Are Charities the Best Vehicle to Solve Social Problems?

I’ve  dedicated my working life to increasing the capacity of charities. I worked in fundraising from the age of 18; raising millions for good causes. It was the constant behest from donors that little or no money  be used for infrastructure that lead me to create Give What You’re Good At (a for-profit match.com for professional pro bono).

I am perhaps an unlikely defendant of capitalism.  Anyone who knows me, will tell you, I am severely passionate about charitable work. Helping and protecting the most vulnerable and providing opportunities for people underpins my being.

For the past six months I’ve been setting up GWYGA globally. Talking to charities and infrastructure support bodies all over the world about what charities need to increase their capacity. Unsurprisingly, I  have given a lot of thought to whether charities are the best vehicle to solve our social problems. It may surprise you to hear what I have learnt.

I have seen a lot of great projects; many of which are taking fresh approaches to solving our most complex problems.  But ALL of which are struggling for funding or funding has ended because funders want to support even more innovative projects, which means projects proven to work go unfunded. Take profitability and social impact side-by-side, this scenario would never happen in business. If it works, businesses scale the product or service, not retire it.

Steve Jobs was castigated by the media for his lack of philanthropic zeal. Famously culling all community investment programmes when he returned to Apple, saying the money would produce more social impact at the company. Two years ago I would have lambasted Jobs for being a greedy capitalist only interested in his own ends. But now, at the intersection of business and charity, my view is all together different.

In some instances business does achieve more because of capitalisms unique feature: profit. Profit can be reinvested to improve the experience for the customer which means long-term and sustainable growth. Profit can be used to attract top talent. Profit allows companies to take risks and profit is a robust measure of whether a company is serving (and in most instances improving the life’s’) of its customers.

Now, before you hunt me down with pitch forks and blazing torches… not everything can be commercialised, and nor should it be. Palliative care, mental health, helping children and animals to name just a few.

I was at a conference last week, where a charity worker accused me of making money from doing good.  GWYGA does not make money from people volunteering. We make money from solving business issues. But even if we did, is this really such a bad thing? Is it really more socially  acceptable for me to make money through selling violent video games, than through helping people give their skills?

I can see why people have this attitude. Charity emerged at a very different time. It was born (legally) in the 16th century as a type of offsetting  for the Calvinists: a religion that promulgated the accumulation of wealth, but preached that spending was hedonistic and would lead to an eternity in hell.  Charities were created for calvinists to put their wealth, but this historical manifestation is ill suited to a rapidly changing society, where the dominate religion is consumerism.

Would Google be where it is today with a non-profit structure? Of course not. If we put aside the tax/ data issues, Google has has a profoundly positive impact on the way we live our lives. ‘Google it’ is now the solution to many modern day problems. It’s certainly got me out of a lot of scrapes.

The conventional wisdom is that  business makes a profit by causing social problems. And a lot of companies have fallen into this.  There are a lot of companies who still see CSR as a PR appendage, a way to increase sales and brand recognition. I truly believe these companies will have no future in an increasingly open world, where one well positioned tweet can cause your stock to drop 12 points. The consumer is in the driving seat, and an inability to satisfy their needs (both consumption and ethically) will lead to bankruptcy.

Those reading might see my thoughts as an advocation of  social enterprise – and it is, in a roundabout why. 50% of social enterprises are charities, many are grant dependent. This often means they chase the money rather than doing what they know works. It has long astounded me that Whitehall sets the agenda for how to address issues they know nothing about. They aren’t on the ground and their prescriptive grants are at best guess work.

I hope all businesses move to a social enterprise model. For now social enterprise  is the butter frosting on a multi layered cake of opportunity — that is a  widespread acceptance of capitalism as a way to solve and SCALE social problems.  More than lining the pockets of the sports car driving capitalistic.

In it simplest form business produce the resources and business  says how they are distributed. Profit and return to shareholders guide actions, but people overestimate businesses pursuit of profit to the detriment of all other gains. Consumer messaging has changed to ‘on your side’, ‘moments that matter’, ‘building a better world together’? And its not just messaging thats changing. Companies recognise the need to engage with people as, well people and the value in driving CSR to the heart of operations.

There’s another, perhaps more personal reason that I’ve become a capitalist proponent: I am constantly disgusted by the lack of social mobility in the UK. Having been born to impoverished Irish immigrants, I learnt very early that I needed to adopt a certain ‘cultural capital’ of speaking and acting to be taken seriously. Entrepreneurship  lifts people out of poverty, because it gives them chances, not vetted by the prejudice of others, but craved by their own performance and determination.

So, as business limps towards greater accountability and transparency, charities limp towards greater autonomy, what’s really needed is more bilingual people who can talk the social and commercial languages, to find solutions that can meet demands from both sides.

To these ends GWYGA  will be opening its free platform to commercial start-ups in 2014 and giving professionals the choice to support organisations who pursue profit and change.

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