A speaker at last month’s National Conference on Corporate Social Responsibility (CSR) and Social Business was reported to have called for companies to move away from charitable work and create social businesses instead. He claimed that charity is a stop gap measure that merely mitigates socio-economic problems, but does not offer long term solutions to those problems. He also added that charities could incur very high operational costs, with some as high as 70 percent, unlike social enterprises which can be more efficient.
This is a dangerous and uncalled for statement that pits charities against social enterprises. Nevertheless I do not believe that the statement was intended to be a call for civil war between the two sectors. I think the speaker was sincerely excited by the concept of social entrepreneurship.
The real challenge that we have in Malaysia today is not so much about which model is better. Rather it is the fact that both the charity and social enterprise models are neither properly understood nor well supported.
Private charitable organisations are the backbone of a morally-conscious society. Note that I use the term “private” in describing charitable organisations to distinguish it from a new form of “GLC” that has proliferated in Malaysia, namely the “Government Linked Charities”. These pseudo-charities are just like their business counterparts. They are both tools to achieve certain political agenda, and they crowd out the real actors in the field.
Coming back to the topic at hand, private charities act as vehicles for people to voluntarily do good. Unlike taxes which are coerced by law, charity is an act of kindness that you do despite the law. You help the needy because you want to, not because there is a threat of punishment. This is the noblest expression of society’s moral consciousness.
Social enterprise is just different incarnation of the same moral consciousness. The most commonly used definition for social enterprise is that it is a business with social aims. Social enterprise and charities actually complement each other and they both are tools for people to do good. They are not competitors or enemies.
When I asked for her comment, Quek Sue Yian, Director of Hong Leong Foundation, made a very good point by saying that social enterprise is not the magic solution but is just another tool in the fight against poverty. She argued that it is more important to focus on solutions and not methods, and that the different methods have to be tailored appropriately so that the actual mission is achieved. Exactly. Arguing that the social enterprise model is better than charity, or vice versa, is just simply misguided.
A far more important task is to help society understand the nature of the good work put in by both social enterprises and charities. I have only worked in the Malaysian charity scene for less than three years. And, together with a few good friends, this October we will start a social enterprise venture to provide care for autistic children in Rawang. I must say that the short period has been quite a whirlwind tour, and the last thing I want is for the two models to be pitted against one another.
The best experience I have had – fortunately or unfortunately – are mainly when working with foreign partners and funders. They seem understand better what charities are and they know exactly how to assess the effectiveness of the partnership.
As for local funders, many are very good but some need serious help. I must stress that this is not really a problem of the funding bodies themselves, but it stems from the lack of proper understanding about the nature of charities.
To illustrate, one funding body, a yayasan, once asked me to justify why we put overheads and operating costs in our funding application. They do not want to fund the operating costs of not-for-profit organisations. I wonder how they expect us to pay our bills and salaries to run the project if there is no money for operations.
Another funder caused real upset in our small team by their attitude. They turned the funding arrangement into a master-servant relationship by giving my project team unworkable deadlines despite what was agreed at the start of the project. There was even a time when my project manager received an email at 6.43pm on a Friday evening, demanding a full financial report to be submitted by Monday. They seem to assume that by virtue of funding our work, they suddenly become the one who must be obeyed.
These are just two examples. But, as I said, we cannot fault the organisations alone. The modern charity world in Malaysia is still relatively new and everyone is learning. Both charity and social enterprise are important ingredients in the “doing good” recipe book. But in order to effectively support social enterprise, I do think we need to firstly appreciate the value and the nature of charitable work. For the spirit of doing good in social entrepreneurship partly originates from the charitable sector. The two are interlinked.
It is imperative that we do not slice up the already small world of charities and social enterprises.
Instead we need to help both to grow and to flourish. Malaysia will be better if these two complementary sectors can walk hand in hand.
This post first appeared in The Edge. Photo from Institute for Democracy and Economic Affairs.
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