Jacob Chikayiko (right), a farmer in Malawi, bought insurance from MicroEnsure to protect against crop failure caused by inclement weather. (Photograph by Opportunity International)

Many people in the developing world are one failed crop, one illness, or one emergency away from financial ruin. In 2008, Opportunity International started MicroEnsure to provide low-cost insurance to the people the microfinance charity serves.

“If something happens and they run into a season where they have a poor crop or they have some unusual weather, they can lose everything in one season,” Vicki Escarra, chief executive of Opportunity International, says of the farmers her group works with in Africa. “Setting up insurance provides them with stability so they don’t lose everything.”

MicroEnsure provides a variety of low-cost insurance products—including crop, health, disability, and even political-violence insurance—to 4 million low-income people in Africa and Asia. The business is growing fast, adding roughly 100,000 customers a month.

New Investors

To date, MicroEnsure has operated as a nonprofit subsidiary of Opportunity International.

But now to help the business gain access to the capital it needs to continue to grow, MicroEnsure is starting the transition to becoming a for-profit venture. The International Finance Corporation and the Omidyar Network are investing $5-million in MicroEnsure and will join Opportunity International as owners of the enterprise.

Opportunity International has taken steps to protect the business’s mission. The shareholder agreement stipulates a commitment to maintaining a low-income customer base. The charity has a seat on the venture’s board of directors, and Terry Watson, chairman of Opportunity International UK, will serve as the company’s first chairman of the board.

“To meet the needs of that kind of growth, we needed more capital infusion than we were capable of getting,” says Ms. Escarra. “The rate of growth was what drove us to say, ‘We need partners to help us do this.’”

Dig deeper: Read how a microfinance organization in Haiti tested insurance in the aftermath of the devastating earthquake in 2010.

In the survey of 99 organizations that each manage at least $10-million in so-called impact investments, 84 percent said that those investments were meeting their expectations when it comes to social and environmental benefits. Fourteen percent said the investments’ social returns were outperforming their expectations, while only 2 percent said they were underperforming.

When it came to financial performance, 68 percent said their impact investments were meeting their expectations and 21 percent said they were exceeding expectations. Eleven percent said the investments failed to meet their financial expectations.

Spectrum of Investors

“Impact investing is a field that is developing a considerable head of steam,” says Luther Ragin Jr., chief executive of the Global Impact Investing Network. He says that while the term “impact investing” is relatively new, pursuing financial returns while seeking social benefits dates back at least two decades.

What’s different today is the broad spectrum of investors adopting the approach, says Mr. Ragin.

“It’s not only foundations and banks, but you’re also seeing high-net-worth individuals,” he says. “You’re seeing family offices, development finance institutions, pension plans, insurance companies. You’re seeing a wide range of institutional investors of the type that have not traditionally been active.”

People managing the investments said they did have some concerns: In particular, they cited a lack of enough of the right kinds of investment capital and a shortage of high-quality projects in which to invest.

The organizations together had committed $8-billion to impact investments in 2012 and plan to commit an additional $9-billion in 2013.

Dig deeper: Read how foundations are increasing their impact investments in an article from our latest endowment report.

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The awards are named after one of the festival’s co-founders, a teacher who was devoted to helping disadvantaged youths learn technology skills.

The winners are:

• Madhura Bhat, who co-founded Health for America, a fellowship program for young people to develop technology solutions to improve health care.

• Elizabeth Davidson, who co-founded ScriptEd, a nonprofit that trains volunteers from the tech industry to teach computer programming to students in New York City high schools.

• Arlene Ducao, who leads Open Infrared, a project that maps ecological features and risks revealed by infrared satellite data.

• Rey Faustino, who started One Degree, an organization that connects San Francisco residents with resources like afterschool programs or help finding a job.

• Gene Gurkoff, who created Charity Miles, a smartphone application that lets users earn money for charity by walking, running, or biking.

• Elena Lagoudi, a former museum worker at the National Gallery in London who now lives in Greece, where she is experimenting with social-media activism and art efforts in the wake of that country’s financial crisis.

• Simeon Oriko, who started the Kuyu Project to teach young people in Kenya how to use social media and other digital tools to improve their communities.

• Amanda Quraishi, who created a smartphone application called 365muslim to promote interfaith dialogue and greater understanding of America’s Muslims.

• Ben Sawyer, who is a leader in the use of video games for social good. In 2002, he co-founded the Serious Games Initiative and now leads the Games for Health Project.

• Rich Schwerdtfeger, who is chief technology officer for accessibility for the IBM Software Group, where he spearheaded an industry-wide effort to make software accessible for people with disabilities.

