Fadi Ghandour's Next Investment: Building a Future for Arab Social Entrepreneurship

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Fadi Ghandour's name has been synonymous with Arab entrepreneurship. In 1982 he established Aramex as an express operator for the Middle East and South Asia, and it became the first Arab-based company to trade on NASDAQ in 1997. He is also a founding partner of Maktoob, the Arab/English Internet portal that Yahoo! acquired in the fall of 2009 for US$85 million.

Now, Ghandour is stepping away from the CEO seat to take on a new role, joining a growing group of social entrepreneurs attempting new business models in the region that blend profit with social impact.

Having long promoted entrepreneurship in Arab countries, Ghandour spoke with Arabic Knowledge@Wharton about Ruwwad for Development, his first step in social impact efforts, in addition to a broader discussion about what's next for social enterprise in the MENA region.

An edited transcript of the conversation follows.

Arabic Knowledge@Wharton: For those who are not familiar with Ruwwad for Development, could you please provide a short description?

Fadi Ghandour: Ruwwad is a private sector led, non-profit community empowerment organization that helps disadvantaged communities through youth activism, civic engagement and education.

We started Ruwwad for Development (which means Entrepreneurs for Development) in Jordan in 2005 by initiating an ongoing dialogue with the community of Jabal Al-Natheef, a severely marginalized urban area of approximately 75,000 residents in the heart of East Amman, Jordan, to identify the needs of the youth, children and the community. We have now expanded to Egypt, Palestine and Lebanon.

Seed funding from Aramex and myself initiated the first project. Then it became an independent organization backed by several private sector entities and entrepreneurs. Ruwwad's model is based on a network of partnerships between the private sector, civil society organizations, target communities and government.

Ruwwad's Mousab Khorma Youth Education & Empowerment Fund (MKYEF) provides students with university scholarships in exchange of volunteering hours every week back into their own community. The volunteering hours are recycled into three main programs targeted at youth, children and the community. It uses a community organizing methodology that supports grassroots leadership development.

Arabic Knowledge@Wharton: How successful has Ruwwad been in achieving social impact? How do you measure the impact?

Ghandour: The impact is measured in different ways. Some of the data is available. But it is also measured in the number of companies and volunteers from the private sector we manage to engage, where the private sector decides to take an active approach to development and invest in their communities. Executives run some programs such as the enrichment program from the private sector, volunteering their time to transfer knowledge and business skills to youth.

Impact is also measured by the employment placement of youth and jobs being created by budding entrepreneurs. One of our students started a company and employs 12 people today. So we also created a micro-venture fund to invest in these new businesses to create employment opportunities rather than just try and place them in jobs.

Our "Six Minutes" reading campaign that aimed to encourage reading beyond school textbooks several minutes a day for pleasure also exemplifies impact. The campaign, led by teachers, youth, and librarians, has created 160 organizers and 23 teams, organized 6,620 public readings and has mobilized 4,463 adults and children who pledged to read alone or collectively.

Arabic Knowledge@Wharton: There's been a lot of talk about social enterprise in India, Africa, and the U.S. But, the MENA region hasn't been as closely associated with social enterprise. Why do feel that is? Are you seeing any changes on that front?

Ghandour: Social entrepreneurs in the Arab World have very much been the story we have been talking about for the past few years, but many choose a different picture when looking at the Arab World.

Anyone who cared to look would have noticed the great social entrepreneurs popping up in the region, from Kamal Mouzawak in Lebanon enabling the small farmers through Souk el Tayeb to Raghda Al-Ebrashi's Alashanek ya Baladi working on employability skills and micro-finance in poverty stricken areas in Egypt, and the social enterprise incubator Nahdet el Mahroossa providing support to the upcoming social entrepreneurs.

In Jordan, we have seen the work of Maher Kaddoura and his great impact on the sharp drop in fatalities and injuries caused by accidents through Hikmat road safety. There's also Rawan Barakat and her audio books for the visually impaired through Raneen Media, Rabee' Zureikat and the cultural tourism and exchange of values with the villagers through Zikra.

We also have Riwaq in Palestine, which engages local communities to preserve Palestinian heritage, and Dalia Association, which creates women empowerment programs and village funds to support projects designed and implemented by the local communities in Palestine. The list is very long.

With the [regional] changes in the past 18 months and with Arab youth requesting change on every front, we will see more social entrepreneurs emerging, taking ownership of their own futures and communities and addressing the challenges they are facing. This could be by creating their own opportunities and jobs or creatively addressing challenges related to health care, education and other services. This trend will continue to grow.

Arabic Knowledge@Wharton: In the U.S., we're hearing more about "Impact Investing," that is, investors taking on more "risky" investments with the belief that it'll have a long-term social and financial return. Do you see this taking place in the Middle East?

Ghandour: In the Arab region, we see a nascent impact investment scene. The ecosystem is starting to form but is still at the very early stages and much more needs to be done. Investors need to take more risks and look for long-term value and results.

We are also seeing several funding mechanisms private equity, venture capital, angel investment, microfinance

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