On Social Entrepreneurship and Poverty

By Luis Fernandez

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Corporations were first created in the early seventeenth century as trade monopolies between Europe and Asia. Since then, these organizations have grown in number and importance, playing a fundamental role in developing nations’ economies through the creation of jobs and wealth. Capitalism and its rapid spread across the globe was the catalyst for this development. In developed countries, capitalism is often viewed as a synonym of freedom, meritocracy, and progress. But the problem of capitalism in general, and corporations in particular, is the enormous inequality that they have created and perpetuated. Today, the world’s eight richest billionaires control the same wealth as the poorest half of the globe’s population (i.e., 3.6 billion people). This is especially outrageous considering that 30% of this half live on less than $2 US dollars a day.

This increasing inequality has created a cycle of poverty that is almost impossible to break. If a child is raised in poverty, it is highly likely that he or she will experience significant disadvantages in terms of education, skill development, healthcare, and other opportunities, which would then lead to a struggle in acquiring a job and a livable income, which will ultimately determine the child’s failure to escape the poverty cycle. As the private sector clearly is not interested in aiding the poor, since it is not “profitable” in most of the cases, and the public sector has always struggled to serve an ever-increasing number of people in need, who is going to help these billions of low income-people out of poverty? This is the job of social entrepreneurs. Social entrepreneurship attacks social problems, such as poverty, in a creative, scalable, and economically sustainable way—that is, filling that inequality void (which nobody wants to address) with social and economic value.

A notable example of social entrepreneurship as a means of empowerment is the Mobile Kitchen Social Project. Also known as TiKizzinMobil, it aims to assist youth from the most impoverished areas in Haiti, creating jobs and offering a micro-management training. TiKizzinMobil’s model is simple: once the person has finished its basic training, that person is given a complete Mobile Kitchen and the necessary means and advice to launch a new business. The benefits of this are exponential. Just imagine: the population of Haiti is about 11 million, of which about 22% is between 15 and 24 years old, so even if a small portion of this group is empowered, it would not only help one individual, but it also would have an impact on many others by creating a snowball effect. The entrepreneur’s family members benefit from a stable income and better opportunities, and the entrepreneur’s communitybenefits from job creation. So, thanks to TiKizzinMobil, Haitian youth now have an alternative to help themselves and their communities out of poverty.

Of course, TiKizzinMobil’s success depends on multiple factors, economic sustainability being the the most important. Currently, TiKizzinMobil’s revenue model is based on donations. The downside of a such a model is that half of the organization’s efforts are directed towards fundraising instead of the service they provide. TiKizzinMobil could migrate from a donation-based model to a self-sustaining one by following a subscriptions model in which the young entrepreneurs would be issued a zero-interest credit to cover the course and the equipment they receive, which could later be paid with a portion of the profits they generate during the first years with their Mobile Kitchen operations.

In any case, TiKizzinMobil is an example of how to combine the power of business with the impact of social initiatives designed to go beyond simple charity. This is the beauty of social entrepreneurship: leveraging the same system that for-profit organizations have architected to accumulate wealth to generate social value. If we have more social entrepreneurs using their talents and creativity to cease the perpetuation of the poverty cycle, then we are going to see progress in reducing the inequality gap that has been unfairly making the lives of a lot of people miserable. We must remember: no one decided where to be born, and those who are fortunate have the responsibility to pay it forward to those who have not, creating a better world for everyone.

Luis Fernandez is a Marketing Analyst at Broad Haven Associates. 

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