We met Prof Muhammad Yunus today!
At an event in Bangalore, we couldn’t be happier when we listened to him address a group of angel/traditional investors, social entrepreneurs and other notable individuals in the development space. We expressed our deep sense of gratitude and thanked him for the way he has been inspiring and paving the way for social businesses.
As we never tire of saying, Rang De is wholly inspired by the Nobel Peace Prize winner’s ideas. Not only did he introduce the concept of microcredit and microfinance, the two concepts of economics that has created a gateway to development in rural India, he has also advocated the idea of a social business—an enterprise created to tackle a social issue in a sustainable manner.
With this model, he founded the Grameen Bank that has transformed the lives of millions of people in poverty-stricken Bangladesh. Among the millions of people that the bank has supported, a whopping 97 percent of them were women.
The dilemma between pursuing growth and social good
Prof Yunus spoke about the push that social businesses need and how they should solve social problems without falling into the trap of ignoring their mission while searching for a path towards self-sufficiency. He reminded us that it is crucial for all of us involved in the development sector to draw a distinction between social businesses and nonprofits as well as social businesses and for-profit social enterprises.
Increasingly, many nonprofits are looking towards raising funds in the manner that for-profit social enterprises do but in the process, they might be pursuing paths that will compromise their social mission.
In his view, should the social businesses earn any form of financial returns in excess of operational costs, it should be reinvested into the development of the business towards their mission. With India seeing hundreds of social enterprises being formed and nonprofits converting their mode of operations, Prof Yunus’ reminder is a timely one.
During our meet, there was also the head of a leading corporate who confessed that their CSR programme had failed miserably.
While they managed to supply clean water to people from low-income communities in a successful pilot in Bangalore, they had failed to see a similar result in other states. Despite the amount of money and goodwill put into the project, they could not achieve the desired results.
Prof Yunus rightly answered that the people who run CSR programmes do not have the set of skills and qualified experience and it would be better for a separate entity to be created in order to tackle a given problem. A company should contribute money towards social causes but their focus should really be on programmes wherein they can leverage their core competencies — had the company’s core competence been in water purification then it would have been well-suited for such projects across the country.
There is a strong need for social entrepreneurs who focus exclusively on a particular problem area and give many years of service to the cause. Whether it be tertiary education for rural students, promoting weaving as a way of livelihood for disenfranchised Bodo women, organic farming in Andhra Pradesh or developing outcomes for children in shelter homes, we have partnered with organisations whose members have the requisite knowledge in their respective fields of interest.
In particular, rural development is a whole different ball game. Different geographies have unique characteristics that an outsider will not be able to immediately understand.
It is becoming increasingly important in the development sector that people with the right qualities and experiences be appointed instead of a one size fits all approach.
The great news is that institutions are springing up to fill this void and we even met Ravi Sreedharan, the co-founder of the Indian School of Development Management who is determined to create a cadre of management professionals exclusively focused on the development sector.
The vision of ISDM is to develop professional management and leadership fo better impact, sustainability and scalability of development sector organisations.
We were honoured to get a chance to meet Prof Yunus again and we look forward to seeing him again in the country.
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After 11 years of operations, Rang De is now taking a massive leap forward with our brand new peer-to-peer lending platform rangde.in. Check it out.