Social entrepreneurship instead of foreign aid

Foreign aid as a development tool has been tried and found wanting. Decades of handouts from developed countries to developing countries have done little more than promote corruption among developing country leaders and continue a cycle of dependency.

Social entrepreneurship is a growing phenomenon among business-minded people who want to make a difference for those in poverty. Social entrepreneurship is different from current corporate social responsibility efforts, which involve projects such as building a well while in the process of building a factory in Africa.

For social entrepreneurs, the social good is the end goal rather than an afterthought. Take Nokero as an example. Short for “No Kerosene,” the company was started by inventor Steve Katsaros, who developed a solar-powered light bulb that could provide light for those without access to electricity. Rather than continually looking for grants to produce the bulbs and then handing them out to people who may not recognize their value or may not be the most in need, Katsaros made the bulbs cheaply enough that he can sell them in the developing world. By selling the bulbs, Katsaros can also stay in business as long as people want his bulbs, rather than becoming unable to provide when the grants dry up.

In addition to stimulating development, social entrepreneurship inherently promotes economic freedom. It recognizes that the poor have the ability to determine their greatest needs, and they deserve the respect and freedom to make their own choices about how to meet those needs. Social entrepreneurs are providing these kinds of opportunities in a cost-effective, sustainable way.

[Excerpt of article by Michelle Kaffenberger]

A small grant can be big

Representatives from grantmakers across Africa joined together in Nairobi to discuss how small grants can mobilize social change. One of the resounding messages that was repeated throughout the day is that ‘small’ grants are not small at all. In fact, for these grantmakers, most of whom are making grants of around US$5,000, ‘small’ grants for local organizations can have a bigger impact than the huge chunks of cash poured into larger NGOs.

Participants articulated the power of complementing local leadership with broader networks to achieve change at multiple levels – community, nation, region. Many highlighted the incredible successes that local groups were able to achieve; successes that were set in motion by grants of only a few hundred dollars in some cases.

For small, local organizations, small grants can be major stepping stones. They can fund infrastructure and staffing, and build the capacity of local leaders to take their work to the next level. They can enable exchanges among communities facing similar issues and unite diverse constituencies.

Above all, it is not about the money itself. Money does not create change. But comprehensive support and mentorship can. Pouring millions of dollars into a particular problem is no guarantee of its resolution. But if accompanied by careful and thoughtful mentorship and capacity building, a small grant can resonate in a powerful way.

[Excerpt of Global Greengrants Fund article]

Philanthropy and Next Generation Wealth

In the past if you were to imagine a room filled with around 100 people with a combined net worth of $50 billion, you might imagine a pretty homogeneous group of staid, white-haired older men. Last week's Nexus Global Youth Summit was a rainbow of unique and enthusiastic Gen-X, Gen-Y and even Gen-Z (15-year-olds) passionate social entrepreneurs.

This summit was convened by Jonah Wittkamper, director of Search for Common Ground-US, "We aimed at connecting young, wealth holders with social entrepreneurs. Instead of feeling isolated, today's wealthy youth can be inspired to change the paradigm of wealth away from materialism to philanthropy."

John Kluge, Jr, age 28, conceives a notion that, " a billion person problem requires a billion person solution." He explained to the UN General Assembly (and his peer audience) that "...the new definition of billionaire is someone who is relentlessly taking on billion person problems -- water, sanitation, illiteracy, etc."

Also attending the Nexus Summit were progeny of first generation entrepreneurs whose parents have created and sold firms to large conglomerates and their family has become instantly wealthy by a single event. Theses young people have found their lives dramatically changed, and these wealthy next generation have found a satisfying calling to combine their wealth and the feel good power of socially responsible philanthropy.

--April Rudin, writing in the Huffington Post

Corporate Social Responsibility and Social Justice

When less than 5 percent of the world’s population live in the United States and consume more than 25 percent of the world’s resources, while roughly half the world is either starving or on the verge of starvation — the only way you can define that system is as a failure.

It’s not a model that we can sell to Africa or Latin America or India. It’s not something we want to pass onto our children. And an awful lot of business people are beginning to understand this. Those young MBA students who are going to be running our companies in the future years are waking up to these facts.

We’re moving into a time when people are really getting the point that we have to be sustainable, that that has to be the driving force. And sustainability includes social justice.

So we can’t be sustainable if people in the world are starving and being exploited. That’s not working. It seeds the roots of turmoil, even terrorism, and it creates tremendous problems for our children. We’re now finally beginning to understand these new facts of life, and our young people are waking up the fastest.

And corporate executives who understand these new trends and steer their companies in directions that recognize that they are not just about making profits regardless of the social and environmental costs will thrive.

[Excerpts of an interview with John Perkins, author of Confessions of an Economic Hit Man]