THE POWER OF RESEARCH, INNOVATION & SOCIAL ENTERPRISING
The renewal of markets, industries and societies is driven and developed through competing innovative ideas and initiatives from companies, scientific researchers, innovators and entrepreneurs. The development takes place under uncertainty about what will succeed, and only a few will be successful. The uncertainty and risks that entrepreneurs, researchers, innovators and start-ups take by daring to test new technologies, business models and products/services in new innovative ways constitute important engines in the renewal of markets, industries and societies. Even if the projects would not lead to the results hoped for, the individuals’ lessons are valuable as these individuals often start new innovative projects. HR&S aims to contribute to a more experimental economy with a focus on Sub-Saharan Africa (SSA).
HR&S wants to support young or small, innovative and gender-equal companies that, with the help of our coaching and soft loans, validate, verify and develop their business and the solution the business is based on. The goal is to create conditions for companies to develop their operations in phases where other support and financing is difficult to obtain.
In the short term, we want to contribute to:
• Increased ability of young companies in SSA to build a business by interacting with the market, verifying and validating offers and business models
• Increased awareness among young companies to work with sustainability and gender equality as competitive factors in their business.
In the long term, we want to contribute to:
• More companies that have developed their business acumen, grow and are profitable in national and international competition
• More companies whose innovation contributes to creating value for the customer, the society and the environment
• Sustainable and equal entrepreneurship that strengthens SSA’s competitiveness through innovations that contribute to the sustainability goals in Agenda 2030.
HR&S recognizes a social context post-colonial attitude in higher-income countries and a social context fragile accountability in lower-income countries.
HR&S targets deep cross-cultural understanding, and that is crucial to recognize that all communities have social contexts, some strengthen the people in that community, and some weakens us. HR&S proposes the expression “fragile accountability” rather than “corruption”, cause each and everyone can decide to change, and we see that change among our partners. It is the same with post-colonial attitudes, and both require an eye-opener among individuals. The social context post-colonial attitudes link closely to the wording in our postings on social media.
Sustainable Development Goals
Achieving Sustainable Development Goals requires economic growth that simultaneously safeguards social and environmental sustainability. The responsibility that lies with the business community is basically about running companies in a responsible and sustainable way that takes into account social, environmental and economic factors in the company’s operations at all levels.
THE POWER OF LOCAL SOLUTIONS
Local solutions are unrecognized
Although researchers, innovators, and entrepreneurs in lower-income countries present amazing ideas, their solutions are often unrecognised and unsupported. Consequently, locally developed and locally adapted solutions are not implemented and local enterprises that would address the needs of the local people are not started.
As a consequence, these societies lack access to locally relevant scientific findings and innovations, products, services, and employment opportunities that would otherwise have improved people’s lives. This also limits the tax income to the government, why these countries tend to lack advanced education structures, social security systems, and resourceful institutions.
Moreover, international negotiations and international trade become unbalanced, and lower-income countries remain behind in the international competitive arena. Consequently, these countries tend to suffer from poverty, causing corruption, crime, and forced migration.
The potential of social enterprising in Sub-Sahara African countries
Traditional actors have not been able to close the delivery gap to the poor (Navarette Moreno and Agapitova, 2017). Public and non-public providers face large challenges in improving service levels and uptake. As a result, the public sector struggles to meet service demand in low-income communities in terms of delivery and quality. Non-Governmental Organizations (NGOs) try to fill these gaps, but can only reach as far as grant funding and sponsorships allow, which limits the scale of services. The formal business sector provides many services but often prioritizes delivery to high- and middle-income populations (Navarette Moreno and Agapitova, 2017). Reaching low-income population is difficult and often unattractive, given difficult-to-access markets, lack of existing infrastructures, high risks, and low-profit margins. As a result, low-income population often rely on informal providers or, simply, lack service options.
Social Enterprises (SEs) in Africa already address service delivery gaps for the poor (Navarette Moreno and Agapitova, 2017). Although positive examples abound, SEs have not yet fully realized their potential in Sub-Saharan Africa (Navarette Moreno and Agapitova, 2017). Indeed, Africa is one of the most vibrant and dynamic regional markets for social enterprises.
