Welcome, thank you so much for joining us glad to have each and every one of you back with us today this entire week is dedicated to fundraising Academy as the nonprofit Power Week and we are talking about major gifts and our guest back again is Jack Alotto and Jack has a certified fundraising executive. Not allocation certification credentials and you also serve as a trainer with fundraising Academy and so today we are talking about the major gift fundraising cycle and we're just thrilled to have this conversation with you at such a deep, deep level as we move forward. So thank you again to fundraising Academy for remaining as a wonderful partner of ours and for the nonprofit show extremely grateful to have you as part of our team and again the entire week is dedicated to fundraising Academy. Thank you to our presenting sponsors, we are esteemed to have each and every one of you as part of the show and truly as part of the sector because you are sponsors exist not just for us here with these episodes but truly for each and every 1.8 million nonprofits around the US and many also globally so thank you for all that you do and all that you are here to serve right alongside. Julia Patrick CEO of the American nonprofit Academy good to be back here with you Julia. I'm Jared ransom her nonprofit nerd but also your nonprofit nerd CEO of the Raven group and again our guest today is Jack Alotto welcome back Jack. Thank you for having me I love coming on this show. Yeah, good well I was teasing you in the in the green room chatter. You know it's always a good thing when we have you on and you come back. Yeah, yesterday and for those of you who are with us or for those of you that need to find this on the archive. We really jumped into major gifts, the discussion which is what we're having a week. I learned some amazing things yesterday, and it was a really interesting framework about what is a major gift. And so what a great way to start. But today we want to explore with you Jack. More about how major gifts and the process of developing these relationships and stewarding these relationships fits into the fundraising Academy cause selling cycle, Jared and I have become big groupies of your whole program. And we learned something new all the time but we really wanted to explore how this all fits into the whole concept of major gifts. So, help us understand this a little bit better. When you look at this slide in front of you which is the traditional major gift cycle. It appears that each of these stages are of equal length, or take as the same amount of time when that's really not the case. In fact, experienced fundraisers know that cultivation takes way long much longer than so solicitation. One of the wonderful things about the cause selling cycle is that it fits so elegantly into this major gift traditional fundraising cycle. And what it what it what we talked about in the cost selling cycle is that some things are going to take a lot more time to do than other things in this cycle. Okay, so that I appreciate your honesty, and I appreciate you helping us navigate that because yeah, I can see that if we get stuck on these phases, and then we're like wait a minute, it's not working. We're going to get a little bit overwhelming or make you feel like you're not working. So, let's talk about major gift in relationship to your cause selling, and and we've got these four steps. We're going to really talk about the first part of this because this is a long conversation, right. Right. And so when we talk about major gift identification. What does that look like. So in the major gift identification when we bring cost selling to identification, we really have two phases of identification, the first being prospecting. And the second, what we talk about in cost selling is the pre approach. And just to briefly tell you how we approach prospecting in the cost selling cycle is that we have a number of places where we have to go out and find major gift donors. One of my favorite, my very favorite, and it worked for me in my own career is, is getting referrals, getting referrals of other major gift donors, first from our board. Going to our board members and asking them, do you know anyone who in your circle of influence or in your network, who would be interested in making a major gift to our organization. And the second place that really worked for me in my career to find major donors was by asking other major donors, that same question. So anybody in your circle of influence who like you would be interested and motivated to make a gift to our cause. So that is really one of the most powerful prospecting tools we have. There are others like attending events, networking like going to the Kiwanis or other organizations, the Chamber of Commerce, and definitely on your website. The second part of this identification process that we talk about in cost selling is what we call the pre approach. Now, this is where we determine what information we need from our prospects to know about our prospects, so that we can anticipate their questions when we meet with them. Some of the things that we try to find out in the pre approach, maybe if we got a referral from a board member, we might ask them questions, what do you know about this prospects interest in this cause that we have. This is also the place where we determine or qualify our major prospect as to their ability to make a major gift to our organization. So this is where we learn who to call what to ask for why and when and where to call them. This is where we begin to start to anticipate their questions. I have a quick question, Jack, and I want to jump in there. So I love the referral where you're literally asking, you know, other invested individuals who they might know and who they believe you should be talking to. And I'm curious, because again, I've been a part of these episodes, and we've had Tony Bell on with fundraising academy. He talks about the mad and test is the mad and test and approach to the prospecting and pre approach is that where we might want to put that into place here. Yes, this would be an area where we do it. You know the other thing about referrals, since you brought it up, Jared, if I ask you for a referral and you say I think Julia Patrick might be a major gift donor. You know what I'm going to do. I'm going to say would you please introduce me to her. Yeah, think of all the time that saves in getting to a prospective major donor. Yeah, it's just an I love that method as my number one go to method there are others certainly that are just as effective but that is really a powerful way, since you brought up referrals. Well, do you think some people might think that's too intrusive that they will say, Oh, I'm not comfortable doing that. I'm just thinking devil's advocate here. But I'm curious if you've seen some pushback. Oh yeah, of course people are going to say, Oh no, I don't want to give you names of people who are in my network. And that's okay. You know, with our board members with our major donors, we are so respectful. And so if they say, I don't want to do that. I don't feel comfortable do that. Certainly, we're not going to keep pushing them to do something they want. But you know, I think as we get to build the relationship with our board members and our major donors, they're going to begin to trust us hopefully, and they're going to feel comfortable in doing that for us. Absolutely. Well, and I'll say that and I do a lot of board training and a lot of board work. I believe that this is one of the problems that we have with our boards is that we don't explain this. When we're onboarding or even interviewing prospective board members that this is a part of their responsibility is helping us make those introductions and cultivating those relationships. When we're just specifically talking about the board. Yeah, this has got to be something that our boards understand is a part of the responsibility. So I'll get off my soapbox. Yeah, absolutely. It gets me all riled up hair on fire moment. I've lost some height. I just saw three inches go down. I can't afford to lose any more hair on fire. Let me tell you. So, because I don't want to join Jack's club. No offense. I love being a ball man it's great. Okay, now we've talked about this and we're navigating towards cultivation, which is another big phase. Talk to us about that because I think this is where I sometimes feel like there's an overlap and and how do we know when we're from when we want the first phase and we're moving into cultivation. So after we've done that pre approach and we've we've we've figured out lots of things about their interest their motivations, their values that kind of thing. Now we move into cultivation and the two phases that from the cost selling cycle that fit into the major gift fundraising cycle in cultivation are approach and need discovery what we call in the cost selling cycle. So approach is where we set a meeting. Now we've understand we've maybe anticipated some of their questions, etc. We discover and try to understand that's why it's called discovery. Try to understand what the donor or prospects interest is in our cause in our programs in our services. And then we try to make a great first impression. So some of the things that we like to say in cost selling is make eye contact. This is really so important for me. I don't care whether it's in the fundraising or just when I meet people, if they're not making eye contact with me. It makes me feel kind of strange shake hands like you mean it maybe we're not shaking hands anymore if it's a fist bump, you know, do it like you mean it if it's an elbow bump whatever it is, make sure you meet it. And here's something that I really urge everyone to do. Forget the traditional greetings during this approach. Everyone asked how are you doing. Do we really want to hear how they're doing. Start with a more interesting question. You know something that will get their attention, as opposed to that traditional, how are you feeling this kind of thing. During the second phase of this cultivation process. This is where we were where we discovered their needs, the donors needs. How do we do that, we do that to really important ways. One, we ask open ended questions, and then we listen to their answers with this is how we begin to understand their gifting motivations. That's the heart. I we say this is the heart of the cost selling cycle. And of course, before we do any of these things we want to rehearse them. Okay, I've got to know. What else do you recommend we say instead of how are you doing. You know, sometimes you know what works for me. I look around their office if they have photos out I may ask them questions. Oh, is that a photo of your son's high school graduation, or is this from a, it looks like you went on vacation somewhere. Sure. You know, where did you observe your surroundings observe. Certainly during the pandemic, I find myself off. How are you guys doing. I always ask, how are you doing, because we're in the middle of the pandemic, you know, and so that is really an important question.  