Feb 18

Pedro belongs to the poorest community in the province. His mother is blind and lacks the means to support him. How would you like to sponsor him for as little as $1/day?

That’s the general gist of any child sponsorship program – do some good, adopt a child, and now that child can live life. There’s a story, there’s a face, and a dire circumstance – who wouldn’t want to give? But how effective is this in solving the situation really?

Take, for example, a program out here in Cambodia who offered $15 to individual drop-outs to get back into school. Noble goal, but the net result was that more kids dropped out. Why? Because they wanted the $15.

First, there’s the ethical issue of individual sponsorship. Should a child be so publically exposed along with their struggling situation? How fair is that to the child? And where do you draw the ethical line for a child to feel “entitled” to a donor half-a-world away?

Second, there’s the logistical issue. A child is rarely an isolated incident and is more likely to be amongst a group of children in a poverty-ridden community. Should one child receive the benefit over another? If he or she does receive surplus treatment, what about the jealousy factor among peers? And if not, then wouldn’t that make child sponsorship artificial – advertising that your dollar is helping one child, but in reality, the money is distributed?

One mission head of a development agency in Cambodia aptly summed it up: “Individual sponsorship is not development”.

Indeed, development projects that are systematically monitored are often the best remedy to a child’s circumstance. But here’s the big but– projects don’t sell as well as a story and a face. Projects sorely lack that human touch.

Here’s some food for thought: How does one balance the need to raise funds by tugging heartstrings, while also being true to the programs that best help?

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Oct 14

“Traditional philanthropy and nonprofits generate a social gain, but they do not design their programs as self-sustaining business models. A charitable dollar can be used only once. A dollar invested in a self-sustaining social business is recycled endlessly.”
Muhammad Yunus

There is a growing belief that the traditional method for doing good, giving money to a large charitable foundation, is broken. To confront this fracture, increasing numbers of passionate individuals who are motivated by doing meaningful work have started a new movement to launch self-sustaining, value-driven social enterprises. These enterprises epitomize entrepreneurship in its purest form, which is solving common social problems in an innovative way. Social entrepreneurs pioneer new approaches to address unmet needs while charitable recipients benefit from better investment in their human capital. In sum, social entrepreneurship is an all-encompassing way for multiple parties to build social value together, leveraging an initial investment and creating a sustainable social venture out of it.

Joseph Schumpeter, an Austrian Economist, wrote about the spirit of entrepreneurship and defined an entrepreneur as someone who identifies a commercial opportunity and organizes a venture to implement it.  Similarly, social entrepreneurship is also about value creation. The motivation for a social entrepreneur is not financial payout but social change. Instead of creating economic value, social entrepreneurs focus on seeking out opportunities to create social value. They gather resources to solve issues, needs and problems that are not fulfilled by either the governments or the private sector.

Furthermore, social entrepreneurship brings together deep collaboration between the non-profit and business world. Social enterprises are beginning to operate with more business vigor to create a broader more definitive social impact. Knowledge of the business eco-system helps drive social enterprises to be more effective and efficient. In order to create a sustainable organization, there is a need to have a business model that has an immense focus on value creation. This model ultimately trickles into charitable beneficiaries’ daily lives. Specifically, they become active participants in social change rather than passive recipients of donation dollars.

Just as entrepreneurship is instrumental in the advancement of the economies, social entrepreneurship is crucial to the progress of the societies as a whole. There is an increasing importance in promoting social entrepreneurship and providing support for social enterprises. Social ventures are generally considered to be small-scale change tackling a small social problem. This is going to change. With the emergence of successful social ventures such as the Grameen bank, we have witnessed that social entrepreneurship can equally create significant impact, changing the lives of millions of people.

That is the value of social entrepreneurship.

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