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Name: Ted Shabecoff
College: Wesleyan University
Class Year: Sophomore (Class of 2016)
Major: College of Social Studies (Interdisciplinary major of history, government, economics, and social theory)
Why He’s in Center Stage: Founder and CEO of The Germinal Fund
Social Media Fun-ness: Check out the website and Facebook page (or email Ted yourself!)

What is the Germinal Fund, and how did you come up with the idea?
The Germinal Fund is a campus-based not-for-profit that uses microfinance and pro bono consulting to empower low-income entrepreneurs.

Microfinance is a financial institution that’s been developed over the past couple of decades that was started by an individual named Muhammad Yunus in Bangladesh, and the theory is that if you provide low-income entrepreneurs with small interest loans, then they can create a business and become prosperous and better the lives of those around them and the community at large. So microfinance as a whole is this umbrella term, not just for lending but for insurance and business services. The idea is that if you extend these financial services that are normally used for larger companies and extend them to low-income people as a non-profit, then this is better than just giving aid, because it puts the power in their hands and it really takes into account the realities of economics and gives them the power to better their own lives.

I started the Germinal Fund this past summer because I noticed throughout freshman year that there was a lot of tension between Middletown (the town where Wesleyan is located) and Wesleyan based on our socioeconomic divide. One of the things that a lot of people remember from last year is that in October there was a series of scares with Middletown residents threatening students, and I think a lot of that fear comes from a lack of understanding and a lack of fear between the two communities.

Throughout high school, microfinance was something I studied and something I was interested in, and when I researched microfinance in the United States, I found (to my excitement) that it was not only something that had been used in urban communities but also by students at other colleges, such as Yale and Brown. I found that just donating some of their time to creating a not-for-profit microfinancing institution, college students have been able to affect the lives of disenfranchised people in their communities, so that’s something I decided to go for, and I thought it just made sense for Wesleyan students too.

Image courtesy of Lily Herman.

Image courtesy of Lily Herman.

What do you think has led to the rise of microfinance over the last five or six years?
I think that what contributed to the boom of microfinance was a new approach to looking at poverty in general. I think what we found within the past 20-30 years in foreign countries is that by just giving aid, it’s not that effective.

Taking the “Teach a man to fish” mantra, when you apply that to foreign aid, that makes a huge difference. Microfinance has been successful not because it gives aid but because it gives people the resources to better their lives themselves, and I think that recent successes from microfinance have really resonated. It’s a model that’s actually really appealing for use in the United States as well. The fact that a lot of young people are more attracted to the more practical uses of nonprofit has also made it a lot more viable.

What’s great about microfinance is that it’s sustainable; people can use the loan and pay it back to you, and it can be given out again and again. You’re not just temporarily helping people out; you’re creating this sustainable business with operations that are effective long-term. It’s not just idealistic; it’s practical too.

How do you think what you learned in high school or college has helped you with the work that the Germinal Fund does?
I’d say there are practical skills that you learn in college (such as organizing tasks and understanding time management and technology), but there are important other skills that Wesleyan teaches you, like thinking critically and quickly. The fun thing about being a member of the College of Social Studies program at Wesleyan is that you don’t have time to go in-depth with every single thing you read; you have to look at everything and synthesize the material from there.

In starting a small business, it’s important to know how to take all the resources at hand and figure out what you need to focus on; you need to know how to set aside the superfluous material. Additionally, another great thing Wesleyan teaches you is how to find creative solutions to problems. There are a million different great solutions to look at, and the rest of the job is trying to figure out which solution or combination of solutions to use. That really gives you the confidence to do things that people don’t think are possible for college students to do.

Image courtesy of Lily Herman.

Image courtesy of Lily Herman.

As you mentioned, you’re part of the College of Social Studies (CSS) program at Wesleyan, one of the most rigorous interdisciplinary majors that the university offers. How do you balance all of that school work with your Germinal Fund duties?
Balancing everything is something I’m still trying to learn! I think it’s a difficulty that a lot college students have. They say you have to choose between sleep, friends, and work, and I’ve probably been sacrificing my sleep a little too much these past couple weeks. But I think one really good trick to organization is treating everything like a job. By splitting up your time into CSS, Germinal Fund, and other things, it helps you make sure you’re not spending too much time on one thing and not enough time on the other. I really try to create a list of priorities, and hopefully I can finish everything.

