On September 25th, 2015, the United Nations hosted a summit at their New York City headquarters to adopt post-2015 sustainability goals. These 17 “Global Goals” aim to end extreme poverty, fight inequality & injustice and fix climate change. There has been a long running debate on the effectiveness of foreign aid, part of the means to attain these goals: what is the best way to do this? Two economists, Jeffery Sachs and William Easterly, have long debated two main approaches to this question. The former suggests that foreign aid and funds are needed to push communities out of the poverty gap while the latter believes that open markets and NOT third party funding will help bring people out of poverty. I propose that a combination of both these viewpoints have the potential to create a more realistic approach to meeting the Global Goals. By integrating nonprofits and hybrid social ventures, social value, as promoted in the Harvard Business Review can be created.
Sustainability of the nonprofit structure
I have volunteered with nonprofit organizations for the last twelve years, my most recent involvement including volunteering on the leadership team for a local anti-sex trafficking organization. While nonprofits each have a unique vision, the overall structure is typically the same: connect donors to the cause you are pioneering. This marries the public or private benefit of the donor with the cause the nonprofit works for. However, this model does not incorporate the longevity of the community receiving services or funding provided by the nonprofit. If a nonprofit doesn’t receive sufficient grants or donations, the community consequently loses the service. This is a one directional funding path. A more sustainable solution would be to create a path which equips communities to be self-sustaining.
What other options are available?
The “hybrid social venture” has emerged as a valuable alternative to the nonprofit organization. A writer for Harvard Business School, Michael Blanding, described this enterprise as “combin[ing] the social welfare logic of a nonprofit and the commercial logic of a for-profit business.” This can take the form of either a nonprofit organization or for-profit entity, but the purpose is to develop capitol and a sustainable funding structure. One local example is FareStart, a nonprofit in Seattle that provides job training in additional to established restaurants and cafes.
Global Goals have been adopted by the international community, but now the question remains as to how to effectively meet these goals. Nonprofit organizations are not going anywhere, but an alternative to the structure of simply raising and distributing funds through grants and donors is to create a self-sustaining enterprise within the community.
For more information on hybrid social ventures: