Entretien avec Zoran Rajn, directeur général de Bona Fides Invest pour le magazine Entrepreneur
Interview with Zoran Rajn after the recent Assisi conference the Economy of Francesco (EoF), in which he actively participated.
Zoran Rajn is the founder and president of the Centre pour l'innovation sociale et le développement durable (CEDIOR) and CEO of the International Center for Crowdfunding (ICFC) based in Zagreb. He has been engaged in social innovation, social entrepreneurship and crowdfunding for more than 10 years.
He is active in the global movement the Economy of Francesco, whose meeting was held in September 2022 in Assisi under the auspices of Pope Francis, and which the media called the Pope’s Davos or the most important event in the world at the moment. The meeting was attended by scientists, social innovators and social entrepreneurs up to the age of 35 from 120 countries, with the aim of finding solutions to create a fairer, more inclusive and sustainable world.
Here are some of Zoran Rajn’s thoughts on the economy, society, entrepreneurship, values, innovation, poverty and the role of Pope Francis in the world.
About CEDIOR and other activities of Zoran Rajn…
The Center for Social Innovation and Sustainable Development (CEDIOR) is a social enterprise and international think-tank , founded in 2012 with the aim of creating and accelerating innovative and sustainable solutions for current social problems. Its portfolio includes almost 50 socially useful projects, and it cooperates with more than a hundred partners from the public, civil, business and academic sectors. As we have been dealing with the topic of crowdfunding since the very beginning, in 2019 we founded the International Crowdfunding Center (ICFC) with the aim of bringing crowdfunding closer to the general public. The work and social engagement of Cedior and ICFC are widely recognized by the public, media and government institutions in Croatia and abroad. The name Center for Social Innovation and Sustainable Development was chosen because sustainable development is the goal of our activities, and social innovation is a means of achieving that goal.
About the concepts of sustainability, social innovation, social entrepreneurship and crowdfunding…
Sustainability is the ability of a system to exist permanently without endangering itself, society and the environment. Social innovations are applied novelties aimed at solving social problems and creating the common good, for example, green technologies, innovative project financing models, new legal regulations, etc. Social entrepreneurship is a type of entrepreneurship where the profit achieved is primarily used to solve a social or environmental problem. In classic entrepreneurship, actors on the market compete to see who will make more money, and in social entrepreneurship, who will solve more social problems and create good for the community. In short, in social entrepreneurship, money is not a goal but a means. Crowdfunding is an innovative and democratic project financing model that involves the public presentation of a venture, usually via an online platform, and enabling citizens to invest money in it for altruistic reasons or with the aim of making a profit or gaining some other benefit. In doing so, it is possible to use several investment models: donations, purchase with time distance, loans, investment in ownership shares and investment in profit shares.
About changing the current economic model that is solely based on profit…
Technological progress has created the illusion of the success of modern society, but it is profoundly unsuccessful, perhaps the most unsuccessful ever, because there have never been better assumptions to solve the main social problems in a short period of time, and instead they continue to pile up. Figuratively speaking, today’s humanity is a technological giant and a moral dwarf. There are many alarming figures, but perhaps these are the most shocking. According to a UN report, a hundred plant and animal species become extinct every day. 94% of the world’s income is distributed among 40% of the Earth’s population. 50% of marine litter is single-use plastic, and every year 8 million tons end up in the oceans. There is currently enough to wrap around the Earth 400 times. 41 million children are killed annually by abortion, which is the biggest cause of death in the world. 30 million people are in a position of slavery. Every 10 to 15 seconds a child dies of hunger in the world. 20% of the world’s population is illiterate. 3.8 billion people live on $2 a day or less. The ratio between the income of the top and bottom 20 percent of the world’s population in 1820 was 3:1, in 1960 it was 30:1, and in 1991 it was 86:1. 1% of the total annual investment in weapons would provide education for all children in the world. This is the “normal” in which we lived until Covid and in which we will continue to live after it, unless we use the current crisis as a catalyst for change.
