Adriana Galue's Blog

musings about entrepreneurship & life…

A Shift in the Charity Industry

Screen Shot 2015-03-26 at 11.21.08 AMIn my mind, it is pretty evident that the days of charity as a core component of international development strategy are counted. Charity is not a poverty reduction strategy.

I have observed carefully how some of the international development industry has gradually shifted from “raw charity” to what I would call “profitable charity” namely microfinance. As shown by multiple examples, notably that of Medellin, Colombia an entrepreneurship Mecca with over 30 years of microfinance presence, the essence of poverty reduction is still based on raw capitalism.  Microfinance has shown that unless there is a clear marketing strategy behind a product, micro loans should not be considered a poverty reduction tool.

The essence of empowering people consists on enhancing their long-term productivity. By this, I don’t mean enhancement of access to cheap labor. True enhancement of long-term productivity should be based on fair wages and fair living standards. As our world economies co-evolve, we have an opportunity to reconsider how to fill the tremendous gap that productivity in the private sector leaves behind. Accumulated wealth in a sector of society is still at the expense of the substandard living conditions of many.

Foundations should be focusing on high impact entrepreneurship investing.  Foundations such as Endeavour & Carlos Slim seem to be having success using this strategy. In addition, it is essential that the private sector align with local initiatives and non-governmental organizations to create long lasting investments. For effectiveness to be optimal, it is also crucial that non-profits streamline their operations pass the requirements of a board. Nonprofit contributions should be regarded as investments rather than mere donations.

My work with several non-profits points to the fact that there are no clear incentives for non-profit operational efficiency. This might be because donor dollars are not regarded as investments. World entrepreneurs are eager to maximize the profitability on the dollar. Why don’t we think of donor dollars the same way?

With that in mind, I am impressed with initiatives that streamline the process of non-profit contribution. Companies such as iGivefirst and Kula Causes are pioneering the field of morphing the new global citizen!

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This entry was posted on 02/13/2012 by in Global Issues, Innovation, microfinance, Non Profits and tagged , .
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