Unitus Update

Unitus has sent out an email to supporter that helps clarify their reasons for exiting microfinance. I may have more to say about the topic later, but today I want to give Unitus the opportunity to tell their side of the story.

Dear Unitus Donors:
On July 2, having accomplished our initial core mission, Unitus announced a major change in strategic direction. A decade ago, Unitus established two interrelated primary goals: (1) to bring commercial funding into the worldwide microfinance marketplace, thus greatly increasing the amount of money available for loans; and (2) help demonstrate on three continents that microfinance organizations can be scaled to serve hundreds of thousands of clients at the bottom of the economic pyramid.

Now, with $50 billion of microfinance capital available to more than 150 million of the world’s working poor—and a large and a growing community of philanthropic and (now primarily) commercial microfinance institutions serving this previously greatly underserved market—we feel the time is right for Unitus to seek out other transformative fields of endeavor.

Accordingly, going forward Unitus will no longer initiate new microfinance partnerships. We will honor all existing obligations and commitments to existing MFI partners, then move on to new high-value activities. With many fine organizations now serving this space, we are confident that MFIs will continue to increase and improve their activities of making capital available for microloans.

Unitus is not a conventional charitable organization. Our goal from the outset has been to identify promising young ideas (such as microfinance) and help them rapidly demonstrate their full potential. The Unitus board and many of our donors support this creative, innovative and risk-taking approach to improving our world. When we started ten years ago, microcredit was still somewhat of an experiment.

Today the commercial microfinance model has been validated and—as we envisioned—powerful commercial players are doing far more to expand access than Unitus ever could.
Because of this unusual approach and our recent announcement, we know many of you have questions. It’s our intent to be completely open and transparent with you. We also always appreciate your input, ideas and feedback as it helps us sharpen and refine our focus.

Is Unitus shutting its doors?

No. We are redirecting our efforts from our focus on accelerating microfinance to new areas where we hope to make new transformational impacts on reducing global poverty, in areas we are currently exploring. As a result, we are winding down our current organization, which was built to support dramatically accelerating access to microfinance. After completing our existing microfinance-related obligations, we will refocus Unitus in one or more exciting new directions.

Is charitable/philanthropic involvement in microfinance no longer relevant?

There are still many people in the developing world who would like access to microfinance services, especially where the commercial case has not yet been made. In these areas, donor dollars may still be required to demonstrate viability. And there are now many high-quality permanent players in this field. Some examples include ACCION, Opportunity International and Grameen. We are confident that these and other organizations, along with the influx of funds from the capital markets, will successfully fill this role within the next decade. This enables Unitus to shift our focus to addressing other pressing needs of the global poor that have received far less attention and require creative and innovative approaches that we are uniquely suited to provide.

Why was this change so abrupt? How long has Unitus’ board been considering this decision?

The announcement may seem abrupt, but Unitus leadership has been considering strategic options for a number of months as it became clear that our original goal of attracting commercial capital to microfinance was reaching a tipping point. In the end, the path we took and our timing represented something of a balancing act. On the one hand, we wanted to wait until we had a high level of confidence that we have done what we needed to do in order to ensure that our strategic partners were on a solid footing. On the other hand, once we had arrived at a definitive decision, we felt a fiduciary responsibility to right-size our expenditure of donor capital while ensuring that we had met our legal, financial and moral obligations to our partners and employees. The reality is that significant changes like this always feel abrupt when they are announced. We are sorry that we could not make this announcement feel less abrupt.

When was this decision made by Unitus board? Was it unanimous?

Our ultimate decision was made in the final weeks before our announcement. All members of the board agreed that this was the right decision.

Who did Unitus board consult before making this decision?

We have consulted with many Unitus stakeholders—friends, founders, investors and donors—about possible future directions. This decision incorporates the many diverse views generated by these conversations.

Is there a problem with microfinance—a financial bubble or something?

