“The best way to help people living in poverty is not to provide them with goods and services, but to provide them with cash. And the best way to provide them with cash is through a job.”
Leila Janah and Sama Group have digitized fair trade. Through Samasource and now Samaschool, which use technology to help people find dignifed work online, she has proven that the power of business can help combat extreme poverty. We spoke with Janah about the intersection of the nonprofit and for-profit worlds, misconceptions around low-income individuals, and what keeps her inspired to change the world.
Can you tell us about the conceptualization of the idea for Samasource? What was your “ah ha!” moment, and what gave you the courage to actually execute on the idea?
Leila Janah: I went to Africa when I was 17, using some scholarship money that I had received for community service, and I thought, “What if I could use this money and go do some adventure like a voluntourism type of thing?”
I went to Ghana and I lived in this tiny village called Akredi, which was maybe 250 people at the end of this dirt road, three hours away from the capital city. That was the seminal experience that changed everything for me.
I worked as a teacher for middle school-age students at the oldest school for the blind in West Africa. Once I saw how incredibly poor the families of my students were, I couldn’t get my head around anything else. I became really curious as to why this country — which had so many hardworking people that reminded me a lot of Indian immigrants that I knew back home in Southern California who’d done really well and all became doctors and lawyers and business owners — was so poor.
I think very few people understand exactly what it really means to live on less than $2 a day, which is true for at least 1.5 billion people around the world. We think, “Oh, they have their crops and they live in these pretty little villages. Life can’t be so bad.” But it really is that bad. All the numbers that you read on global poverty are adjusted for purchasing power in each country.
When we say someone lives on less than $2 a day, from an economic standpoint, we mean they live on less than what $2 a day would buy you in an American city. Imagine being in a city or even some rural town in America with $2 in your pocket and having to get by for an entire day. That’s what those numbers mean. I knew a kid from our community who I later learned died of malaria because his parents couldn’t afford a $2 medication.
This was all so shocking, and also just seemed so avoidable. It wasn’t like solving this problem was rocket science. It just seemed like there wasn’t enough collective will and the systems weren’t designed correctly to allow these people to move out of poverty.
I studied international development in college, and several years later, I stumbled into the idea for Sama while working at an outsourcing center in India as a management consultant for a firm based in New York. One thing I noticed when I was working at this rm was that some of the people who were working at the outsourcing center came from really poor backgrounds. I met one man who was coming in from Dharavi, which is South Asia’s largest slum, where “Slumdog Millionaire” was filmed. Many of the workers would commute to work in rickshaws. I thought if we could somehow gure out how to make this corporate environment work for the type of people I met in Ghana, maybe that would be a key to addressing poverty.
Part of the reason I was thinking this way is that I had spent a lot of time living with and working with very low-income people and understanding what they wanted out of development. In Ghana, one thing that I noticed was that everybody who was poor was working.
It wasn’t like people were sitting there drinking coconuts and just lounging around, which I think is what some people imagine life in poverty to be like. We hear it all the time: “Oh, those people just don’t have the Protestant work ethic. They’re just not willing to pull themselves up by their bootstraps.”
Living with those people in Ghana and seeing exactly what they had to do to make $1 a day was totally eye-opening. About a billion people work full-time and still earn less than $2 a day. What they want is not to not work. What they want is dignified work that pays a living wage. If you can connect people to those types of jobs that allow them to increase their earnings, they would prefer to buy their own goods and services rather than be handed something from an aid agency or a social services agency. I think that is also true for people here in the US who are in poverty.
I had already been really interested in fair trade and in some of the previous movements to empower people by giving them access to dignified work. One of the challenges I saw with some of these movements is that they were focused on industries that were relatively small, often food commodities or handicrafts. But we weren’t taking that ethos and that thinking and applying it to some of the big and booming corporate sectors like data outsourcing and processing.
Looking at the numbers, it just struck me that if we could take that kind of fair trade thinking and apply it to the outsourcing industry and create a social label and PR bene t for clients — if we could create some cachet around positive social impact for companies that hire people from marginalized backgrounds in this new industry — we could potentially impact millions of people because the scale of the industry is so large.
The amount of money that can be made dwarfs anything in the commodities markets. If I’m thinking about how to make a poor rural person in Ghana richer, I’d much rather connect them to an Internet-based job than help them marginally improve their farm output, which might earn them a few more cents a day but not really catapult them out of poverty.
