20 1

One week. Creativity for poverty.

What will YOU do with 27?

The Gumball Challenge

An entrepreneurial microfinance benefit com-petition launching in November 2007.

Start a team or join one. Register online. In one week, create value with a $27 loan and 27 gumballs.

At the end of the week, any profits go to loans for the working poor in developing countries.

The Gumball Challenge is a project of:

One week. Creativity for poverty.

GumballCHALLENGE

2007THE

GUIDEBOOK

What will YOU do with 27?

THE

2

The Stanford Organizing Committee thanks the organizations above for their

generous support of the Challenge.

BASES Social E-ChallengeBuca di Beppo

FraicheHobees

KivaPizza My Heart

PrintPowerStanford Entrepreneurship Network

Wrike

IMAGE CREDITS: Kiva.org (p.13, 15), sxc.hu (p. 8: lusi/Sanja Gjenero; p.10: spekulator/B S K; p.16 dime: asolario/Alicia Solario, penny: Nbauer/Nathan Bauer; p.19 glasses: doctor-a), flickr.com under Creative Commons license (p.16 bamboo: beggs/Brian Jeffery Beggerly; p.17 basket: Scott Robinson).

Our Vision

Gumball Capital’s ultimate goal is to inspire entrepreneurship for social change. With the Gumball Challenge, we’re trying to raise awareness of microfinance among students. We hope you learn a little about microfinance during the Challenge, and take the excitement of being entrepreneurial to any future activities you pursue!

1818

3

FAQ

Q: Why 27?A: We’re glad you asked! (Everybody does; that’s the point.) In 1976, Muhammad Yunus lent $27 to 42 poor working women in Bangladesh. He later started the Grameen Bank, which has now loaned billions to over 5 million poor women. Yunus and the Grameen Bank were jointly awarded the 2006 Nobel Peace Prize for their “efforts to create economic & social development from below”.

Q: Why gumballs?A: It’s the idea of a gumball machine: you put in a small amount of money (say, a quarter) and a gumball rolls out (of poverty, perhaps). And in the process, the other gumballs move closer to the exit chute. In the same way, microfinance empowers individuals to lift themselves out of poverty, and can help those around them as well through employment opportunities or new services.

Q: What happens if our team doesn’t return the $27?A: The Team Captain and Loan Officer agree to take full responsibility for returning the loan, and we expect them to follow through.

Q: Do we have to return the gumballs?A: No.

Q: Who’s running the Challenge?A: Your wonderful local Organizing Committee! And Gumball Capital, a nonprofit started by Stanford students. Check us out at www.gumballcapital.org.

Table of Contents

The Gumball Challenge Guidebook A Short Note to You Participating in The Challenge

Want to compete? 4 easy steps: 1. Grab a group of friends or classmates (or join an existing Team) 2. Sign up online 3. Brainstorm: what will you do with 27? 4. During the week: be creative, post updates, shoot video

The Rules (If You Want Your $27 & 27 Gumballs) 1. Sign up by the deadline 2. Do a bit of extra work on Team formation 3. Fill required Team roles

Microfinance Material The Gumball Fund About Kiva The Story of Muhammad Yunus

Gumball Challenge FAQ

4

6

9

12

18

44

1717

A Short Note To You

Dear Gumballer,

We’re excited that you’re joining us for the Gumball Challenge, a microfinance benefit competition. The idea is simple: entrepreneurial teams create value in one week, aided by a microloan of $27 and 27 gumballs. Teams give any profit to a microfinance-related cause.

We hope the Gumball Challenge gives you an opportunity to learn more about microfinance. Don’t forget to read the section “Microfinance Materials.” We were inspired by Kiva and Mohammad Yunus, and we’re sure you’ll feel the same way.

If you do make money for a microfinance-related cause, it’s also a chance to empower entrepreneurs around the world so they can ensure their own success.

Finally, we hope you seize this opportunity to develop your own creativity and entrepreneurial spirit. After all, that’s the goal: “Creativity for Poverty.”

