Achieving Social Good via Capitalism

It has become apparent that traditional philanthropic support for countries suffering from widespread poverty and lack of infrastructure has failed to achieve goals of long term self-sustainability. While many of the efforts by countries and charitable organizations have been noble in intent, they appear to only be treating the symptoms rather than the causes. Of course there are many different theories as to how best to approach the root problems, but many agree that economic development plays a critical role in self-sustainability and long-term economic and social empowerment.

In recent times, “capitalism” has become a “dirty word” associated with greed and fraud, but one must not forget the tried and true benefits as well. The goal of capitalism is to maximize profits, and while not perfect, capitalism does indeed promote accountability, efficiency, and fiscal responsibility. Add ethical values into the mix, and it’s hard to argue with this model. The question then becomes, can capitalistic values be applied to social causes? It appears it can…

We can theorize and conjecture all want, but what we want to see a model that been put to the test and has produced some of the positive results we are looking for. Take First Step for example. This non-profit, a subsidy of World Hope International (a charitable organization) has created a special economic zone in Sierra Leon which attracts what they call “ethical investment.” The organization is out to make a profit using a capitalistic model, but creates local opportunity, attracts foreign investment, and then ultimately re-invests its profits toward further development. One of the successes that have resulted from First Step and its special economic zone is a juice company called Africa Felix Juice. They are the first company to successfully export a product since the civil war 10 years ago; a huge accomplishment.

See below for a few articles about them:

Making Profit in Africa: A Transforming Role for NGOs and Development Organizations

“The First Step example demonstrates how NGOs and development organizations can leverage their assets, including networks, in for-profit ventures that still meet their organizational objectives and actually can accelerate economic development. It is possible for non-profits to develop successful for-profit ventures for the social good… ‘the mindset of an entrepreneur needed to do this is much different than the humanitarian and development mindset.'”

Africa next: An enterprising hand up, not a handout

The social enterprise: making a buck and doing good

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