About models of economic reform in the footsteps of Pope Francis…
In today’s world, there are three business concepts. The first is that the company exists to make the greatest possible profit for its owners or shareholders regardless of the harmful consequences it creates. Another concept is that a company exists to generate the highest possible profit, but respecting the highest standards in protecting its own employees, clients, suppliers and society as a whole. The third concept is that a company exists to primarily solve social and environmental problems while achieving financial sustainability. This is the concept of social entrepreneurship that we mentioned a moment ago. The goal of such companies is not to make as much money as possible for their shareholders, but to do as much good as possible for society and the environment with the realized profit. Unfortunately, the first concept is still dominant around the world and many of the problems we face stem from it. Consumers need to develop awareness of the necessity of buying local and ethical products and services. In the system we live in, politics is a reflection of voters, and the economy is a reflection of consumers, and we need to be aware of the power and responsibility we have as voters and as consumers.
About his own economic outlook…
My economic worldview is shaped above all by Christian morality and social entrepreneurship. All projects launched by CEDIOR and ICFCF must meet our 4P acceptance principle – Pater, people, planet, profit, i.e., each project must be in accordance with God’s commandments, must be aimed at the good of people and the environment, and must be financially sustainable in the long term.
About the lessons that humanity can learn from the current corona crisis…
For Covid, the rule is that not all evil is for evil. The pandemic exposed numerous weaknesses of nation states and the international community. Awareness of these problems is a generational chance to create a better system. I will try to list a few of them. First of all, the focus is on coronaviruses. Experts dealing with animals have been warning for many years about the danger of coronaviruses, which are transmitted from animals to humans, because humans are spreading more and more, clearing forests and entering the habitats of wild animals. If we do not stop such an aggressive attitude, we are putting ourselves in danger of facing a new pandemic in the future. On the international level, it is necessary to develop crisis mechanisms, for example, to establish an international crisis fund into which members will periodically pay funds and use them in emergency situations, as well as to foresee clear sanctions for those members who do not timely submit information of importance to the entire international community.
Furthermore, at the level of international organizations, it is necessary to devote oneself to the creation of a “total book”, a never-completed project that will collect all practical knowledge on how to rebuild society in the event of a major natural disaster and include the learning of its content in national school curricula, because the institutional system it can fall apart a lot easier than we think. Today we are in an absurd situation. Knowledge increases every day at an incredible rate, we get more information in the daily newspaper than the average 18th century man heard in a lifetime, but as individuals we have extremely little knowledge of basic life skills.
As for nation-states, we have had the opportunity to see how long supply chains are fatal in situations like this, which is why it is important for each country to have its own food, energy and medicine production. Without it, it is not possible to talk about the sovereignty of any state. Also, we realized that we cannot keep all our eggs in one basket. Countries that rely on tourism and rentierism felt this especially. It is easier to minimize the damage with the existence of a diversified economy. Likewise, states should increase investments in health, science, digital transformation of public services, telecommunications infrastructure and public security services. Through the pandemic, we have also seen that the lowest paid occupations are crucial for the normal functioning of society, which is why they need to be revalued morally and financially.
When we talk about work, it should also be said that working from home has proven to be a possible concept that still needs to be nurtured, which can be a particularly valuable alternative for young parents so that they can spend more time with their children and strengthen their families.
In the end, we learned to appreciate more the freedom and social interaction that we take for granted, and it became clearer that God, homeland and family become the main supports in times like this. Evil is a sprinter, but good is a marathon runner. We can and must turn every bad situation in life into something good. I hope that we will be wise enough as a society to do this even with Covid, after which we have a chance to become better people.
On the economy of Pope Francis…
The idea of the event The Economy of Francesco is that participants create solutions to create a fairer, more inclusive and sustainable world. 2,000 scientists, social innovators and social entrepreneurs up to the age of 35 from 120 countries participated in the event. The selection process was demanding, and the participants who achieved notable results in their fields were selected. The participants were divided into twelve groups, and during the three days of the event, each group presented its own recommendations that it had been working on for the past year. It is important to emphasize that the end of the event on Saturday is not the end, but the beginning of the whole story, because the cooperation between the participants and the activity organizations will continue. It is a well-known thought that no problem can be solved at the same level of consciousness that created it, and that is precisely why it is crucial that young people are involved in finding solutions to important social issues. I am personally active in two groups – Finance and Humanity and Work and Care.