While effective in reaching the poor, SEs face significant obstacles in growing their activities to a scale where they can substantially contribute to the achievement of development impact. Many SEs struggle to scale-up and develop sustainable business models. SEs face high barriers that are often aggravated by the difficult markets they serve. Common challenges include: i) unconducive regulation and policy, ii) lack of financing solutions, iii) weak infrastructure and human capital, and iv) lack of information and networks (Navarette Moreno and Agapitova, 2017).
Therefore, a key question of development programmes, research and policy is how best to identify and remove these obstacles. SEs often fall between traditionally recognized public and private organizations, and the public sector often does not play a catalytic role, in terms of taking steps to help develop or partner with the SE sector (Navarette Moreno and Agapitova, 2017). Looking toward 2030, achieving the SDGs for the poorest populations will be costly and cannot be done solely by the public sector—SEs can be partners in achieving the SDGs. Development practitioners will need innovative solutions and supportive environments that will allow these SE innovations to scale and accelerate results.
ACCOUNTABILITY MUST BE BUILT
Mungiu-Pippidi (2017a) claims that corruption is a default governance order, as people tend to favour their own, be it family, clan, race or ethnic group, and that treating the rest of the world fairly, seems to be a matter of extensive social evolution and sufficient resources. Mungiu-Pippidi (2017 b) argues further that the most countries today are corrupt rather than non-corrupt and that we should understand corruption as a social practice or institution, not just as a sum of individual corrupt acts. The author continues that in a development perspective, countries whose governance is presently based on norms like ethical universalism (public goods distributed fairly and equitably) have a past with other norms, and that the history of clean countries shows that good governance is the product of evolution. Modernity is a long and frequently incomplete endeavour to build private separation and a state that is autonomous towards private groups.
Mungiu-Pippidi (2017b) claims further that treating corruption as a deviation is problematic in lower-income countries. He points out that most anti-corruption approaches are built on the concept that public integrity and ethical universalism are the default governance norms. The author claims that this approach leads to policy failure, as norm building and norm enforcement require two different approaches. The approach of treating corruption as a deviation leads to investing in norm-enforcing instruments in cases where instead norm-building instruments are required. The Mungiu-Pippidi recommends rather to draw and support national long-term strategies aimed at building public integrity and ethical universalism, as well as to reduce opportunities and increase constraints for corruption.
An individual is corrupt when engaging in corrupt acts, regardless of whether the person is on the public or private side (Mungiu-Pippidi, 2017b). In one context, the corrupt agent is just a deviant and can be sanctioned by the principal if disclosed. In another case, the principal colludes with the agent, and corruption is exercised throughout a pyramidal organization that extracts resources disproportionately in favour of the most powerful group. So, anti-corruption means solving problems of power discretion and collective action.
Strategy for change
If we target change, then, Mungiu-Pippidi (2017b) argues, we need a “Theory of change” addressing why the status quo would change and who would bring the desired evolution. (HR&S is using the terminology “Strategy for change” instead of the commonly used “Theory of change” to avoid confusion with the terminology “Scientific theory”.) Mungiu-Pippidi (2017b) also claims that the main theories of change presently informing intervention are too general: modernization theory (although education and economic development have increased over the past twenty years without bringing better governance), and state modernization (the belief that by building state capacity, the integrity problems will be resolved).
Identify agency for corruption control
Countries can achieve control of corruption in two ways (Mungiu-Pippidi, 2017b). One is the surreptitious way, where open access, free competition and meritocracy (government or the holding of power by people selected according to merit) are achieved as a side effect through incremental changes of institutions, without being a main collective goal. This worked in the past for many of today’s higher-income countries. The second way is when the rule of law and control of corruption are delivered as collective goods after collective agency and investment, for instance, after sustained anti-corruption campaigns. Both paths need human agency. In the former, the role of the agency is small. It is presumed that nobody will oppose reforms that are not perceived to be posing a threat to anybody. Those reforms are just common sense, professionalism, and public demand for government performance. In the latter case, considerable efforts and alignment of both the interests favouring change and ideology of ethical universalism are needed. Identifying the human agency capable of delivering change becomes essential.