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Children try out a new hand-washing station. (Photograph by East Meets West Foundation)

An international aid charity is taking an unorthodox approach to helping people in Cambodia and Vietnam improve sanitation and hygiene: It asks beneficiaries to help pay for the construction of latrines and hand-washing stations, but then gives them cash rewards when they get results. The effort will now spread, thanks to a $10.9-million grant from the Bill & Melinda Gates Foundation.

The East Meets West Foundation, in Oakland, Calif., works with local groups to provide hygiene education, train masons to build high-quality latrines, and broker low-cost loans that families can use to install latrines and hand-washing devices. Families receive a $10 rebate to help offset construction costs after an independent group has verified that the latrine is in place.

Communities also get incentives: They receive cash awards to be put toward public-works projects, such as roads and sanitation facilities in schools, when the percentage of households that have latrines and hand-washing devices hits 30 percent, and the communities receive more money when those rates reach 95 percent.

Stretching Grant Dollars

Millions of people in Vietnam and Cambodia lack sanitation facilities, and the cost of building them ranges from $50 to $250 per household, depending on the region, says John Anner, the organization’s president.

“There’s simply no way that philanthropy is going to fill that gap or that the government is going to put up that kind of money,” says Mr. Anner.

Beneficiaries bearing part of the cost helps scarce grant dollars go further, he says, and scale is important because the benefits of improved sanitation, such as better health and cleaner water, depend on large numbers of people in the community adopting good hygiene practices.

East Meets West says it will be able to use the Gates grant to bring hygiene education and well-built latrines to 344,000 households, or more than 1.7 million people.

Motivated Participants

Mr. Anner says that the number of participants in areas where the organization has already offered the program has consistently exceeded its forecasts.

“Everybody knows that when you’re sick you can’t go to work; kids can’t go to school,” he says. “Medical costs are paid for out-of-pocket in a lot of these places, and they can be very, very high.”

The loans also help the charity identify people who will take the project seriously and keep the facilities in good repair, says Mr. Anner.

“Straight-up charity makes it very difficult to distinguish between people who really, really want what you have to offer and people who are just willing to take anything’s that free.”

The company, which had sought the trademark in Great Britain, Jamaica, the United States, and the European Union, has been using the term in its advertising for the last two years to describe how businesses use social media to connect with customers. In its announcement, Salesforce.com pointed to the outcry from nonprofits and socially minded businesses as the primary reason for its reversal.

“It was never our intention to create confusion in the social sector which we have supported since our founding,” Marc Benioff, chief executive of Saleforce.com, said in a written statement. “As a result of the feedback we received, Salesforce.com has decided to withdraw its efforts to trademark the term ‘social enterprise’ and plans to discontinue its use in our marketing.”

The alliance is calling on supporters to write letters supporting the trademark office’s denial of the application during its comment period, which ends September 9.

In the United States and around the world, tens of thousands of businesses whose primary goal is social or environmental good use the term social enterprise, says Kevin Lynch, chief executive of the Social Enterprise Alliance.

“If somebody gets a trademark on it, the ability of individual organizations to continue doing their work under the banner of social enterprise all of the sudden is very much diminished,” he says. “One private company could control the use of that phrase.”

‘Different Sectors’

In a blog post about the controversy, the software giant said it seeks to register the trademark only in the information-technology sector.

“When it comes to trademarks, businesses or organizations in different sectors can use the same trademark,” a spokesman for the company wrote. “Salesforce.com does not own or intend to own the trademark rights for the term social enterprise within the nonprofit sector, and is not seeking to restrict descriptive uses of the phrase by others in philanthropy, social responsibility, community involvement, or mission-driven organizations.”

Mr. Lynch isn’t satisfied with the company’s position: “There are many social enterprises already operating in the computer and software spaces for which Salesforce.com is specifically attempting to secure the mark.”

The trademark office requires that public comments be submitted on paper. The Social Enterprise Alliance is collecting digital letters from supporters until Wednesday, September 5, at 1 p.m. Central time, which it will then deliver to the trademark office in printed form.

Salesforce.com also applied to trademark the term in Great Britain, Jamaica, and the European Union. Social Enterprise UK is leading the international effort to oppose the trademark applications.

To tackle problems in a rapidly changing world, nonprofits need to adopt a new mind-set, one that emphasizes improvisation, ad hoc networks, and adaptation, says Andrew Zolli, executive director of PopTech, a New York charity focused on innovation, and co-author of a new book, Resilience: Why Things Bounce Back.