About the pontificate of Pope Francis and his role in the world…
I see the Pope’s pontificate in accordance with the name he chose. When we say Saint Francis, the first associations for a Christian are the poor, peace, nature and animals. Pope Francis acts accordingly: he helps the poor and the needy, points out social injustices, fights for a Church devoid of luxury and open to believers, encourages peace and dialogue between religions and peoples, and draws attention to our duty to treat nature and all beings as good stewards and guardians of all that God has entrusted to us. I especially appreciate the Pope’s simplicity, humility and gentleness, which I consider to be the qualities of truly great people and leaders. In the context of the problems of contemporary society, Pope Francis is the right man in the right place at the right time.
About the poor and excluded…
When we talk about poverty, it is necessary to point out that there are two types of poverty – material and spiritual. Material poverty is a state in which a person or community lacks enough material and financial resources to meet their basic existential needs, and spiritual poverty is a state in which an individual or community lacks virtues to meet the moral standard set by God. Both types of poverty are fatal and need to be fought against, and this can mainly be done through better education, better spiritual education and moral literacy of society, tax policies, more accessible sources of financing and encouragement of social entrepreneurship. The eradication of these two types of poverty is the fundamental mission of Cedior and ICFC.
About the advantages of crowdfunding over other sources of financing…
First of all, crowdfunding is a democratic and affordable source of financing. There are many examples where companies started their development with financing through crowdfunding, because they could not get money in any other way, and later grew into large companies. With every source of financing, certain problems often arise. For example, with EU funds, the problem of co-financing often arises, where the project owner must provide 20 to 50% of his own participation, and the problem of pre-financing, where the project owner is granted 100% of the grant, but with the condition that he finances the initial phase of the project with his own funds and then justifies them. When financing projects from the state budget, the problem of bureaucratic obstacles often appears, and when it comes to bank loans, the problem of collateral.
Walt Disney, before getting a loan for his cartoon project, was rejected by 121 banks because he could not offer collateral. Business angels and investment funds, on the other hand, invest in a very small number of specific projects that have the potential for quick and high returns. At the beginning of the year, I had the opportunity to visit a German venture capital fund that invests only in social entrepreneurship. They receive more than 500 projects a year, and invest in only 2 to 3, with the lowest investment amounting to 500 thousand euros, and their goal is to sell their business share and exit the project in the next five years.
The next advantage of crowdfunding is that the financial risk is dispersed among many people, so if the project fails, no one bears significant financial consequences. Likewise, the crowdfunding campaign enables validation of the idea and market testing before incurring large costs. This also helps business angels, investment funds and banks to get a better picture of the risks for themselves if they are hesitant to invest in a project. In addition to the listed financial benefits, there are also marketing benefits. The preparation and implementation of the campaign serves as excellent advertising and a means of gathering the social community around the project, creating a loyal customer base, attracting media attention, getting feedback and new ideas for business improvement.
Finally, in the case of donation, prize and lending crowdfunding, the project remains 100% owned by the holder, which is not the case with business angels and investment funds.
About the banking sector…
Banking is not popular in society, but if the business is approached correctly, it can indeed be noble and ethical. As much good as a doctor can do for a man’s health, so much can a banker do for his finances. Bankers should not only be sellers of money, but also doctors of human finance. This is exactly why I am a supporter of ethical banks that have a socially responsible approach to the client, refuse to sell a banking product if it is not in the best interest of the customer, make the community financially literate, provide services to vulnerable groups, offer favorable credit programs to meet the basic life needs of citizens, avoid non-purpose consumer lending that is dominant among conventional banks, they invest in small and medium-sized enterprises that empower the local community, especially in ecological agriculture, renewable energy sources, green innovations and social entrepreneurship, they avoid investments in fossil fuels, weapons production, gambling and industries harmful to human health and the environment , they support start-up entrepreneurs with capital, knowledge and networking with other stakeholders in the market, they give employees uniform salaries without bonuses and penalties for sales results because they encourage bad treatment of clients and product sales, they transparently present their investments and operations, and the goal of their overall business is not maximization profit for its shareholders, but the maximization of benefits for its clients while achieving financial sustainability and creating financial reserves in case of future economic disruptions in the market.