Demand for good governance is increasing all over the world (Mungiu-Pippidi, 2017b). Changing governance across borders is a difficult task. Still, international partners may want to try to socialize with enlightened elites, and there are certainly opportunities to help civil society and a developing enlightened citizens’ community (Mungiu-Pippidi, 2017b). In practice, though, that is not so easily done. Corrupt governments are often treated like as enlightened elites and entrusted the ownership of anti-corruption programmes that will never take off – not only because they often are the wrong programmes, but because they really should be implemented against the main interests.
Fortunately, modern smartphones with Internet access provide a great shortcut to individual autonomy and enlightened participation. Any assistance towards increasing the percentage of ‘enlightened citizens’ armed with smartphones is worthwhile (Mungiu-Pippidi, 2017b). But for the transition strategy, we need more than that.
We need a careful stakeholder analysis and coalition building. As a ground rule, whoever is competitive, stands to lose in a particularistic society (exclusive or special devotion to a particular interest) (Mungiu-Pippidi, 2017b). He or she faces two options: to desert particularism and move on to a more meritocratic realm (hence the close correlation between corruption and brain drain) or stay and fight. These are our recruitment grounds. It is essential to understand just who has the interest to challenge the rules of the game and who is prone to defend them, in other words – to identify the institutional status quo losers and winners. Who would remain a winner even if they open the door to the more merit-based competition? Who, among today’s losers, would gain something essential? These groups need to come together to make change happen.
As we have a very close correlation between the rule of law and corruption control, the results are often clear: when corruption is high, the rule of law is below the threshold (Mungiu-Pippidi, 2017b). So, legal approaches to anti-corruption (an anti-corruption agency or a strong punitive campaign) can hardly be expected to deliver if the rule of law is weak. The same goes for civil service capacity building in countries where bureaucracy has never achieved autonomy from its rulers. What is needed for good governance is an autonomous class of magistrates and an autonomous class of bureaucrats (Mungiu-Pippidi, 2017b). These cannot be delivered by capacity building in the absence of domestic political agency. This is why the functional accountability tools are those associated with civil society agency. Voluntary implementation of accountability tools by groups involved (businesses who lose public tenders, for instance, or journalists seeking audience) generally works better than official implementation. The latter seldom delivers.
Entrepreneurs (SE) have been defined as persons who solve pressing and insurmountable social problems, making an immense yet durable and irreversible social impact (Nowak et al., 2020). Nowak et al. (2020) claim that SEs do these remarkable things with minimal investments, having as assets their passion, commitment, big yet realistic visions for change, creativity, and entrepreneurial skills. Thus description by Nowak et al. (2020) of entrepreneurs is supported by the findings of Navarette Moreno and Agapitova (2017) that Social Enterprises (SEs) in Africa have been found capable of addressing service delivery gaps for the poor, when traditional actors have not been able to close the delivery gap.
Mungiu-Pippidi (2017b) argues for coalition building and that the groups benefiting from the positive change need to come together to make change happen and reflect over whom, when and how international partners can assist along the road to a virtuous circle.
Informed by the findings of Nowak et al. (2020), Navarette Moreno and Agapitova (2017) and Mungiu-Pippidi (2017b), HR&S is seeking partnership with social entrepreneurs in Sub-Sahara African countries and with local stakeholders benefitting from a positive change as well as international partners who can assist HR&S with our mission.
Culture is borderless
A meta-analysis of intra-national compared with international differences found greater variety within than between countries (Gerhart et al., 2005). It was argued that one important reason for this variety was to be the notion of agency—that people can and do make independent choices. Another was that culture is not invariably exclusive. Instead, people are simultaneously part of overlapping, sometimes even apparently contradictory, cultures through circumstance and choice.
World value survey (WVS)
An analysis of world value survey (WVS) data made by the political scientists Ronald Inglehart and Christian Welzel asserts that there are two major dimensions of cross-cultural variation in the world:
- Traditional values versus Secular-rational values and
- Survival values versus Self-expression values.
The global cultural map, created by the two scientists, shows how scores of societies are located on these two dimensions. Moving upward on this map reflects the shift from Traditional values to Secular-rational and moving rightward reflects the shift from Survival values to Self–expression values.
