From charity to enterprise: A new theory of development

The “first world” has poured over a trillion dollars into the “third world” over the latter part of the last century. Such institutional aid has taken many forms, such as grants, loans, direct investment and so on. While one could argue about the hidden motives behind this aid, ranging from altruistic to political, the main rationale for foreign aid has been poverty alleviation. And when measured against that indicator, the trillion dollars has a relatively poor ROI.

In the last decade, theories around poverty alleviation have harnessed novel ways of thinking about the problem. Accountability, scalability, sustainability are just a few examples of the buzzwords in this arena. There has been a move away from thinking about charity based solutions to exploring those that empower people in the long term. The theory of change here is simple: give a man a fish and he will eat for a day; teach him to fish and he will eat for a lifetime.

But how do you teach someone to fish? You need, at the minimum, a body of water with fish in it. This is where the social entrepreneurship comes in. While entrepreneurship transforms innovations in economic goods, social entrepreneurship harnesses its power to serve a social good: poverty reduction and development. Social entrepreneurs bring to the least developed regions of the world the tools needed to develop latent abilities, be it through access to capital, education or healthcare. Of these, the move towards engaging the free market to solve problems of the bottom of the pyramid has been one of the most exciting developments.

Channeling the power of the free market into parts of the world previously untouched by it has transformed how we think about the less fortunate among us. It morphs charity from money that is simply given away to more of a two way street: donor dollars can be recouped over time and reinvested, increasing the incentive for profit-minded individuals and organizations to contribute their time and energy to the issues afflicting the bottom billion.

Social entrepreneurship has great promise to solve the pressing needs of a significant portion of the world. It needs to be added to the arsenal of tools we use to fight poverty and bring greater opportunities to more and more of our fellow humans.

One thought on “From charity to enterprise: A new theory of development

  1. Just beautiful! I wish I could come visit in person! Your despoictirn of the many scents is quite enticing, as well as the photos of the blooms. Yes, every garden should have roses!

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