Empowerment, good governance and cost recovery are vital factors that contribute to the sustainability of a social enterprise.
Contributed By Yong Yung Shin
In the realm of doing good, philanthropy and profitability are two “P”s that have traditionally been at loggerheads with each other. The indisputable fact is that a direct handout harms more than it helps, but doing good while doing well may just go hand-in-hand.
At the opening of the Singapore International Foundation Young Social Entrepreneurs Programme 2011 on March 31 at Youth Park, Dr. Tanatat Puttasuwan shed light on the sustainability of social enterprises, as he shared about the effectiveness of empowerment, good governance and cost recovery.
Puttasuwan is the executive director and president of Population and Development International, a non-profit, US-based organization that works with local institutions in Southeast Asia to eradicate poverty.
Taking a leaf out of PDI’s 25-year track record of community development work in Thailand, Puttasuwan showed how the Village Development Partnership has successfully empowered villagers for the last 22 years. By learning the concept of “value-add” like making flowers out of dried tilapia fish scales, raising pigs and processing crabmeat, villages are able to identify and initiate income-generating opportunities. Hence, they do not depend on handouts for survival. “These things seem so simple, we take them for granted, but elsewhere in the world, in rural Cambodia, Vietnam and Thailand, it’s a big step. It needs to be taught and explained,” said Puttasuwan. Beyond economic interests, the villagers are also taught on local administration, public health education campaigns, and gender equality, in order to nurture native leaders.
For a social enterprise to be sustainable, cost recovery (recouping what has been invested) has to be factored in. To achieve this, revenue streams have to be created. To address the problem of malnutrition of schoolchildren, for instance, the Primary School Lunchbox program was set up. Farms established within school compounds produce vegetables and herbs, and students learn to cultivate the crops, and their mothers come to the school to prepare lunch. Surplus crop is then sold at the local markets, with the profits channeled into the school’s lunch fund for future development. It’s a classic case of teaching a man how to fish instead of giving him the fish.
Even the education system operates like a student’s dream school—instead of exams and rote memorization, students learn at their own pace, do their research on the Internet and present their findings in class. The students, represented by a student council, decide on matters ranging from the school expenditure to the design of the school uniform, and even sit in during the teacher selection process. Both PDI and its benefactors, therefore, have a part to play in the governance of the whole initiative.
While the schools are built using seed funds from donors and corporate partners, the sustainability element derives from BREAD (Business for Rural Education and Development) which offers a logistics framework that allows Thailand’s rural poor to sell products and handicrafts to an international market. The profits are then channeled into the school fund to maintain financial sustainability.
The keynote address was followed by a dialogue session with Richard W. Blossom, president of GTL Limited and Elim Chew, founder of 77th Street and SIF Governor.
Building on SIF’s objective of giving Asian youth a leg up in social entrepreneurship, this year’s program saw approximately 30 youth between ages 18 and 25 participating in a three-day workshop to learn how to develop ideas into sustainable social enterprises.