Article II: Social Ventures in Africa: What can go Wrong? by Brian Ray Dinning, social venture lawyer

Article 2:  Social Ventures in Africa:  What can go Wrong?

By:  Brian Ray Dinning, JD, LLM and Social Venture Lawyer

June 29, 2012

Sometimes committing your life to a worthy cause like social ventures comes with many challenges and obstacles such as:  differing world views, different goals and objectives (especially from banks and investors who have financial goals rather than the founders and social venture partners who generally have charitable and social goals as well as financial goals), the unpredictable nature of people and a limitless host of other complications and factors.  Business and social ventures are hard work – let alone business and social ventures in Africa, where resources, personnel and supplies can be scarce and corruption, violence and theft are rampant.

 

The US Government published that over 50% of all businesses started in the US fail within the first five years.[1]  New Venture Lab – Equipping Christian Entrepreneurs, quotes interesting statistics from Harvard Business School noting that the failure rate of businesses can be as high as 95% (depending on how you define failure).  Their website, quoting a Harvard Business professor, provides:

 

“Most companies fail. It’s an unsettling fact for bright-eyed entrepreneurs, but old news to start-up veterans. 

 

But here’s the good news: Experienced entrepreneurs know that running a company that eventually fails can actually help a career, but only if the executives are willing to view failure as a potential for improvement.

 

The statistics are disheartening no matter how an entrepreneur defines failure. If failure means liquidating all assets, with investors losing most or all the money they put into the company, then the failure rate for start-ups is 30 to 40 percent, according to Shikhar Ghosh, a senior lecturer at Harvard Business School who has held top executive positions at some eight technology-based start-ups. If failure refers to failing to see the projected return on investment, then the failure rate is 70 to 80 percent. And if failure is defined as declaring a projection and then falling short of meeting it, then the failure rate is a whopping 90 to 95 percent.

 

“Very few companies achieve their initial projections,” says Ghosh. “Failure is the norm.”[2]

 

 

While this is the reality for businesses in the United States, a University of South Africa study indicates that the rate of small business failure in South Africa can be as high as 80%.[3]  MIT and other business schools note that the failure rate of social ventures will likely follow that of other for-profit businesses.

 

The challenge is to continue working to improve the lives of the 400 million people living on less than $1.25 per day in Africa regardless of past failures or challenges.  As Nelson Mandela states, “The greatest glory in living lies not in never falling, but in rising every time we fall.”  Quoting Vinod Khosla, billionaire venture capitalist and co-founder of Sun Microsystems: “There needs to be more experiments in building sustainable businesses going after the market for the poor. It has to be done in a sustainable way. There is not enough money to be given away in the world to make the poor well off.”[4] Researchers on social ventures at Duke note that: “We live in an age in which the boundaries between the government, nonprofit, and business sectors are blurring. This blurring results from a search for more innovative, cost-effective, and sustainable ways to address social problems and deliver socially important goods, such as basic education and health care.”[5]

 

Furthermore, Dees and Anderson realize that social venture projects and social entrepreneurs focus on the social impact of social venture projects and business-minded people focus on the financial returns thereby creating complexity.  “It is extremely hard to make strategic decisions about resource allocation or practical cost/quality tradeoffs when the social impact of these decisions is nearly impossible to measure in an efficient, timely, and reliable fashion.  It can become all too easy to focus too heavily on the more familiar, tangible and straightforward economic measures of success.”[6]

 

Businesses including social ventures fail for many reasons.  A New York Times columnist notes the top 10 reasons for small business failure:

 

“1. The math just doesn’t work. There is not enough demand for the product or service at a price that will produce a profit for the company.

 

2. Owners who cannot get out of their own way. They may be stubborn, risk averse, conflict averse — meaning they need to be liked by everyone (even employees and vendors who can’t do their jobs). They may be perfectionist, greedy, self-righteous, paranoid, indignant or insecure. You get the idea. Sometimes, you can even tell these owners the problem, and they will recognize that you are right — but continue to make the same mistakes over and over.

 

3. Out-of-control growth. This one might be the saddest of all reasons for failure — a successful business that is ruined by over-expansion. This would include moving into markets that are not as profitable, experiencing growing pains that damage the business, or borrowing too much money in an attempt to keep growth at a particular rate. Sometimes less is more.

 

4. Poor accounting. You cannot be in control of a business if you don’t know what is going on. With bad numbers, or no numbers, a company is flying blind, and it happens all of the time. Why? For one thing, it is a common — and disastrous — misconception that an outside accounting firm hired primarily to do the taxes will keep watch over the business. In reality, that is the job of the chief financial officer, one of the many hats an entrepreneur has to wear until a real one is hired.

 

5. Lack of a cash cushion. If we have learned anything from this recession (I know it’s “over” but my customers don’t seem to have gotten the memo), it’s that business is cyclical and that bad things can and will happen over time — the loss of an important customer or critical employee, the arrival of a new competitor, the filing of a lawsuit. These things can all stress the finances of a company. If that company is already out of cash (and borrowing potential), it may not be able to recover.

 

6. Operational mediocrity. I have never met a business owner who described his or her operation as mediocre. But we can’t all be above average. Repeat and referral business is critical for most businesses, as is some degree of marketing (depending on the business).

 

7. Operational inefficiencies. Paying too much for rent, labor, and materials. Now more than ever, the lean companies are at an advantage. Not having the tenacity or stomach to negotiate terms that are reflective of today’s economy may leave a company uncompetitive.

 

8. Dysfunctional management. Lack of focus, vision, planning, standards and everything else that goes into good management. Throw fighting partners or unhappy relatives into the mix and you have a disaster.