Traditional values emphasize the importance of religion, parent-child ties, deference to authority and traditional family values. People who embrace these values also reject divorce, abortion, euthanasia and suicide. These societies have high levels of national pride and a nationalistic outlook.
Secular-rational values have the opposite preferences to the traditional values. These societies place less emphasis on religion, traditional family values and authority. Divorce, abortion, euthanasia and suicide are seen as relatively acceptable. (Suicide is not necessarily more common.)
Survival values place emphasis on economic and physical security. It is linked with a relatively ethnocentric outlook and low levels of trust and tolerance.
Self-expression values give high priority to environmental protection, growing tolerance of foreigners, gays and lesbians and gender equality, and rising demands for participation in decision-making in economic and political life.
People’s priorities shift from traditional to secular-rational values as their sense of existential security increases. The largest increase in existential security occurs with the transition from agrarian to industrial societies. People’s priorities shift from survival to self-expression values as their sense of individual agency increases. The largest increase in individual agency occurs with the transition from industrial to knowledge societies.
The value differences between societies around the world show a pronounced culture zone pattern. The strongest emphasis on traditional values and survival values is found in the Islamic societies of the Middle East. By contrast, the strongest emphasis on secular-rational values and self-expression values is found in the Protestant societies of Northern Europe. These culture zone differences reflect different historical pathways of how entire groups of societies entered modernity. These pathways account for people’s different senses of existential security and individual agency, which in turn account for their different emphases on secular-rational values and self-expression values.
Generally speaking, groups whose living conditions provide people with a stronger sense of existential security and individual agency nurture a stronger emphasis on secular-rational and self-expression values. On a global scale, basic living conditions differ still much more between than within societies, and so do the experiences of existential security and individual agency that shape people’s values.
Rosa et al. examined the relationship between the state of necessity and entrepreneurial activity, through qualitative case studies from Uganda and Sri Lanka, and the survey of 1006 Ugandan adults. Questions are posed on the tenability of the hypothesis that necessity is a primary motive for a business start-up in poor countries. The relationship between necessity and business start-up, though significant, is in the opposite direction from that predicted by the “necessity hypothesis”. Those with low incomes were much less likely to start a business because they often became “trapped” by having to work long hours for just enough income to survive. Opportunistic diversification, however, flourished once resources improved. The results question recent attempts to classify countries on the basis of distinctive forms of entrepreneurship based on necessity and opportunity.
TEAM-BUILDING & MOTIVATION
Mungiu-Pippidi (2017b) argues for coalition building and that the groups benefiting from a positive change need to come together to make change happen. HR&S adds to this argument that when these coalitions have been built, then team-building and motivation must be addressed.
Members of a team
We need to put together a team with the required knowledge, skills and ability to complete the tasks. When choosing a participant for each team, we must also consider what complementary skills and attitudes each member brings (Peacock, G., 2016). Teams that bring different styles together enjoy many benefits of cognitive diversity; increased creativity and innovation; improved decision making (Peacock, G., 2016). Each team member must then appreciate the value each other team member can bring to the team, and how a diversity of opinion and some conflict will lead to better and faster decisions. According to Peacock, G. (2016), successful teams need to be small, between six and ten participants. If larger teams are required, the team can be broken down into smaller groups for regular problem-solving sessions.
The right team dynamics is also crucial. In a team, members are interdependent; they interact and depend on each other to achieve shared goals. Peacock, G. (2016) argues that in a successful team each participant has to: i) recognize the opportunity, ii) feel accountable for the entire company’s success, and iii) have the energy to persevere when the going gets tough. Team members must also trust each other, communicate openly, and be willing to accept conflict.
Training teams & leaders
To ensure a team is successful, we need to provide training (Peacock, G., 2016). Training teams together rather than individually is preferred because i) it helps teams develop, test and run processes such as coordination, ii) it enables team members to build trust, which is necessary for sharing information and knowledge, iii) it develops a shared memory of the awareness and ability of the team to identify and process information. Teams develop an awareness of which team member has knowledge on which topic. Shared memory is also important in creative problem-solving.
