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Hi, I'm a finance blogger who is interested in how different financial tools, including microfinance, can deliver real value to consumers.
Occasionally Iâ€™m asked about microcredit programs targeting youth, and I confess I remain skeptical of them.Â But recently I came across a really remarkable model for engaging youth â€“ not as borrowers, but as funders of microcredit â€“ and it turned up in my home town, of San Mateo, CA.
In 2008, Hillsdale High School formed a club called The Hillsdale Effect, dedicated to raising funds for microfinance.Â This year, the club raised over $6,700 for Namaste-Directâ€™s microloan program in Guatemala and an additional $5,000 for club membersâ€™ study trip to Guatemala through local fundraising events and through leveraging their partnership with the San Mateo Rotary Club.
The clubâ€™s advisor, Greg Lance, said, â€œMy interest revolved on involving students in tangible projects in the real world.Â The Rotary Club was already involved in microfinance and they thought involving youth would be a good idea.â€
The group was initially formed by nine high school seniors, who studied microfinance â€“ inviting speakers in banking and microlending, studying development economics, and even going to Guatemala to meet Namasteâ€™s borrowers and see microfinance in action.Â The video they returned with inspired many of the next generation of students to join the club in 2009.
Joel Olazabal, one of todayâ€™s members, joined after seeing the video.Â â€œMy mom and dad grew up in Mexico and didnâ€™t have many opportunities.Â Since I do have educational opportunities, I wanted to help others.â€
Another student, Katharine Caputo, got involved after writing a paper arguing that poverty was inevitable.Â â€œMr. Lance challenged me on that,â€ she said, â€œSo that was what sparked my interest in getting involved.â€
The group cites three factors for success: strong partners, location, and knowledge of their donor markets.
Partnerships:Â Â Rotary gives The Hillsdale Effect the opportunity to raise money through fund raising events targeting Rotarians, and they connect the group to other local Rotaries.Â The San Mateo Rotary has also donated directly to the clubâ€™s fundraising program for Namaste-Direct, their partner-MFI.Â â€œAlso, because Namaste is a smaller organization, the president has been able to give us time â€“ giving us instruction about the program, and even leading us on our trip to Guatemala this June,â€ says club advisor, Greg Lance.
Location, Location, Location:Â The Hillsdale Effect chose to finance an MFI that not only had offices nearby, but also worked in Latin America â€“ an area many of the students had a connection to.Â â€œOriginally, we were going to work with a Rotarian in Honduras,â€ said advisor, Greg Lance, â€œbut communication was difficult becauseâ€¦ he was in Honduras.Â Namaste-Direct is based in San Francisco, so communication is easy.Â However, they work a lot in Guatemala so they have a good awareness of whatâ€™s going on there.â€
Know your Donors:Â Perhaps the clubâ€™s most successful fundraising to date has been through its student market â€“ and they know this market well.Â Over a two week period, the club raised over $6,700 from Hillsdale High School students and staff with a â€œPenny Warsâ€ promotional.Â Each class was given a giant plastic water bottle â€“ every coin deposited in a bottle gained a point for the class and every dollar deposited was a negative point.Â â€œSo youâ€™d put coins in your own class jar and dollars in the jars of other classes.Â At the end of the week, weâ€™d announce who was in the lead and then theyâ€™d get sabotaged to the max with dollar deposits,â€ explained student Mariko Kuga.Â â€œWe raised $6,784 and there are only 1,200 students in our school.Â It worked because it appealed to the high school studentâ€™s sense of competition.â€
The impact of The Hillsdale Effect has gone beyond its microloan recipients, circling back to the local community in San Mateo.Â The program engaged Hillsdale High School students, teaching them about developing economies, banking systems, lending, poverty, and microfinance.Â Club members and advisor, Greg Lance, have aspirations to broaden the program â€“ perhaps taking it into schools throughout the district.Â Some Hillsdale Effect graduates have already gone on to introduce the concept at their colleges.Â How do you think it can be taken to the next level?