That’s how the idea got started. Two years later, in 2005, I quit my job and decided to start Samasource. We launched in September 2008. The original business model, which we’ve since adjusted somewhat, is that we win contracts from large technology and data firms and we take responsibility for the quality of the work that we’ll deliver. A lot of the work is around things like data processing or data tagging or manipulation. For example, we clean up a lot of address records for companies that have big databases of contact information for people. We do a lot of image tagging for companies that maintain large stock photography or other image databases.
I found a guy who ran an Internet café in Nairobi, Kenya, who was my age, 25, at the time. He was my first partner. He had four computers in this dusty, tiny office in the central business district of Nairobi. He was having a really tough time making enough money because nobody could afford to spend a dollar an hour to use the Internet. I said, “This could be a really cool business proposition because we can probably make much more than a dollar an hour doing this work. You can offset the cost of your Internet and pay a living wage to low-income people.” He said he would have absolutely no problem finding poor people to do this work because 80 percent of Nairobi’s population was making well under a living wage and living in the slum.
That’s how we got started. Our initial contract was with a local nonprofit that was digitizing books for blind readers here in the US. They had this website called Bookshare that let you log in and listen to audio books as a blind reader for free. We were the rm that digitized the books and turned them from scanned pages into readable text files that the audio software would read to these blind users. It was such a cool double social mission project. And we just grew from there.
Can you tell us more about Sama’s work in the US?
LJ: We launched a domestic offshoot that we rebranded as Samaschool last year, which is part of our core mission to connect low-income people to work and move them out of poverty. At Samaschool, we do that through job training. We’ve taken a lot of the lessons we learned at Samasource and made them available publicly at samaschool.org. Anyone who wants to learn how to benefit from the digital economy can go and take our courses for free.
We started Samaschool as a pilot, and we found that by teaching people about all of the opportunities now available in the digital economy — everything from being a remote worker on a site like Upwork or TaskRabbit and some of the new opportunities that are opening up for the contract workforce of tomorrow.
We found that most low-income people had no idea that these platforms even existed and, if they did, they had no idea how to optimize their profiles and make the most money and actually bene t from these programs. We thought, why not take the learnings we provide at Samasource, package them, and see if we can broaden the number of people we give that training to? We can’t hire all of them directly, but we can open up our platform.
So far, close to 800 people have gone through our training at Samaschool. On average, people experience an income increase of 10 percent once they’ve finished our ten-week boot camp. We also just started an online program, which has enrolled close to 3,000 people.
I’m excited because I think there’s been a lot of focus on coding, which is great, but there are only so many coding jobs. I think we need to be looking at the outcomes behind job-training programs to see what actually works, specifically for low-income people, for people who are at or below the poverty line, and figure out how we raise them above that line.
You have a history of thinking outside of the box — what other innovative approaches are catching your interest right now?
LJ: We’ve been exploring social impact bond funding for Samasource. We’re working on something called a social impact security, which would be the first instance of a social impact bond where the payer is actually a private philanthropist rather than the government, and we’re actually recruiting funders for this right now.
The idea is that we will commit to a certain social impact, so for example we might say we can move people out of poverty for X price per person. We might find a funder who says, “OK, I’m willing to spend $10 million moving a certain number of people out of poverty, but I’m not going to pay unless you can prove that you as an organization have actually done that.” Basically, we say what the goal is, the private payer puts up the money and says, “I’m willing to pay and I’m good for it,” and then some investors take on the risk. Investors actually fund the security and then those investors get paid back with a return by the donor if we hit the outcome goal.
This was tried very famously on Rikers Island recently for a recidivism reduction project and it failed. The nonprofit that was working on the problem couldn’t achieve the desired targets, but the social impact bond concept succeeded because the government didn’t end up paying for the full cost of the program because it didn’t work. I think Goldman Sachs was the company that was the private financer, and so Goldman took the hit, which is exactly what you want — you want investors to take the hit on the risk. We would be the first nonprofit that works in international development to be part of this kind of movement if we can raise the money for the security. [For more on social impact bonds, see Anna Bowden’s article in Issue 2 of CONSCIOUS COMPANY.]