You know, and because she wouldn't eat her food, or she didn't want to go potty outside or whatever it is, or I had an argument with my children because they wouldn't eat breakfast. I mean, is that really do we really want to hear all those things. I mean, I don't know. Right. Yeah, and it's really just become the, the custom question and I there's been so much conversation about, and as the person even answering honestly so I love being aware. And I was just thinking if you do meet in person, you know, something with that could be, you know, did you get here okay was the traffic alright, you know, just something that's not that standard and we're all accustomed to answering. I'm curious, Jack, how much in addition to the pre approach and the prospecting. Do you depend on Google search right and maybe some wealth mining or data mining information how much of that do you do in addition to this to this meeting. So definitely Google, you know, internet searches, you look at social media, you can find out a lot about people on social media, LinkedIn, Facebook, Instagram, lots of information out there to help you prepare for that approach. And it's also a great way to find out about their needs, what they're interested in. You could look at public records on Google, you know, if they get to other nonprofit organizations. Definitely look into your own CRM your customer relationship database, because there is where you're going to find a lot of information have the attendant events. You could start your conversation by asking them. Hey, I noticed that you came to our gala last year. You came to an open house. What was your impression of that there's that open ended question. What was your impression of the work we do. All of those open ended question closed ended questions really are very short responses open ended questions help us build relationships and at the heart of cause selling is relationship building. To follow along with that, you know, the relationship, undoubtedly, I'm thinking here based on the conversation that started this, this nonprofit power week out yesterday. You know, these are really people that we should already be knowing. Right. I mean, it might be that you are new, you know, as a development person are new to this individual but don't you think that that's probably a fair assessment to say, these folks that we're going to be talking with they already have some sort of relationship with us. Some of them do some of them may not, you know, I remember in my own career Julia when you know I worked for an animal welfare organization and you know several communities have more than just one animal welfare, they may have the Humane Society and they may have like a foundation for rescue animals or whatever. I would go through the records of other animal welfare organizations and find names in there, who I was not familiar with, had not been giving to our on animal welfare organization. And then I would start my research on them to see if they had a good fit. We knew that they already gave to animal welfare. So now how do we get them to understand about our program. Interesting. You know, makes sense, especially if you're thinking about actually working this and expanding it. And one of the things I want to touch briefly on, because you had some really interesting comments yesterday about defining for your organization, what that major gift was. One of the things that we ended with right before we left was, do you identify with that prospective donor that they are a major gift. This would be a major gift. Right. And I would say, yes. Yeah, you said that and I was fascinated and I'm wondering if this dovetails to the need discovery piece where it's like a donor wants to be considered a major gift. Right. Yeah, totally I love this. You know, we say it we say all the time and constantly treat every donor as if they're a major gift donor. Yeah, with that same level of respect and care that you would treat any donor and that's true. I remember working just briefly I remember working and people in a faith based organization and older people retired people would send me to $1 bills. Yes. But that gift was as meaningful to me because it was a gift of their heart. It was a gift of love as a $10,000 gift. Okay, so, so that that's number one. I think it's really important when we say if I'm meeting with a prospective major donor and I say, we are asking a small number of people to make to step up and make this major gift. I am creating an exclusive group of people, and I'm asking you to join that exclusive group group of people by making a significant gift, a major gift that will have significant impact. What an honor that is to ask somebody, even if they can't make that major gift. It's an honor to be asked. That's the way I look at it. Jack, you hit on something that I love in the philanthropy world is receiving that recurring gift from someone and and I just brought back so many fond memories of a check that has, you know, scribbled handwriting, maybe $5, $10, but kind of like that tithing to the organization. And it is just the sweetest, best, you know, gift and I always, you know, look forward to seeing those in the mail. I think that's just right. It's beautiful. I think so many of us have served in this role and have been honored to have a similar experience, I think is is fantastic. Now, I wasn't on yesterday. So thank you Julia for catching me up to speed and I am curious if you touched on this yesterday and if not perhaps we can dive a little deeper today. A major gift. Is that defined as a one time gift or consecutive so for instance, you know, working with an organization that currently their major gift is 2500 and I really think that they have the possibility of taking it to 25,000 big jump. However, my understanding is that that would be a 25,000 or whatever your major gift definition is over the course of a set amount of time and I'm curious if it is a one time. Here's the big check, or if it is more of that definition, you know, over a given amount of time. Good question because we didn't talk about that we didn't talk about duration, we talked we spoke more about. It's like a one action so yeah really good question Jared. Yeah, you know I think it could be. First of all, a one time gift is still a major gift. But here's where our professionalism and where the cost selling cycle works so well in that kind of innovation part that approach and that need discovery is to keep them giving. Yes, to make it a recurring gift if you're doing it right. If you're really cultivating them along the lines of the two things that we talked about in cost selling, then they're going to come back. And then I know you're going to talk about stewardship later this week. That is really key to getting that recurring gift. Really, really interesting. You've talked about a lot of things that for our viewers that might have just joined us or have not fully engaged in the cost selling cycle. So thinking about some of those back episodes that we have where we had Tony Bell on and we went through step by step with with a lot of depth. That might be something really to revisit and and allow yourself to get back into some of that knowledge in that process because it fits so beautifully with what it is we're talking about. And again, this is a full week of really diving into this exclusively with that concept. Yesterday was fascinating to talk about what a major gift is. And I think that you just spelled a lot of myths for me. And being asked and asking, having sat on both sides of the desk. I was like, wow, I mean a lot of light bulbs went off Jack and they had they continued throughout the day. So I appreciate that you and Pearl Hogan were on. We had two documents that we offered to provide everybody and they were specific graphs and systems for defining what a major gift is. And so those are available. And really, really super interesting. We're going to continue this conversation throughout the week. We're going to be talking more about the prospecting piece of it. How you steward these folks and this information. What does that mean with the relationships, and then we'll follow up the full week with the main man himself, Tony Bell, answering questions that have already started to come in. And they're very, very interesting questions. And so we will, Jared will actually be with him on that day. And we'll be talking about how this dovetails to the world of fundraising when it comes to major guests. This has been fascinating and I'm so appreciative Jack, that you would come on and talk about this. Really, really interesting. For those of you who are living in this world or want to engage in more relationships with major gift donors. Drop us a line let us know you're thinking what maybe questions you might have, because again this is an amazing opportunity to spend a full week on this. It's fascinating. And I will be back tomorrow. Yes, you will. Thank you so much. And for those of you that might have questions. If you join us live you're welcome to use the Q&A as we are live an episode. And if you prefer you can send us an email there's many ways and how you can get in touch with us but the American nonprofit Academy. On that website you can submit information questions Twitter is another platform so feel free to reach out to us if you'd like for us to add in a question, perhaps for Jack tomorrow