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Should you trust a social enterprise bank?

On the face of it, Erste Bank had the right credentials. A Grameen social business partner as was Grameen Creative Labs..

In the Summer of 2010, when the Social Business Tour is  hosted in Budapest and calls  for submissions in an Idea Contest 

Do you have a social business idea? We help you realise it!

By then our work has gone far beyond an idea, having long been published as a strategy plan on a very prominent website. It described a 'Marshall Plan' for Ukraine which had been in the hands of USAID since February 2008   I introduce them to our earlier work in Russia:

Dear Jeff,

thank you very much for contacting us concerning Your microfinance inintiative in Tomsk – could you provide us with more information on the activies you are pursuing in Ukraine and Russia currently?

As we are closely cooperating with Grameen Creative Lab currently on the so called Social Business Tour, and as I could understand from your mail you have already tried to be in contact with GCL, I think that we could potentially help you, if we would know what you want is your proposal?

Could you provide us with a summary of your activities and plans where you see our added value?

My very best regards,

Jan Kouba
Erste Group Bank AG
OE 0196 0324 / good.bee
A-1010 Vienna, Friedrichstrasse 10

I reply and receive an acknowledgement  of submission on 9th July:

Dear Jan,

Thanks very much for your reply. I am copying this to Terry our founder , currently in Ukraine.

The project is described here on our website and later reviewed in an interview for a follow on project in Crimea.

The strategy paper delivered to Ukraine’s government can be found here, in the links on our commercial website you’ll see impacts created when recommendations were implemented by government

Child care reform for example has led to a 40% increase in domestic adoption.

I should also mention, noticing that you have Serbia listed as one of your development areas, that Terry spent a week during 2004 to produce a preliminary proposal for the polluted Bor/Majdanpek region, which he may care to expand on.

Kind regards,

Jeff Mowatt

This marks the end of the conversation with competition winners later announced.  A few months later however , I’m shocked to see that our social enterprise proposal for Ukraine  under another banner with Erste as one of the partners.  One of our own customers, The British Council who promote British culture and values overseas, taking the lead.  For many it will confirm what has long been suspected of business plan competitions.

In August 2010 our social business plan is described in an interview with Axiom News, where the proposal of a social investment fund is mentioned:

"The funds will be directed to concluding a project in the Ukraine which involves funding the training of residents to develop social businesses. Included in this work is supporting children who have disabilities, many of whom have been left to die in secretive locations. P-CED is helping to move these children to safety and give them access to modern healthcare."

Death in the field

Founder Terry Hallman spoke out about child abuse and corruption at considerable risk. A year later the last person to see him alive was a leader of Maidan civic activists, who wrote quoting from his letter to USAID - 'Whether these kids live or die, is of little, if any, interest to Mafia'

"The author of breakthru report “Death camps for children” Terry Hallman suddenly died of grave disease on Aug 18 2011. On his death bed he was speaking only of his mission – rescuing of these unlucky kids. His dream was to get them new homes filled with care and love. His quest would be continued as he wished."

One of his last actions was to contact another USAID partner, PWC, about abuse of copyright 

It's something of a paradox, that these efforts having met such resistance should be so well approved when I shared the story of people-centered economic development with McKinsey's Long Term Capitalism challenge. My submission described how capitalism could be applied to deliver social as well as econoimic returns, where people and their needs have priority.  The New Bottom Line, as I described it.

'This is a long-term permanently sustainable program, the basis for "people-centered" economic development. Core focus is always on people and their needs, with neediest people having first priority – as contrasted with the eternal chase for financial profit and numbers where people, social benefit, and human well-being are often and routinely overlooked or ignored altogether. This is in keeping with the fundamental objectives of Marshall Plan: policy aimed at hunger, poverty, desperation and chaos. This is a bottom-up approach, starting with Ukraine's poorest and most desperate citizens, rather than a "top-down" approach that might not ever benefit them. They cannot wait, particularly children. Impedance by anyone or any group of people constitutes precisely what the original Marshall Plan was dedicated to opposing. Those who suffer most, and those in greatest need, must be helped first -- not secondarily, along the way or by the way. '

The Eve of War

By then social breakdown was not far away. In February 2014 I shared an appeal for support from the EU with my MEPs in the South West. It came from the Maidan leader who discovered Terry's body. Their requests included support with economic development:  

"Support political reforms and economic development: When the new government is in place, support Ukraine financially to get on a path of sustainable economic revival. A kind of „Marshall Plan“, can bring long-term economic benefits to Ukraine and save it from otherwise imminent long-term default."

Was it just a coincidence, that around the same time, at the Davos Philanthropic Roundtable, capitalism with both financial and social  returns was being discussed? On the panel Muhammad Yunus joined Bill Gates and Sir Richard Branson. 



The First Casualties

Truth, it's been said, is one of the first casualties of war.  Among the first non-combatent casualties in Ukraine were passengers on Malaysian Airways flight MH17

Their bodies were scattered over the small town of Torez,  Some landed in the grounds of the orphanage described in 'Death Camps for Children' where other bodies lay in rough trenches.  

"I saw eight more bodies up the street that day, all of them mostly naked, falling right from the clouds on us,” said Larisa Zvereva, a teacher at the orphanage that houses 20 children. Her charges must have holy protection, she said, because not a single falling body, nor any piece of the airplane hurt the children or local people. Then Zvereva began to sob uncontrollably, remembering the wounds, the torn limbs and missing parts of bodies."

Ruslan, a 14 year old orphan, wanted to know why a decapitated boy found in the garden had died.

Trust however, is essential when it  comes to social enterprise, regardless of experience and personal cost.