 

9. The lack of a succession plan. We’re talking nepotism, power struggles, significant players being replaced by people who are in over their heads — all reasons many family businesses do not make it to the next generation.

 

10. A declining market. Book stores, music stores, printing businesses and many others are dealing with changes in technology, consumer demand, and competition from huge companies with more buying power and advertising dollars.

 

In life, you may have forgiving friends and relatives, but entrepreneurship is rarely forgiving. Eventually, everything shows up in the soup. If people don’t like the soup, employees stop working for you, and customers stop doing business with you.  And that is why businesses fail.”[7]

 

 

Aside from the ten reasons noted above, in my experience with social ventures in Africa, the ventures did not work out as planned because of differences in goals and objectives between the partners, tension between the profit-making side and the social aspect of helping people and outlandish, intentional and unprofessional (and sometimes criminal) behavior and actions of others which interfered with, delayed or handicapped the social ventures.

 

Of all the reasons for small business and social venture failure noted above, it would be the outlandish, intentional and unprofessional (and sometimes criminal) behavior and actions of others, which caused our social ventures in Africa to either fail, be delayed or become handicapped.  In order to fully illustrate this point and to tell my side of the story, I will publish this seven part series complete with documents, video, photos, letters and email.

 

In addition to documents, video, photos, letters and email, there are also witnesses to most or all of this outlandish behavior including from the perpetrators themselves.  While some of these people are looking forward to a day in court against me, they will have to take the witness stand (under penalties of perjury) and answer for their outlandish behavior and actions and, hopefully, they will understand how their actions harmed the social venture projects, other investors and donors and the local people of Africa.

 

 

Article 3 is entitled:  Social Ventures in Africa:  Wextrust Capital – The Good, the Bad and the Ugly.

 

 

 

 

 

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[1] Small Business Administration

[2] http://www.newventurelab.com

[3] Mabaso, NR, University of South Africa (March 2008).

[4] MIT Entrepreneurship Review: From the Lab to the Land: Social Entrepreneurs Explore Appropriate Technology Dissemination (Nov. 26, 2010).

[5] Dees and Anderson, Duke Social Entrepreneurship: “For Profit Social Ventures,” (2003).

[6] Id.

[7] Goltz, J., “Top 10 Reasons Small Businesses Fail,” New York Times (Jan. 5, 2011).

Article I: Introduction to my social venture work in Africa by Brian Ray Dinning, social venture lawyer

Article 1:  Introduction to my Social Venture Work in Africa

By:  Brian Ray Dinning, JD, LLM and Social Venture Lawyer

June 27, 2012

 

NOTE:  As I am writing this series, I have been wrongly accused of wire fraud related to social venture projects in Africa and face a trial in the United States.[1]  While I do not believe I have done anything criminal, that decision is likely in the hands of a jury of my peers and I hope and pray that truth and justice will ultimately prevail.  The purpose of this series is to tell my side of the story, complete with letters, video, emails, documents and all backed up by witnesses.  As a lifelong follower of Christ, I trust in God and his promises like John 8:32 “Then you will know the truth, and the truth will set you free.” (NIV)  I also want my wife, children and family to know that I did my very best to help as many of the 400 million poverty-stricken people of Africa as I could and I will work as long and as hard as I can to help them for the rest of my life. 

 

I also want my family, friends and others to know the truth behind the delays, slowdowns, obstacles and impossible situations we faced when doing social ventures in Africa.  While it has been disheartening at times and sometimes I just want to give up, I often think of men like Nelson Mandela, who endured years in prison only to be released to become the President of South Africa.  As Mr. Mandela states:

 

“Let there be justice for all. Let there be peace for all. Let there be work, bread, water and salt for all. Let each know that for each the body, the mind and the soul have been freed to fulfill themselves.”

NELSON MANDELA, speech, May 10, 1994

 

“The greatest glory in living lies not in never falling, but in rising every time we fall.”

 

NELSON MANDELA, Autobiography

 

 

My aunt and uncle were Christian missionaries in Africa and my family performed missions work in South Africa for over 35 years.  Brought up in a dynamic faith-based household, I was always taught that we must care for orphans, widows and the poor – and that everyone is born with a purpose in life.  As unlikely as it might sound, by the age of 10, I knew I wanted to be a lawyer, and I also knew that one of my purposes in life was to help people in Africa. It wasn’t until much later in life that I understood how I might combine those two ambitions.

 

I’ve been a practicing lawyer for 22 years and, up until recently, I’ve had a spotless record, full of accomplishments and commendations that have brought me and my family a great deal of pride.  As a tax and business consultant to energy and mining companies in 2011/2012, I was able to charge an hourly rate for consulting work of $400 and I am blessed to make a good living in the for-profit world.  In social ventures, you can also make a salary or work as a consultant but sometimes (most times) the pay is not as good.

 

I have had the privilege of traveling to Africa over 60 times, and in 1992 through 1994, I helped my professor at Georgetown University write a legal textbook on how nonprofit organizations can do for-profit social ventures, which is the foundation of the modern day social venture or social entrepreneurship project.  This work resulted in the legal treatise entitled, “Sanders, Partnerships and Joint Ventures Involving Tax Exempt Organizations” (Wiley & Sons 1994).

 

I started doing work for clients in Africa in 1994 and have been working on social venture projects in Africa ever since then.  These were missions-type projects where we would help build a church or community center, help with clean water, renewable energy, organic food and more.  In this work, I realized that the local people of Africa had dreams to become something more, to be connected to the world that existed beyond the boundaries they were confronted by – to also ensure that their children had a future.