or for Tony on our fry yay ask and answered. More than happy to address those as long as we get them from you so thanks again. It's amazing. I want to put up here on the screen. Jack's information, because really an interesting voice to have, not only somebody who has had a successful career in this very topic, but also you are a lead trainer was for CFRE correct. Yes, I run a study group for that. I'm a big fan of CFRE, and I run a study group for them. Awesome. Cool. Well, I love your perspective because it's really something that I think with as we mature, you know, in this process of being successful fundraisers being competent fundraisers and really aligning our donor investors to our missions. It has to be more scientific, it can't just be so charismatic and get filled it's it has to have some science behind it. If we're really going to be successful and so, Jack, this has been an amazing opportunity for us to have you with us and be really be able to get into your mind. Again, if we haven't met, I'm Julia Patrick, President and CEO of the American nonprofit Academy been joined by Jared Ransom, CEO of the Raven Group, who's been my co host we're now moving into our third year of this. It's really an honor to be able to get the great minds of people like Jack with us to discuss these amazing things. We also want to thank all of our presenting sponsors about you, we would not be here, having these robust discussions and Fundraising Academy folks who told the story yesterday, Jack, Jared, and we kind of talked with with the fundraising Academy folks and said, we've got this crazy idea do you think if we did a full week of just one topic, anybody would watch and they're like, yeah. Absolutely. So that's, that's where we are today and it took us, you know, almost a year to put this together and get this formalized because we had so much that we wanted to talk about, and we had so many people asking us questions about this very daunting major gift topic. And so I think that what I've been learning from you Jack is that it's something that we don't need to be so fearful about. Oh right. But we need to be strategic about. Yes, absolutely. Yeah, yeah, I, I'm not, I don't think we should ever be afraid to ask people for money because we honor them. We want them to join with us in in doing something really important in our world. Absolutely. That's a cool way to end this. Well, it's been magical. We've got a lot more to talk about. It's been a journey already to understand what these processes can look like and how they can be natural. I think Jared and I have both been very amazed at the natural progression of the cause selling cycle, and that it takes away some of that. Well now what do I do and some of that anxiety, and that if you can just follow through and understand, I think it's really an amazing thing. Before we sign off today I've got one more quick question for you and maybe it's not that quick but we don't have much time left. Okay, and you mentioned Jack about the CRM issue about pulling people, you know pulling data and understanding who you're working with who's worked with you in the past. I'm wondering if some of this information can be generated and back into those those data, that data process. You know how you know I mean briefly because I know we're running out of time. How you use your database. The first thing I would do is determine what a major gift current donor looks like. By looking in your database. Who are they what do they look like what causes are they giving to what's their linkage to your organization what are their interests, what are their motivations. Once you understand your current donors, then go out into the world and find other people who have those similar traits. Love it. Wow, well that's a magical way to end this segment. We're really excited to have you back on again tomorrow. We're going to deep take a deep dive even further into the cycle. Set you up I think really well with a great and confident foundation for what we're talking about major gifts. And as we end every episode we want to remind all of you and ourselves. Stay well. We'll see.


Yes. Hi! I missed you guys. Hi. Thank you. Thank you so stop.  We're back. We're back. I missed you all so much. Hello and welcome back to Dapper History. It's been a while but I'm finally back and I'm going to tell you about the parts of history that are really interesting that you probably haven't heard about. But before we get into that, I can't believe I'm saying this but story time. So I actually have a job in real life outside of embarrassing myself on the internet. I work in the medical field which is very fitting for today's episode. So recently at work I was sitting with a co-worker, things had slowed down so we like had a chance to breathe. Tell me why this dude looked me in the eye and said, oh Julia, I saw you on YouTube. Would I tell you that I have never been closer to quitting and changing my entire identity? Luckily he had just seen one of the Dapper History videos so it was all fine and he like thought it was funny or whatever. Anyway so I've just been taking about a month to recover from that traumatic experience. Look who joined us. It's Julia again. Anyway speaking of the medical field that's where today's topic takes place. When I say Dapper History I'm using that term lightly because this is actually a very recent story. So recent in fact that it's still ongoing at the time that I'm recording this video. So today I will be telling you the story of Theranos, one of the most costly scams in the history of the field of medicine. But before we get into that we need to talk about the woman behind all of it. That's right we're doing another Girl Boss episode. We're doing it. This is the story of Elizabeth Holmes. Elizabeth Holmes was born February 3rd, 1984. An Aquarius explains a lot. Her parents were very powerful people and so from a young age she wanted to be powerful too. From a very young age when asked about what she wanted to be when she grew up, Elizabeth would say things like I want to be an inventor. I want to be a billionaire. I want to be a Silicon Valley mogul. She wanted to change the world and she had the drive and the parents money to do it. Elizabeth had an uncle who she was close to who was a very important part of her life from a very young age.  It was too late to treat him and he unfortunately passed away. This devastating event obviously had an impact on Elizabeth. Years later in the future Elizabeth would say that her uncle was one of her biggest motivations and the devastating loss of him made her want to invent something that would make less people have to say goodbye so soon. Now I've noticed that when people talk about the trainwreck that Theranos eventually became they very rarely talk about the story with her uncle and I understand that it's not exactly relevant to later events but I think that it's a very crucial detail in this story. Here in the United States where we don't have free healthcare it's kind of become the norm for people to put off seeking help for like medical problems because it's just so expensive and aside from just the astronomical cost there's other reasons why people here don't go to doctors. People of color specifically black women experience such disparities in treatment that many of them simply don't trust doctors to help them. Almost every person that I know has some horror story about either themselves or a loved one being failed by the healthcare system being let down by it being given a wrong diagnosis and wasting all of their money. I actually lost my grandpa a few years ago to pancreatic cancer. It was discovered too late to treat it after he went through years and years of false diagnoses and a lot of pain. When Elizabeth showed up on the scene and proposed Theranos she was speaking directly to the experiences and trauma of millions of people specifically in the United States. Did it sound unrealistic and lofty? Sure but what if it was possible? What if people who come after us won't have to go through what we went through? What if one woman is actually able to change the world? In 2004 Elizabeth dropped out of Stanford and used her parents' money to make her own company called Real Time Cures. It was here where she came up with the idea of inventing a machine that would be able to run blood tests with just a drop of blood rather than a large blood draw. This was actually inspired by her own fear of using needles. Okay so this is very ambitious already right? Especially for someone who has no experience in the medical field. Oh but our girl was not done yet. This thing was not just going to run one test. This was going to run all the tests. You can think of it they're going to test your blood for it. Cancer, HIV, herpes, your blood sugar, high cholesterol. It'll even screen you for ailments that you don't have yet and let you know if you're at risk for them. It'll tell you your 23andMe result. It'll tell you which sailor scout you are. I'm only kind of exaggerating right now.  We don't have the technology to run even one of these tests with just one drop of blood. How would we run all of them? Looks like the girl boss is the one getting gatecapped. Since science had failed her, Elizabeth returned to something that she knew would work, nepotism. She scheduled lunch with Tim Draper a family friend and after explaining to him the idea of Theranos he wrote her a check for a million dollars on the spot. I'm not joking.  