THE

One week. Creativity for poverty. Gumball 2007

CHALLENGE
The Gumball Challenge

An entrepreneurial microfinance benefit com-

petition launching in November 2007. One week. Creativity for poverty.
Start a team or join one. Register online. In
one week, create value with a $27 loan and 27
gumballs.

At the end of the week, any profits go to loans

for the working poor in developing countries.
THE
What will YOU do with 27? GUIDEBOOK
The Gumball Challenge is a project of: What will YOU do with 27?

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 BASES Social E-Challenge
Buca di Beppo
Fraiche
Hobees
Kiva
Pizza My Heart
PrintPower
Stanford Entrepreneurship Network
Wrike Our Vision

Gumball Capital’s ultimate goal is to inspire entrepreneurship for

The Stanford Organizing Committee
thanks the organizations above for their
generous support of the Challenge.
social change. With the Gumball Challenge, we’re trying to raise
awareness of microfinance among students.We hope you learn a little
about microfinance during the Challenge, and take the excitement
of being entrepreneurial to any future activities you pursue!

2 IMAGE CREDITS: Kiva.org (p.13, 15), sxc.hu (p. 8: lusi/Sanja Gjenero; p.10: spekulator/B S K; p.16 dime:
asolario/Alicia Solario, penny: Nbauer/Nathan Bauer; p.19 glasses: doctor-a), flickr.com under Creative
Commons license (p.16 bamboo: beggs/Brian Jeffery Beggerly; p.17 basket: Scott Robinson).
 FAQ Table of Contents
Q: Why 27?
A:We’re glad you asked! (Everybody does; that’s the point.) In 1976, The Gumball Challenge Guidebook 4
MuhammadYunus lent $27 to 42 poor working women in Bangladesh. A Short Note to You
He later started the Grameen Bank, which has now loaned billions Participating in The Challenge
to over 5 million poor women. Yunus and the Grameen Bank were
jointly awarded the 2006 Nobel Peace Prize for their “efforts to Want to compete? 4 easy steps: 6
create economic & social development from below”. 1. Grab a group of friends or classmates (or join an existing Team)
2. Sign up online
Q: Why gumballs? 3. Brainstorm: what will you do with 27?
A: It’s the idea of a gumball machine: you put in a small amount of 4. During the week: be creative, post updates, shoot video
money (say, a quarter) and a gumball rolls out (of poverty, perhaps).
And in the process, the other gumballs move closer to the exit
The Rules (If You Want Your $27 & 27 Gumballs) 9
chute. In the same way, microfinance empowers individuals to lift
1. Sign up by the deadline
themselves out of poverty, and can help those around them as well
2. Do a bit of extra work on Team formation
through employment opportunities or new services.
3. Fill required Team roles
Q: What happens if our team doesn’t return the $27?
A:The Team Captain and Loan Officer agree to take full responsibility Microfinance Material 12
for returning the loan, and we expect them to follow through. The Gumball Fund
About Kiva
Q: Do we have to return the gumballs? The Story of Muhammad Yunus
A: No.
Gumball Challenge FAQ 18
Q: Who’s running the Challenge?
A: Your wonderful local Organizing Committee! And Gumball
Capital, a nonprofit started by Stanford students. Check us out at
www.gumballcapital.org.