Can you tell us about the decision to incorporate as a nonprofit?
LJ: There’s no for-profit piece of Sama Group, but we do have an earned revenue model. Many nonprofits now have an earned revenue model. Think about the Girl Scouts; they sell over $700 million worth of cookies each year. That’s earned revenue, but it doesn’t make them a for-profit. Or Goodwill, which is a $3 billion earned revenue enterprise. I think a lot of people think charity when they think nonprofit, and when they think charity, they think “fully funded by donations,” but actually that’s already started
to change for a large number of nonprofits.
However, for Sama, we’re unusual in that a high percentage of our revenue comes from this earned income, and it’s still part of our social mission because this revenue is generated by our social mission. It’s generated by hiring and employing these low-income workers. These types of models are really interesting because they ensure that the mission remains the prime objective of the organization, rather than profit-making. And I think in a nonprofit structure, you can always guarantee that the social mission will trump any discussion of profit, and that’s a really important distinction.
Secondly, I think it builds a lot of goodwill when people choose Samasource as a vendor; they know that they are choosing an organization that — if it ever becomes profitable on our earned revenue — will always reinvest that profit back into the organization rather than payout any individuals. We can all make salaries, and I can pay our staff market-rate salaries (although most people are making well below market, including me), but nobody has any equity in the company and there’s no chance that we could sell the company and make a lot of money. I think that’s a really important distinction because it means that when we make decisions at Sama, we’re really trying to make decisions to benefit our social mission as opposed to our profitability, although there’s a healthy balance between the two.
All that said, we also have an investment in Laxmi [a natural skincare line that creates jobs where individuals earn at least three times the local average wage], which is a new company I set up. It’s technically not an investment; I set up an LLC when I built Laxmi so that I could donate one-third of my founder’s shares in Laxmi to the nonprofit. The way we did that was by setting up an LLC that the nonprofit partly controls and that I partly control, and that’s how the equity gets back to the nonprofit.
I think this is a really unusual and interesting way of doing things. Mark Zuckerberg and Priscilla Chan, when they announced their decision to give away 99 percent of their wealth, also did that through an LLC. It affords more flexibility than a traditional charitable donation because you can invest in different types of things that might have a social mission.
So all this is to say that there’s a lot more in between the very traditional charity that’s only raising revenue off of donations and the profit-maximizing company that’s trying to extract every last cent in margin. There’s a really interesting middle ground now that involves a lot of companies that are maybe taking a hit on their profitability in order to do something positive for social and environmental impact in the world.
And then on the flip side, we have nonprofits that are starting to think more and more about how they might generate earned revenue through providing services or selling stuff. I feel that, in the future, every company that we purchase goods and services from will have a social component. And I think part of how we can usher that in is through tax benefits for companies that overtly solve the social and environmental issues that we would otherwise have to put tax dollars behind.
How do you see the world of business changing in the future?
LJ: I think the role of government and policy is to solve market failures, of which there are many, but there are a lot of things that the market will not address because it’s not really profitable to build a business in that category. For example, preschools for very low-income families who can’t afford to pay for early childhood development. I think there’s a strong moral case that that’s where the government should step in and offer incentives, either to private companies or social enterprises, to provide those services.
The future will see a lot more of those type of incentive mechanisms as opposed to the government directly providing the service. Government will act more like a venture capital firm investing in the most promising social innovations. Whether those services are provided by nonprofit or for-profit companies will matter less than what the outcomes are.
I mentioned social impact bonds earlier. That’s a really interesting model for outcome-driven funding for important social goals, whether it’s reducing recidivism or improving literacy or reducing early childhood mortality in a developing country or even reducing maternal mortality in the US. We are thinking of new structures for financing those kinds of social improvements that still harness the benefit of the market and the innovation and creativity inherent in private individuals coming up with solutions, as opposed to trying to develop them within a big bureaucracy.
What does social justice mean to you?
LJ: Social justice, to me, means equal opportunity. I think that is an inherently American idea, despite what we are hearing now in political debates. Equal opportunity is the cornerstone of everything that we value as a nation. It’s why my parents came here. It’s why I think we are still a light, an inspiration to people around the world, and why this country is really more of an affinity group than it is a traditional nation. We all come from different backgrounds, but we share this common idea that people should be valued
for their work and their talents and their unique attributes, and that if we have a level playing field, then people can thrive in whatever way makes sense to them.