What have been some of the biggest challenges that the Germinal Fund has faced so far?
One of our biggest challenges has been our age. Being college students, adults tend to think we lack follow through, and they think we have these grandiose ideas with no way of actually doing it. What I’ve found when we pitch this idea of microfinancing is that adults tend to think, at best, “Oh, that’s a cute idea…”

I do think that our age also gets to be this great opportunity because we’re young, we have energy, and Wesleyan has taught us to think outside the box. So all we have to do is apply that critical thinking we’ve learned and stick with it. Because we do have that energy and extra time, that’s what I ultimately think is going to make us succeed.


Image courtesy of Lily Herman.

Who are the other main members of the Germinal Fund, and what do they do?
What’s awesome about the Germinal Fund is that it’s entirely a collaborative effort, so early on, I got a group of really amazing students to come together.

Right now on the Executive Team, I have two other chief officers. There’s Adam Saul, who’s the Chief Financial Officer, so he’s bringing a lot of his banking experience to the table. There’s also Jason Bradner, who’s the Chief Marketing Officer, and he’s been instrumental in getting publicity for us in terms of getting us known within the Wesleyan community.

The way I see our organization working is that each client will ideally have two students working on one account, and because each client has two students concentrated so deeply on their case, there will be dedicated relationship there.

What advice do you have to high school students or college students who are looking to get into microfinance or just entrepreneurship in general?
With entrepreneurship in general, you really just have to take an idea and run with it, because you really don’t have anything to lose. Entrepreneurship is finding an eclectic mix of resources and meshing them together to make it work, so what I’d say is just flesh out your idea. Create a really detailed plan, and after that, harness your personal network. Talk to everyone about it; eventually, someone will know someone else who can help you. It’s something that’s really exciting, and as a student, you shouldn’t feel daunted by it at all. At worst, it’s not going to happen, but you’ll have gained a lot of experience in taking initiative. And that’s really what we need in our fast-paced world. So do what you want to do now instead of later!

Where do you see yourself and the Germinal Fund in five years?
I see the Germinal Fund as remaining entirely student-run. It gives students a great experience, and that’s something that is really appealing for me. So I’m really hoping that it’s strong and vibrant but that it stays in the hands of students.

Image courtesy of Lily Herman.

Image courtesy of Lily Herman.

Personally, I want to continue doing something that’s business-related or has something to do with social entrepreneurship. I would love to advise nonprofits on strategy, because I really like to look at things from a distance and see what’s working and what’s not. That’s just how my brain works, so hopefully I can have a job that requires a lot of critical thinking, because I want to continue using the skills I learned at Wesleyan to make a difference.

Author’s Note: My interview with Ted was conducted quite a few months ago, and due to some editorial circumstances, we weren’t able to get it on the site until now. Thus, Ted was awesome enough to provide me with an update on how the Germinal Fund has been going since I talked to him last fall:

Since its founding this past summer, the Germinal Fund has already been able to make impact in the Middletown community.  Over a dozen Wesleyan students have joined the Germinal Fund team, and have been trained in financial bookkeeping, business planning, and topics of strategic consulting.  We are currently working with four local business owners, designing websites, creating financial statements, and making business plans.  Thanks to the invaluable support of our partner organizations, the Germinal Fund has developed professional-quality pro bono programs to serve members of the Middletown community.  Consult Your Community introduced us to and directed us in strategic and operational consulting, while Lend for America gave us the tools to provide small, zero-interests loans of $500-$5000 to business-owners.  Representatives from the Capital Good Fund, a microenterprise loan fund based out of Rhode Island recently came to Wesleyan to certify student volunteers in personal income tax filing via the IRS VITA program.  In 2014, students will prepare dozens of tax statements, and will also be able to help sole-proprietors navigate the intersection between personal and business finances. 

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Image courtesy of Lily Herman.

The inspiration for our name, ‘Germinal Fund,’ comes from 19th century author Emile Zola’s most famous novel.  The title of the novel evokes hope of reform and change for the bitter lives of the coal miners in northern France.  From Latin’s “germen” or bud, “germinal” refers to the earliest stages of a development.  It is our hope that with your continued support, that we can germinate the seeds of social change, and realize a more prosperous future for all Americans. 

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the author

Lily Herman is a junior at Wesleyan University in Middletown, Connecticut. Besides bopping around on The Prospect, Lily is a columnist for USA TODAY College (read the Quad Report, yo); an editorial intern for The Daily Muse; a contributing editor for the campus blog Wesleying; a national contributing editor for Her Campus; and an editorial/marketing intern at HelloFlo. When she is not studying or awkwardly waving at people around campus, Lily enjoys eating Sour Patch Kids and re-watching the Friday Night Lights series finale (she's Team Saracen, by the way). Also (shameless plug alert), feel free to follow her on Twitter, or email her at lherman(at)theprospect(dot)net.

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