‘Leadership’ training shall not be confused with ‘management’ training (Peacock, G., 2016). Management training will improve our ability to dictate and manage individuals but not motivate, engage and develop individuals.
Virtual teams rarely, if ever, meet in a face-to-face setting and such teams are becoming more common, for a variety of reasons. Townsend et al. (1998) described virtual teams as groups of geographically and/or organizationally dispersed co-workers that are assembled using a combination of telecommunications and information technologies to accomplish an organizational task.
Virtual team members require great skills. Team members will be challenged to adapt to the new technologies that link the team. Team members must also learn new ways to express themselves and communicate. Virtual team’ challenges highlight how traditional performance factors, goal clarification and communication are even more important in virtual teams (Townsend et al., 1998).
Cross-cultural team members require great skills. Team members will be diverse and thus must be able to manage advanced communication skills (Townsend et al., 1998).
There is a complexity to teamwork that must be recognised when pulling a team together, and teams cannot be left to develop their own internal processes (Hackman, 1990). Many teams can benefit from having an impartial observer/facilitator in the initial sessions to help identify and improve the team dynamics and initially keep the project focused (Peacock, G., 2016). Peacock, G. (2016) mentions that besides team member ability, also team member motivation and coordination strategy are required for successful teams.
Hackman (1990) identified a number of actions required to ensure a team’s success:
- Career and reward system must include an incentive to work collaboratively. Action must be taken to build a team and establish boundaries, giving the team authority to manage their internal processes and relationships, internally and externally.
- There needs to be a careful balance between managerial and team authority. Managers need to provide direction (where the team is aiming) and set outer limit constraints on team behaviour (things the team must never do). However, the team must have full authority for the methods to accomplish their tasks.
- Teams must have an enabling structure to succeed. Teams cannot be left to develop their own internal processes. An enabling structure has three elements: i) A well-defined team task that engages and sustains team members motivation. ii) A well-composed team (as small as possible) with clear boundaries, including members with technical and interpersonal skills. The team should be a good mix of different types of people. iii) Clear and specific expectations of the extents and limits of the team’s accountability and authority limits.
- Providing reward, training and information systems that align with the team working. Ensure the team has the necessary resources to succeed (equipment, tools, space, money and staff).
- Teams need coaching and development to obtain the skills required to work successfully as a team.
Peacock, G., (2016) also proposes a number of actions related to team management:
- Alignment on direction: each individual must have a shared belief in the end goal
- High-quality interaction: participants must trust each other and openly communicate, with a willingness to accept conflict
- Team members are energized to take risks: this will create an innovative environment, where individuals learn from each other and outside ideas.
Also deciding which problems to tackle is an important part of successful team management (Peacock, G., 2016). Choose issues that need collective, cross-boundary expertise. Avoid issues that could be handled by individual business units or functions, as these problems or opportunities can be addressed as part of business-as-usual.
The process of resolving problems
Organizations cannot improve unless they consistently seek out and resolve their problems (Cook, R and Jenkins, A., 2014). When a company engages its people in problem-solving as part of their daily work, they feel more motivated, they do their jobs better, the organization’s performance improves, and a virtuous cycle starts to turn. Such an approach can tap the enormous potential for the company and its customers (Cook, R and Jenkins, A., 2014).
- Openness to talking about the problem: It is important to have an openness to problem-solving (Cook, R and Jenkins, A., 2014). Great problem-solving begins with being able to acknowledge problems without judgement. Hidden problems don’t get fixed and keep organizations from reaching their objectives.
- Willingness to see problems wherever they may be: Before you can acknowledge a problem, you have to be aware of it. Identifying problems, particularly before they grow into a crisis, is a skill that can be learned (Cook, R and Jenkins, A., 2014).
- Understanding that small problems matter: We need to understand that small problems matter as much as large organizational problems (Cook, R and Jenkins, A., 2014).
- Commitment to approaching problems methodically (Cook, R and Jenkins, A., 2014). An effective process for identifying and solving problems involves five steps:
- Define the problem. Clarify what should be happening and what is happening. The gap between the two is where the problem lies. Defining the problem well ensures that the team has a shared understanding of the real issue.