When we talk about banks, I want to point out that Father Ante Gabrić, one of the greatest Croatian missionaries who died in the name of holiness while working with St. Mother Teresa, in India in the middle of the last century, he developed a rice bank that helped the poor in the fight against moneylenders, and he also initiated a number of other social innovations, for which more than 50 years later some were awarded Nobel Prizes. Cedior and ICFC will establish an award in his name for social innovation in the fight against poverty and social exclusion.
About artificial intelligence and crowdfunding…
Cedior and ICFC are working on the development of big data software that collects and processes large amounts of data and draws useful conclusions about the riskiness of crowdfunding campaigns. On the one hand, this will help project owners to detect weaknesses in their project, better prepare the campaign and attract more investments, and on the other hand, it will help investors to more easily recognize high-risk projects and manage their money more efficiently. The software will not autonomously make decisions about risk, but will serve as a supplement to the expert evaluation of the appraiser. In the whole world, no one is doing it except us. In addition, we are working on the development of the Crowdfunding Encyclopedia, a digital database of all knowledge about crowdfunding, based on user input and artificial intelligence. In addition to the fact that users will be able to edit it like Wikipedia, the Encyclopedia will create and collect the latest crowdfunding content based on AI software .
Just as at the end of the films there is an inscription that not a single animal was killed for the purposes of the film, so we also like to point out that not a single job was and will not be lost for the purposes of developing our AI software. In fact, new jobs will be created. With the application of artificial intelligence, the issue of jobs will develop in two directions. On the one hand, new jobs will be created that will require new knowledge, as in the case of Cedior and ICFC, and on the other hand, some jobs will be extinguished, especially repetitive ones. The most resistant to shutdown will be those workplaces that will ask for creativity, empathy and complex motor skills.
About role models in entrepreneurship…
My role models are entrepreneurs who see business as caring for society. First of all, don Bosco, as one of the earliest examples of social entrepreneurship, who during the industrial revolution in Italy spiritually and socially empowered young people who were threatened by poverty, and consequently falling into crime, gangs and prison. He made them literate, he provided them with vocational education so that they could become shoemakers, tailors, masons, carpenters, bakers, printers or learn some other trade, he started workshops where he employed them, he founded the Society for Mutual Aid of Workers and wrote the first apprenticeship contract in Europe and asked employers to respect it to protect young people from exploitation.
The oratories he founded for young people served as 4 in 1, they were a home, a school, a parish and a playground. In addition to providing them with education and housing, he also provided them with spiritual education with the aim of making them honest citizens and good Christians, and he also recognized the importance of play, which is why he organized numerous activities such as playing sports and social games or forming theater companies and musical orchestras. In order to be able to develop numerous projects, he provided funds through the sale of products produced in workshops, organizing lotteries and raffles, and donations, whereby donors would receive gifts, which can be considered a forerunner of crowdfunding .
As a historical example of a woman social entrepreneur, I would mention Maria Montessori, who, like Don Bosco, who developed a preventive method in education, left a deep mark in the field of child education with the main educational principle “help me do it myself”. When we talk about education, we should also mention Saint Angela Merica, the founder of the Ursulines, who lived in the 15th and 16th centuries, and whom contemporary pedagogues call a visionary and forerunner of modern pedagogy. For example, 500 years ago, she advocated that classes should not have more than 20 children so that teachers could dedicate themselves to each child individually with respect and love.
