Stephanie Strom of the New York Times is out with an overview of the Unitus/SKS story. Her story focuses on the interrelations between the two organizations and the IPO proceeds that Unitus will be receiving. For the first time, Muhammad Yunus, the father of microfinance and critic of for-profit microfinance approaches, weighs in on the Unitus situation.
From the story:
“The other nonprofit ensnared in controversy is a Seattle-based group called Unitus, which holds a stake in SKS that will be worth millions after the I.P.O. The group’s board shocked the nonprofit community this month by saying that all of the organization’s 40-person staff would be laid off and that Unitus would no longer be involved in microfinance activities.
…“If Unitus is closing down, that shows what is the real result of this I.P.O.,” said Muhammad Yunus, an economics professor who is considered the father of microfinance and has been critical of the SKS stock offering. “You are now encouraging the profit-maximizing part, and the nonprofits are closing down.”
…Omidyar Network [a big Unitus donor] had been concerned enough about the structure of the Unitus board that last autumn it paid for a study by a management consultant. According to two former Unitus executives, the study concluded that some directors had too many nonprofit and for-profit roles with Unitus — particularly one, Geoffrey Woolley, who was chairman of the investment fund running Unitus’s profit-making investments and was an investor in those funds and in SKS.
Mr. Woolley resigned from the board last fall, but Mr. Grenny said he would now be brought back to help plan Unitus’s future beyond microfinance. Mr. Woolley declined to comment.
…The unwinding of Unitus stands in contrast to the way Acción, another nonprofit group that focuses on microfinance, handled a $140 million windfall from the 2007 public offering of the Mexican microlender Compartamos. Acción, which still holds a 9 percent stake in the Compartamos, has used the money to expand its microfinance operations, and its executives and directors had no investments in the operation.”
You can read the full story here. A graphic showing the history of the SKS and Unitus is here. A graphic showing where the IPO money is going is here.
As I announced yesterday, I spoke with Geoff and he will be writing a guest post here at Tactical Philanthropy describing Unitus’ side of the story and his plans for the Unitus to tackle a new area of “maximum social impact”.