Because the world has entered a period of “extraordinary volatility” and the problems society faces are increasingly complex, he argues, figuring out why some individuals, organizations, and systems are resilient in the aftermath of a crisis while others are not is paramount.

“We’re all ballroom dancing in the minefield,” says Mr. Zolli.  “In an environment like that, we have to be able to prepare our companies, our communities, our organizations to be able to deal with those disruptions. And that is a different agenda that we have had, even in the recent past.”

Riots Over Tortilla Prices

In the book, Mr. Zolli and his co-author, Ann Marie Healy, point to massive protests in Mexico City over the price of tortillas as an example of how complicated and interconnected modern problems have become.

In January 2007, the price of corn was 400 percent higher than it had been just three months before. But the reason for the spike wasn’t a failed crop or price fixing, as some of the protesters suspected. A year and a half before, Hurricane Katrina shut down oil production on the Gulf Coast, and the resulting jump in the cost of gasoline increased demand for ethanol, an alternative fuel made from corn. Farmers, in turn, switched from edible corn crops to inedible varieties used to make the fuel, which pushed up the price of corn used to make tortillas.

“We are connecting systems in ways that we don’t understand until they fall apart,” says Mr. Zolli.

‘Hacked-Together Technology’

Andrew Zolli (Photo by Heather Phelps-Lipton)

At the same time, he says, volatility—in the form of terrorism, economic crisis, geopolitical instability, and climate change—is making it harder, if not impossible, to forecast coming shocks.

“When you find a resilient response to a problem, what you typically find is not one formal institution or one nonprofit executing a response that they had cooked up beforehand,” says Mr. Zolli. “You find bits of organizations and social networks and individuals and independent actors and hacked-together technology platforms. What you find is a lot of improvisation.”

A real-world example: a volunteer effort that collected, translated, and mapped more than 100,000 text messages asking for help sent by survivors of the 2010 earthquake in Haiti.

The effort was started by Ushahidi, a nonprofit technology group that had built a system to map where crises were erupting in the wake of election violence in Kenya several years earlier. But the response quickly took on a life of its own, involving volunteers around the world, multiple nonprofits, first responders in Haiti, and others.

One of the most remarkable steps in the project’s rapid development came when a Twitter follower in Cameroon put one of the organizers in touch with an executive at Haiti’s largest mobile carrier, who was instrumental in setting up the short code survivors used to submit their messages.

Learning to Improvise

Mr. Zolli worries that the transition to a future that requires fluid responses to unexpected problems will be tough for a lot of charities.

“Most nonprofits are not very good at improvising,” he says. “They do one thing, and they’re rewarded for doing one thing, one way for a long time. So it can be hard for them to update their programming to create a culture that rewards improvisation and risk taking.”

But with institutions like IBM, the Rockefeller Foundation, and the World Bank focusing increasing attention on resilience, charities can expect to hear a lot more about the concept in years to come, says Mr. Zolli: “It’s all a conversation about how do you build systems that can take a punch.”

Go deeper: Listen as Mr. Zolli tells the story of how Hancock Bank, in Gulfport, Miss., improvised in the wake of Hurricane Katrina in a way that helped residents during a very difficult time—and improved the bank’s fortunes.

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A University of the People student from Haiti (Photo courtesy of University of the People)

University of the People has an ambitious goal: to use the Internet to provide an extremely low-cost college education to students around the world. And the nonprofit’s big idea is starting to gain traction with grant makers.

The Bill & Melinda Gates Foundation has awarded $500,000 to support the university’s effort to gain accreditation. The grant comes on the heels of recent awards by the William and Flora Hewlett Foundation, the Intel Foundation, and the Ewing Marion Kauffman Foundation.

Since its inception in 2009, University of the People has enrolled 1,500 students from 132 countries. Courses are taught by professors from around the world who volunteer their time, and the university offers degrees in business administration and computer science.

“If you educate one person, you change his life,” says Shai Reshef, the technology executive who founded and leads the university. “If you educate many, you change the world.”

While University of the People uses the Internet to deliver courses, the organization takes a straightforward, no-bells-and-whistles approach to technology.

“Since we wanted to make sure that any person with any Internet connectivity will be able to study with us, we don’t require broadband,” says Mr. Reshef. “So we don’t have audio, and we don’t have video.”

An online discussion forum for a University of the People course

The wide variety of ways that students gain access to the Internet has surprised even the university’s leaders.

Some students take part using dial-up connections at home, while others study from Internet cafés. To cut down on Internet café charges, some students download classroom materials to a flash drive, study and complete assignments on an offline computer, and then return to the Internet café to upload their work. Some students rely entirely on mobile phones for their Internet access.

