Economist Abhijit Banerjee was awarded the 2019 Nobel Peace Prize for his renowned research based around one simple question: How do you know? Every person operates with their own preconceived assumptions that help them to make sense of the world. Whether or not these assumptions are correct is a question at the foundation of numerous social sciences.
Social entrepreneurs, or people who develop or fund solutions to social problems, can benefit from asking themselves this same question, challenging what they know (or think they know) about the group they intend to help with their efforts.
Overgeneralizing complex social problems not only minimizes the suffering people experience because of them but can encourage initiatives that are much more damaging.
In his book, The Anti-Politics Machine, James Ferguson analyzes the effectiveness of international aid projects. Looking specifically at aid interventions in Lesotho, Ferguson argues that Western donors have constructed the country into an object with its own structure of knowledge attached to it. Put differently, because donors often have little socialization with the people directly experiencing social issues, they create their own idea of what people’s needs are and solve for those instead of actual needs.
Take the buy one, give one model of TOMS shoes, for example. By purchasing a pair of TOMS shoes, the for-profit company gives a pair to children in need. This model tells consumers two things: the problems poor children experience are because they lack shoes, and giving them shoes solves these problems–neither of which are true. Overgeneralizing complex social problems in this way not only minimizes the suffering people experience because of them, but it can encourage initiatives that are much more damaging than handing out shoes.
Western nonprofits looking to bridge digital divides such as Computer Aid send donated Internet technology to African countries. The places receiving donations often don’t have the infrastructure to repair or accommodate donated technology, resulting in landfills of e-waste. Agbogbloshie in Ghana is one of the world’s largest e-waste landfill, contaminating local resources and endangering residents’ health.
Although these situations are specifically about international aid, they reflect a larger issue of “service mismatch” which is a common occurrence in social entrepreneurship and the aid sector. Wealthy philanthropists are often so far removed from the social problems they intend on solving and may even have contributed to them through their means of wealth accumulation. How ironic is it that Jeff Bezos pledges to fight climate change all while promoting a culture of overconsumption and whose business is a global leader in plastic pollution?
Nonprofits are unique in that they serve a “double bottom line,” meaning they are responsible to both the people who receive their services and their donors. Who they are more responsible to remains an open question, although it’s no debate that organizations need to keep their donors, or the people who keep the lights on, satisfied. Understandably so, because without them, there is no organization to provide any services.
The problem with this situation lies in the fact that many donors who give the greatest gifts may lack the experience or knowledge needed to make helpful decisions for the beneficiaries of nonprofits. Further, their donations more often than not come with conditions, also known as restricted funding. Donors will come to an organization with a solution in mind regardless of if their idea is backed in research or fact. Research shows that donor-imposed restricted funding has a negative impact on effective program outputs and service delivery. The wrong side of the double bottom line has institutional influence.
The wealthiest of people are in a position where they can seriously help people. One way they can do so is through the giving of unrestricted gifts which allow organizations to use funding to meet their most primary needs–needs that donors may not think of as being important such as overhead costs or direct aid programs.
MacKenzie Scott and her husband, Dan Jewett, have led by example over the past two years. A new report shows the positive impacts of the MacKenzie Scott Foundation’s billions in unrestricted gifts to nonprofits. The organizations who received unrestricted grants were more able to achieve their mission, secure long-term financial stability, and strengthen organizational capacity.
Philanthropy is an important part of what allows nonprofits to carry out positive social change. Individuals make up the largest source of charitable giving year after year, and many do have a personal stake in the causes they support. It’s just always good to be curious and mindful about nonprofit service provision to make sure people are getting the support they really need rather than what outsiders think they need.