- Identify the root causes. Learn as much as possible about the problem, preferably by observing it as it occurs. This step is often skipped, but it is essential; without it, there is no way of knowing whether you are solving the real problem.
- Develop a solution. Crafting a good solution rests on distinguishing cause from effect. A solution that tackles the root cause will eliminate the symptom that the problem causes; if the root cause has truly been found, removing the proposed solution will lead to the symptom’s return.
- Test and refine the solution. The solution must be tested to ensure it has the expected impact. If it solves only part of the problem, further rounds of the problem-solving process may be needed before the problem disappears completely. For validation, conduct a final experiment without the solution to see if the problem recurs.
- Adopt new standards. The last step is to incorporate the solution into standards for work, with training and follow-up to make sure everyone has adopted the new method. That should eliminate any possibility of recurrence. Moreover, sharing the solution more broadly across the organization allows others to glean insights that might be applicable in seemingly different scenarios.
- Recognition that observations are often more valuable than data: Observation and questioning partners and team members provide a powerful and immediate source of insights into processes, workflows, capabilities, and frustrations with current ways of working (Cook, R. and Jenkins, A., 2014). Gathering and analyzing financial and accounting data is geared toward financial outcomes and cannot replace gathering and analysing information about the operating processes.
- Ensure continuous improvement: Problems never cease to arise. Building a problem-solving culture that lasts is not about fixing particular problems but about always striving to do things better (Cook, R and Jenkins, A., 2014).
- Through having a process, we will generate more ideas faster and select ideas faster. If we find we always get the same results from our problem-solving/innovation meetings – maybe it is time to take a different view (Peacock, G., 2016). Reframing our problem and looking at it from different perspectives or viewpoints can help us find different solutions – many of them are different from the usual raft of solutions. A change of focus can reveal a solution that was lying just outside our frame of vision (Peacock, G., 2016).
- A true problem-solving organization will have the ultimate goal for everyone in the organization to own the responsibility and take the initiative to solve the problems that are most relevant to them (Peacock, G., 2016). In these organizations, people build capabilities more quickly and collaborate across internal boundaries more effectively.
- Leaders shall be following a constant problem-solving approach, define the real problem, and rely on facts (rather than behave instinctively) (Peacock, G., 2016). Thus, leaders need to step back, be asking questions and take time to reflect (rather than jump to conclusions). Leaders need to commit to approaching problems methodically.
- Using a problem-solving process also allows teams to move faster, avoiding competition or conformity (Peacock, G., 2016). When working on complex problems in teams, teams tend to take too much time or too little time (Peacock, G., 2016). Teams take too much time because they do not have an agreed method to generate ideas or select the best ideas. Teams take too little time because they generate too few solutions and then approve solutions quickly, without exploring all the possibilities. Teams that take too little time rarely challenge accepted ways of doing things.
- Barriers to innovation are pervasive and predictable, but not that strong (Peacock, G., 2016). The simplest and easiest way to overcome them is to help people notice what they have been overlooking. We shall take a different view and see what is right in front of us.
- When people compete, instead of looking for ways to develop ideas, they actually tend to look for ways to destroy ideas (Peacock, G., 2016).
Honouring the expectation of a donor
The expectation of a donor
When someone is donating, the expectation is usually that this money shall serve an underserved population, community or person somewhere in the world. The donor will want something with the resources offered; whether it is funds, items, work-hours or knowledge.
This is also true concerning donations generated through the tax system, governmental aid; both tax on salaries as well as tax on corporations.
Now, as this was the reason for giving this money, the expectation of the donor HAS TO BE 100% honoured.
As the the expectation of the donor is that the donation shall serve the underserved population, and that this has to be honoured, the funds must be implemented in a way that it serves the under-served population in a sustainable manner. If food is provided one day, but not the next, this must be seen equal to playing with people’s psycologial strength.
Practical strategies ensuring sustainable impact
Sustainable impact requires practical strategies and professional operations. HR&S offers this service.
Raising the funds
Charities. Many studies have compiled data over the level of administration in the charity sector. Some claim it is 26-87%, other 60-70%. The administration cost includes salaries and other obvious costs that is required to run a registered and professional institution. If the charity is registered as a company, then they also pay corporate tax. The conclusion can be that it is costly to convincing people to donate to people they do not know and that this requires a lot of effort.