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 A Short Note To You
Dear Gumballer,
We’re excited that you’re joining us for the Gumball Challenge, a
microfinance benefit competition.The idea is simple: entrepreneurial
teams create value in one week, aided by a microloan of $27 and 27
gumballs. Teams give any profit to a microfinance-related cause.
We hope the Gumball Challenge gives you an opportunity to
learn more about microfinance. Don’t forget to read the section
“Microfinance Materials.” We were inspired by Kiva and Mohammad
Yunus, and we’re sure you’ll feel the same way.
If you do make money for a microfinance-related cause, it’s also a
chance to empower entrepreneurs around the world so they can
ensure their own success.
Finally, we hope you seize this opportunity to develop your own
creativity and entrepreneurial spirit. After all, that’s the goal:
“Creativity for Poverty.”
Sincerely,
Stanford Organizing Committee
& Gumball Capital, Inc.
Unleashing of energy and creativity in each
human being is the answer to poverty.
–Nobel Peace Prize recipient Muhammad Yunus
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FAQ
Q: What’s the Gumball Challenge again?
A:A one-week microfinance benefit competition, where participants
create value with a $27 loan and 27 gumballs. It’s being run at 5
schools this pilot year, including Stanford, UC Berkeley, St. Olaf,Yale,
and Sewanee.
What can you really do in just one week?
A: An amazing amount. Let’s see... body ads for student groups?
Health kits for the dorm? Neon hairdye booth? Wii Sports with
Michelle Wie? (OK, you’ll need her permission.) Pranking services?
Gumball Assassins? (And these aren’t even the good ones.)
Q: Can we use anything besides the $27 and 27 gumballs?
A: Yes. You don’t have to use the $27 and 27 gumballs, and you can
use any other resources at your disposal. We don’t want to restrict
your creativity--the 27&27 are meant to be inspirational.
Q: When I recruit people, they say they’re not creative and
don’t have any ideas for what to do. What should I say?
A: Tell them to stop being delusional. Also, they don’t necessarily
need an idea of their own-- many people with ideas are looking for
others to help with their idea, and want them on their team.
Q: Can we do ______ for the Challenge?
A: Yes! As long as it’s not illegal or unethical, we’re excited to see
how creative you can be.
 Yunus found 42 people in all—stool makers, basket
weavers, rickshaw drivers, and more—in similar
Participating in The Challenge
situations. In fact, they needed a combined 856
taka, or less than 27 US dollars. And Yunus loaned
them the money. Anyone can participate in The Challenge
The Grameen Bank
by signing up for a Team online at
To finance additional loans,Yunus went to a nearby bank and signed www.gumballchallenge.org.
as guarantor of poor borrowers without asking for collateral from
them. His work laid the foundation for the Grameen Bank, established
in 1983, a bank devoted to serving the poor of Bangladesh. Gumball Capital provides a $27 microloan and
In creating the Grameen Bank, Yunus ignored the conventional
27 gumballs (27&27) to teams that meet a few
wisdom that prevented poor people from receiving loans. Grameen’s basic requirements (see “The Rules” below),
original methodology on banking for the poor, “microcredit,”
included several innovative features to help borrowers succeed.
via your local Organizing Committee.
Since its inception in 1983, the Grameen Bank has grown to serve
over 78,000 villages with its 2,400 branches. The Bank has provided
over 6.3 billion dollars to 7.2 million borrowers, and boasts a loan
recovery rate of 98.6 percent. Today, more than 250 institutions in
nearly 100 countries operate microcredit programs based on the Gumballs

27
Grameen methodology.

A Nobel Peace Prize Recipient

In 2006, Muhummad Yunus and Grameen were jointly awarded the
Nobel Peace Prize for their “efforts to create economic and social
development from below.”
Dollars

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 Want to compete? 4 easy steps The Story of MuhammadYunus

1
Grab a group of friends or classmates (or join an
existing Team)
Our version seem a little too Disney? Read about it for yourself!

In 1976, the citizens of Bangladesh were suffering from a three-

year-long famine. A man named Muhammad Yunus decided to lend a
First come the people. Grab a group of your friends or classmates
helping hand— with just $27.
who want to be on your Team and convince them to join you. Or,
just look at the existing Teams online and see if you recognize the
Traveling to the nearby village of Jobra, Yunus
names of anyone whose Team you’d like to join.