 

So, I believe that I was blessed with the talents, ability and vision to look for innovative ways to help the local people in Africa to create jobs, income and a future.  This was – plainly stated – to look at their natural resources (land, water, wildlife, mineral rights etc.) and help them locate the tools (people, financial partners and education) to help them maximize those resources – by building a tourism lodge, starting a micro business or starting a minerals project.  This way, the local African people could achieve sustainability – meaning they could feed their families, afford to send their children to school and have food and clean water.  More importantly, when talking with local community elders, they overwhelmingly said they want to provide a bright future for their children.

 

Initially, in 1994, I was asked to go to South Africa with some filmmakers to do a reconciliation film entitled “The Final Solution” by filmmaker Christopher Krusen about the life of a dynamic lawyer turned missionary named Gerrit Wolfaardt.  This changed my life because Gerrit told me that “you must meet the heartfelt needs of the African people in order to talk to them about God, and missions work and micro enterprise.  A starving person needs to be fed first before all else.”

 

On this trip, I met John Coors, the youngest of the Coors brewery brothers.  John hired me as a consultant to help with his project “Golden Photon” – which was designed to create solar energy water pumping systems to provide clean water to the rural communities in Africa.  They also created a solar energy battery charging system to charge car batteries, which could be used, exchanged and reused by local people to power a light, radio or other electric appliance for their homes.  Both were designed as micro businesses and were ingenious social ventures.  These men, Gerrit Wolfaardt and John Coors, were pioneers in social ventures and I am thankful for the example they set for me.  With my recent research and writing on how non-profits can do for-profit ventures, I was perfectly suited to help them.

 

These were amazing times because the Apartheid Era had just ended a few months earlier and Nelson Mandela, jailed 27 years by the Apartheid Era as a terrorist, was now the President of South Africa at the age of 76!  The entire country was buzzing with life and hope – and expectations:  for example, Nelson Mandela promised that he would help provide housing for all people so tens of thousands of people living in the rural countryside moved into the cities expecting to be given a home – not understanding that such a promise would take decades to complete.  I met Bishop Frank Retief of the St. Johns Church of England in Cape Town, where eleven people were tragically killed in a church bombing by those loyal to Nelson Mandela in their struggle for freedom.  Such stories of loss and tragedy and yet miraculously the Government of South Africa switched control from all White to mostly all Black in a short span of months – and all without any bloodshed.  South Africa was a new nation and I was blessed to travel there several times a year from 1994 to the present.

 

In 1998, I met a man in Stellenbosch, South Africa, the wine country outside of Cape Town,  who had heard of our social venture work and asked if I would like to travel to a country in need, Central African Republic, and work at a National Park, Manova Gounda St. Floris National Park – a World Heritage Site in Danger.  From 1980 to 1999, the once rich elephant population dropped from 66,000 to 2,000 – all victims of poaching!  It is also one of the poorest countries in all of Africa and its population is being ravaged by HIV/AIDS.  After researching the country and the issues, I agreed to travel with him to Central African Republic in 1999.

 

Knowing that we needed a lot of help, I called Ted Turner’s office at CNN in Atlanta.  His assistant listened to my story and then told me to send a fax to her office.  Three days later, I received a call from Ted Turner’s office asking me to go to his newly formed UN Foundation in Washington, DC to meet with them.  In 1999 – 2002, I worked as a consultant for Earth Conservancy where we partnered with UNESCO and the UN Foundation in Central African Republic to manage three large National Parks including Manova Gounda St. Floris National Park. In 2001, Earth Conservancy organized a UNESCO and United Nations sponsored mission trip to assess the current state of the National Parks.  Headed by an intelligent and insightful woman named Elizabeth Wangari from UNESCO’s World Heritage Center, the trip and mission in May, 2001 was a great success and we had amazing adventures including several Presidential receptions with President Ange Felix Patasse.

 

We built two tourism camps to help create jobs and to teach the local community about conserving wildlife so that tourists would come to the untouched paradise.  There were many stories about life and death struggles with poachers, being held at machine gun point by soldiers, the amazing biodiversity and wildlife, walking on foot into a pride of lions, cannibals, naked pygmies and more.  As early as 2000, we heard of the terrible persecution of Christians in Southern Sudan.  In fact, it was the Sudanese soldiers who were the primary poachers in the National Park.  With all this land, millions of acres, I thought the National Parks would be a perfect place to also provide sanctuary for those people being persecuted in Southern Sudan – just across the border from Manova Gounda St. Floris National Park.

 

Based upon these visits, in 2000 and 2001, prior to September 11, 2001, I wrote several White Papers to the late Congressman Murtha asking the US Government to help in our Central African Republic work as the small country is surrounded by Libya, Sudan, Chad and Congo.  In meeting with the Congressman, I suggested that a peacekeeping and conservation mission would allow the US Government to post intelligence personnel so that these dangerous areas filled with terrorist training camps could be watched.  The White Papers were bounced around the US Congress and different government agencies and I met with many people but it was decided that since the US Government did not have a formal presence in Central African Republic that our Government could not help.  Tragically, we learned that many of Saddam Hussein’s terrorists trained just across the border from Manova Gounda St. Floris National Park.  I often wonder if these terrorists could have been detected or stopped earlier had we been able to establish an intelligence gathering post in Central African Republic, while also doing our humanitarian and wildlife conservation work.

 

But, as life always evolves and circumstances change, one week after our United Nations sponsored trip to Central African Republic, the military of the country staged a coup, President Patasse fled the country taking untold millions of dollars with him and most of the government officials we worked with were killed.  With the help of his friend Qaddafi (who I met in 2000 along with President Nicephore Soglo of Benin) and the Libyan and Congolese army, Patasse regained control of the country but a successful coup ousted him from power in 2003.  Ten years later, after a failed Presidential bid to become the President of Central African Republic again, former President Patasse died in Cameroon in February, 2011.

