In the first of his monthly meanderings, Peter Shrimpton, Founder of Heart, pleads the case for Social Innovation in South Africa….
We know the facts. Every day, the very livelihood, dignity and survival of people in need come under attack from a number of hybrid aggressors – from water to food, disease to wars. In Africa, the numbers are so great that people have become statistics, bell curves on flip charts and Powerpoints. But while there can be no dispute about the presence of such problems, but there is a constant debate about the most effective way to go about solving them. I think there is only one true solution – social innovation and its natural heir, social enterprises.
The challenges that confront our local population and environment are not exclusive to South Africa. And neither are the responses. Traditionally, society would look to providing handouts to charities who deal with the problems at ground level.
Decades on, it has become clear that giving billions away to charity each year does not produce sustainable solutions. I am the first to acknowledge that there are many trusted and deserving organisations to support and that charitable contributions are an important driver of the social sector. At the bottom of the pyramid however, handouts create dependency and distortion because handouts are most often a temporary reprieve for cash-strapped charitable organisations struggling for survival.
Truth be told, the real problem is that the entire amount of capital available for grants and donations is only a small drop in a rising ocean of need facing the African continent. Facing this scale, it is clear that neither free market economies nor charities alone are likely to solve the escalating social and environmental challenges.
We need to find new solutions to old problems. We need to find sustainable solutions that permanently eradicate problems and we need to find them fast.
I believe our salvation will come through social innovation. All across the world people are developing innovative ways to improve quality of life. Whether it’s in alternative energy, food security, early childhood development, low-cost housing or a multitude of other critical focus areas, scores of successful models are emerging daily. Google them and see.
Right now, this global movement is being driven by social entrepreneurs. These extraordinary individuals are solution-oriented, innovative, pioneering, resilient, ambitious, industrious and courageous.
Driven by the powerful urge to ease the suffering of others immediately, they often embark on social ventures without adequate resources, infrastructure, knowledge or experience. That is the nature of the social entrepreneur. Yet, despite their short comings, social entrepreneurs around the world are producing outstanding results, and by results I mean ones that are both impactful and sustainable.
Thousands of sustainable models have been conceived, tried and tested. The beauty of their operations is that in most cases they are market-based solutions to social problems. These ‘social enterprises’ are non-profit or for-profit organisations that address specific social or environmental problems whilst earning income through trading products or services.
Social enterprises are essentially holistic hybrids – they bind the social and environmental goals of a conventional charity with the commercial rigor you would expect to find in a successful profit-making firm.
Social enterprises can break through the capital barrier of grants and donations to access an expansive quantity of capital available through loans or social private equity.
How? Loan repayments or dividends enable these market-based social solutions to provide investors with a social and a financial return, otherwise referred to as Blended Value.
Since many of these innovative market-based solutions are grassroots ventures with little access to capital, I believe that government, corporations, foundations and social investors of every kind re-orientate their charitable handouts towards investing into social enterprises.
It is vital that we support social entrepreneurs with innovative solutions in South Africa. We must identify and invest into these organisations. We must make every effort to help social entrepreneurs start up and stay up. Why? Because social entrepreneurs are our only hope of driving real, sustainable social change at grassroots level.