Interview - Brizio Biondi-Morra

The AVINA Foundation works in 14 countries in Latin America. One of its key aims is to strengthen the sustainability of its 1,600 partner organizations. How does it do this, Alliance asked AVINA President Brizio Biondi-Morra.

His answer centres round the need to avoid dependency – supporting the development of business plans, providing challenge grants and making only one- to three-year funding commitments are some of the approaches here. But his own experience as a ‘failed’ business entrepreneur – where his financial success did not bring him real fulfilment as a human being – taught him that a key factor in organizational sustainability is the inner dimension, the values.

‘We try to build in a concern for sustainability from the start,’ says Brizio Biondi-Morra. ‘We try to avoid any kind of dependency relationship, financial or otherwise.’ He illustrates this point from his first experience with AVINA founder Stephan Schmidheiny, when he was himself an AVINA partner.

Avoiding dependency

Biondi-Morra was then head of the INCAE Business School in Costa Rica, ‘and part of the job is to go with a hat’. He asked for ‘what I felt was a substantial amount of money, but an amount I felt I could in conscience make good use of’. Schmidheiny accepted, but two weeks later he reconsidered his decision. ‘“Look, Brizio,” he said, “I obviously honour my commitment, and the issue is not my having to write a cheque. However, what you are asking for is substantial, and I wouldn’t want to create a dependency for your institution, because then I may end up harming it.” “You don’t know the balance sheet of my organization,” I answered. “We’re in the black. We don’t need your financial support to survive, but with your backing we can do things that will make a huge difference in terms of attracting the best people and creating national and regional impact.”’

Biondi-Morra then invited Schmidheiny to become a member of the INCAE board so that he could see from the inside how strong the organization was, and that what he was asking for would not create a dependency. ‘He bought the concept and eventually he gave the full amount that I asked. But that shows the level of concern from the beginning.’

So does this mean that AVINA is more comfortable giving money to quite successful organizations that are doing well to help them move up to the next stage rather than to those that are struggling? Not necessarily, is the answer. They don’t have to be financially strong per se, ‘but you have to see what proportion of the funds you are giving vis-à-vis the rest of the project.’ One approach is to give resources as a matching fund. This encourages diversification and so lessens dependency on AVINA and everybody else.

But dependency is not necessarily financial. It can involve access to information, contacts with people, and so on. ‘So it’s very important that whatever resource they need, organizations develop and strengthen their own capacity.’ And we support them in doing so.

But AVINA does sometimes give start-up funds to people who haven’t any funding yet. In this case, they would decrease their investment over a period of two or three years as they bring in more resources.

Surprisingly, AVINA’s commitment is never for more than two or three years – and it is actually guaranteed only for a year a time, with renewal being subject to meeting agreed targets. ‘That sends a signal that the next year’s funding can’t necessarily be taken for granted.’ But when the funding ends, the relationship continues. ‘Often we realize that the non-financial component of the support is more important than the financial.’

Non-financial support

He gives an example of an organization that was providing educational services for about a million poor children which estimated their headquarters overhead at just $5,000 or $6,000 a year. ‘For an organization that supports 1 million children, I just couldn’t believe it. We asked how much they thought they spent in a year on these schools. Eventually they said it was anywhere between $200 million and $250 million a year, $50 million plus or minus.’ So the first thing AVINA did was to help them strengthen their coordinating mechanism. The second thing was to provide computers and software to connect them so they could learn from each other. The third thing was to support them in developing a strategic plan for the entire organization, which they didn’t have. ‘You can’t imagine the delta [a mathematical term meaning increment] just from providing simple administrative tools.’

A relationship of equals

From the beginning, says Biondi-Morra, ‘we invite leaders to create a joint venture, and that means we are partners with them. This is easy to say but difficult to do. In that sense there is no relationship of superior to inferior, of giver to recipient. The partners simply bring different components to a single venture, and we win or lose together. So we try as much as possible to be in a relationship of equals. And that is not a relationship of dependency.’ ‘Joint venture’ is not a legal definition, however, but a way of describing this relationship.

In the first stage of a venture, AVINA invests economic resources plus the experience of the Representatives and their teams on the ground to build a stronger project strategy. The partner puts in the vision, social capital and implementation capacity. Later, AVINA provides social capital (knowledge, a community of leaders, social networks, credibility) and the partner brings economic and other human capital. ‘The relationship evolves as one of mutual give and take.’