 

The sad story is that the people of Central African Republic, who live in a country filled with the most amazing natural resources, remain the poorest of the poor in Africa.  Also, the infamous warlord Joseph Kony and his rebel army are thought to be hiding out in those beautiful National Parks in Central African Republic still abducting children, raping, murdering and promoting terror.[2] Tragically, due to circumstances beyond our control, the work for the local poor in Central African Republic remains unfulfilled.  I often dream of that beautiful country and the people there and in Southern Sudan and wish I could have done more to help.

 

In 2002, my law firm was sponsoring The Shakespeare Theatre season of productions in Washington, DC.  I was asked to represent the firm at a gala banquet for the Shakespeare Theatre in Washington, DC.  There I dined with Justice Ruth Bader Ginsberg, Justice Rehnquist and the newly-appointed Head of Africa at USAID, Constance Newman, now Assistant Secretary of State for African Affairs.  Ms. Newman was fascinated by the social venture model of partnering for-profit and non-profit companies to promote community-based projects in Africa.  Ms. Newman asked that I meet with her staff at USAID and provide power point presentations and keep her updated with any progress.

 

At the same time, in 2003 and 2004, Dr. William Brown, a Fulbright Scholar and Ph.D Professor, and an innovative film crew worked with Earth Conservancy to produce two award winning HIV/AIDS education films work in Kenya and Tanzania with the United States Department of Defense.  The films focused on the true life stories of soccer stars and promoting education, testing and awareness of HIV/AIDS.  Winning awards at the Houston WorldFest film festival, the films achieved the goal of educating young people about HIV/AIDS and were shown throughout Kenya and Tanzania using a screen projector shown on bedsheets sewn together by a team who traveled from village to village.  Earth Conservancy stills works in Tanzania and I am working on the establishment of social ventures with Dr. Steven Kiruswa, Ph.D and Maasai warrior, at his home town near Mount Kilimanjaro.

 

Maasai Warriors:  Social Ventures in Tanzania and Kenya

 

In 2005, our social venture team was privileged to partner with several local Xhosa Tribal communities in South Africa to help them manage and sustainably develop tens of thousands of acres of beautiful oceanfront property.[3] Sotheby’s International Realty said it is the most untouched and beautiful coastal property remaining in South Africa.[4]  Because all of the small beach hotels were run by local white South Africans under a for-profit model – meaning they did not share any profits or ownership with the local people – our goal was to help the local community develop their own natural resources where the local people were actually partners in the projects.  This would allow the local communities to not only receive jobs and education but also potentially receive profit, if the projects succeeded.[5]  Through Earth Conservancy, we also participated in three missions trips to build a church and a playground for a local orphanage.  We also sent hundreds of bicycles, tons of food and clothing, soccer balls, medical supplies, computers and school supplies to the local people from clothing and bicycle drives that my wife and I organized.

 

As of today, I am still working as hard as I can for social ventures to help the poor in Africa.  In 2011 and 2012, I helped to pay the start up costs for several new social venture projects in organic farming, education and a wildlife refuge and I have not received any compensation for my efforts.  Furthermore, I started to pay back my past compensation from the social ventures to be discussed in this series.  My goal is to help the people in Africa and to do my best – along with other caring people – to create sustainable and successful social ventures in Africa.

 

Article 2 in the Series is entitled:  Social Ventures in Africa:  What can go Wrong?

 

 

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[1] See Attached Letter by Dr. William Brown to Asst. US Attorney Stephen Haynie dated January 30, 2012.  There are literally dozens of endorsement letters for the social venture projects from law firms, accounting firms, real estate professionals, construction companies, engineering companies, pastors, professors, the Government of South Africa, Municipal Government and the impoverished local communities we are trying to help with the social venture projects.

[2] See http://whc.unesco.org/en/decisions/2357/ and http://whc.unesco.org/archive/2001/whc-01-conf205-inf6f.pdf  and http://allafrica.com/view/resource/main/main/id/00020168.html.

[3] See Attached Endorsement Letter from Sotheby’s International Realty.

[4] See Attached Listing from Sotheby’s International Realty for Hole in the Wall and specifically   see page 8 to view the listing for the social venture project at Hole in the Wall.

[5] See Attached Legal Opinion Letter from Smith Tabata Law Firm dated September 1, 2008.

Introduction to Social Venture Projects by Brian Ray Dinning, social venture lawyer

Social Entrepreneurship in Africa: A New Business Model in a Blossoming Continent

 

By:  Brian Ray Dinning, JD, LLM and Social Venture Lawyer

 

 

June 21, 2012

 

 

“I’m encouraging young people to become social business entrepreneurs and contribute to the world, rather than just making money. Making money is no fun. Contributing to and changing the world is a lot more fun.”
       – Muhammad Yunus, Founder of the Grameen Bank

 

 

Social entrepreneurship is a partnership – it combines both social objectives such as feeding the poor, creating jobs, promoting education along with traditional business objectives of profit-making. Traditionally, an investor– like a Mega-Corporation—thinks of a project the same way a predator thinks of its prey. The goal is to extract as much capital as possible with little regard for the well being of the environment in which that capital lives. The new social venture model, recognizing that all boats rise with the tide, hopes to profit while making a “satisfied customer” of the environment. In plain speak, it means if we’re going to make money on business projects in Africa, then we must help the local people to create jobs, receive skills training and partner with the local Africans so that when and if we make profits from helping them develop their natural resources then we all share in those profits.  This is the first principle of social entrepreneurship and the first principle by which I guide my business ventures.