Sincerely,

Stanford Organizing Committee & Gumball Capital, Inc.

Unleashing of energy and creativity in each human being is the answer to poverty. –Nobel Peace Prize recipient Muhammad Yunus

FAQ

Q: What’s the Gumball Challenge again?A: A one-week microfinance benefit competition, where participants create value with a $27 loan and 27 gumballs. It’s being run at 5 schools this pilot year, including Stanford, UC Berkeley, St. Olaf, Yale, and Sewanee.

What can you really do in just one week?A: An amazing amount. Let’s see... body ads for student groups? Health kits for the dorm? Neon hairdye booth? Wii Sports with Michelle Wie? (OK, you’ll need her permission.) Pranking services? Gumball Assassins? (And these aren’t even the good ones.)

Q: Can we use anything besides the $27 and 27 gumballs?A: Yes. You don’t have to use the $27 and 27 gumballs, and you can use any other resources at your disposal. We don’t want to restrict your creativity--the 27&27 are meant to be inspirational.

Q: When I recruit people, they say they’re not creative and don’t have any ideas for what to do. What should I say?A: Tell them to stop being delusional. Also, they don’t necessarily need an idea of their own-- many people with ideas are looking for others to help with their idea, and want them on their team.

Q: Can we do ______ for the Challenge?A: Yes! As long as it’s not illegal or unethical, we’re excited to see how creative you can be.

1616

55

Yunus found 42 people in all—stool makers, basket weavers, rickshaw drivers, and more—in similar situations. In fact, they needed a combined 856 taka, or less than 27 US dollars. And Yunus loaned

them the money.

The Grameen BankTo finance additional loans, Yunus went to a nearby bank and signed as guarantor of poor borrowers without asking for collateral from them. His work laid the foundation for the Grameen Bank, established in 1983, a bank devoted to serving the poor of Bangladesh.

In creating the Grameen Bank, Yunus ignored the conventional wisdom that prevented poor people from receiving loans. Grameen’s original methodology on banking for the poor, “microcredit,” included several innovative features to help borrowers succeed.

Since its inception in 1983, the Grameen Bank has grown to serve over 78,000 villages with its 2,400 branches. The Bank has provided over 6.3 billion dollars to 7.2 million borrowers, and boasts a loan recovery rate of 98.6 percent. Today, more than 250 institutions in nearly 100 countries operate microcredit programs based on the Grameen methodology.

A Nobel Peace Prize RecipientIn 2006, Muhummad Yunus and Grameen were jointly awarded the Nobel Peace Prize for their “efforts to create economic and social development from below.”

Participating in The Challenge

Anyone can participate in The Challenge by signing up for a Team online at www.gumballchallenge.org.

Gumball Capital provides a $27 microloan and 27 gumballs (27&27) to teams that meet a few basic requirements (see “The Rules” below), via your local Organizing Committee.

27Gumballs

Dollars

66

1515

1

2

Want to compete? 4 easy steps

Grab a group of friends or classmates (or join an existing Team)

First come the people. Grab a group of your friends or classmates who want to be on your Team and convince them to join you. Or, just look at the existing Teams online and see if you recognize the names of anyone whose Team you’d like to join.

Sign up online

Join An Existing Team Go to www.gumballchallenge.com, sign up, and browse through existing Teams. Make sure you know someone on the team already; if not, contact the Team Captain so they know who you are! Someone (anyone) on the team must Verify you after you sign up. Form A New Team Go to www.gumballchallenge.com, sign up, and create your Team. Then have everyone else on the Team sign up and join the Team you’ve created. Click “Verify” next to a Team member’s name after they sign up if you want to confirm they’re on the Team. This lets them edit the Team profile and post Team updates, just like you can. That’s it!

Important: You must choose a microfinance-related cause to support when forming a new Team. Your Organizing Committee has listed a cause they trust. If you decide to give to a different microfinance-related cause, write it in here.

The Story of Muhammad Yunus

Our version seem a little too Disney? Read about it for yourself!

