The traditional concept of the word “charity” has earned an unfortunate reputation. It is associated with inefficiency – all emotion and little intelligence. It is associated with fraud and scams, underscored by the occurrence of corrupt “briefcase NGOs”. Compared with impact investing and social entrepreneurship, charity is often considered archaic and old school, conjuring images of missionary schools, soup kitchens, homeless shelters, and beggars on the streets. Yet today is the day we celebrate the International Day of Charity. In honour of the anniversary of Mother Teresa’s death, the United Nations established September 5th as the International Day of Charity. This day positions us to reconsider the negative paradigm of charity and celebrate not just its significance, but its transformation.
With excessive spending on overhead and administrative costs, to glamorous charity dinners that do not seem to focus enough on the issues, charity’s bad reputation is not so far fetched. But with the millennial generation, there has been a shift. A demand for authenticity, a desire to do things differently, to innovate. It is with this generation we saw a significant increase in volunteer trips to villages in Africa, slums in India, and the advent of the social entrepreneur.
The social entrepreneur is someone who finds a way to combine social impact (providing a social good) with a for-profit business model, thereby enabling capitalist market forces to work for the betterment of society. “You mean I can do good, and ensure financial sustainability? Awesome!” David Bornstein’s Book on changemakers, “How to Change the World” cemented the amazing work of social entrepreneurs through evaluating select Ashoka fellows and the work they do around the globe to develop a model for social entrepreneurship.
In 2007, the term impact investing was coined at The Rockefeller Foundation’s Bellagio Center, putting a name to investments made with the intention of generating both financial return and a measurable social and/or environmental impact. Today, impact investing is about unlocking private capital for social good:
“Global philanthropic funds, even when combined with the development or aid budgets of governments, add up into the mere billions of dollars. Meanwhile, the cost of solving the world’s most critical problems runs into the trillions—including an estimated $2.5 trillion annual funding gap needed to achieve the Sustainable Development Goals (SDGs) in developing countries alone. Private capital is urgently needed in order to fill this gap and address pressing global challenges.”
In a Forbes article from September 2014, Sir Ronald Cohen and Matt Bannick stated:
“Poverty, homelessness, crime, unemployment continue to plague even the wealthiest of nations. Imagine if in addition to existing efforts, we could leverage trillions in private capital and bring the same level of focus and entrepreneurial dynamism that we see in the private sector to meet the pressing needs for better schools, more job opportunities, improved public services, safer streets?”
Impact investing is poised to change the trajectory of poverty, crime, homelessness, for education, green energy and much more. It just needs to be unleashed.
So what does this have to do with Mother Teresa? Nothing, and everything. Impact investing and social enterprises are competing in the same space as traditional charities. Even though impact investment may have enlarged the funding pool, it has focused disproportionately more on social enterprises to the detriment of non-profit organizations.
It is a marvel that entrepreneurs have started businesses that provide social good. Solar companies, mobile health, agri-businesses have literally saved millions of lives. However, when social entrepreneurs are able to approach the same foundations as charities for funding, it creates an atmosphere of competition, especially in developing countries, where resources are limited and the need is greater.
In an interview, Chris Walker, former Acumen Fellow and social entrepreneur, presents an argument for both impact investing and charity. He identifies social issues that still require the traditional charity approach: advocacy for human rights and relief efforts for natural disasters and refugee situations. In light of Internally Displaced Persons (IDPs) fleeing the insurgency in northern Nigeria and Syrian refugees flooding Europe, this is a current reality. Who are the organizations rising up to provide aid? Charities.
Innovators may argue that even these issues can be resolved with the right business models and technology applications. For example, an insurance scheme for flood enables governments to plan ahead and tap into funding reserves when a crisis hits, thereby reducing the need for charities to support the disaster once it happens. So maybe it’s just a matter of time. But while we wait for the solutions to be discovered or engineered, how do we deal with the problem of today?
Beyond large scale natural disasters and relief situations, and human rights, there are some simple basic needs facing all societies, some more than others: providing food, shelter, clean water, education, and basic healthcare to the poorest of the poor. Creating an app on a mobile phone that offers first aid tips for basic injuries, does not replace the need for doctor. Providing a tablet with textbooks to children for free, does not negate the need for teachers. What app or device can we develop that provides a substitute parent for the orphan?
Again, the issue is not that innovation, sustainability and scale are bad, but that we’re all competing in the same funding space. Corporates, philanthropists, impact investors, and donors are focused on scale. How far can this $1mn go? How many lives can it transform? How much bang for the buck? If they had to choose between sponsoring one child for 6 years, or buying 1,000 mosquito nets that can save 5,000 people from malaria, guess which proposal wins the funding?
In my line of work, fundraising is challenging because of seemingly competing needs. It costs NGN 250,000, per month for 6 months (NGN 1.5m) to rehabilitate to drug addict. With these same funds, you can send 16 children to school for a year, 2 child to school for 6 years. With NGN 1.5m you can empower 30 people to learn tailoring and start a micro business. Yet we need to rehabilitate drug addicts so they do not become a menace to society. We need to educate out of school children so that they do not enter the cycle of poverty. We need to train out of school youth so they do not become restive and enter a life of crime. We need all three services and they should not be in competition with each other.
Today as we commemorate International Day of Charity, we can renew our perception of charity by remembering the life and work of Mother Teresa.
Of Eastern European origin, she was the last born of a wealthy Albanian family. A devout Catholic from an early age, she left home at age 18 to join the Sisters of Loreto as a missionary and never looked back. She ended up on the streets of Calcutta a few years later as a teacher in a Convent school. Disturbed by the extreme poverty around her, she eventually left the convent and dedicated the rest of her life to helping the poor.
She had no source of income and at the onset had to beg for food and supplies. In the beginning of 1949, she was joined in her effort by a group of young women and laid the foundation to create a new religious community helping the “poorest among the poor”. She founded the organization Missionaries of Charity. Its mission was to care for “the hungry, the naked, the homeless, the crippled, the blind, the lepers, and all those people who feel unwanted, unloved, uncared for throughout society, people that have become a burden to the society and are shunned by everyone.”
Mother Teresa was overwhelmed by challenges of poverty but rather than give up, she focused on one life at a time. Each small act of kindness grew to an international organization that provides aid and relief to the poor worldwide. At the time of her death, Mother Teresa’s Missionaries of Charity had over 4,000 sisters, and an associated brotherhood of 300 members, operating 610 missions in 123 countries. These included hospices and homes for people with HIV/AIDS, leprosy and tuberculosis, soup kitchens, children’s and family counselling programs, personal helpers, orphanages, and schools. The Missionaries of Charity were also aided by Co-Workers, who numbered over 1 million by the 1990s.
We need a global paradigm shift for charities. These organizations are at the front lines in this fight against poverty, feeding, clothing, educating and tending to the poorest of the poor, and they need your support. At the end of the day, they exist because of your money, time, love, and support.
“If you can’t feed a hundred people, then feed just one.” – Mother Teresa
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Sola Adeola is the Executive Secretary of Freedom Foundation, a non-profit with the mission of providing rehabilitation, education, and empowerment programs, to impoverished people in Nigeria, with the hope of transforming lives and changing society. For more information about the Foundation, please visit our website www.freedomfoundationng.org.
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