 

I have been privileged to work with social ventures in Africa since 1994 and have visited Africa as early as 1983 to visit my uncle and his family, who served as missionaries in Africa for 35 years. Following in the example my family set for me, I’ve been on three mission trips to Africa. These have been astonishing experiences that have left me grateful and happy to be able to help others. In my life, I’ve been blessed to help feed hundreds of children in Africa and to express my love and devotion to a beautiful people. By getting involved, even taking little steps, we can all touch people, helping to change the course of lives forever.  That is the essence of social ventures and social entrepreneurship – creating sustainability for the business, the employees and the local people – hopefully making a profit while doing good.

 

As you will see in my subsequent Series of Seven Articles, sometimes committing your life to a worthy cause like social ventures comes with many challenges such as: differing world views, oppositional goals and objectives (especially from banks and investors), the unpredictable nature of people, and a limitless host of other complications and factors.  Face it – business is hard – let alone social ventures in Africa – with at least half of all businesses in the United States failing within five years (a Harvard professor notes that up to 66% of all businesses fail from differing viewpoints between people in the start-up process).

 

However, helping those in need in Africa or elsewhere around the world is a cause worth fighting for and an opportunity for social ventures and socially-motivated organizations such as The Bill and Melinda Gates Foundation, Oprah Winfrey or The Grameen Bank to make a tremendous positive impact.  We can all help by getting involved in helping others in your own home, in your neighborhood or city or any other place in the world where people need a helping hand.

 

Africa, once known as “The Dark Continent” is a booming economic giant with abundant natural resources, growing economies and a rapidly expanding middle class. Not surprisingly, the business world is noticing. As Forbes states, “African economies easily rank among the most resilient in the world. In the middle of the 2009 global economic recession, Africa was the only region apart from Asia that grew positively at about 2%.”  And it will get even better in 2012. Africa is favorably positioned to become one of the fastest growing regions in the world, and according to the International Monetary Fund, economic growth across the entire continent of Africa will be an amazing 6% in 2012.

 

Africa remains, however, largely misunderstood.  The media and news networks generally focus their stories on the negative news:  the dictators, conflicts, pirates, health issues and more. This negative bias by the media has led to ignorance on the part of the people of the developed nations of the world to the vast and burgeoning investment climate in much of Africa.  Of course, as noted above, the mega-corporations are all jumping on the bandwagon long before the rest of the world catches up.  This is how the mega-corporations seize their market share and maintain dominance, through recognizing the emerging economies, market opportunities and consumer spending trends before the rest of the of this world, and pouncing.  Currently, much of their attention is focused on the emerging markets of Africa.

 

Africa also has 400 million people living on less than $1.25 per day.  The mega-corporations cannot and should not reap the benefits of the abundant natural resources of Africa without first addressing the heart-felt needs of the local people for nourishing food, clean water, an opportunity for a job and the basic necessities of life. It is this basic principle that separates the social venture and socially-responsible companies from the mega-corporations.  Thankfully, social entrepreneurship is an economic phenomenon that allows the global innovator to recognize an investment opportunity or market trend and capitalize on it utilizing a unique and solidifying arsenal of tools such as social venture capital, new business structures, growing social awareness, social media, non-profit support and grassroots entrepreneurship.  Examining the social entrepreneurship model as it relates to the role of the social entrepreneur in Africa – as an emerging trend in an emerging continent – and discussing the value proposition of the idea of partnering with – or supporting – social entrepreneurs in Africa is the goal of my research and writing.

 

Social venturers or social entrepreneurs see the “greater good” in working on projects that have both a financial and social business purposes.  As stated by some social venture pioneers, social ventures are revolutionary and are here to stay.

 

“Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry.”
- Bill Drayton of Ashoka

 

“Social entrepreneurs have existed throughout history. St. Francis of Assisi, the founder of the Franciscan Order, would qualify as a social entrepreneur — having built multiple organizations that advanced pattern changes in his “field.” Similarly, Florence Nightingale created the first professional school for nurses and established standards for hygiene and hospital care that have shaped norms worldwide. What is different today is that social entrepreneurship is developing into a mainstream vocation, not only in the United States, Canada, and Europe, but increasingly in Asia, Africa, and Latin America. In fact, the rise of social entrepreneurship represents the leading edge of a remarkable development that has occurred across the world over the past three decades: the emergence of millions of new citizen organizations.”
– David Bornstein – How to Change the World: Social Entrepreneurs and the Power of New Ideas

 

“We need to reverse three centuries of walling the for-profit and non-profit sectors off from one another. When you think for-profit and non-profit, you most often think of entities with either zero social return or zero return on capital and zero social return. Clearly, there’s some opportunity in the spectrum between those extremes. What’s missing is the for-profit finance industry coming in to that area. Look at the enormous diversity of the for-profit financial industry as opposed to monolithic nature of the non-profit world; it’s quite astonishing.”
  -Bill Drayton – Ashoka

 

Article I in the Series is entitled:  Introduction to my Social Venture Work in Africa

George Clooney on Sudan and Africa by Brian Dinning, JD, LLM

George Clooney on Sudan and Crisis in Africa

Call it a publicity stunt – but George Clooney put his life and reputation  on the line to help those in need in Africa.  Because of his activism more people know about the humanitarian crisis in Sudan today than they did yesterday, because of George Clooney’s arrest during a protest outside the country’s embassy in Washington.

