightest stay at home to develop their own communities and not chase the American dream abroad. This will be tricky to manage for either Obama or Romney.

Regardless of where you fall on the affordable care act this appears to be an issue that will be with us for some time.

Kenya’s Leading Banker to the Poor

Equity Bank, to those operating in the larger microfinance sphere, is a well-known, successful bank serving low income, previously “un-bankable” folks in Kenya. Its successes have been innumerably lauded over the years:

• The company was on the verge of collapse by the 1990s.
• Non-performing loans made up 54% of their portfolio.
• By 2011 it was Kenya’s second-most profitable bank with a pretax profit of $150 million.

Much of the credit is due to CEO James Mwangi who arrived in 1993, intently focused on ramping up the bank´s microlending strategy. Individuals with deposits of less than $200 and little in the way of collateral were targeted and the ride took off from there.

What is interesting about Equity Bank to those I am sure outside of microfinance, and even to those within, is Equity’s success was built not solely on the age-old, concepts of sound banking, but rather human/social relationships and their complex interplay inherent to Kenya and intimately understood by Mwangi.

Societal norms and shame … those are at the heart of Equity’s success, two concepts that executives have not shied away from admitting either. In the developing world credit bureaus are scarce and credit records even scarcer. As such, as a lender, how do you control for the risk of non-repayment of loans? In this instance, you rely on culture.

Social standing and societal norms in East Africa are such that shame brought upon a family or village for the non-repayment of something like a loan is so great that banks like Equity are able to “safely” (nothing is safe, safe in banking) loan without knowing much, if anything at all about the client’s credit history. And with an unbanked population of roughly 326 million adults throughout the continent, there is plenty of demand to be found at every turn.

Equity recognizes this and has expanded even further utilizing what is called agent banking. This is a process in which a storefront will be paid a commission by the bank to act as a remote teller of sorts thus increasing “branch” access to often hard to reach, rural areas. The bricks and mortar business of banking is pricey, and while branches still continue to proliferate, banking in the developing world doesn’t have a shot at reaching the folks outside major cities without agent banking and mobile banking facilitating outreach. Equity knows this well and counted on roughly 4,000 agency bank locals in March of 2012. A full 1/5^th of its transactions are now being done through agents.

Equity is a fantastic example of a business that understands its customers better than any outside, theoretical model could attempt to replicate. It would be great if we in the larger development arena could pay more attention to home-grown successes like Equity.

Top Aid Government Donors and Recipients

AlertNet is a humanitarian news service, free by the way, that covers crises worldwide. They have some great new data on aid – specifically which governments are giving what and who the recipient governments are.

Top government donors:

• U.S. – $4.6 billion
• EU institutions – $1.7 billion
• UK – $1.1 billion
• Japan – $812 million
• Sweden – $715 million
• Germany – $685 million
• Norway – $472 million
• Canada – $464 million
• Australia – $439 million
• Spain­­ – $408 million

Top recipient countries:

• Somalia – $1.14 billion
• Sudan – $858 million
• Ethiopia – $762 million
• Afghanistan – $687 million
• Kenya – $550 million
• Pakistan – $460 million
• Haiti – $459 million
• Democratic Republic of Congo – $431 million
• Palestine/Occupied Palestinian Territories – $405 million
• Chad – $335 million