Among the more modern examples, I would inevitably mention the creator of Nutella, Michele Ferrero, who was a devoted believer. At the celebration of the company’s 50th anniversary, he stated in front of the media: “We owe the success of Ferrero to Our Lady of Lourdes, without her we would not be able to do anything.” He put statue of Our Lady in every office and facility, and he would regularly make a yearly pilgrimage to Lourdes together with his managers. He also organized a visit to Lourdes for all his employees. Rocher pralines, which were introduced in 1982, were named after the Rocher de Massabielle cave in Lourdes, where Our Lady appeared in 1858. Rocher means “rock” or “boulder” in French.
When taking over the company in 1957, he addressed the employees with a letter in which he stated that his only wish for the company is to be strong and to guarantee a safe and peaceful future for the employees and their children. Delocalization, rationalization and layoffs were never mentioned in his managerial vocabulary and strategy, and the factory existed for the man, not the man for the factory. He organized bus transportation for the employees from their homes to the workplace in Alba, as well as the return home at the end of the shift. He provided them with above-average wages, free medical care and other social benefits, which is why the employees never went on strike. He rarely appeared in public, never gave an interview and refused honorary degrees. He stated that a person’s name should appear in the newspaper only twice – the first time when he was born, and the second time when he dies. In 1983, he founded the Ferrero Foundation, which promotes the development of science and art. In addition, the Foundation provides national and international scholarships for the education of children of current and former employees, and also through the Ferrero Seniors program offers a large number of benefits for all those who have dedicated more than 25 years of their lives to the company. He died in 2015 on Valentine’s Day at the age of 89. 60 thousand people came to his funeral, and shops, schools and institutions in Alba were closed that day. He died in 2015 on Valentine’s Day at the age of 89. 60 thousand people came to his funeral, and shops, schools and institutions in Alba were closed that day.
As I mentioned in one of the earlier questions, in Croatia we also have a great example of social entrepreneurship in the company Tim Kabel, which is known as one of the most socially conscious Croatian companies headed by the couple Ivan and Mirjana Topčić. The company implements a pro-natal policy and women do not face uncomfortable questions about motherhood during job interviews, but are encouraged to have children so that employees receive financial support for each newborn. All employees’ children receive a stipend during their high school and higher education, and during the summer holidays they are allowed to work in the company through the Student service at a fee that is above the average prescribed student hourly rate. All employees have the right to take out a company loan at the lowest possible interest rate. They also receive Easter and Christmas bonus, and their salaries are significantly above the Croatian average. At the end of each business year, the company organizes an outing and celebration for employees and their spouses, where the best employee of the year is announced and receives a double Christmas bonus.
About the challenges faced by young people today…
Young people today face many problems. Unemployment, lack of perspective, pressure to meet the standards imposed by society, addictions, peer violence and mental health are some of the most pressing. The causes of these problems are multiple, but I would like to refer to two causes in particular.
The first cause is poor formal education. The goal of education must be action. It is not only important to learn what the world is like, but also how to be active in it and how to change it. This second component is missing and young people are therefore unprepared for the challenges of real life and the labor market. In the same way, it is necessary to recognize talents in children from a young age and guide them in the direction where they will be realized in the best possible way, and the flaws will be minimized.
Another cause is inadequate spiritual education. Society lacks linguistic, financial, digital and any other literacy. But none like spiritual literacy. We live in a time that relativizes morality, which is why young people do not understand what sin is, why it is sin, and what the consequences of sin are on life. This leads them to make wrong life choices, and these choices lead them to life shipwrecks at worst, and dissatisfaction at best. They get a particularly distorted image of life that they don’t know how to deal with critically through the media and social networks, which often promote vain materialism, an unhealthy cult of beauty, instant fame and overnight success without work. It is necessary to start teaching children and young people that the most important thing in life is to strive for holiness, and to be holy means to be the best in love, honesty and responsibility. Society today no longer needs a stronger computer or a faster car, technological development has reached a point where it is beyond what humans need. The world cries out for moral role models. There are the greatest opportunities and the least competition.
Zoran’s final message…
Instead of earthly things, we should run after heavenly glory. Invest in love for God and love for man. Anyone who does so will reap a rich dividend. It is a recipe for life success and the only safe investment here on Earth!