We don’t focus most of our energy and efforts on prognostication. However, we (in consonance with the reasoned analysis in The Economist and that of many other credible observers) do not see signs of a global bubble brewing in microfinance—notwithstanding the unavoidable individual anecdotal cases of over-borrowing and over-lending. That said, we and our partners have always strived to follow sound fiscal policy and due diligence processes, which we feel should be incumbent upon all lenders—not only for their own sake but also that of their borrowers. Most of our partners, and many more MFIs in the industry, are following sound lending practices (such as those outlined by the SMART Campaign).

Why are you letting go of the Unitus team? Aren’t there at least some people who make sense to keep on for Unitus 2.0?

The board’s view is that the directions we are exploring will not require an organization of the current size and shape. This downsizing has been without question the most painful decision we have made. Our employees are extraordinary, which doubles the pain. The fundamental reality is that the outgoing Unitus staff—bright, talented and passionate—was built for our focus on accelerating access to microfinance.

We are trying to balance what we feel is our moral obligations to our staff with what we see as our fiduciary responsibility to preserve as many resources as possible for new strategic initiatives that will have the greatest impact toward sustainably reducing global poverty. All employees are offered severance pay commensurate with their job and the length of time they’ve been with Unitus. Going forward, we feel that the most responsible thing to do is to gauge our human resource needs as the strategic direction of Unitus 2.0 evolves, and fill them on a case by case basis with the best possible people for that direction—whether or not those individuals are former Unitus employees.

Will Unitus be involved in accelerating financial services for the poor or something else? Will Unitus continue to work in India? Africa? Other places?

Our core underlying purpose of improving opportunity and quality of life for the world’s working poor remains unchanged. The Unitus Board is currently considering a variety of strategic opportunities throughout the developing world, including India, Africa and other important areas. Our primary goal/mission is still to maximize the socio-economic impact for those currently not being served by current solutions in the marketplace. As we solidify our direction, we will be providing further updates and announcements.

How will the remaining Unitus charitable resources be used/spent?

100 percent of monies donated to Unitus will be used for our charitable mission of reducing global poverty and enabling economic self-reliance. In the short-term, some resources will be used to complete our obligations to microfinance partners and to efficiently wind down the microfinance-related operations of Unitus. The remaining funds will be allocated to new philanthropic strategic initiatives determined by the board in keeping with our mission of reducing global poverty. As always, we will continue to be completely transparent in the ultimate uses of the dollars our donors have entrusted to us.

Who is helping create the new vision for Unitus?

We are fortunate to have strong founding board members and current or former board members deeply involved in this process: Joseph Grenny (board chair), Mike Murray (former board chair), Bob Gay, Tim Stay and Dave Richards. Geoff Woolley—a former board member who has been instrumental in much of the innovative work Unitus has done—has agreed to be actively involved. In addition, we are partnering with senior members of the Unitus team—and with many of you.

Please know that it has been a tremendous honor for us to collaborate with you in working to empower and improve the lives of so many working poor individuals and families through microfinance. We are inspired by your generosity and enlightened good will, and deeply committed to maximizing the effect for good of your contributions. As we envision Unitus 2.0, we welcome your insights and would be honored to continue to work with you.

All the best,
Joseph Grenny
Chairman of the Board


  1. Tim Ogden says:

    I remain curious on two important points:
    1) How will Unitus “meet its existing commitments” without any staff?

    2) As noted in the beginning of the email, the clearly stated goals of Unitus involved microfinance–that’s what donors were giving to, not general poverty alleviation. So are Unitus’ donors all happy that their funds will be repurposed to the broader goal? How many of them were consulted? Given the puzzled reaction of large donors like Omidyar Fund it doesn’t seem like very many of them were.

  2. Tim Ogden says:

    Yes–very interesting that in the Holtzman article several of the statements in this email are contradicted, namely:

    1) the consulting of donors other than those on the board
    2) that this option had been considered for a long time
    3) that the decision was truly unanimous

  3. Anonymous says:

    Where was the “moral obligation” to the staff when letting them go? Since this was in the works for quite some time, why would you not have let your “dedicated” team know they were going to be laid off? I can’t fathom how this team must feel. Quite frankly, there WAS no moral obligation whatsoever. I think Unitus should be ashamed of the action taken in regards to the staff layoffs.