Poverty is a global issue that concerns everyone living on the planet, but it seems no matter what people do, the issue refuses to be resolved.
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At first, some questioned the ethics of certain NGOs, large amounts of money were being donated but no palpable change was being noticed. Recent investigation into this phenomena revealed that it isn’t the NGOs are corrupt, but rather the aid-based system that was failing.
Criticisms that material donations to impoverished countries would completely upset already weak economies gained momentum. Except in the cases of disaster relief, bulk donations tend to put people out of work and driving them into bankruptcy. For example, Jason Salder the owner of I Wear Your Shirt, donated massive amounts of t-shirts to a number of nations in Africa, but it resulted in aggression from foreign aid workers.
He inquired as to why he was being bombarded with condemnation and he got his response – what will happen to the t-shirt vendors in Africa when there are t-shirts being distributed for free?
In a sense, every donation of clothing or food that has been made has had a negative effect on an economic level, which is the key factor in raising a nation out of poverty.
Due to repeat occurrences such as this one that involve people across the world, a solution needed to be found that would put an end to the detrimental effects of aid donations.
The Dawn of Social Enterprise
Simply put, a social businesses is a business that is created with the intention to provide aid to impoverished countries in a lasting manner, such as creating jobs.
Social enterprise has picked up in a number of developing nations across the globe, with India being viewed as a pioneer.
Funds have been started by the likes of Ravi Venkatesan, the former chief of Microsoft in India, to invest in social businesses who wish to expand and develop further.
Blake Mycoskie is the CEO of Toms, a business that was started on the premise of aiding those in need.
Toms are shoes that benefit the world on two counts. The first is that they are environmentally friendly as they are made of hemp, cotton and recycled plastic bottles and therefore do little damage when disposed of.
The second reason is that for every pair of Toms that are purchased, another is donated to those in need.
However, the same criticism applies to Toms as it is only creating another aid-based economy. Upon hearing the reproaches against his business model, Mycoskie saw the sense of the argument and is now in the process of adjusting his approach.
He said, “If you really are serious about poverty alleviation, our critics said, then you need to create jobs. At first I took that personally, but then I realized that they were right… using our model to create jobs is the next level.”
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