I feel like they have no idea what money is. It's an idea my daughter's friend told me. What could it cost a million dollars? Elizabeth rented some lab space and got to work pitching Theranos for all it was worth. I want to remind you that at this point they did not have the technology to actually make this happen. That didn't stop our girl from crowdfunding her heart out. By the end of 2004 Theranos had six million dollars in investments and that number just kept going up. Remember, we're talking about an invention that's going to change the world. Everyone wanted in on this. From the Silicon Valley moguls to the Wall Street bitches. Everyone was investing in it. And against all odds it looked like Theranos was keeping its promises as they had successful test results to show for their research. Keep this in mind. We're coming back to this later. With this new success they were able to start selling blood tests to the public to real people to test their blood. Keep this in mind too. We are coming back to it. At this point any rational person would say Liz this is all moving a little bit too fast. Someone needs to pump the brakes or else we're all going to get in trouble. But there's one more detail about Elizabeth that I haven't told you yet. The only thing she liked more than power was attention. A healthcare pioneer is being compared to visionaries like Bill Gates and Steve Jobs. Her innovation has made homes the world's youngest female self-made billionaire. By 2014 people could not stop talking about Elizabeth and she was loving it. She was on the cover of Fortune, Forbes, Inc. and so many other magazines. Forbes recognized her as the youngest female self-made billionaire ever. She was even named Woman of the Year by Glamour. And best of all around this time Elizabeth had to do a lot of interviews. And oh boy did she love doing interviews. I guess now's as good a time as ever to talk about how weird Elizabeth was in her personal life and in her work life. She ran Theranos in this really excessively secretive way. She would even fire employees who she heard were saying too much. Can you tell us a secret? I don't have many secrets. Any visitors who came to the headquarters would have to sign a non-disclosure agreement and they were followed around by security everywhere including to the bathroom. She was also insane when it came to her employees. She would keep track of the time that everyone showed up and the time that they went home because she believed that everyone should be working as hard as she is, obviously. Yes, you know what inspires me? Fearlessness, drive.  Bob, stay in school. Okay, let's talk about it.  Elizabeth was obsessed with Steve Jobs and would just try to be him in every way. She never took vacations because Steve never did. Her office was decorated exactly the way that Steve did and most obviously she always wore a black turtleneck because that's what he's best known for wearing. But then she took this black turtleneck thing and ran with it saying that like, oh I've always worn black turtlenecks. This has always been my style. It's all I've ever worn even when I was younger. Even though it takes like two seconds of googling to see that when she was younger she didn't regularly wear turtlenecks. I also find it interesting that she chose Steve Jobs as the person she wanted to idolize when he was notoriously abusive to his employees and generally regarded as a terrible person. But hey, he was successful, right? That's all that matters. Okay, hold the phone. Hold the phone. I apologize for derailing my own video but I just discovered something and I will not be silenced on it. So I was googling trying to find this article that I had read because I was going to use it as a source. For those of you who don't know I always put my sources in the description so if you want to see where I got the information it's down there. The article I was looking for was the one I had read about how Steve Jobs was very abusive to his employees and just like made a very toxic work environment and was a really bad boss. It should also be noted that I was looking this up on a MacBook Pro, an Apple product, okay? Steve Jobs' baby. Tell me why the suggested results when I typed in Steve Jobs' employees were, how does Steve Jobs motivate his employees? Steve Jobs empowering employees? Steve Jobs rewarding employees? How did Steve Jobs reward his employees? How did Steve Jobs empower his employees? All of these suggested results are obviously positive and meant to lead someone who just happened to be googling this to the conclusion that Steve Jobs must have been a really like inspiring, encouraging boss. Could it be that on Apple products when you google things about Steve Jobs it's not that it like suppresses information but it suggests positive information before you like get the whole story. I don't know, I just made this discovery. I thought it was interesting. If I get murdered after this video comes out it was not an accident, it was Elizabeth Holmes defending Steve's honor. But the cherry on top of this compulsively lying cake was her voice. In those dozens of interviews that she did Elizabeth would always speak in this very low baritone voice and would speak very slowly and deliberately. I believe the individual is the answer to the challenges of healthcare. And I'm not bringing this up to make fun of women with deep voices. I have a kind of deep voice myself. I'm bringing this up because like every other part of her persona this was faked. She would force her voice to be deeper while talking in interviews and you could sometimes hear moments where she like almost broke character and her voice got a little bit higher. People always noted that after she took a sip of her drink her voice would be a little bit higher and then it would drop lower very abruptly or like as she was talking as she was kind of running out of breath her voice would sort of go back to normal and then it would abruptly drop back down again.  There's a lot of speculation on why she decided to talk like this. Some say that it was so that she would sound more authoritative and masculine and commanding of attention. Some even say that it was so that she would sound more like Jeff Bezos. Nope wrong ball guy. So that she would sound more like Steve Jobs that's it. But for whatever reason she did it her voice is one of the most striking things about her to the point that even years later people can't stop talking about it. And for good reason I can't think of one other person who I've seen consistently try to fake their voice like that. It's just that every single aspect of her identity was faked or borrowed or exaggerated in some way so that she could play this ideal silicone valley genius that she had spent years designing in her own mind. But I think you know what's coming next in this story. The facade unfortunately could not last. For alas they hate to see a girl boss winning. In 2015 John Kerryu an investigative journalist for the Wall Street Journal received a tip that something about Theranos's testing was fishy. He talked to former employees even obtaining private company documents on their lab result. In an October of that year Kerryu published an article revealing the truth. Theranos's devices were regularly giving inaccurate results and the accurate test data that they had been showing off was actually obtained using commercially available machines. You know the kind of machines that Theranos was supposed to be replacing but Elizabeth continued to gaslight and gatekeep calling the journal a tabloid. When asked about it on CNBC she said this is what happens when you work to change things.  But at this point it was too late. People were losing faith in Elizabeth and Theranos was not able to withstand an actual investigation. For the next few years it was one blow after another until Elizabeth was completely stripped of all of her previous accolades. Oh yeah um remember earlier when I told you that Theranos started selling blood tests to the general public? This is my dramatic re-enactment of what I think the people who bought blood tests from Theranos looked like when they heard the news. Pretend this is a newspaper or something. Ah man that's too bad. I guess it really did sound too good to be true. It's always the crooked CEOs isn't it? Wait a second. She has my blood. That woman has my blood and I don't know what she used it for or what she is currently doing with it. What the f- In 2017 Theranos was sued by the state of Arizona for allegedly selling 1.5 million blood tests to the general public while misrepresenting information about these tests to the customers. Finally in 2018 Elizabeth and her business partner were indicted for nine counts of wire fraud and two counts of conspiracy to commit wire fraud. Hey guys they probably did it. These charges were eventually racked up to being 12 counts of wire fraud one of which was related to a patient's blood. To be honest I don't know where this story ends because like I said it's still ongoing. Elizabeth is set to face trial in August of this year so I guess we'll all see and maybe I'll make an update video but I think I speak for everyone when I say that when the trial happens I'm genuinely curious if she's gonna talk with the deep voice or if she was just sound normal. If she talks with that voice I'm gonna flip out. I think the worst thing that Elizabeth Holmes did out of all the crimes that she committed was getting people's hopes up and I say this because I don't know if countries outside the United States really understand how bad it's gotten here but we are at rock bottom. It's the norm for diabetics to have to ration their insulin because they can't afford enough to stay alive. During the middle of the pandemic hospitals are getting shut down because they're not making enough money. We are desperate for things to get better and then here comes Elizabeth offering this pipe dream where things getting better is possible. How could we not get our hopes up? And this is where I circled back to that story about her uncle, how she said that losing her uncle is what motivated her to want to change medicine forever. She knew how badly it hurt to lose someone to a late diagnosis. She knew how bad people wanted this and she knew that it wasn't possible and she sold it anyway. She faked evidence to back up her claims. She faked evidence to make the fantasy seem feasible and for what? So that she got to play dress up as the billionaire genius she always wanted to be since she was a kid? People are dying Elizabeth. Grow up.  What the f-


