Business needs and social good are in synergy

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Sajid Ahmed | 13 Sep, 2016
You want to help. Your heart is in the right place. You come with a pedigree. You are talented. You want to live with a spirit of generosity and integrity. Now what?

First, we must accept and concede that the technology to feed, cure, educate, transport and sustain 1.3 billion Indians does not exist yet. We cannot declare victory on a social cause. All we can hope for is to keep shifting the equilibrium through a series of small upgrades.

The pivotal challenge is to decide on the best ways to accomplish these upgrades -- access to food, water, healthcare, safety, dignity and freedom. Where do we look for solutions? So far, we have found hope in the energy and enthusiasm of non-governmental organisations (NGOs), gracious government programmes, generous philanthropists, and other noble social outfits. Their abundant generosity has seen a consistent rise paralleling India's economic growth. This has not translated into the results we hoped for, at least not at the pace we expected.

Whether you are an individual or an established social organisation, a corporate management approach to charity can help organise and simplify the process.

India is home to the largest number of registered NGOs. The heroic efforts of the government's various projects like village outreach and childhood education initiatives are admirable. Social organisations are at the forefront of both social welfare and social reform. The altruism of our movie stars and cricketers eclipses their performances on the screen and the field. Yet, progress is neither proportionally fast nor sustainable because the cycle of fundraising has to be repeated periodically with unpredictable results, with no resources to scale. Scale is what business does best.

Many see business as the problem rather than a solution. Think of banking, the drug industry, the fast-food industry, the furniture industry or any other kind of manufacturing and you can see the justification for this attitude. Greed and exploitation mark most people's perceptions of business operations -- but that is a gross distortion of the role of business. It is true that profit motivates businesses to create resources. All wealth is created by business and only business can create, sustain and scale resources. It is this very repetition and scalability that moves the mass of humanity forward.

Donations, subsidies and exemptions can never be enough to solve extreme poverty. Moreover, it is disheartening that we tend to turn a blind eye towards the results after we receive our tax exemptions and accolades. Programmes like Corporate Social Responsibility (CSR), which urge businesses to give more and get more involved in social issues, have started yielding benefits in finite silos. For all its limitations, a business solution to social issues is the only self-sustaining one and by far the fastest one, considering that the cost of improving lives in India is startlingly low compared to other countries.

Far from being out of sync with each other, business needs and social good are in synergy. Lacking is the knowledge and awareness on ways to address social issues with a business model. Business owners must take the responsibility of good fortune and see themselves as agents of change and see philanthropy as the market for love and care. The most effective changes so far have come from partnerships between NGOs, governments and businesses to collaborate and share knowledge and techniques to scale.

The activist Dan Pallotta urges that in addition to businesses seeing themselves in a new light, the rest of us also need to look at non-profits differently, letting go of our many biases concerning their management.

Making money in the non-profit sector is uncomfortable for many. While we understand completely the need to make money in the for-profit sector, we treat the pursuits of doing well for oneself and doing well for the needy as mutually exclusive. Why is that?

Another bias is our stringent intolerance of operational costs and overheads in the use of our charity money. Advertising and marketing are as important in the non-profit sector as in the for-profit sector; yet our attitude becomes tight-fisted when we hear of money spent on promoting non-profits. How else will a non-profit raise awareness and donations?

Overhead costs have long been cursed for taking a percentage away from actual charity, but there is no distinction between the two. When we stop looking at overheads and start looking at impact, we realise that overheads allow charities to scale. Without overheads, charities would only have the seed capital collected from donations. Fundraising is an overhead and it allows charities to multiply seed capital.

Lastly, innovation in the non-profit sector is curbed because failure can put your character into question. Prohibiting failure kills innovation. An encouragement to take risks can generate new revenue ideas just like in the for-profit sector.

Our ability to solve social ills has not kept pace with our ability to create them. We need business leadership to step up in finding a cause and to support it consistently, because sustainable funding is a problem for all non-profits. As with any new venture, a savvy investment is one that yields maximum impact. Corporations can encourage accountability by requesting annual reports from the charities they support -- and then measure effectiveness and impact, giving priority to numbers.

Corporations will have to take the entrepreneurial risk to fuse business and social issues. We need leaders who understand the new reality, and are audacious enough to break the mould of traditional thinking, to use the scientific method to test new ideas for social change and, above all, to use reason and empathy.

(Sajid Ahmed, is Director, Hamdard Laboratories India. The views expressed are personal.)