Nonprofit Chronicles

Social entrepreneur Leila Janah is a regular on the do-good circuit: She’s been to the Clinton Global Initiative, the Aspen Ideas Festival, the Fortune Global Forum, SOCAP, BSR, SXSW and Tedx. She’s a media darling. She’s got a new book out.

But what has she accomplished? Let’s have a look.

There’s lots to admire about Janah, a 35-year-old graduate of Harvard who is the founder and CEO of Samasource and LXMI, two social enterprises that provide work to poor people in Kenya, Uganda, Haiti and India. By all accounts, she is well-intentioned, energetic and, importantly, committed to measuring the impact of her work.

Samasource is a nonprofit outsourcing company that recruits young people to do digital work for such clients as Google and TripAdvisor. A for-profit business, LXMI — it’s pronounced “luxe-me” and evokes Lakshmi, a Hindu goddess — sells luxury beauty products that are sourced from shea nuts in Uganda.

Both capitalize on opportunities created by globalization to alleviate poverty.

In her new book, which is called Give Work: Reversing Poverty One Job at a Time, Janah writes: “Give work–dignified, steady, fair-wage work–and you give the poorest people on the planet a chance at happiness.”

Well, sure. Wasn’t it Ronald Reagan who said that the best social program is a job?

So what’s not to like?

For starters, the book. Give Work is a mush of well-worn ideas and fuzzy thinking.

Sometimes it reads like a college admissions essay: “We all agreed that our time in Ghana had been transformative.”

Sometimes it states the obvious: “The world’s most destitute citizens are not poor because they are hopeless. They are not poor because they lack smarts, talent, motivation or will.”

Sometimes it’s self-aggrandizing: “I thought what Muhammad Yunus did for microfinance, I could do with outsourcing.”

Sometimes it’s grandiose: “It is my hope that those dedicated people working at the government level and within international agencies will see in this book an exciting new foreign aid model, one that could overhaul the role of organizations like the World Bank and the International Monetary Fund (IMF).”

Still, Janah is an entrepreneur, not a writer, so she can be forgiven a clunker or two.

But why write a book about about Samasource or LXMI? Neither is path-breaking. A nonprofit called Digital Divide Data pioneered socially-responsible, digital outsourcing back in 2001 when Jeremy Hockenstein who, like Janah, is a Harvard grad and former management consultant, set up shop in Cambodia. (Digital Divide Data gets just a passing mention in Give Work.) As for LXMI, Janah writes that there was “no Chanel of social impact” until she started LXMI, but other companies sell nearly 150 Fair Trade-certified beauty products from about 50 countries.

The same question–why?–can be asked about the uncritical, even adoring, coverage of Janah and Samasource by the press. The book jacket of Give Work notes that Janah

has been profiled in the New York Times, Fast Company, Wired, Forbes and Inc. She was named one of Conde Nast’s Daring 25 and Elle’s 2016 Top Women in Tech, and Samasource was named one of Fast Company’s Most Innovative Companies of 2016.

Fortune, my former employer, named Janah one of its 40 Under 40, an annual ranking of the most influential young people in business, and flew her to Rome with big-company CEOs to meet the pope. A story by Laura Arrillaga-Andreesen in The New York Times’ T Magazine named her one of Five Visionary Tech Entrepreneurs Who Are Changing the World. Another was Elizabeth Holmes of Theranos. That didn’t end well.

This isn’t Janah’s fault. She’s glamorous, as well as dedicated, and the buzz around her can help attract donors and clients to her enterprises, as she notes in Give Work.

Stories or data?

“When our communications team pitches a story on Sama to a journalist, it often turns into a story about me and my life, complete with a glossy photo spread,” she writes. “It can be embarrassing, but the thing is, it works. People like personal interest stories more than they like data.”

She goes on to say: “It’s time we social entrepreneurs stopped being so self-effacing.” This evidently is not a problem for Janah. Last year, she wrote a essay in Glamour headlined No, Freezing My Eggs Isn’t Selfish — It’s the Best Decision I’ve Ever Made.