Running charities is a businessness idea as is creates employment. It is not a for profit business idea, but a non-profit business idea. Small charities can be expected to spend larger percentage on administration than big charities, as big institutions have a larger capital. But does this matter. Is it not the absolute amount of money that goes into the running of institutions at continents other than the underserved population, that is not at all involved with the implementation of the money. Another business idea is to offer services to charities that raise money. The actual concequence of this is that givers provides more salaries to people that operates in other continents than the underserved population.
A challenge with raising funds can be that the institution may want to point out a need, and in order to emphasize on the need may want to show the receiever of the funds as depending on this money, maybe weak, vulnerable, sad… This may cause a stigma. It is also not clear if the GDPR is fully respected.
Governmental bodies: Also governmental bodies, that are not involved with the fundraising itself, suffers from a high level of administration costs which may be related to, among other issues, the bureaucracy generated from managing and reporting on governmental tax money, as well as responding to the political values of the ruling government.
Concusion & recommendations
Institutions raising funds must have a reasonable low level of administration cost, in order to honor the giver. HR&S proposes 0- 15%, ALL institutions, as well as company tax. The administration costs shall only cover unavoidable costs including bank fees, transfer of funds fees, and web-site fees. If 60-70% of the donors money is used only to raise the money, there is nothing left to pay for the professional implementation programmes that can ensure a sustainable solution.
Thus, just collecting donations without being able to sustainably improve peoples’ lives CANNOT be a business idea. Ad hoc support can expect to deepen poverty as it keeps the beggers in a depending situation, which can be expected to reduce their self-esteem and lower the motivation to take own initiatives.
Funds that are just distributed without demand on accounting, auditing, accountability and transparency increases the perception that money comes and goes and is not the result of income generation. The only people who benefit is an sustanable manner from charities that focuses on fundraising and not the implementation, are the employees of the charity.
HR&S proposes international-national social enterprises as the sole method to eradicate extreme poverty. Local business loans and local business coaching can preferably be funded through donations.
Serving the under-served in a sustainable manner
Donations & the expectation of the receiver
After donations have been raised, whether it is through charities or tax, and the administration costs have been removed, the money is transferred to the target country. Now the real challenge begins, the implamantation of a programme that actually honours both the donor and the receiver of the donated funds.
60 years of enormous amounts of aid money, while still the number of extremely poor people in Africa is still increasing proves that this is a very difficult task. Thus for obvious reasons, this diffult task cannot be manages by NGOs and/or volunteer workers, but the implemetation of the poverty reducing programmes requires professionsal institutions.
Institutions with professional staff, who operated according to professional practical strategies, The funds is ususlly not transferred to the underserved themselves, but to institutions who are serving the underserved. Institutions that can show scientific evidence for that the funds invested are actually increasing the level of livelihood among the underserved population in a sustainabel manner.
Practical strategies & professional operations. Sustainable impact requires practical strategies and professional operations. HR&S offers this service.
Professional local HR&S institutions. Thus we need professional local institutions serving the underserved. Such institutions are already implemented in high-income countries. If the institutions benefit from donations, they must honour that the funds is targeting the under-served. The donated funds must reach the poor. Such institutions cannot be managed by volunteers, nor staff without proper and advanced edcuation. The institutions must have a professions, effective and efficient set-up, like a professional business providing social good as a business idea. HR&S offers this service.
The perceptions of the receiving institutions. Now, what is the perception among the staff at the institutions receiving the donated funds. Is the receieving staff made aware of the intention of the donor, that this money shall ONLY serve the under-served, for example extremely poor communities, either directly or indirectly but only the targeted population, or, do the receiving institution staff consider themselves vulnerable enough to be entiteled to have direct benefit from the donated funds?
Concusion & recommendations
Institutions in target countries receiving donations CANNOT use the funds to cover their own institution’s running costs, but can only be used to cover project specific direct implementation costs. Moreover, activities MUST generate evidence based sustainability for the social good they implement.
HR&S proposes international-national social enterprises as the sole method to eradicate extreme poverty. Local business loans and local business coaching can preferably be funded through donations.
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