More people fail IELTS writing because of Task 1 than Task 2, but this lesson is going to show you how simple it is to get a band 7, 8 or 9 in Task 1 by following a few simple steps. First, we're going to show you how to use the question to structure your answer and then we're going to transform a formal letter into an informal letter by making a few simple changes to keyword and you're also going to find out how I nearly got arrested in an Asian airport because I missed my flight. So without further ado, let's get into it. So the first thing we're going to do is look at the similarities and differences between a formal question and an informal question and there's one key thing that tells you exactly whether it's formal or informal. So every question starts off with kind of this question statement at the start where it gives you the scenario, it gives you the context that you're supposed to write about and then it will say write a letter or write an email to and tell you who you are writing to. Now this is very, very important because how you know something is informal is it will always say friend, write a letter to a friend, write an email to a friend. If you see the word friend, then that is an informal letter or an informal email. Anybody else, so if it's asking you to write to a business or your boss or anything else apart from friend is formal. Now a lot of students will ask at this point, well what about semi-formal? Within the IELTS context for writing Task 1 general training, there's no such thing as semi-formal and it just makes it way more complicated for the student. The key to success on the IELTS test is to keep everything as simple as possible. Friend informal, anyone else formal, just keep it simple. Then it will always give you three bullet points and this really helps us when we're writing because this is going to show us the exact structure we're going to use which I'll show you in the rest of this lesson. Then write at least 150 words so you must go over 150 words. I would recommend that you write between let's say 160 and 200. Below 160 then there might be a chance that you will be under 150 if you miscount. Anything over 200 then that really is going to eat into your time that you should be spending on Task 2. Writing around 160 to 200 is kind of the sweet spot. So you do not need to write any addresses. Begin your letter or begin your email as follows, dear sir or madam, that is another indication that it is a formal letter and you should always write dear sir or madam if it is not a friend and if it is a friend, if it's informal, it will always say dear dot dot dot dot and you can add in any name, pick any name, Chris, Tim, Tom, doesn't matter what it is. So the first thing we're going to do with our formal letter is we're going to put in dear sir or madam. So we'll put that in at the top. The structure we're going to use is we're going to use four main body paragraphs. So the first paragraph will be our purpose. Why are we writing this letter? This is how we should start any letter or any email telling the reader why we are writing this thing to them and you'll be able to get that information by looking at the first sentence or the first paragraph. You recently missed a flight you think was the fault of the airline. So that is why I'm writing to them. So I am writing regarding. This is a formal way to begin any letter. You don't have to use this. This is just how I'm starting my letter. So I'm writing regarding a flight I missed with your airline. This sets the context and then because what was the problem? This is a letter of complaint. So I'm going to state the problem because I believe your staff's negligence should be addressed. So what I can do is I can just tick this first paragraph because this means that I have completed my first paragraph and I've done what I'm supposed to do, which is state the purpose. The next thing, the next paragraph that we're going to use is the first bullet point. So we take the first bullet point and then we write about that about how many words. Generally I don't like to tell students exactly how many words because then they worry about the number of words rather than the quality of the paragraph. Your first priority is to write a good paragraph, not to write a short or long paragraph. Generally for task one general, anything between 40 and 60 words is appropriate for each of them bullet point paragraphs. Anything under 40, then if you do that a few times, you might be under when you get there and that could waste a lot of time. Anything over 60, then you could be wasting time again. There's no need to really do that. So anything between 40 and 60, when you're practicing and just use a word counter when you're practicing on using software like Microsoft Word or Google Docs, just check generally how long your paragraphs are and then you'll get to know generally how many sentences are between 40 and 60 words. So explain why you believe the airline was at fault. So I checked into your business class lounge one hour before departure and the receptionist assured me that she would tell me when the aircraft was boarding. So what we're doing is just taking the first bullet point and adding detail. The best thing that you can do in this scenario is doing what I'm doing, which is writing about a real situation that actually happened to you or a similar situation that you could adapt that you could change slightly because it is going to be much easier to write about. If you can't do that, if you have never missed the flight, you can use your imagination. You know what an airplane is. You probably know what an airport looks like and what happens in an airport. It doesn't have to be exactly correct. It just has to be on topic. Each of these paragraphs relating to each bullet point must only discuss, must only write about the thing in the bullet point, explain why you believe it was at fault. So I'm explaining it to this person. Another thing that you can think about is, will the reader, imagine a real person is actually reading this, will they understand, will they know what I am writing about? If it's a letter of complaint, will they be able to understand and deal with my complaint? And if you think about it that way, you'll be able to add in enough detail. So unfortunately, despite being told of a delay of at least half an hour, it departed on time while I was still in the lounge. So I've explained why I believe the airline was at fault. This is actually a real true story. I was in the business class lounge and they were like, yeah, there's a delay. Relax, we'll tell you when the plane is boarding and then the plane left without me. Then we can move on to the second bullet point and start a new paragraph. When you're starting a new paragraph, the best thing to do is just skip a line between each paragraph or an indent like I'm doing now. It doesn't really matter. Just ask yourself, will the examiner be able to understand where one sentence ends and the next paragraph begins? Just skip a line, keep it simple. When I went to the gate, I was shouted at by the gate staff for missing my flight. And they threatened to call the police and have me arrested. Yes, that actually happened. They made me miss my flight, blamed it on me, and then got very angry when I pointed out that it was their mistake, not mine. They removed my bag from the plane and escorted me out of the airport. I had to rebook my trip at great expense and missed an important meeting. So I'm describing the impact that this had on my journey. I'm not going to get into the formal language just yet. I think it's easier to explain the difference between formal and informal when we compare the two side by side. And that's our second bullet point taken care of. So now we have to say what you want the airline to do.  What I want them to do. So accept that everyone can make mistakes, but law enforcement officers should only be called in extreme circumstances, not because your employees cannot admit that they are wrong. So I'm going into more detail on this specific bullet point. In the comments, which country do you think would phone the police on you? Or people from that country because they are embarrassed that they made a mistake? So we're finished up with bullet point three. Now we're nearly done. All we have to do is just sign off and then we're done. How I always sign off a formal letter is yours faithfully. Just remember formal faithfully, FF, formal faithfully. And then sign your name, not a signature, just write your name normally. It doesn't have to be your name either. Don't write my name, but you know, make up a name if you want.  I've finished the letter and then move on. So now what we're going to do is write the informal letter or email. Doesn't really matter. They're both the same thing for these purposes and show you the difference in the type of language that we're going to be looking for. Because many students think that task one general training is easy. Knowing the difference between formal and informal words and using them accurately and appropriately is not easy at all. But it will be easy for you after you watch this video. So let's look at the difference between these two questions again. So you recently missed a flight, you think this was the fault of the airline. You recently agreed to meet a friend but missed the meeting, right? So what I'm going to do for the purposes of these lessons is show you that it's exactly the same person and it's exactly the same context. So the reason why I missed the meeting was because I missed my flight. Explain why you missed the meeting because I missed my flight. Describe the impact that it had on your day, exactly the same. And the third one is slightly different. Say what you want the airline to do, suggest how you can meet up in the future. I'm going to use that paragraph to show you how you can use even more informal language. So instead of dear Sir or Madam, dear Tim, literally do not spend any time whatsoever thinking about the name, pick any name, it does not matter. So instead of I am writing, what we're going to do is write I'm writing. One of the differences between formal and informal is with informal, you're going to use a lot more contractions. I am versus I'm, I would, I'd, she would, she'd. This is more informal because it's how people normally talk. We do not normally talk to each other and say, I am writing to you. You'd say I'm writing. So one of the ways that you can think about informal writing is how you normally speak to people. I know that there is formal speaking and informal speaking, but 99% of speaking is informal. So we're going to change regarding to I'm writing to let you know regarding is very formal, let you know to inform someone. Inform is very formal, let you know more informal. Let you know I missed my flight because the airline's staff messed up. So not every single word needs to be informal because, for example, is not a formal or an informal word. It is just a normal word. It is neither formal or formal, informal, getting mixed up myself, but your staff's negligence should be addressed. That is very, very formal. Messed up is a phrasal verb, so it is a lot more informal. Phrasal verbs messed up, for example, is something that you will include more in an informal letter than you would a formal letter. So all you're doing is thinking, how can I change this slightly to make some things informal?  