Working with business

Introducing social and business leaders and stimulating an effective dialogue between them is an important part of AVINA’s approach. In Brazil, for example, this interchange is a condition of partnership. AVINA also requires that partners raise a certain percentage of their funds from private companies. ‘Initially, they said, “Oh, that can’t be done”, because in Latin America the relationship between the NGO sector and the business sector often seems to be a confrontational one. Suddenly they discover that they have a lot of interests in common. And for NGOs and businesses to realize that they can become allies is a real breakthrough. Stephan, our founder, keeps repeating that there cannot be successful companies in failed societies. In other words, companies have much to gain from operating in prosperous societies. Equally, there cannot be a prosperous society when companies fail. Who’s going to employ people?’

What about failure?

What happens if an organization that AVINA supports doesn’t make it, or the things that AVINA does to support them don’t work out? It seems that this is a rare event. AVINA won’t start supporting a project until the leader and the AVINA representative have developed a shared vision and a strong strategy. They will then do a detailed milestone-by-milestone projection which schedules activities and specific objectives and the times when they should be completed. ‘Often the situation changes as you implement the project, and then you have not so much failure as correction. We have to allow for flexibility, re-programming, re-orienting, and in the end we sometimes find ourselves in places we didn’t think we’d be when we started.’

There are nevertheless a few cases in which AVINA and the leader terminate the relationship. Joint ventures depend on both parties sticking to their side of the bargain. ‘When one side of the joint venture doesn’t perform, the other has to terminate the relationship. It’s basically a question of values.’

AVINA and Ashoka

What about AVINA’s relationship with Ashoka? The formal relationship began when AVINA funded Ashoka’s growth in Latin America in 1994. Both organizations work throughout Latin America and both support social entrepreneurs. Does each have its own niche? How do they complement each other when they support the same social entrepreneur? Do they offer a different kind of support?

‘AVINA’s model of focusing on leaders as a key element in bringing about positive social change was inspired by early conversations between our founder and the founder of Ashoka, Bill Drayton,’ says Biondi-Morra. ‘Both organizations strive to promote social change. For Ashoka, this means the construction of an entrepreneurial, productive and integrated citizen sector. For AVINA, it means partnering with leaders and stimulating interaction among them in order to catalyse social transformation based on the concept of sustainable development. For Ashoka, direct financial support to an elected fellow takes the form of a stipend, while AVINA sees its financial support in terms of an “investment” in the leader and the initiative, with mutually agreed results expected.’

Over the last few years, the two organizations have both grown considerably in Latin America and collaborate regularly on the ground in countries where they both operate. Roughly 4 per cent of AVINA partners are also Ashoka Fellows.

Given that both organizations focus on individual leaders, this seems a surprisingly small proportion. Why is this? ‘As we’re both looking for leaders, there is an overlap, but we’re not going to finance all the same people just because there’s an overlap. All leaders don’t have to be financed through AVINA. While Ashoka focuses on a particular stage of development of leadership, which is very critical, we may look at other stages.

Too much emphasis on leadership?

Both Ashoka and AVINA put a huge emphasis on individuals and individual leadership. Sometimes people criticize the concept of social entrepreneurship for focusing too much on individuals rather than organizations. In Latin America, specifically, is it true that people don’t necessarily respond well to this individual emphasis?

‘In Latin America, the very concept of leadership as a concept is culturally loaded,’ Biondi-Morra readily agrees. ‘There is a history of caudillismo, dictatorship.’ AVINA doesn’t have an official definition of what they mean by leadership, but they do have a booklet, published by VIVA Trust, Liderazgo, Liderança, Leadership: Testimonios personales, containing the ‘personal testimonies’ of some of their leaders, so developing a sense of what they mean through examples.

‘But if I was forced against a wall to give a definition,’ he says, ‘I would say it is someone who has a proven record of successfully helping other people grow. Which is the opposite of the egocentric caudillo. So what we mean by leadership is the opposite of ego building or individualism; it is somebody who is at the service of the community, somebody who is ahead – but not necessarily on top.’

Biondi-Morra sees the task facing AVINA here as no less than giving back meaning to the word ‘leader’ in Latin America. He recalls a conversation about the criteria for being an AVINA leader. ‘One of the things we said is that accountability is important. “Oh, but a leader cannot be accountable,” came the reply. “If he or she is accountable, they’re not a leader.” They had precisely the concept of the caudillo, a leader who is not accountable to anybody. So we said OK, this may be your definition of leadership, but for us a leader in society is somebody who is accountable for his or her actions while providing an inspiring vision.’