In 1976, the citizens of Bangladesh were suffering from a three-year-long famine. A man named Muhammad Yunus decided to lend a helping hand— with just $27.

Traveling to the nearby village of Jobra, Yunus encountered Sufiya Begun, a 21-year old mother of three. Though Sufiya spent her days crafting beautiful bamboo chairs, she was hardly able to

earn enough money to feed herself.

Yunus discovered Sufiya’s reliance on middlemen, or paikars, to get the bamboo she used to make her stools. Each day, Sufiya borrowed bamboo from these paikars for five taka, roughly twenty-two cents. But in order to afford the bamboo, Sufiya was forced to sell her stools back to the paikars for a fixed price of five taka and fifty poysha, earning her a profit of two cents each day.

As Yunus remarked in his book Banker to the Poor, “The existing economic system made it absolutely certain that Sufiya... would never save a penny and would never invest in expanding her economic base. I had never heard of anyone suffering for the lack of twenty-two cents.”

1414

77

About Kiva

How it worksKiva “lets you lend to a specific entrepreneur in the developing world, empowering them to lift themselves out of poverty.”

Kiva is an nonprofit that allows anyone to lend money via the Internet to the working poor in developing countries. It makes this act of microlending easy and transparent in a way that has attracted over 130,000 individuals: that’s the number of people who

have lent a combined $13 million to developing-world entrepreneurs as of October 2007.

Watch a video of microlending in actionOne inspiring anecdote comes courtesy of New York Times reporter Nicholas Kristof. Kristof used Kiva to lend to Abdul Satar Muhammad Rajab, a baker in Afghanistan. He later flew to Kabul to meet Abdul and found that Abdul Satar had opened a second bakery using the loan provided by Kristof, with plans for six more bakeries.

For more on this amazing story, check out Kristof’s “D.I.Y. Foreign Aid” video at this link:

http://video.on.nytimes.com/?fr_story=feedroom186917

Thuan Nguyen Thi, kiva.orgLong My, Hau Giang, Vietnam

3Brainstorm: what will you do with 27?

Need some help jumpstarting the creative process? Here are some ideas we’ve come up with (may require more than just 27 gumballs):

Host an Event Host a Pingpong/foosball/pool tournament, with fee for entrants Gumball Games: e.g., Assassins (but with gumballs). Have a photography contest and sell the best prints. (Try Zazzle.com.)

Provide A Service Sell ‘Cold Care Kits’ with tea, cough drops, chicken noodle soup, etc. Offer a consultation as an interior decorator/organizer for dorm rooms. Give a massage with gumballs.

Do Something Crazy Trade your gumballs for a house (Google “One Red Paperclip”)Print post-its that say “I pledge $$ for microfinance” and solicit funds. Gumball Capital raised thousands of dollars in just a few days doing this!

•••

••

•

••

Gumball Games

Do SomethingCrazy

Cold Care Kits

Photography Contest

Host An Event

Provide A Service

88

1313

4During the Week: Be Creative, Post Updates, Shoot Video

When Gumball Challenge week arrives (Nov. 27 - Dec. 3rd at most schools in 2007), put your creative engines to work!

Visit www.gumballchallenge.com frequently to: Post Team Updates on your activities Fill out your most recent income and expenses, if any See what other Teams are doing!

Important: Your Organizing Committee will use Team Updates when awarding prizes, as will Gumball Capital when determining Competitor Team awards in several categories, including “Riskiest Idea that Succeeded,” “Most Spectacular Failure,” “Best Microfinance Advocate”, and “Most Money Raised.”

Shoot photos and videos of everything you do and share them with your Organizing Committee. Gumball Capital will use these to make some cool documentaries about the Challenge.

•••

The Gumball Fund

The Gumball Fund is a permanent pool of capital that makes loans to the working poor.

Students participating in the Gumball Challenge can give their team’s profits to any microfinance-related cause, and The Gumball Fund is one option.