Nonprofit Chronicles, as it happens, is interested in data as well as personal stories, so let’s turn to the data. To Janah’s credit, Samasource is one of only seven nonprofits to have undergone what’s called an “impact audit” by a startup called ImpactMatters, founded by Dean Karlan, a Northwestern economics professor, and Elijah Goldberg, his former student. The people at ImpactMatters are serious about estimating impact; their audit of Samasource runs for 123 pages.

The trouble is, measuring the impact of Samasource is hard. ImpactMatters’ audit highlights many unknowns, particularly around the counterfactuals: What would have happened to the people who worked at Samasource if they had not gotten that job? Would they have languished in poverty? Or would they have found work elsewhere? As workers must undergo training, secure a job with Samasource and keep the job, they are likely to be highly motivated and therefore more likely than their peers to see their incomes grow, even in the absence of Samasource.

Similarly, if Janah and Samasource had not come along, the digital work that Google and TripAdvisor and others customers needed done would have been done elsewhere, almost surely in a poor country. If the Samasource workforce is merely displacing other low-income workers, in India, say, or the Philippines, most or all of Samasource’s impact could be offset because it is creating losers as well as winners. Tricky, no?

“For donors, Samasource is a sensible investment of philanthropic dollars only if it generates greater impact than its for-profit competitors,” the audit says.

Samasource’s own measures of impact did not impress ImpactMatters. (This would probably be true for 90 percent of nonprofits that self-report their impact.) Samasource surveys its alumni to see whether their wages have gone up, but only 32 percent report back; these are likely to be the most successful, the auditors note. For these reasons, the auditors say: “The rise in earnings Samasource reports is an inaccurate estimate of how much beneficiaries’ earnings rose in the labor market.” Ouch.

ImpactMatters takes a stab at estimating what it calls Samasource’s Donor’s Cost of Net Impact, and finds that for every $100 donation, the nonprofit generates $64 in earnings over three years for its workers. That doesn’t sound good. Still, without benchmarks, it’s hard to compare Samasource to other nonprofits that aim to improve the livelihoods of the poor. Almost surely, though, donors would be better off giving to Village Enterprise, which helps poor people in Africa start small businesses and, according to ImpactMatters, generates $180 in income for every $100 in donations. (Village Enterprise is also a recommended charity of The Life You Can Save. Its CEO is Dianne Calvi. I’ve never heard of her either.)

All that aside, ImpactMatters praises Samasource as a learning organization, saying:

Samasource makes systematic and continuous changes to its model…Samasource’s iterations were adopted systematically, with recognizable components of the Plan-Do-Check-Act cycle.

Samasource has proven that it is not only unafraid of change, but also embraces change.

Indeed, Janah branched out from Samasource to start not only LXMI but also Samahope, a crowdfunding site for medical treatments for the poor, and Samaschool, a program to train low-income Americans for jobs in the so-called gig economy. Samahope raised more than $1m to fund critical care for almost 17,000 women and children in 11 countries before Janah merged it into Caring Crowd a crowdfunding platform run by Johnson & Johnson. That’s impressive.

Samasource became profitable in 2016, Janah told me by phone. So maybe the question of how much impact donors are having has become moot. “This is a viable model that should be scaled up,” she said. If Samasource can grow without donations, that would be a excellent. Annual revenues of Samasource and Samaschool will be about $15 million this year, and about 9,000 people have gone through the Samasource program since it was formed in 2008. To better understand its impact, Samasource is planning a randomized controlled trial with Innovations for Poverty Action, an independent evaluator.

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So, to return to the title of this blogpost, how should we think about Leila Janah? The key is to think, and to resist the temptation to cast NGO leaders as saviors. It’s also crucial to  remember that good intentions are not enough. So much of the reporting on Janah focuses on her big heart, and her personal story; it’s hard to resist a pitch about an attractive young Harvard graduate, out to save the world. Very little of the coverage asks whether Samasource is actually doing good, at what cost, and at what scale. If it did, Janah might not have the hubris to present her ideas as “an exciting new foreign aid model” that could overhaul the World Bank and IMF.

In the end, though, this isn’t about Janah. It’s about the reporters and book publishers and conference organizers who perform little or no due diligence when it comes to nonprofits. They may think they’re helping, by shining light on a hero or heroine. In truth, they’re doing a disservice to nonprofits–especially those that go about their business, quietly and effectively.