An International
Development
Strategy

Can Social Enterprises be Self-Sustaining?

Feb 2, 2018

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"Wholly sustainable social enterprises are a myth." So declared Alastair Wilson, CEO of School of Social Entrepreneurs in London, in a post September 14, 2017. When you work with people with less education in less desirable environments and pay higher costs than your competitors, it is harder to turn a profit. It is very tempting to turn to grant funding to generate the income you need to sustain your impact. Before long you are dependent on grant funding. In the end, the claims of many NGO’s to be producing sustainability prove hollow.

Delivering goods and services, therefore, rarely produces sustainable development. However, we believe that two factors not mentioned by Alaair Wilson can change that: mentoring and volunteerism.

Social enterprise by definition tackles the underlying issues that keep people from succeeding economically. There are reasons why people are underdeveloped. For example, they may not be able to start a small business because they don’t know how to run a business. If you factor into the project the cost of the education and mentoring they need in order to become successful, no project can be self-sustaining. However, if the mentoring truly develops beneficiaries as whole people, then they will want to provide that mentoring to their children and social networks, who will then develop without the explicit services of the social enterprise.

What about the use of volunteers? Volunteerism is not common in poor communities where everyone struggles for daily bread. It is unreasonable to expect volunteers to give large amounts of their time on an ongoing basis. But it is entirely reasonable to expect beneficiaries to pay back the time that has been invested in them. If this were consistently done, social benefits could spread through a community in a sustainable way.

The problem is that neither volunteerism nor mentoring unrelated people are cultural norms in much of the world. Both go against the inherent self-centeredness of human beings. Those fortunate enough to have their immediate needs met sometimes discover that altruism provides a kind of joy beyond that of a full stomach and a good show. Most often, however, willingness to sacrifice one’s time and comfort for others requires some sort of spiritual motivation. It requires gratitude—the sense that I have been given more than I deserve—and the sense that God blesses us so that we can bless others. Both of these are biblical values.

That is why we are working through churches to do economic development. We are trying an experiment. We have agreed to work only with self-help groups who have committed themselves to starting new self-help groups at their own expense. We will spend equal time developing financial and business skills on the one hand and studying biblical principles of living on the other hand. Our goal will be to transmit the values of volunteerism and mentoring as deeply as the principles of loan repayment and marketing. If we are successful, the economic development that occurs will be sustainable.