Are Charities Becoming More Social Entrepreneurial?

Social Entrepreneurship Versus Charity

Last night we had a Board Meeting for the Organisation I am a Director for called Empower 4 Life. We started to brainstorm ways in which raise money to equip the poor for self-sustainability. We discussed some fundraising ideas but the majority of the discussions centred around some social entrepreneurial projects that we could set up. Obviously, social entrepreneurship is my passion but when you look at traditional charity organisations around the world, there is a merging trend to use more entrepreneurial practices to become financially sustainable.

While charity reflects the benefactor’s compassion for humankind and is measured in terms of the generosity of donations to the less fortunate, social entrepreneurship reflects more than the good intentions of its enthusiasts, who are not merely driven by compassion, but are also compelled by a desire for social change. Oftentimes, charitable organisations survive at the mercy of their donors whose contributions vary with the economic climate. Lets face it the economic climate has been pretty bad lately, and as a result donations can fluctuate.

A nonprofit that practices social entrepreneurship, on the other hand, relies less heavily on donor funds because it creates social programs that are meant to be self-sustaining. Social entrepreneurs manage donor contributions in an effective manner, investing in social ventures which can then generate their own revenues to sustain themselves.

In other words, while charity uses donor funds to buy food to ease the poor’s hunger, albeit only temporarily, social entrepreneurship uses its funds to make a lasting social impact, creating instructional programs that teach the poor how to grow their own food so that they can take care of themselves in the long run. It can also set up a social entrepreneurial model to provide nutrition through developing a citizen base.

Social Entrepreneurship for Self-Sustainability

In a world of scarce resources, it is no longer enough to simply donate out of good intentions. Rather, J. Gregory Dees, Professor, Practice of Social Entrepreneurship, Fuqua, emphasises the need for people to value the social impact that their donations are actually having. He explains the growing recognition that corporate social responsibility benefits businesses as well as the community and that welfare organisations will only be really effective when they start exploring social entrepreneurial partnerships.

“In society, I’d like to see more value placed on social impact and success than on good intentions or effective marketing or the severity of the need you’re claiming to serve. I’d like to see a fundamental change in ethics or culture around that. We still have the lingering effect of a culture of charity, which honors people for their sacrifice—how much they give and the purity of their motives. The word charity comes from the word “caritas,” which is Latin for love or compassion. We’re rewarding people for demonstrating their love of humankind, but we’re not often looking to see whether it has the intended impact. So I’d love to see an ethics change, so that we honor people for the impact they’ve had directly, or indirectly in choosing to support programs and organisations and individuals that have had impact, not just for how much they give or how generous they are.”

Nic Frances is a social entrepreneur and he once worked for charity. He has written a  book called The End of Charity: Time for Social Enterprise.  This is the story of how he came to understand that charity can never deliver a just and sustainable world. The winner of the 2006 Iremonger Award, it is a challenging and thought provoking exploration of how we should rethink the idea of charity. He argues that to truly address the problems of poverty, inequality and environmental sustainability we need to become social entrepreneurs, establishing social businesses with real values at their centre. This book looks at the authors own principles of social entrepreneurship, based on the idea that the market can be a tool for delivering many values other than profit.

I love Charities and have been involved with them since I was a child and I will continue to volunteer and donate to them. They must and will always exist but the trend for them to take on more social entrepreneurial practices will in turn mean self-sustainability and greater impact. This will always be a good thing! What do you think?



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