[Aid to Africa] Agents of Social Change in Africa

from Embassy Magazine

The first in Embassy's four-week series on the budding social reformist sector in South Africa, Kenya and Canada, profiling the people and the policies behind social entrepreneurship.

"There are three kinds of people here in Kenya," says Dave, an eatery-owner in Kisumu, a city of 160,000 on Lake Victoria. He sets down a bill worth 60 cents for a satisfying lunch of milky tea, fried smelts and chapati. "The politicians, the business-minded and civil society, of which some are discouraged and others have given up."

A bold international pledge to do more for Africa isn't a beacon of hope for Dave, his wife and four children. "They sing, sure, but it's only a song," he says of the foreign politicians. "And we've heard it before."

Dave, an employer of seven, is enrolled in a carpentry course. Tuition is an onerous expense that means his family can't eat as well. He explains that should municipal officials who collect daily rent make good on a threat to expropriate the dirt floor from under his open-air restaurant, his woodworking skills could become an alternative means of survival.

In poor nations and around the globe, a burgeoning class is breaking free from conventional moulds. "Social entrepreneurs," is the popular label given to what the author of How to Change the World, David Bornstein, describes as creative individuals with the "determination, savvy, and ethical fibre to advance an idea for social change in society on a large scale." Its most visible impact over the past three decades has been in poor nations where needs are most acute.

Amongst donor governments, non-profits and citizens in the developed world this phenomenon has, for the most part, operated below the radar screen. But that's not to diminish from the lively activity that is taking place, even in Canada's "third" sector comprised of charities, not-for-profits and non-governmental organizations.

Am I a Social Entrepreneur?

There is no agreed-on job description for a social entrepreneur. In broad terms, social entrepreneurship is a movement that puts people above profits. The vital key is that it seeks to do both at the same time: generate social value and financial returns, or at least not operate at a loss.

Said another way, social entrepreneurs borrow techniques from the corporate world for the purpose of improving the livelihoods of their "clients" --the poor, and especially the very, very poor. They identify yawning gaps where governments or markets have failed the under-privileged, and then mastermind innovative solutions. Put yet again, social entrepreneurs are perhaps the leading practitioners of the famous business dogma: the customer comes first.

Another feature of a social entrepreneur is the drive to take an idea to scale. The product, service or delivery method is not just a localized solution, but one that can be transferred much further, maybe even around the world.

Examples serve to best illustrate. A product could be a low-tech, low-cost micro irrigation pump that proliferates yields; a service could be a microcredit institution that gives collateral-free loans; and a delivery method could be a project that inserts poor farmers into the global supply chain, taking their produce from the field to the warehouse to the grocery store shelf.

The golden boy of social entrepreneurs is Muhammad Yunus, a Bangladeshi professor of rural economics whose Grameen Bank was the first to offer low-interest seed funding to the very poor. The idea grew in an aggressive fashion, and between 1976, the bank's debut year, and 2003 it lent $4.5 billion to 2.8 billion Bangladeshi villagers, reports Mr. Bornstein. The money was used to build homes or bolster tiny business ventures, particularly in agriculture. The United Nations marked 2005 as the Year of Microcredit, a celebration of the worldwide revolution of micro lending that followed on the heels of Grameen Bank. By 2004, Mr. Yunus' experiment had expanded to more than 3,100 microfinance institutions reaching more than 92 million clients, according to the Microcredit Summit Campaign.

Like Henry Ford's assembly line that revolutionized the auto industry, social reformists create change on such a massive scale it would be hard to put the brakes on, let alone reverse.

The Skeptics

Social betterment through a profit-making strategy is a curious marriage. Most aid agencies balk at the idea of even a modest return on their investment. Just imagine the Canadian International Development Agency, the country's official poverty slayer, explaining its venture capital investment to taxpayers. "Philosophically, engaging the private sector has been seen as a bad thing," says David Wheeler, a director at York University's Schulich School of Business in Toronto, Ontario.

On the flip side, Mr. Wheeler says the predominately altruistic approach to poverty alleviation has been tried, tested and failed. "When I hear the term 'donor' I think, 'ouch, that's dependency,'" he says.

Mr. Wheeler says it's time to get rid of stereotypes and recognize the importance of non-profits that exploit the market in the interest of the poor. "These are not people trying to become millionaires. They are trying to help people survive," he says.

Either Side of the Aid Dollar

Governments -- both donors and recipients -- are predictably keen to talk about big picture policies, like the World Bank's Poverty Reduction Strategy Papers or national development plans.

Jim Wall, Canada's High Commissioner in Kenya, explains that Canada's mission is to help provide the enabling conditions "to liberate small enterprise so they can thrive." While hard to convey its importance in a few snappy sentences, donor support toward public goods -- a functioning justice system, health care delivery or classroom textbooks -- is the most effective way for Canada to help solve intractable social problems, he says.

"There is no doubt that non-governmental projects are invaluable... and they are more photogenic and easier to explain," says Mr. Wall. "But if the government doesn't build roads, and the axle on a truck driving goods to market breaks, then it's the farmer who loses out, and that's something an NGO can't prevent."

Almost 40 per cent of Kenya's 34 million people are touched by the hard work of more than 6,000 registered NGOs, according to Kenya's Ministry of Planning and National Development. Stephen Wainaina, the ministry's director, says he encourages non-profits, a category in which he lumps social entrepreneurs, to adhere to government-led strategies that target the weakest links for the majority of the country's citizens living on less than $1 day.

A narrow, do-gooder method of development spells disaster, says David Kibe, also of the national development ministry. "We have had so many collapsing projects because the local communities had no interest in them," he says. "After donors leave, the community didn't care enough about the idea to continue. The community needs to feel part and parcel."

Business Case

The study of social entrepreneurship is becoming standard coursework in business schools. Elspeth Donovan is Director of the Master's of Business (MBA) program at Cape Town University in South Africa. She says the right mix of business acumen and social awareness will help end Africa's cycle of dependency on aid dollars, once and for all. She has introduced a course on social enterprise that not only teaches non-profit management, but also how to run a business that "is rooted in providing a social benefit." A non-profit that aims to make social advances -- first and foremost -- and also strives for capital gains is known to have a "double bottom line." She calls this "an ideal model" to turn around a startling reality: Slightly less than 14 per cent of the world's population lives in Africa, yet the continent only accounts for two per cent of global trade.

Double Duty

Few argue the vital importance of powerful governments upholding resolutions to boost aid and spend it more strategically, slash debts owed by the poorest countries, and loosen their stronghold in global trade. But the stepped up campaign to "make poverty history" will not be won with the generosity of rich nations alone. On the frontlines, social entrepreneurs, for one, seem to be proving that some of the best solutions come from within.

Over the next four weeks Embassy will publish a series of articles that highlight social reformists in South Africa and Kenya, as well as in Canada's budding sector. The exploration uncovers some heroic individuals working against tough odds, sometimes making measurable gains but also suffering setbacks.

Sarah McGregor traveled to Africa early this year to conduct independent research with the financial assistance of the Canadian International Development Agency, through its Journalist and Development Initiative. The series was produced with the support of the government of Canada through CIDA.