What are some of the common misconceptions you see about people from low-income communities and how do you deal with them?
LJ: I think in America we idolize wealth because we equate wealth with merit. And we believe so much in the American Dream and the concept of meritocracy that we assume that if someone is winning, they’re winning because they worked harder than everyone else, because they are smarter, because they did something different, that it was their own effort and their own volition that brought them that success. I think inherently we’re sort of primed by evolutionary biology to value merit. I think it’s like there’s something hard-wired within us to admire people who go aboveboard, who work especially hard, who exhibit discipline and the other character attributes that we associate with success.
But I think it’s problematic that, if you actually look at the data, we are not as meritocratic as we think we are in America. The measure of meritocracy that economists use is the percentage of people that move from the bottom fifth of income
in a society to the top fifth within a generation. That’s a measure of income mobility that is a good proxy for meritocracy because you would think that if talent is equally distributed, you’d see a lot of movement. If you live in a true meritocracy, you’d expect to see that people born in the next generation would have an equal chance of ending up anywhere in the income spectrum.
We’re not seeing that in the US. We see that Northern European countries like Norway, Denmark, and Sweden have much higher rates of income mobility from one generation to the next than the US does. And that runs counter to everything we think is true about America. To me, restoring that mobility is really important to maintaining the American Dream and keeping in place the values that we all stand for, which is that you should be rewarded based on how much effort you put into things.
That’s kind of controversial; that’s even more right-of-center than what a lot of people believe. I think that if you choose not to work as hard, you should be rewarded less, and I don’t believe in equal outcomes by any means. But I think right now we’re in a system that is just so skewed toward perpetuating wealth for those who have it — multi-generational wealth — and depriving others of the opportunity to ever get a leg up in the system. That’s just bad for America. It’s bad for economic growth, for which you need a strong and vibrant middle class. It’s bad for our standing in the world. It’s bad in so many ways. So the challenge that I’m most passionate about is, how do we get more people to achieve their potential by leveling the playing field?
Can you tell us about your personal leadership style and how you stay focused on your own personal development as a leader?
LJ: I think the exercise of writing down what your values are and looking at them often is important, so I did that for myself and then we did that as a company. My own values — and these are as much aspirational as they are currently in practice — are grace and optimism. I have also written out how I think I should embody those traits each day and why they’re important to me, and I try to remind myself regularly.
As a company, we went through a values exercise to understand what we stand for today and what we want to stand for in the future. And those values are grit, humanity, getting things done, and integrity. I would say that it’s a constant struggle for me to try to exhibit those. I am so far from being the kind of leader I want to be, but it is helpful knowing what the guiding light is.
I think there’s a challenge that we have to admit, which is that social entrepreneurs are put on a pedestal, which is bad for them because I think they start getting a big ego and that certainly happened to me. You get so much constant praise and everyone’s like, “Oh, you’re doing such amazing things for the world,” and no one wants to criticize the social entrepreneur.
And then on the ip side, we hold them to these unrealistic standards and we don’t see social justice leaders as flawed human beings, which we all are. I’m giving a talk at the Wisdom 2.0 Conference about Gandhi and Martin Luther King Jr. and how they had lots of personal flaws and that that’s fine, just like all people have personal flaws. We shouldn’t exceptionalize social justice leaders because I think it absolves everyday people of the responsibility to do something and to take action.
It also hurts those leaders because it holds them to impossibly high standards. I can think of so many of these “exposés” on social entrepreneurs where people say, “Oh my God, we discovered that actually the story isn’t as good as everyone says it’s been!” I remember a New York Times article on Kiva, which really pissed me off because I was thinking, in the wake of the financial crisis, those financiers are the real bad guys. A social entrepreneur whose model is not providing exactly the same benefits as he or she thought it was should not really be the subject of our persecution.
It’s only because we hold people to such crazy high standards, because we put them on these pedestals, that we’re so crestfallen when we feel like there’s any sort of a problem in their model. And then we’re like, “Oh no, everything sucks,” because even the heroes that we’ve put on these pedestals are flawed. I think we end up becoming more cynical. I think we just have to realize that every human being has good parts and bad parts.