2
Sign up online
Join An Existing Team
Go to www.gumballchallenge.com, sign up, and browse through
existing Teams. Make sure you know someone on the team already; if
not, contact the Team Captain so they know who you are! Someone
(anyone) on the team must Verify you after you sign up.
Form A New Team
Go to www.gumballchallenge.com, sign up, and create your Team.
Then have everyone else on the Team sign up and join the Team
you’ve created. Click “Verify” next to a Team member’s name after
they sign up if you want to confirm they’re on the Team. This lets
them edit the Team profile and post Team updates, just like you can.
That’s it!
Important: You must choose a microfinance-related cause to support
when forming a new Team. Your Organizing Committee has listed a
cause they trust. If you decide to give to a different microfinance-
related cause, write it in here.
encountered Sufiya Begun, a 21-year old mother
of three. Though Sufiya spent her days crafting
beautiful bamboo chairs, she was hardly able to
earn enough money to feed herself.
Yunus discovered Sufiya’s reliance on middlemen, or paikars, to get
the bamboo she used to make her stools. Each day, Sufiya borrowed
bamboo from these paikars for five taka, roughly twenty-two cents.
But in order to afford the bamboo, Sufiya was forced to sell her
stools back to the paikars for a fixed price of five taka and fifty
poysha, earning her a profit of two cents each day.
As Yunus remarked in his book Banker to the Poor, “The existing
economic system made it absolutely certain that Sufiya... would
never save a penny and would never invest in expanding her
economic base. I had never heard of anyone suffering for the lack of
twenty-two cents.”

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 About Kiva 3
Brainstorm: what will you do with 27?

Need some help jumpstarting the creative process? Here are

some ideas we’ve come up with (may require more than just 27
How it works
gumballs):
Kiva “lets you lend to a specific entrepreneur in the developing
world, empowering them to lift themselves out of poverty.”
Host an Event
• Host a Pingpong/foosball/pool tournament, with fee for entrants
Kiva is an nonprofit that allows anyone to lend money
• Gumball Games: e.g., Assassins (but with gumballs).
via the Internet to the working poor in developing
• Have a photography contest and sell the best prints. (Try Zazzle.
countries. It makes this act of microlending easy
com.)
and transparent in a way that has attracted over
130,000 individuals: that’s the number of people who
Provide A Service
have lent a combined $13 million to developing-
Thuan Nguyen Thi, kiva.org • Sell ‘Cold Care Kits’ with tea, cough drops, chicken noodle soup, etc.
Long My, Hau Giang,Vietnam world entrepreneurs as of October 2007.
• Offer a consultation as an interior decorator/organizer for dorm
rooms.
Watch a video of microlending in action
• Give a massage with gumballs.
One inspiring anecdote comes courtesy of New York Times
reporter Nicholas Kristof. Kristof used Kiva to lend to Abdul Satar
Do Something Crazy
Muhammad Rajab, a baker in Afghanistan. He later flew to Kabul
• Trade your gumballs for a house (Google “One Red Paperclip”)
to meet Abdul and found that Abdul Satar had opened a second
• Print post-its that say “I pledge $$ for microfinance” and solicit
bakery using the loan provided by Kristof, with plans for six more
funds. Gumball Capital raised thousands of dollars in just a few
bakeries.
days doing this!
For more on this amazing story, check out Kristof’s “D.I.Y. Foreign Aid”
video at this link:
Provide A Service
http://video.on.nytimes.com/?fr_story=feedroom186917 Gumball Games Cold Care Kits

Photography
Contest
Do Something
Crazy
Host An Event

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4
During the Week: Be Creative, Post Updates,
Shoot Video
When Gumball Challenge week arrives (Nov. 27 - Dec. 3rd at most
schools in 2007), put your creative engines to work!
Visit www.gumballchallenge.com frequently to:
• Post Team Updates on your activities
• Fill out your most recent income and expenses, if any
• See what other Teams are doing!
Important: Your Organizing Committee will use Team Updates
when awarding prizes, as will Gumball Capital when determining
Competitor Team awards in several categories, including “Riskiest
Idea that Succeeded,” “Most Spectacular Failure,” “Best Microfinance
Advocate”, and “Most Money Raised.”
Shoot photos and videos of everything you do and share them with
your Organizing Committee. Gumball Capital will use these to make
some cool documentaries about the Challenge.
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The Gumball Fund
The Gumball Fund is a permanent pool of capital that makes loans
to the working poor.
Students participating in the Gumball Challenge can give their team’s
profits to any microfinance-related cause, and The Gumball Fund is
one option.
Purpose
The Gumball Fund is a permanent pool of capital that makes loans
to the working poor, through Kiva. (For more on Kiva, see “About
Kiva.”) When loans are repaid, the money is automatically lent out
again. The Gumball Fund gives students an easy way to engage with
microcredit, since it displays real names and faces of microloan
recipients funded with loans largely contributed by students.
You can find all the developing-world entrepreneurs that the
Gumball Fund has loaned to here:
http://www.kiva.org/lenders/gumballcapital
History
A group of students at Stanford University participated in the
EntrepreneurshipWeek Challenge at Stanford University in February
of 2007 and won the competition by raising
$3000 in pledges from over 300 students
in just three days. (They printed Post-Its
pledge notes and went around talking up
microfinance.) The collected money was
used to start the Gumball Fund.
 Microfinance Materials
Microfinance is the practice of providing financial The Rules
services to poor people. It may include services
such as loans, savings, and insurance.