All you're doing is looking at things and thinking, okay, I am, let's use a contraction, I'm regarding, let you know, staff's negligence should be addressed, they messed up. And if you do that enough, then your writing will become a lot more informal. And vice versa, if you are more used to thinking informally, then you could think, okay, that's an informal way of saying it, how could I say it in a more formal way? Okay, so I checked into your business class lounge one hour before departure. I checked into their business class lounge one hour before departure, basically exactly the same. Again, not every single word, not every part of the sentence needs to change, just some of it. So, and the receptionist told me, assured me, told me, told is slightly informal, I suppose, not a huge difference, but we wanna change it as much as we can. Now we're changing she would to sheet. Again, a contraction, this is more how we speak. We would not really say to someone she would, we'd say sheet. Tell me when the aircraft was boarding, we'll change that to give me a shout. Give me a shout isn't slang, it's more idiomatic language. The more idiomatic language you can use, the better. And idiomatic language does not mean idioms, it includes idioms, but idiomatic language is language that native English speakers normally use. That includes idioms, that includes phrasal verbs, that includes colloquialisms like local language, and phrases like this, give me a shout. That just means let me know. By the way that you can improve this is by listening to native English speakers and how they actually speak. This is why at IELTS Advantage we don't really recommend that people use textbooks to improve their English to a band seven, eight, or nine, or YouTube channels that are specifically aimed at lower level students. Definitely not learning English in your native language like a lot of YouTube channels do, because that doesn't expose you to real English. English that native English speakers actually use. This is what people in my local town, in London, in New York, in Sydney, this is how they actually write emails and speak to each other. The more you can demonstrate that, not in every word, not in every sentence, but the more you can do it accurately and appropriately, the higher your score is going to be. Again, not that easy, is it? I just like saying that because there's so many academic people that think that they're superior to general training in some way. It's not as easy as you think. When the aircraft was boarding, when the aircraft was boarding. So I'm literally copying bits of the formal letter into this to really emphasize, and I know I've said this a lot, that you do not need to change every single little thing. The examiner is just scanning for instances of informal language. Not, oh my God, this word is not informal. So I'm gonna start this next sentence with alas. This might sound formal because it is quite a rare word for English learners to use and to understand. The reason why I'm including this is two reasons. Number one, formal does not mean high level. Formal does not mean a big, big complicated word that very few people actually use. Don't make that mistake. The second reason is it is an informal way. It's a funny way of saying this thing didn't happen. In the end, something bad happened. Language generally that is funny is more informal. If you used this in a formal letter, people would think that you're being rude. But if you're talking to your friend in an email, they'd find it funny. That's another difference between these two contexts. So alas, even though they told me I could chill out, chill out is informal way of saying relax. That's what we do in a business class lounge. You relax. So I've changed in my head, okay, what do you do in a business class lounge? You relax. How can I say that informally? Chill out. So alas, even though they told me I could chill out for half an hour, it left on time while I was still in the lounge. That's the first pull-up point done. So when I went to the gate, I was shouted at by the gate staff for missing my flight. When I went to the gate, I was shouted at by the gate staff for missing my flight. You could change this slightly. You could maybe change shouted to screamed, but shouted isn't really formal or informal. If you can hear anything in the background, that's my little boy shouting and screaming in the background. Screaming, shouting, they're just neutral words really. And they threatened to call the cops. So instead of police, cops, cops is slang for police. And there are many, many, many different slang terms that you could use for the police. Rosers, Pealers, the old bill, pigs and other not so complimentary slang words. Maybe don't use like the really, really rude slang words, but if you, you know, there's an easy one there. Police, there's in every country, there are 20 different names, slang names for the police. Just pick one. And have me thrown in the slammer. Slammer is a slang term for jail. Again, there are 20 different slang terms in every country for jail. We say slammer because when the jail door closes, it slams it, boom, it makes a big noise, so slammer. They removed my bag from the plane and chucked me out of the airport. So you're not changing every single noun in this sentence. Plane, I'm sure there are slang terms for plane, airport, I'm sure there are more informal ways of saying that. But what you should not do is spend a huge amount of time trying to think of informal ways of saying everything. Chucked, so this is a verb instead of thrown, to chuck something, to throw something, this is an informal way of writing to throw. The reason why I didn't change plane or airport, but I did change chucked is because it immediately easily came to me. Remember, you only have 20 minutes or less to write your task one response.  I know I've said it many times, but the examiner is not looking for every word to be changed. So I had to rebook my trip. I had to rebook my trip, which cost an arm and a leg. An arm and a leg is an idiom to say something cost a lot of money. Okay, so in the last bit, I've changed important meaning to our catch up. Catch up is an informal way of saying meeting or date, and that's our second paragraph and our second bullet point taken care of. We can move on. Then finally, the last bullet point suggests how you can meet up in the future. Why don't we take a rain check? A rain check is a informal way of saying postpone something to delay and meet up when you're, so not you are, you're another contraction, home for Xmas. So Xmas is just a shortened way of saying Christmas. What about Boxing Day for the Foody? Foody is a slang term for football. Boxing Day is the day after the 25th Christmas and traditionally here in the UK and Ireland, people go out and watch Foody. I'll, instead of I will, another contraction, make it up to you is an informal way of saying like resolve a problem that you have between two people, make it up to you, means you'll do something to fix a problem by getting the first round in. The first round, a round of drinks. When you go to a bar, the first round is when you buy drinks for all the people that you're with. Now, you don't have to use language like this. You might be looking at this and thinking, I don't know anything about Foody. I've never been in a bar in my life. I don't know what a round is. So you don't need to copy this exact language. All you have to do is look at the bullet point and think about the context and think, is there any informal language that I can easily, accurately and appropriately use? Now, you might look at this and think, I don't know anything about rain check or Xmas or Boxing Day or Foody or rounds in a bar. You might never have been in a bar in your life. You don't need to understand these particular words. What you need to do is look at the bullet point that you're writing about and think about informal language you do know about. So what you can do is think, okay, suggest how you can meet up with them in the future. You might know a lot about computer games and you know a lot of informal language because you play a lot of computer games online. So you could say, let's meet up in an internet cafe or let's go around to your house and we'll play computer games or you might know a lot about sports or cooking or whatever. Think about the thing that you are familiar with that you know about, that you are comfortable using informal language and then use the bullet point to inform what you're going to write about. But don't just insert lots of idioms and slang words and phrasal verbs that are not related to the bullet point. You must stick to the bullet point. And then I'll just finish off the paragraph just to make sure that I'm in between that 40 to 60 words. I'm sorry about all this. We all make mistakes, don't we? Okay, there's nothing really that informal about it. I'm just finishing off the paragraph in that way. Then we just need to finish off. I just like to put all the best, Chris. I'm not going to put pale because this is an informal letter. My friend knows my second name. All the best. You're only going to write one informal letter. So just remember this, put it at the end, then move on to task two. So I hope that you enjoyed that lesson. If you did, stop. I've got another lesson for you. Task one is worth 33% of your total writing mark. The other 66, 67% is task two. So here's a video that is going to help you improve your task two score as well.