Image 1 of 2

George Clooney arrested Photo: REUTERS

Like George Clooney, I have dedicated my life to those in need in Africa.  My beliefs come from my dedication to the service of God and to my beliefs from the Bible which tells us to care for the orphans, the widows and the needy.  So, like George Clooney, I, Brian Ray Dinning, will work to help as many people in need in Africa as I can – even if this means the loss of reputation, the loss of liberty or imprisonment by an injustice system or people or the loss of my life.  

Because some things are more than a belief.  Our great Nation and its Founding Fathers believed this to be true.  Nelson Mandela, the great freedom fighter from South Africa, believed this as well.  The care of the poor, the widows and orphans of Africa is a fight worth fighting for.  The life of a child is precious – whether in the US, Europe or Africa.  Hats off to George Clooney and his father for their convictions and sacrifice.  I only hope and pray that I can help the needy children and people in Africa with the talents, gifts and abilities that God has given me and I hope that others join with us in making our World a better place for all.

Brian Ray Dinning

An Inside Business Article about the Civil RICO Lawsuit

Lawyer sues investors and their attorneys

Posted: March 9, 2012

By Mary Flachsenhaar

mary.flachsenhaar@insidebiz.com

Attorney Brian Ray Dinning, a former Suffolk resident who has been sued numerous times by investors in his nonprofits, has responded by filing a complex civil case in Suffolk Circuit Court that names 10 defendants.

Among the charges listed by Dinning, who represents himself in the case, are defamation, libel, slander, as well as interference with business relationships and statutory business conspiracy that have injured Dinning’s business, professional reputation and future employment opportunities, according to the suit filed on Feb. 22.

The defendants include six individuals, from Hampton Roads and elsewhere, who have previously sued Dinning in an attempt to recoup money they invested in his nonprofit organizations; two attorneys who’ve represented some of those investors; and two residents of South Africa, the country where Dinning has been involved in work with the indigenous population and attempted development projects during the last 10 years.

In addition to Dinning, Pure Africa LLC, one of the many companies he created, is named as a plaintiff.

Dinning, whose most recent residence was in Somerset County, Pa., although it’s unclear where he lives now, declined by email to be interviewed for this story because of pending litigation.

In February, he appealed a May 2010 jury verdict in Norfolk Circuit Court that ordered him to pay more than $722,000 to a Pennsylvania couple who invested in his South African projects. Danny and Debra Murrill of Mechanicsburg, Pa., had sued Dinning on charges of fraud and breach of contract. The Murrills are named as defendants in the lawsuit filed in Suffolk by Dinning.

Dinning charges in the suit that, beginning in 2007, the 10 defendants and others began to conspire and enact an aggressive negative press campaign against Dinning and Pure Africa. The campaign extended to stories that appeared in Inside Business.

“Negative, false and libelous articles were published about Dinning through the concerted, planned and combined efforts of the defendants,” Dinning wrote in the suit.

Inside Business has published numerous stores about Dinning since November 2006.

Additionally, the lawsuit states that seven of the defendants “recklessly and maliciously filed frivolous complaints with the Federal Bureau of Investigation and other federal and state agencies including South African government agencies alleging that Dinning’s projects in South Africa do not exist and accusing Dinning of perpetrating numerous frauds against the Murrills and others.”

According to the lawsuit, Dinning has suffered physically, emotionally, psychologically and financially as a result of the negative actions of the defendants. The suit goes on to say his personal and professional reputation have been harmed; he has lost investors and donors; and his personal, family and church relationships have been damaged.

On all counts combined, Dinning seeks a total award of more than $30 million, punitive damages of nearly $2.5 million, plus interest, attorney fees and costs.

Several defendants contacted by phone or email either did not respond or declined to comment because they’d not yet seen the lawsuit.

In addition to the Murrills, the defendants include Jason Roper, the attorney who represented the Murrills in their case against Dinning; Allan and Maureen Stiner of Norfolk, whose lawsuit against Dinning was settled out of court; George Bowles of Williams Mullen, the Stiners’ attorney in the case; Steve P. Geller of Suffolk, who advised Dinning about building a golf course in South Africa; W. Granville Batte, formerly of Virginia Beach, who was involved in a suit against Dinning that was settled out of court; and Bossie Bosman and Jeff Brown, both of South Africa. Bosman at one time worked with Dinning on some of his projects. Brown writes a blog about South Africa’s Wild Coast, the site of some of Dinning’s proposed developments.

Jason Roper, who had a law practice in Virginia Beach until last year, now practices law in Pittsburgh with the firm of Blumling & Gusky. As a result of complaints brought against him by Dinning and Norfolk attorney Duncan Byers, who has represented Dinning in the past, Roper was suspended from practicing law in Virginia for three years. The Virginia State Bar Disciplinary Board cited misconduct and fairness to opposing party or counsel, among other violations. Roper said in an email he plans to appeal the suspension.nib

Thank you!

Thank you all for the kind support through calls, emails and comments about the lawsuit filed in the Suffolk Circuit Court in Suffolk, Virginia against the small group of collaborators in the aggressive negative press campaign against me and the social benefit ventures that I work on in Africa.

Thanks also to the Rico Law Blog for the write up on the lawsuit at ricolawblog.wordpress.com.

 

New Legislation designed to help “social ventures” by Brian Ray Dinning, tax lawyer

Passing unanimously in the Virginia House of Delegates is the new “social venture” vehicle called the “B Corporation” or “Benefit Corporation” which is a vehicle designed to promote the social ventures that I and others have been promoting in Africa and elsewhere around the world. With the structure of a corporation and some unique characteristics of tax exempt charitable organizations, this is the wave of the future with six States adopting similar legislation and up to 18 other states with laws in the works.