PurposeThe Gumball Fund is a permanent pool of capital that makes loans to the working poor, through Kiva. (For more on Kiva, see “About Kiva.”) When loans are repaid, the money is automatically lent out again. The Gumball Fund gives students an easy way to engage with microcredit, since it displays real names and faces of microloan recipients funded with loans largely contributed by students.

You can find all the developing-world entrepreneurs that the Gumball Fund has loaned to here: http://www.kiva.org/lenders/gumballcapital

HistoryA group of students at Stanford University participated in the EntrepreneurshipWeek Challenge at Stanford University in February of 2007 and won the competition by raising $3000 in pledges from over 300 students in just three days. (They printed Post-Its pledge notes and went around talking up microfinance.) The collected money was used to start the Gumball Fund.

1212

99

Microfinance Materials

Microfinance is the practice of providing financial services to poor people. It may include services such as loans, savings, and insurance.

Microcredit, or microlending, is the practice of providing small loans of money (microloans) to poor individuals who would not otherwise be served by a traditional bank because of their unprofitability.

MFI (microfinance institution): An organization that provides microfinance services. They usually charge higher rates than traditional banks, but far less than the alternatives available to the poor, e.g. loan sharks. More than 7000 now exist worldwide.

Important Nuances to Remember

Microfinance is not a “solution” to poverty. It’s one very effective tool among many.Muhammad Yunus, as much as we love him, did not “invent” or “start” microfinance.In our writing we sometimes use the terms “microfinance” to refer to “microcredit” for simplicity’s sake. See “Terms & Definitions” for an accurate explanation of both.There are valid criticisms of microfinance. We don’t claim to be experts, but we believe the upsides have far outweighed the downsides.Curious to know more? Go out and read about microfinance for yourself.

•

•

•

•

•

Philip Otunga, kiva.orgMigori, Kenya

You must agree to the following guidelines for your team to receive your $27 microloan and 27 gumballs.

If you don’t want these resources, you can still participate by signing up online as described above.

The Rules

!!

1010

1111

1

2

Sign up by the deadline

The exact deadline is determined by your local Organizing Committee, to give them enough time to figure out how much money and how many gumballs they’ll need to provide.

Important: If you sign up online after the deadline passes, you can still participate. You just won’t receive your 27 gumballs and $27 loan.

Do a bit of extra work on Team formation

1. Figure out who’s going to be the Team Captain and who’s going to be the Loan Officer. (See below for explanation of these roles.)

2. While creating your Team online, you must select an Organizing Committee. They will contact you to arrange pickup details for the 27&27.

3. Your Team must be verified by your local Organizing Committee. Each OC has its own policy on verification; you may want to contact them if it isn’t clear. Once they verify you you’ll have a “Verified” badge on your online Team profile. (Hooray!)

3Fill required Team rolesA minimum number of two responsible Team members is required to receive your $27 loan and 27 gumballs, one Team Captain and one Loan Officer. There is no maximum limit on team size.

Team CaptainThe Team Captain acts as the primary point of contact for the Organizing Committee. He or she is ultimately responsible for leading a fun, safe, and entrepreneurial experience for their team.

Required duties for Team Captain:Provide email address and phone number to the Organizing Committee CaptainMake sure Team Updates are posted at least once each day at www.gumballchallenge.com.Personally post one final Team Update within 48 hours after the Challenge ends, containing a summary of the team’s activities for the week, and the total amount of money spent and raised.

Team Loan OfficerThe Team Loan Officer manages money-related activities. This should include collecting receipts and recording income/expenses.

Required duties for Team Loan Officer:Sign the Team Loan Officer’s Contract online.Receive and keep track of daily income and expenditures (if any) by posting Team Updates with income/expenditure fields filled out.Return the $27 loan and profits to the Organizing Committee Loan OfficerIf profits are donated to a separate microfinance-related cause of the team’s choice, the Team Loan Officer must a submit donation receipt to the Organizing Committee Loan Officer.

Your team may need to assign other roles as necessary.

•

•

•

••

•

•