Muhammad Yunus writes about the twin aspects of ego. There’s the selfless aspect of every human being and there’s the selfish aspect of every human being. Our economic systems and our political systems should reflect both of those aspects. He argues that capitalism is really designed around the selfish part of ourselves, and we relegate all of our altruistic tendencies to the social sector and to nonprofits, and to volunteering at your child’s school and going to church. But really, the future is in integrating those two aspects of ourselves and having a more holistic economic system that takes both into account.
I think the same is true for the non-profit sector. We also need to realize that social justice leaders have egos, have personal flaws, should be paid decent wages, and are not saints. I think we have this tendency to want to heroize people and that can be a little dangerous.
Do you have any personal practices that help you work on your values? Do you work with a coach? Are there other things that you’re doing to facilitate your own personal growth?
LJ: I will say this in print: I think therapy is really important. It shocks me that we spend so many resources on professional development and even personal development, and everyone works out and knows that they should eat well, but there’s still a stigma around talking about therapy. I’ve read a ton about neuroscience and the positive effects of therapy on the brain for anyone who’s experienced any kind of trauma, which can come in so many different forms and is a big part of this kind of work. Sitting with people who are actively going through major physical trauma or emotional trauma, which is a part of being extremely poor, also has an effect on you. I think it’s really important, for social justice leaders especially, to have a place to go to talk about that and to process it. Otherwise, I think it makes us worse leaders. I certainly was before I discovered therapy two years ago.
I also got really into yoga and meditation about two years ago. I used to think that yoga was for people who just didn’t have much adrenaline and that it would be too boring for me. My therapist was the one who said, “For someone whose brain is as frantic as yours, there’s benefits to calming the brain down through breathing techniques and meditation.”
Are there other business models for addressing poverty and social justice that you’re excited about right now?
LJ: I’m really compelled by all the data and my own experience that the best way to help people living in poverty is not to provide them with goods and services, but to provide them with cash. And the best way to provide them with cash is through a job. Obviously jobs are complex and hard to give out, so in the absence of providing them with cash through a job and through the market — which is always going to be the preference because it’s more sustainable — we can also provide them cash through a transfer.
That is anathema to a lot of more conservative politicians in the US who think that handouts are terrible, but it turns out that for very low-income people — people whose brains are basically operating in literal and figurative starvation mode — a direct cash transfer can do a lot of things immediately. It provides an up-front investment, and typically the data on cash transfers that I’ve seen show that very low-income people typically invest in food, education, healthcare, and shelter — the things that you would want someone to invest in. It’s not like people are using this money to go buy lots of cigarettes and drugs, even though that’s what we might imagine for whatever flawed reason.
If you actually look at the return on investment of, say, giving cash transfers versus running a big social service agency that provides all these services and then has to determine who gets the services and how, it might actually be much cheaper for taxpayers, and more efficient, in terms of the outcome that we’re trying to achieve for the given population, to just give cash. And I think that we should be open to testing that more. There are experiments going on in Europe with different communities, but here, politically, it would get shut down so quickly. In my opinion, we should open ourselves up to all possibilities and actually study which method works best based on outcomes. If we give ten families cash transfers and we give another ten access to various social services, which method is the most effective for producing desirable long-term outcomes in that population?
There’s now a lot more activity around randomized control trials in the social sector, which I think would be a really good way to run these types of experiments and actually develop good social policy that’s based on facts, and not just on opinions about poor people. Those cash transfer models are really interesting to me, and there’s an organization called GiveDirectly, which I think is doing a really interesting job of working on poverty through those sorts of transfers.
What do you think it’s going to take to debunk some of the myths around people who are living in poverty?
LJ: I almost think we need compassion training. I often tell our donors, “You don’t have to go to Uganda. I can take you to the Bayview neighborhood [in San Francisco]. We can go ten minutes away from here or we can go and stand with a homeless person and interview them about their life.” We all get wrapped up in our own silos. It’s very easy, and I do it, too. I think it’s a constant exercise. It’s almost like a personal development exercise to challenge your own assumptions about your place in the world and why you’re there.
I feel like it’s happening in the younger generation already. The big, conspicuous consumption is less of a thing, except maybe with the Kardashians. But I feel that most people in the younger generation find that really distasteful and feel like a better world is only going to be created if we have solidarity with people everywhere.
Photos: Chloe Aftel