Well, thanks very much to the organizers for including this paper on the program. This is joint work with Marcelo Melendez at UNDP, Ignacio Flores, at the City University of New York, and Nicolás Urdaneta, who used to be here and is now a student at Duke University. So, in the interest of time, let me jump right into what we do and start by saying that this is simply a facts paper. We're aiming here at laying out basic facts about what is the relationship in Latin America between inequality and the organization of the productive sector, which is the sector where the income of many people is generated. This is a question that is actually very prominent in the current global debate. The context is one where inequality has grabbed more attention recently because of the increase of inequality in many advanced economies, most notably the Anglo-economies. And in that debate, the discussion of the role that firm size and especially super star firms, very large firms, and very large market concentration plays for the increase of inequality in those countries. So the basic question we want to lay out is what is that relationship here in a region where one inequality not only is high now, but has been very high for a very long time. This is one of the two more unequal regions in the world, where market concentration is also high, but where market concentration has a bit of a different flavor than in those economies. And in particular, it has also the feature that not only we have very large firms, but also we have a low, a bottom part of the firm size distribution with a plethora of tiny firms. And in a region where the huge fortunes perhaps of very large firms or owners also combined with a very high prevalence of poverty and very deep poverty aggravating the income inequality problem. This is just an illustration of those last two facts. Here to different, sorry, here to different ways to divide the income distribution in Latin America according to two different sources. The world inequality database being one that corrects the income distribution with different sources and basically both of those versions show that as compared to the European Union or the United States, we have a very thicker, lower tail and one that is longer is also reflected in these two other pictures where what we see is that income of the lowest and the top deciles or any part of the distribution are farther from the median income as compared to both the U.S. and the European Union and that that also that there is a more marked asymmetry reflected in the fact that in the bottom decile that problem is exacerbated. So what we do is very simple. We basically want to lay out two basic facts. We want to characterize first the firm size distribution, which is a classical question in the macro literature, but one that has been traditionally addressed in the context of firms that are registered and that can be followed from business statistics. But that is not a useful a useful way to characterize the firm size distribution when the question is one of inequality because the incomes of many people in Latin America are generated outside that traditional firm sector. So the first thing that we do in this paper is this characterization, I'm sorry, of the full firm size distribution trying to include all businesses, all productive units, which implies a mythological challenge that I will talk about next. We not only do that for Latin America, but compare to a wide, the widest arrange of benchmarks that we have been able to find to date and continue into that effort. And then the second thing that we do is characterize in a very broad manner what is the cross-correlation between that distribution of businesses and the distribution of income, of the incomes of workers, rather the earnings of workers that come from those, from that productive sector. As I said, there is a crucial mythological challenge and that is that we will not find many of the relevant productive units in the traditional business statistics. And that creates a problem because the bias in those traditional statistics is precisely against the smallest productive units, against people who are, who have what I will call unipersonal business units, people who are self-employed. And that is a very important part of the occupied population in Latin America and on the one hand, and of the business sector in Latin America. So what we do is we actually resort to a different type of information, one that is not a likely suspect when you're going to talk about businesses, but that it turns out to be useful. And that is information on individuals, either the labor force surveys, the household surveys, or other types of individual level surveys that give us a full picture of all the people who are occupied in the productive sector of the economy. It turns out that many of those statistics have information not only on the worker itself, himself or herself, but also on the productive unit where that worker works. And in particular, it has information on the sector and it has information on the size of the employer, measured in terms of other employees. In some of the countries that we have information for, we mix that with information from administrative records on firms. Of course, this also brings limitations. This is individual level data, and that also implies that we do not have much information, much more information on the employer itself. We don't have productivity, we don't have labor intensity, so what we can do with this is limited. And the other problem that you're going to see is the size categories tend to be very broad, and they become even broader when we try to compare different countries, given that the definitions of the size categories are different. And the third problem is that many of this individual level surveys take the labor force survey of any country are indeed representative in general of the population, of the labor force, and of the occupied population. They're also representative at sort of wide beams of those distributions, but they're not representative when you focus on a very thin bin of distribution. And that generates the problem that some of the people that worry us when we think about inequality, and in particular the very rich, the richest of the rich, that's a very selected population that is not necessarily captured by these types of statistics. And so what we try to do is we test the robustness of our results to the attempts that people have run in different countries to correct for that. Okay, so with all that introduction, I'll give you our two basic findings. So there's two things I want you to take away from this. One is, if we just think of the first question, the firm size distribution of countries in Latin America, the basic conclusion is that now that we have incorporated in what had been measured before from business statistics, the remnant of the productive sector, that is the people who were not employed in the firms captured in those statistics, the concentration in small businesses that has been known for a long time for all underdeveloped and developing economies becomes even more prominent. And so what we have is a truly massive concentration of the productive activity in very tiny businesses in Latin America, which has no parallel in any advanced economy. And when I say tiny businesses, again, I mean all productive activities, including people who run their own business in the form of self-employment. So let me illustrate that with a few numbers. So what I'll try to do here is present numbers from Latin America and then some comparators, again, with the very wide categories that we can look at. Here you have the percentage of total workers that fall in three different categories. One is they work for firms with ten or more employees. Notice that I'm here, this large firm category is not really large firms. We're talking about small businesses, those between, say, 10 and 15 employees, medium businesses, those above 50, and depending on the country, the limit may be 100 or 250, and then we do have also the very largest of businesses. Then we have a category of people working at businesses, firms of less than 10 employees, and then we have a third category of those who are self-employed. Let me just show you or underline what I find most striking. If you take any advanced economy you have here in the US, you have here countries in the European Union who are above the median income per capita, these are countries in the European Union who are below the median income per capita of that group. This is rich economies in Asia. In any of those, the vast majority of workers, the vast majority works at a firm with ten or more employees. In the US that is close to 80%, in the rich countries of Europe that is close to 70, as is in the rich countries of Asia, and even the poorer countries in the European Union have the characteristic that most of their workers work at something that would jump to people's mind when they think about a firm or an enterprise or a corporation. Then on the other extreme, those comparator countries, rich or richer economies, have very few people who are self-employed. In the richer groups of these comparators, that is less than 10%, but even in the others, it is not more than 15%. By contrast, on average in Latin America, that is above 30%. The other category of people working at what I'm going to call microenterprises here is also one where Latin America has much more presence than these other countries. That's the basic first fact. I think white striking in terms of its magnitude, we have always known that the firm's distribution is shifted to the left in less than about economies, but the numbers are really striking. Let me also say that within those microenterprises, it is the smallest of categories that's predominant in Latin America out of roughly a third of workers that work in less than 10 employee businesses. Most are in businesses of one to four employees. And then let me also point to now trying to go a bit finer into the categories of size for the countries where we are able to do that. In this case, we can only divide here Colombia, and I'll show a few more numbers in a second for other Latin American economies. One feature that we're also finding in this particular economy in Colombia is what people call the missing middle. So it's not only that you have a lot of people in the tiniest businesses, but also that in the rest, those with 10 or more employees, most people are concentrated at the top. Here in particular, at businesses of 100 and more workers, whereas only 12% are in businesses in the very wide range between 10 and 100 employees. Let me also point that there's some dispersion across countries in the region, but still the high predominance of self-employment and work at microenterprises is a consistent