Using System Dynamics to Disrupt Nonprofits and Help Children in Poverty

Chris Penny is President and Founder of Broken Crayons and an entrepreneur. He also is a member of the MIT EMBA class of 2017.

MIT Sloan’s mission is to develop innovative and principled leaders who will improve the world. This resonated with me, as I’ve always had a desire to help impoverished children, especially in the developing world. However, it wasn’t until I started this program that I was able to turn my good intentions into an actionable plan, much less a plan that might even disrupt the nonprofit world.  
The key was utilizing the EMBA network, going to ‘see and assess,’ conducting small experiments, and learning from mistakes. In other words, I followed the MIT Sloan method for affecting change. Today, Broken Crayons has opened 15 businesses, which has positively impacted the lives of more than three dozen children in Ghana. Now, we’re scaling our approach to impact entire communities with plans to turn Broken Crayons into a self-sustaining organization.

Look for the root cause
The first step involved Systems Dynamics, which taught me to model the relationships in all parts of a system and how those relationships influence the behavior of the system over time. Applying this knowledge, I built models to identify the root cause of youths and poverty. The overarching question centered on how I could use simultaneous interventions to break the system of poverty.

Go see and assess
Another MIT principle is understanding the importance of observing the ecosystem you seek to impact. After connecting with a friend and former colleague Carl Dey, I decided to focus my efforts on the ecosystem of Ghana. The next step was going to ‘see and assess’ the ecosystem in Ghana.
Several of my classmates made the trip with me to Ghana. While there, we talked to government and tribal leaders, educators, parents, religious leaders – basically anyone who would talk to us about childhood poverty in Ghana. It became apparent that if we wanted to help kids, we needed to start by helping their mothers. If you tell a mother that she has a chance to get her child out of the slums, she will maximize the opportunity for the sake of her child.

The team then met with mothers – who were preselected by community leaders — with good hearts and vision for a better life. Their children were at risk of being kicked out of school for not being able to pay tuition. These women’s jobs involved walking up and down busy streets selling items like beans, pineapples and water bottles from containers carried upon their heads. Their goal was to simply earn 25-75 cents a day to feed their kids.

During follow-up interviews, we asked the mothers about their dreams. A typical goal was to own their own store, where they would sell their goods and make more money. Based on these observations and conversations, we developed a plan for our first pilot group.

Conduct Experiments

We selected seven mothers to participate initially. Our goal was to ensure that the children of the women we supported would be able to stay in school. By looking at poverty through multiple lenses, we decided to open businesses for each of the women. Additionally, we helped the women start a savings account, provided healthcare for their families, created professional and social networks, and taught them basic business principals.

All of this was provided at no cost to the families. Our urban empowerment model for the entire year in Accra, Ghana cost roughly the equivalent of $1,000 USD, including the construction costs to build a store.
The experiment was a success. Today, almost all the women have tripled their income, and their children are in school. They have become self-sustaining business owners, who no longer need funding from Broken Crayons. In fact, most of them are now helping the next group of women as mentors.

One woman perhaps summarized the impact best when she observed that her children now have enough food that you can “see their cheeks!” It is humbling to see these women thrive. All they needed was a door to be opened. For a minimal financial investment, we are starting to see the real possibility of generations changing.

Looking ahead

As we do more iterations of experiments, we’ll incorporate what we learn in future groups. Our goal is to make this a sustainable model, with the mothers eventually paying a portion of their profits to support future groups of women. If even 60% can pay back a portion of their income, it would have a multiplier effect. We hope that within 24 months, our role will just be as mentors, while the mothers lead the organization.
I credit MIT’s EMBA Program with providing the knowledge, models, and network to truly disrupt poverty. When you hear that a child’s cheeks are full for the first time in their life, that echoes everything that MIT Sloan’s mission stands for.

How can you use your business education to improve the world?

To learn more about Broken Crayons, click here.