“We didn’t know it was possible, and then one of the students showed us,” says Mr. Reshef.

The one place where University of the People provides the Internet connection for students is in Haiti. There, the university is working with local charities to provide computer centers to help 250 earthquake survivors complete their studies.

Seeking Sustainability

University of the People does not charge tuition, but it does require some fees. The application fee ranges from $10 to $50, depending on the student’s country of residence. Applicants from developing countries pay less.

Starting in September, the university will charge a $100 exam-processing fee for each course. Students who cannot afford it will be able to seek contributions from donors to cover the fees on a Kiva-like Web site the university is developing or apply for a University of the People scholarship.

“The theory is that nobody will be excluded for financial reasons,” says Mr. Reshef. “But we still expect our students to help us become sustainable.”

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Information from beneficiaries can help organizations improve their programs and spark new ideas for fighting tough problems. For real-world examples of charities using client feedback to strengthen their programs, read an opinion piece from The Chronicle’s current issue.

Too often, nonprofits are uncomfortable asking clients what they think about programs and fail to appreciate the value of their feedback, argues Mr. York. Instead, he says, charities prefer to ask employees for their comments and suggestions, and hire outside evaluators.

“Self-reporting has gotten such a bad rap,” says Mr. York, “and the entire private sector would just guffaw at this.”

Customer Satisfaction

Businesses, he says, are relentless in their efforts to gauge customer sentiments. When for-profit health-care systems want to know how well they’re performing, they ask patients, says Mr. York.

“You put that same health service in the nonprofit sector,” he says, “and now you’ve got to hire someone to observe and gather secondary data and do everything possible because we can’t trust that they’ll tell us whether they feel better.”

Charity officials are reluctant to own up to their discomfort with client feedback, says Mr. York, who says he sees it when his company is hired to evaluate nonprofit programs.

“The minute I start saying I’m going to survey and interview and hold focus groups with your recipients, they’ll say they like it,” he says. “But now all of a sudden, you’ve got a lot of chefs in the kitchen going, ‘No, you can’t ask that.’ It’s really a challenge.”

And that’s unfortunate, says Mr. York: “What our field pejoratively labels self-report is the most unbiased data you’re going to get.”

Go deeper: What do you think? Join The Chronicle on Tuesday, July 10, at noon U.S. Eastern time for a live online discussion about how charities can seek feedback and new ideas from the people they serve.

In Nairobi, a similar group worked on a system to report election results in real time,  including incidents of election violence and accusations of voter fraud.

In Toronto, others worked on a system that could allow Nepali women to send ultrasound pictures via mobile devices.

All of them were volunteers, willing to lend their technological expertise to nonprofits and causes.

These projects and others were part of the “Random Hacks of Kindness” weekend, a twice-yearly, 36-hour work session for designers, programmers, and technology experts to solve problems facing nonprofits and other organizations interested in doing good. The  most recent events, held this month in 25 cities worldwide, drew 900 participants, according to organizer SecondMuse, a consulting firm that works with companies and individuals on better ways to collaborate.

The event spawned from a 2009 “crisis camp” in Washington that focused on ways technology could help in natural disasters and other humanitarian crises, says Elizabeth Walker Sabet, a consultant at SecondMuse and an organizer of Random Hacks. At that event, employees of Google, Microsoft, Yahoo, the World Bank, and NASA, decided to work together to start regular “hackathon” events to put ideas in to action.

The Federal Emergency Management Agency joined in support and helped create software at the first Random Hacks of Kindness event that was later used to help Haiti and Chile following earthquakes in those countries.

From there, the events grew.

“The community really took over,” says Ms. Sabet. “There was an outpouring of interest from all over the world.”

Groups in different cities have gathered for six weekends—one in June, one in December each year—generating about 229 solutions to 444 proposed problems. The events are entirely paid for with donations from private sources and organized by local volunteers, helped with logistics by SecondMuse.

Local groups of technology experts are always looking for problems to solve, Ms. Sabet says, and are happy to work with nonprofits. All those groups need to do is submit their problem online and be prepared to do some work to sketch out what they need.

During the weekend of the hackathon, nonprofits work with the technology experts to explain more about what problem they need to solve to help guide the solution.

“That’s what gets people so excited about volunteering their time,” says Ms. Sabet. “The most rewarding thing we consistently hear back from the programmers is, ‘It was so amazing to be able to work with this nonprofit that knows the situation on the ground.’”

In the video below, Ms. Sabet explains how nonprofits can get involved with a local Random Hacks of Kindness weekend.

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