Hi everyone, my name is Jenny Ng and I’m currently in Ecuador for an eight-week internship with Social Entrepreneur Corps. I’ve been having a great time experiencing a different culture and language, as well as learning more about social entrepreneurship.
In preparation for our time on the field next week, our team has undergone more intensive training in the past few days, which I will talk more about in this post. I’m going to throw some photos in there to keep things interesting.
There were a couple things that stood out to me in particular in the training sessions:
1. Morality is often confused with frugality. During one of the training sessions, we had a look at this TED talk by Dan Pallota. He argued that non-profits take too much pride in spending as little overhead as possible that they overlook the possibility of making a bigger social impact through a larger overhead, such as through marketing efforts. Meanwhile, non-profits that do see the value in overhead are slaughtered in the media for using donations for investments other than direct-relief efforts.
Of course, I can understand why a non-profit with a significant overhead may raise eyebrows. After all, a non-profit is different from a conventional business in that it operates on money from people who donate with the intention of advancing a social issue. Naturally, people feel a sense of security in knowing that their money has been used in direct-relief efforts and has not gone to waste, whereas money used for overhead comes with a certain level of risk.
However, if a non-profit can make 3 dollars per 1 dollar donation by increasing the marketing efforts of a fundraising event, then that 1 dollar overhead investment has the potential of tripling the intended social impact. This overhead investment is essentially the backbone of every successful business. We make investments in the short-run to receive benefits in the long-run. If we want a non-profit to be as sustainable as a successful conventional business, then we need to recognise that non-profits too, need a significant investment in human capital, marketing and such.
Another point that was brought up by one of the members of our group was that choosing a career in the non-profit sector should not necessitate that you (put harshly) “live in a cardboard box.” For instance, Irene Khan, then-CEO of Amnesty International, was criticised in 2011 for a payment of £533,103 following her resignation. Without commenting on what I actually think of the payment, I find it interesting that the media portrays billionaires such as Bill Gates as philanthropists for donating a portion of their money to humanitarian causes, whereas people who devote their lives to humanitarian causes are harshly scrutinised for any spending beyond what is considered necessary for an average lifestyle.
Even beyond the subject of non-profits, there seems to be a lot of unnecessary stigma surrounding the idea of making profit. Take for example, TOMS’ buy-one-donate-one shoe model that recently received criticism when people discovered that TOMS was a for-profit company. It seems to be inconceivable to some that a company can make profit at the same time as advancing a social issue. It is often easy to fall into the trap of categorising things as either one end of the spectrum or another, and in this particular case, the spectrum happens to be either only for profit, or only for the good of social welfare.
My take on this is that there is nothing inherently wrong with exchanging monetary value for some other form of value, be that a product or a service. In fact, this acts as an incentive for people to actively find solutions to problems and gaps that exist in their communities. After all, most businesses cannot be successful unless they effectively address a need in the community, and it shouldn’t be frowned upon for a business to receive recognition for doing so. I do find it somewhat comforting to see that there are more companies nowadays that attempt to combine the social and profitable aspects of business.
2. This brings me to the second thing I learned this week, which is that failure happens at the extremes. By this, I mean that failure tends to happen when you do too much of one thing, or too little of the same thing. For example, being absolutely in control of a project versus deferring all tasks to other people; being too humble versus being too prideful. This is something that I will have to keep in mind over the next two months, as the work I will primarily be doing is helping local entrepreneurs set up small businesses. It will be important to strike a balance between leading and allowing a certain level of autonomy. While we do want to provide guidance to the entrepreneurs, we also want them to ‘put some skin in the game’ because people tend to value things that they work for.
3. The third and possibly most important thing I learned about this week was the micro-consignment model that our work with Social Entrepreneur Corps (SEC) is based upon. Basically, this model acts to empower people in rural regions to become local entrepreneurs who sell products that will benefit members of the community, such as water filters and solar products. How SEC does this is by training the entrepreneur in business and marketing skills, providing products for the entrepreneur to sell (after conducting a feasibility study) and assuming all financial risks on behalf of the entrepreneur. When an entrepreneur sells a product, a portion of the profit will go to the entrepreneur and another portion will go to SEC. I like that the model does two things: 1) provide access to products that will better the community, and 2) provide an opportunity for the entrepreneur to income-patch.
What we are doing with SEC is surprisingly similar to a project I have been working on in the South Bend community, and I hope that my experience here in Ecuador will provide some insight into that project.
4. On a similar subject, one of the things that I noticed in the past two weeks is that the problem of distribution is the biggest obstacle to setting up businesses in rural areas. In many cases, people don’t lack the skills to create marketable, quality products. For example, on our visit to Principal, we stopped by a business that made the most delicious Siglalon jam, and a couple of women who made beautiful hand-woven crafts. These same products would sell for 10 times the amount in the States. The only missing piece of the puzzle was a means of distribution, and this missing connection made all the difference between a successful and unsuccessful business. This is something I hope to look into in the coming weeks and months. Thanks for reading!