Microcredit, or microlending, is the practice You must agree to the following

of providing small loans of money (microloans)
to poor individuals who would not otherwise
be served by a traditional bank because of their
unprofitability.
Philip Otunga, kiva.org
guidelines for your team to receive
Migori, Kenya
your $27 microloan and 27 gumballs.

MFI (microfinance institution): An organization that provides If you don’t want these resources, you
microfinance services. They usually charge higher rates than
traditional banks, but far less than the alternatives available to the can still participate by signing up online as
poor, e.g. loan sharks. More than 7000 now exist worldwide. described above.
Important Nuances to Remember

• Microfinance is not a “solution” to poverty. It’s one very effective

tool among many.
• Muhammad Yunus, as much as we love him, did not “invent” or

!!
“start” microfinance.
• In our writing we sometimes use the terms “microfinance”
to refer to “microcredit” for simplicity’s sake. See “Terms &
Definitions” for an accurate explanation of both.
• There are valid criticisms of microfinance. We don’t claim to
be experts, but we believe the upsides have far outweighed the
downsides.
• Curious to know more? Go out and read about microfinance
for yourself.

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1
Sign up by the deadline
The exact deadline is determined by your local Organizing
Committee, to give them enough time to figure out how much
money and how many gumballs they’ll need to provide.
Important: If you sign up online after the deadline passes, you can still
participate.You just won’t receive your 27 gumballs and $27 loan.
2
Do a bit of extra work on Team formation
1. Figure out who’s going to be the Team Captain and who’s going to
be the Loan Officer. (See below for explanation of these roles.)
2. While creating your Team online, you must select an Organizing
Committee. They will contact you to arrange pickup details for the
27&27.
3. Your Team must be verified by your local Organizing Committee.
Each OC has its own policy on verification; you may want to contact
them if it isn’t clear. Once they verify you you’ll have a “Verified”
badge on your online Team profile. (Hooray!)
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3
Fill required Team roles
A minimum number of two responsible Team members is required
to receive your $27 loan and 27 gumballs, one Team Captain and
one Loan Officer. There is no maximum limit on team size.
Team Captain
The Team Captain acts as the primary point of contact for the
Organizing Committee. He or she is ultimately responsible for
leading a fun, safe, and entrepreneurial experience for their team.
Required duties for Team Captain:
• Provide email address and phone number to the Organizing
Committee Captain
• Make sure Team Updates are posted at least once each day at
www.gumballchallenge.com.
• Personally post one final Team Update within 48 hours after the
Challenge ends, containing a summary of the team’s activities for
the week, and the total amount of money spent and raised.
Team Loan Officer
The Team Loan Officer manages money-related activities. This
should include collecting receipts and recording income/expenses.
Required duties for Team Loan Officer:
• Sign the Team Loan Officer’s Contract online.
• Receive and keep track of daily income and expenditures (if any) by
posting Team Updates with income/expenditure fields filled out.
• Return the $27 loan and profits to the Organizing Committee
Loan Officer
• If profits are donated to a separate microfinance-related cause of
the team’s choice, the Team Loan Officer must a submit donation
receipt to the Organizing Committee Loan Officer.
Your team may need to assign other roles as necessary.
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