Interestingly, this movement stems back to a lot of original work by nonprofit guru, Michael I. Sanders. In helping him with research on “Partnerships and Joint Ventures Involving Tax Exempt Organizations (Wiley & Sons 1994), I learned the foundational work on social ventures which has culminated in the need for structures like Virginia’s B Corporation.

Please read the exempt from the Squire Sanders law firm website below:

As of July 1, 2011, Virginia becomes one of the early adopters among states that will permit social entrepreneurs to legally create a new corporate form known as a “benefit corporation.” This new form of corporate entity is intended to permit social entrepreneurs to codify their missions in their corporate charters. This permits the board of directors and management of a benefit corporation to pursue and take societal benefits and social goals into account in exercising their fiduciary discretion instead of being required to act strictly in the best interest of shareholders, a change that eliminates concerns over liability for breach of fiduciary duty under existing corporate law.

Pursuing Public Benefit

The law is modeled on a similar statute enacted by Maryland in 2010, and similar proposals are pending in a number of other states. Virginia’s legislation improves upon Maryland’s statute and makes Virginia the preferred jurisdiction for social entrepreneurs. Virginia’s benefit corporation statute, which is codified as Sections 13.1-782 to -791 of the Virginia Stock Corporation Act, requires that the corporation’s purpose include pursuit of “general public benefit.” The legislation broadly defines “general public benefit” to mean “a material positive impact on society and the environment taken as a whole, as measured by a third-party standard, from the business and operations of a benefit corporation.” However, it also allows benefit corporations to pursue specific public good purposes, including any benefit that serves one or more public welfare, religious, charitable, scientific, literary or educational purposes, or another purpose or benefit beyond the strict interest of the shareholders of the benefit corporation, such as:

Providing low-income or underserved individuals or communities with beneficial products or services;
Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;
Preserving or improving the environment;
Improving human health;
Promoting the arts, sciences or advancement of knowledge; or
Increasing the flow of capital to entities with a public benefit purpose.

The statute allows entrepreneurs to commit their for-profit ventures to a specific public good, requires directors and officers to take specified public good interest into account in corporate decisions and actions, and requires them to report on contributions to that goal and submit to auditing of their impact. The statute includes remedial provisions for shareholders to take action against directors and officers who fail to consider the specific public benefit in their decision making and actions. Having official “benefit corporation” status allows entrepreneurs to consider stakeholders such as employees, communities or the environment in business decisions.

Eliminating Risk of Lawsuits and Reducing Costs

Under existing corporate law, company directors may face lawsuits for acting on social objectives if contrary to the financial interest of shareholders, but this statute eliminates that risk. Social entrepreneurs have often faced difficulty fitting their hybrid missions of making money and doing good into existing business entity forms. The variety of arrangements historically utilized (e.g., nonprofits controlling for-profits) can be costly to set up and operate, and often limit the ability to raise money from outside investors. By allowing for the adoption of the “benefit corporation” form of entity, Virginia has permitted its economic institutions – in this case the laws that govern corporations – to keep up with the growing interest in the social enterprise sector.

Many expect that the new legal designation will unlock new capital for social ventures from investors who want to park their money in mission-driven companies.

Enacting the Law

Virginia Gov. Bob McDonnell (R.) signed the bill on March 26, 2011 at the end of Virginia’s legislative session. The bill, sponsored by Democratic state delegate Jennifer McClellan, passed Virginia’s Senate unanimously and passed the House of Delegates by a vote of 97-0.

The last great coal reserve in Africa by B. Ray Dinning tax lawyer

That is why I have been telling members of my Profit Hunter investment service about one forgotten corner of Africa that is emerging as the world’s new energy hotspot.

You see, the former Portuguese colony of Mozambique is sitting on the Southern Hemisphere’s biggest coal reserves.

In fact, this may be the last great coal reserve in the world.

And demand for coal among energy companies and steel producers is soaring…

So those reserves are suddenly receiving a lot of attention.

The sums involved are huge…

And here at Profit Hunter, we have found a backdoor way to get a slice of the action.

The last great coal reserve in the world

Mozambique isn’t one of the first places that comes to mind when you start thinking about investment opportunities. But the former Portuguese colony on the east coast of Africa offers huge opportunities for savvy investors.

The Moatize basin in the country’s remote Tete province may be the last untapped great coal reserve in the world. Moatize holds an estimated 2.5 billion tonnes of coal. That’s enough to keep producing for decades to come. And demand is set to keep rising.

Coal is already the world’s biggest source of energy for electricity production. And it will be the second fastest growing source of energy after natural gas between now and 2030.

So there is a real investment opportunity here.

Just consider: China is building new coal-fired power plants at a rate of about one per week! And then there is India. Asia’s other giant plans on adding more than 400,000 Megawatts of new capacity by 2030 – and the bulk of that is going to be powered by coal. So, the coal story still has a long way to go.

Because coal isn’t just a vital source of energy. It is also crucial for the production of steel.

And that has attracted some of the world’s biggest companies.

The world’s biggest iron-ore producer has invested…

Brazilian steel giant, Vale do Rio Doce, will spend $1.4 billion to build a giant coal mine at Moatize. And production is set to begin by 2011. The mine is expected to produce 8.5 million tonnes of coking coal and 2.5 million tonnes of thermal coal a year. So it serves both the steel and energy industries.

That could eventually rise to as much as 40 million tonnes per year. And there is enough coal in there to keep the mine going for the next 25 years.

Vale is the world’s biggest iron-ore producer. It supplies more than a third of the world’s iron-ore exports. So the sheer size of their investment in Moatize tells you how big a profit opportunity they have spotted here.

