GreaterGood South Africa

Can social entrepreneurs change the world?
Monday, June 30th 2008

Wherever you go in the development world these days, people are talking about social entrepreneurs and how they just might be the answer to tackling global poverty. By using entrepreneurial principles to work on the world’s big problems, can they find solutions where traditional non profits have failed? GreaterGood SA’s own founding social entrepreneur, Tamzin Ractliffe, investigates the phenomenon.

A few years ago, nobody had heard the term ‘social entrepreneur’ but now it seems everywhere you look, there’s a social entrepreneur taking on one of the world’s big problems in a new way. But is the entrepreneurial approach the way forward for development?

Spotting a gap

Social entrepreneurs are often defined as people who can recognise a social problem and use business or entrepreneurial principals to create a solution. These are people who bring urgency, passion and a business-like approach to development and they can often find solutions to critical issues that have evaded governments and traditional non profit organisations.

What sets social entrepreneurs apart is their ability, just like ordinary entrepreneurs, to spot a gap in the market and then find a way to fill it. This means that they are people who can quickly assess what is not working in society and come up with ways to fix it.

Beyond philanthropy

Non profit or philanthropic organisations do very valuable work channelling the generosity of the rich to the underprivileged. But philanthropy alone is not enough to solve the world’s problems. There are billions of dollars going into development in Africa, for example, yet much of Africa is still blighted by poverty. Aid is constrained by a limited picture of Africa’s real development needs. Funds are mainly channeled through governments or large grant-making foundations that have their own specific development agendas. So the small, grassroots organisations – often doing the most vital work at the coalface of poverty – lose out.

Corporate social investment has limits too: research conducted in 2003 indicates that 15% of CSI programme funds focus on company employees with a further 49% going to the communities in which companies operate. Two-thirds of CSI spending was targeted towards urban and peri-urban areas, with only 34% going to rural communities. So the areas with the greatest needs, and with the least access to resources, do not receive the bulk of corporate investment.

Social entrepreneurs fill the space between philanthropy, aid and corporate social investment: they marry a results-oriented, business approach with the desire to create real change in the world.

Banking on change

Nobel laureate, Muhammad Yunus, is a much-celebrated social entrepreneur who brought fresh thinking to the problem of poverty in Bangladesh. As an economics professor in the mid-1970s Yunus discovered why, no matter how hard they worked, poor people in his country remained poor: they were in the grip of moneylenders. Yunus decided to set up a new kind of bank that would serve the poor – the Grameen Bank.

Grameen Bank makes loans to the poorest of the poor, particularly rural women. It has been a phenomenal success: since its inception, it has lent $6 billion, with a 98.6% rate of repayment.

“If we are not achieving something,” Yunus says, “it is because we have not put our minds to it. We are accepting psychological limitations that prevent us from doing what we claim we want.”

Results-driven

When I started GreaterGood South Africa from my home in 2003, I felt strongly that traditional philanthropic giving alone was not enough to lift people out of poverty and that innovative solutions were needed to address the huge imbalances that exist between South Africa’s rich and poor.

My belief was that results-oriented business processes and technology tools could do much to redress these imbalances. Technology networks can transform the traditional map of development, expand community horizons and allow the kind of progress in a single decade that was once only possible after generations.

GreaterGood SA uses technology to connect people but we also aim to improve the accountability of the development sector and create a new generation of more considered, donor-investors. What is entrepreneurial about GreaterGood is that we started by asking the questions: Why shouldn’t non profits be held to the same high standards as profit-making corporations? And why should there not be a ‘profit’ (in terms of lives changed for the better) in social development?

Moving away from charity

With the birth of SASIX in 2006, we were able move donors from a “charity” mentality of traditionally reactive or “feel-good” giving to a more analytical and considered approach to tackling poverty in South Africa. SASIX applies the same sort of assessment and due diligence to philanthropic and responsible financial investment as is given to more traditional financial investments.

In fact, if SASIX was a person, it would be a social entrepreneur: it takes a new approach to development, brings business processes to solve social problems and is focused on measurable results. And while it may not have changed the world just yet, SASIX is taking on South African issues and having a great deal of success; over R8.9m has been invested in 42 social development projects in just two years.

Going global

The beauty of technology is that it doesn’t matter where people live – a donor in France can research and support causes in South Africa without having to leave the comfort of their home. The next logical step for GreaterGood South Africa is to extend the entrepreneurial SASIX concept to the global social capital market to enable someone in Portugal to invest in assessed and evaluated development projects in Kenya or Mexico, for example.

Watch this space for news about how we will be taking the SASIX concept global.

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