feature. The missing middle is less robust. I'm sorry, this had been corrected. These numbers for Mexico are incorrect and also for Peru, but the basic point is that the missing middle is less robust, but still in many of the countries where we do see, say, less than 15% of workers in that very wide range, again, of between 10 and 100 employees. That is to say, not only we have lots of people in microenterprises, but what we are most missing is people who can move or businesses that can grow to being small and medium-sized, and we do have a concentration at the very top. Let me also say that if we don't take these other comparators, but we, for instance, we think, well, what's going on, it's simply that these countries are sort of at an earlier stage of development, and they will catch up eventually. So what if the comparator is not any of these countries, but say the US, whenever it had the same level of income that Latin American countries have today. Let me just say that what that was the case, sorry, I'm going the wrong direction here. When that was the case, say, in 1940, the US had a level of GDP per capita equivalent to that of Peru today. It still had very little self-employment compared to that, sorry, to that particular comparator, 48%. In 1950, the US was similar to Costa Rica in terms of today's GDP, and it had lower self-employment, et cetera. So that's a different way of looking at the same problem. So that's fact number one. Then let me move to fact number two. Is there a correspondence between that and the low levels of income of, sorry, the high levels of inequality? And you'll see that my glitch right now has to do with the fact that there is a very high correlation and in particular, there is a very high correlation between having a low personal income, a low level of personal earnings, and being at a particular type of business. In particular, being either self-employed or working at a micro-enterprise. So this table here is showing you, again, the distribution of workers across different types of businesses. Each column adds up to 100, but it shows it at different points of the income distribution, and in particular for each of the five quintiles plus the top 5%. The basic fact I want to point at is perhaps best captured by the fact that if you take one or the people at the bottom quintile of the income distribution, you will find almost no one, 5%. Almost no one who works at a firm that has 10 or more employees. Almost everybody here is either self-employed, which is the most prevalent category in that part of the income distribution, or working at a micro-enterprise, or an entrepreneur that owns a micro-enterprise but has very low income. That is to say, we're talking here about, sorry, transformational entrepreneurs, sorry, not transformational entrepreneurs, sorry, five entrepreneurs, sorry, again. Public sector is not in this picture. It doesn't change that much, that picture. Not surprisingly, the public sector employees are more towards the top end, and they work at a very large, quote unquote, firm. Okay, thank you, Mariana, I had forgotten to say that. The other thing to notice is that as you move across the income distribution, that changes substantially. So once we are with people at the top, we actually have sort of the opposite characteristic, and this looks much more like, say, the United States where most people work at businesses of 10 or more employees, or own one of such businesses. The other thing I wanna point out is that in the US, there is much less of a gradient between firm size or firm business type, and the income distribution. Though there is some gradient, it is still the case that even for the poorest of workers or the lowest income workers, the vast majority here, almost 70% of them, work at firms that have 10 or more employees. I'm short on time, so the only other thing I wanna say is basically that this differential distribution is not simply driven by the fact that the productivity distribution is shifted to the left to start with. So it's not simply that we have less productive businesses, and thus those businesses end up being smaller because they don't have the ability to grow, but also that we have more disproportionate allocation of resources towards precisely those businesses where the productivity is lowest and where incomes are lowest. Let me just show you, rather than this overall, the composition, let me just signal that with some numbers, what you have here is for the first decile of the earnings distribution. These is the gap between the median earnings and the earnings at the first decile, and that gap can be as large as 12, so one person in this category here, the average person, has 12 times less income or earnings than the median person, and the fact that I was pointing at in my previous words is the fact that it is precisely the categories where this gap is largest, even within the first decile, even within the lowest productivity decile, it is this largest gap categories that grab the most concentration of workers. Just to leave a number in your heads, sorry, this here is say the composition of how much can we attribute the gap between the 50th percentile and the first decile, and the difference in that gap between land America and the US, how much can we attribute that to a larger gap in every business category that I showed you for the first decile in land America versus the US, and how much is this quote unquote misallocation in the sense of the region allocating precisely the most resources where the largest gap is, and the number is quite striking, 60% of that gap can be attributed to this disproportionate allocation of workers to those categories. So I'm not going to summarize, I basically gave you the two basic facts, let me just say that this is robust to using the world inequality database method for correcting incomes with the tax statements, especially to capture whatever happens at the top. The basic facts survive, even though the distributions are not identical, we basically this correlation, yeah, this is perhaps a good way to show it, that the basic correlation is sustained, the basic facts are sustained, and the basic correlation between the type of business and the income that people receive is sustained. Just a few words of discussion for closure. As I said at the beginning, this relationship between inequality and market concentration is a focus globally. For Latin America, this is certainly one story, there is much more information in the paper, for instance, showing that indeed market concentration is higher in any of these countries within the entrepreneurial sector, but the facts that we have just highlighted basically demand that in the discussion in Latin America, we do not forget about the one, the importance of poverty, to the, sorry, this is telling me that we're done. One, I was saying the importance of poverty for inequality in Latin America, so we can not simply focus on how we take the huge fortunes of these very rich people and translate it to other people because to start with, we have a lower level of income and much more concentration in poverty and the most vulnerable incomes, so that's fact number one. In fact number two, we may have high concentration within the traditional firms sector, the traditional, the other sector that we traditionally understand as the business sector, and that is something certainly that we need to pay attention to. Competition is crucial, we need, as I said, to populate that small and medium-sized enterprise sector, but we cannot forget the fact that those people in poverty and vulnerability are actually being left out of any sort of business sector association. So to start with anything we do to try to reduce inequality, of course the theme of these conference, by attending the business sector needs to take into account the fact that we actually, to start with, need that business sector to grow and to be able to embrace more people and produce incomes for more people rather than letting them out. Thank you.


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Welcome to Top 5, I'm Jackie Paol and this is where we take a look at the 5 key stories that everyone is talking about. This time, with the year-end look-back season upon us, we're recapping some of the biggest moments and trends in and around music culture in 2022. So let's get started. The most anticipated album this year came from, who else, the queen bee herself. Beyonce dropped her club-ready album Renaissance this summer and it quickly climbed the charts. With the record's lead single, Break My Soul, becoming her first solo number one release since 2008. Thanks to the massive popularity of the latest season of Netflix's Stranger Things, the singer's most recognizable record made a comeback this summer. Running up that hill went mega viral, meaning you could hear it everywhere, on TikTok, on the radio, even in the grocery store, all while introducing the British art pop singer to a new generation of fans. For as many highs as music fans had this year, there were also some lows, but while the music world is still mourning the loss of Foo Fighters drummer Taylor Hawkins, it also came together to celebrate his life and his love of music, with friends and family throwing an epic charity concert in his name at Wembley Stadium, featuring performances from his Foo Fighter bandmates Liam Gallagher, Queen, Paul McCartney and so many more. To be sure, the concert was one of the most emotional events of the year for music fans. With this outpouring of love and awesome sight of Hawkins' son Shane, absolutely crushing the heavy assignment of sitting behind the drums with the Foo Fighters to play my hero. R.I.P. Taylor, you will never be forgotten. Megan Thee Stallion had an unmatched year in 2022, continuing her legendary climb while proving there's nothing the original Hawke Girl can do. She released her successful sophomore album Traumazine, cementing herself as one of rap's most gifted lyricists and quotable song stylists. She entered into a production deal with Netflix, partnered with Cheerios for a popular Super Bowl commercial, became the first-ever female rapper to perform at the Oscars. Oh, and she just joined the MCU. The Super Bowl halftime show is consistently one of the most-watched TV events, and in 2022, hip-hop dominated one of the world's biggest stages. Dr. Dre, Mary J. Blige, Eminem, Kendrick Lamar and Snoop Dogg came together to pay tribute to the genre, blending old favorites and new chart-toppers for a performance that will go down in the history books. No, really. The show was such a spectacle that later in the year, it won not one, but three Emmy awards, including one for Outstanding Variety Special Live. That's all for us today on Uproxx Top 5. I'm Jackie Pal, and we'll see you next time.