Seven years on, he feels that if you go around different countries and meet the leaders, you find that there is a common thread that unites them all – their values. ‘These are people who take their leadership to the service of other people.’

VIVA and GrupoNueva

To understand fully the philosophy of AVINA, says Brizio Biondi-Morra, one has also to understand the concept of VIVA. ‘Essentially it’s like a triangle. You have a group of companies, GrupoNueva, which has been given by Stephan Schmidheiny as an endowment to a trust, VIVA Trust, which then takes part of the profit and gives it to AVINA for social investment. So VIVA is the coordinating mechanism.’

Why was this done, instead of creating a much simpler mechanism like an endowment? To answer, Biondi-Morra returns to an earlier point. ‘As I mentioned, sustainable development implies in part, at least from our perspective, that you can’t have successful companies in failed societies, especially in the developing world. In this model the company, instead of adding to the equity of a single investor, adds to the social benefit of society in general. And AVINA invests some of the dividends to help develop a more sustainable society. So the aim of VIVA is for GrupoNueva and AVINA to create a kind of virtuous cycle.’

A ‘failed’ entrepreneur

Biondi-Morra sees this arrangement as a big factor in motivating some of the most socially conscious people in management. This belief draws on his own experience. ‘I see myself as a failed entrepreneur,’ he says. ‘By that I mean that even though I was financially successful, I didn’t find human fulfilment as a businessman; I had to seek it elsewhere. Had I had the creativity of thinking of my own VIVA or being part of a system like it, I might not have left the business world.’

What about the ordinary GrupoNueva workers? How does it affect their motivation to know that they’re working for something that is supporting a social cause rather than lining someone’s pockets?

Biondi-Morra feels that this is a source of pride. ‘There is also a sense of identity, a sense of contributing in a unique way. It’s highly motivating.’ But he emphasizes that the existence of AVINA is not meant to exempt GrupoNueva from the responsibility of acting as a good corporate citizen.

The role of VIVA

And how does the three-way relationship affect AVINA? Does it make AVINA’s income unpredictable, dependent on whether it’s a good year or a bad year for GrupoNueva? Where foundations receive a percentage of profits each year as income, this can make the foundation subject to fluctuations in the fortunes of those businesses.

Apparently, VIVA is designed to address this issue too. ‘Embedded in the VIVA concept is an awareness that social processes, in terms of their inner logic and cycles, are entirely different from business cycles. We cannot go by quarterly reports, nor can we use the same indicators of results. So it is important to establish a level of budgeting that allows for sufficient prudence.’ Stephan Schmidheiny’s contribution, he explains, included not only stock but also cash reserves to cover for some ups and downs.

The importance of values

In a recent article in Alliance, Bill Drayton quoted Biondi-Morra as saying that creating a successful global organization has more to do with faith and values than anything else. How does this apply to AVINA?

In answering, Biondi-Morra goes back to his conversation with Drayton. ‘I think that Bill and I agree that unless an organization provides some kind of answer to some of the deepest aspirations of human nature, something that touches deep, deep down, the organization will not have the inner resources to be sustainable in the long run. That’s what I meant about faith.’

And how does this conclusion apply to AVINA, this feeling that the most important thing for holding an organization together is shared values? ‘I didn’t create the organization, Stephan did,’ Biondi-Morra reminds us. ‘And values are so engrained in Stephan that when I joined the organization the values were already in place.’

And does everybody who works for AVINA shares those values? He believes they do. ‘Ultimately I believe that commonality of values is what drives the organization as a whole toward fulfilment of its mission. I remember some discussions about introducing a bonus scheme. “You think we’d work more because of a bonus? It’s a mission, a vocation, not a job!”’ He insists that this feeling is widespread throughout the organization.

According to Biondi-Morra, it’s not just the values that matter but the way they are shared. ‘We sometimes say that what AVINA can contribute to Latin America is not money, not people, not experience, but a new way of relating to each other, which is what we all enjoy at AVINA.’ For somebody coming from outside the organization, he admits, it looks overdone. ‘But if you put it in the context of the drama, and the problems we’re trying to deal with, this is what keeps you alive and not desperate.’

Brizio Biondi-Morra has been President of the AVINA Foundation since 2003. He can be contacted at info.costarica@avina.net

See www.avina.net