And so has the world’s biggest steel producer…

But Vale isn’t the only one trying to get its hands on Mozambique’s coal. Steel giant Arcelor-Mittal bought 35 per cent of the Rio Minjova company, which owns coal exploration rights in Tete. And it’s got the option to become the majority owner if exploration proves successful. Arcelor-Mittal is the world’s biggest steel company. It is controlled by Britain’s richest man – Lakshmi Mittal.

Then there is India’s Tata Steel. These are the chaps who bought Anglo-Dutch steel company Corus in 2006. Now it has teamed-up with Australia’s Riversdale Mining and is carrying out a feasibility study to produce coal from land on which it holds rights in Mozambique.

Welcome to Africa! B.Ray Dinning Tax and Business

INTERNATIONAL TAX PARTNERS

Practice Profile for Brian Dinning, JD, LLM (tax)

Brian Dinning’s has practiced international and domestic tax, business and mergers and acquisitions law since 1990.  Today, Mr. Dinning’s consulting practice focuses on domestic and international business entity taxation including corporate, non-profit, partnership and joint venture tax law, mergers and acquisitions, and business transactions.

Mr. Dinning advises clients on the formation, structure and taxation of business ventures, start-up enterprises and joint ventures between the tax-exempt and for-profit corporation. He has structured several multi-million dollar domestic and international joint ventures.  With specialized expertise in energy, energy tax credits and domestic and international energy transactions, Mr. Dinning represents small to large energy clients with tax credit opinion letters, energy ventures and tax credit syndication.

Mr. Dinning represents a diverse spectrum of clients: corporations; partnerships; limited liability companies; universities; energy and renewable energy projects; high-technology ventures; health-care entities; charitable and educational organizations; contractors and developers; syndications; and private individuals. He has assisted in tax administration and litigation at the federal, state and local level. He specializes in domestic and international tax and corporate planning.

 

Education

LL.M in Taxation, Georgetown University Law Center, 1993

J.D.  Regent University School of Law, 1990
B.A. Grove City College, 1987

Bar and Court Admissions

District of Columbia

Virginia
United States Tax Court
United States Court of Federal Claims

Points of Distinction

Mr. Dinning has structured numerous international companies and multi-national joint ventures including several for a Fortune 500 Company in the energy industry. This work includes traveling with the client, conceiving and organizing the business structure, negotiating the terms of agreement with the boards and/or officers of the foreign participant, leading a team of domestic and international lawyers, accountants and business advisors in drafting the agreements, solving any problems and closing the transaction.

Mr. Dinning has extensive experience in tax credit transactions under Section 29, Section 42, Section 45 and other energy related tax credits and tax incentive transactions.

Mr. Dinning’s experience in structuring the business activities of domestic and international organizations includes setting up asset protection strategies, tax minimization structures, international business entities, offshore trust companies, tax-haven manufacturing entities and licensing agreements.

Mr. Dinning was one of the key attorneys representing the developers of the Gallery Place/MCI Center Development providing guidance on District of Columbia Tax Exempt Bond Financing.

Finally, Mr. Dinning was the sole attorney in the merger of two Tax Law Specialty Law Firms in Washington, DC, which included negotiating the transaction, preparation of the tax-free merger documentation and closing the transaction to a successful conclusion.  Mr. Dinning has presented for several international charities to their major donors and has performed extensive and complex charitable, tax and estate planning for the major donors.  Clients include three universities, international charities, large hospital and international social venture organizations.

Activities

Mr. Dinning served as an Adjunct Professor of Law at Regent University School of Law in Corporate Taxation, Business Planning. He has been Guest Lecturer on Non-Profit Organizations, Charitable Trusts and Mergers and Acquisitions.

Publications/Speeches

Mr. Dinning has conducted research and writing on non-profit organizations including significant research, drafting and editing of a treatise entitled, “Sanders, Partnership and Joint Ventures Involving Tax Exempt Organization,” (John Wiley & Sons 1994) and the First Supplement. This treatise is used as the primary textbook for non-profit organization at both Georgetown and George Washington LL.M programs.

Mr. Dinning was a Guest Speaker at the World African Growth Opportunity Act Conference for the U.S. State Department in Washington, DC and Dakar, Senegal. The topic was “Beyond Micro Enterprise: Structuring Social Entrepreneurship Ventures.”

Mr. Dinning was a Guest Speaker for the U.S. Department of Commerce on “Doing Business in Africa:

Structuring Partnerships and Joint Ventures that work.”

Previous Work

Mr. Dinning worked at law firms in Washington, DC, Maryland and Virginia. Mr. Dinning was a Federal Judicial Law Clerk to the Honorable Paul T. Baird, United States Claims Court in Washington, DC. Mr. Dinning also served as a Staff Attorney and Senior Staff Attorney at the United States Court of Federal Claims.

Brian Dinning is an an avid photographer, safari enthusiast and world traveler who seeks to work with other cultures and people groups to create a safer, more green friendly world.

Brian Dinning has been working on an innovative sustainable resources and development model for use in developing countries around the world and especially in Africa.

Brian Dinning’s goal is to promote sustainability, professionalism and good stewardship in our project areas of expertise.

Brian Dinning works as a consultant to promote Sustainable Resource Development in Africa.  The Toronto Globe named this the “Century of Africa” and Africa has become the world focal point in this century.

Brian Dinning provides consulting and development services in three main areas:

*    Resource Security including Food and Water Security

*    Green Energy and Sustainable Development

*     Legal, Tax and Business Consulting Specializing in Africa