Introducing Social Business Concept in Tanzania (Part One)

Hello ! Have you ever thought about any sustainable way of facing the most pressing social needs of our time ? I’m sure you did or you’re too curious to discover it. Well, throughout this article and the next I will share with you ‘the new formula for solving social problems such sustainably’-social business.

In Tanzania as in other parts of the world we’re aware of different means that developed on humantarian ground to help people from various social ills such as extreme poverty, wars, floods, hunger,malnutrition etc. We’re also familiar with efforts that are taken to improve social needs such as education, health, electricity etc.

Common means developed include formation of gaverments, multilateral insitutions (Word Bank and IMF etc ) non profit organizations (NGOs, charity etc) and the so called ‘Corparate Social Responsibility’ set by for-profit companies. All these are formed in the name of helping needy people to solve social problems such as alleviating poverty, ending hunger, increasing access to quality education, health care, infrastructure and electricity to mention few.. But to what extent has these ways succeed to create social benefit ?

Indeed, we can’t underestimate their contributions in the world. And it demand no statistics to prove this, I appreciate.!   Perhaps interesting discussion comes when measuring ‘sustainability of these means’ especially Nonprofit Organizations and For-profit Companies through their Corporate Social Responsibilities (CSR). Governments and Multilateral Institutions are complex means to be established and managed by indiviuduals, so I’ll leave them out in this discussion.

These organizations are important in this discussion simply because, any individual(s) or company that aim to solve some social problems will often establish nonprofit organization or foundation or any form of charity to work on it. Its obvious and for many years we’ve been built to believe so. Of course, their works are great, but here is why we need new means of creating social benefits in Tanzania-more efficient and sustainable ;

          Nonprofit Organizations

These take various forms and go under many names: not-for-profits, nongovernmental organizations(NGOs),  charitable organizations, philanthropic foundations, and so on. Many were formed on humantarian and religious reasons, that require us to devote portion of our incomes or time for those in needy.

Each year billions of money  flows to these organizations to fund different projects and progams. However, the built-in weakness of charity is that: It relies on stream of denotions provided by generous individuals, organizations and government agencies. And when these funds fall shot, the good wrks stop. According to Prof.Muhammad Yunus, the founder of Grameen Bank and the one coined the idea of Social Business, charity is a form of trickle-down-economics ; if trickle stops so does help for the needy.

In Tanzania, currently many NGOs claim about ‘shortage of funds’ and yet some have shown signs of closure. Reasons given include Dr.Magufuri’s contractionist economic policy and fall in donor funds especially USAID following Trump’s move to cut international aids in some areas of priority.

So, funds are cut, fall short or stop at all but social problems remain unsolved. Is charity a sustainable means of solving social problems ? For all good work that nonprofits, NGOs and foundations do, they cannot be considered as sustainable means of solving the world’s social ills.

   Corporate Social Responsibility 

This is the means used by for-profit-companies to denote portion of their profits for helping society. Its taken following NGOs, social activists, and politicians’ pressure on corporations to modify their policies in regard to labour, the envieonment, product quality, pricing and fair trade. The pressure is greater to those companies that harm the society such as mining and manufacturing companies.

In Tanzania, you can find many big companies have established ‘foundations’ that works to alleviate poverty, sponsor students, build schools, health centers and so on. Its considered as social contribution of the company to the surrounding community. And this is legally framed.

However, despite the fact that the concept of CSR is built on good intentions, yet  in many occassions corporate leaders misuse the concept to produce selfish benefits for their companies. Their philosophy seems to be: Make as much money as you can, even if you exploit poor to do so-but then denote a tiny portion of the profits for social or create a foundation to do things that will promote your business interests”. And then publicize how generous you are !

In some cases, the same company that committs itself to CSR, spends 99% on money-making projects that make social problems worse.

Unfortunately, there are many corporate executives and managers who are ready to provide well-intended Corporate Social Responsibility but the structural nature of the companies hinders this. Basically these managers work for the interests of investors who own the companies. And in principle, owners or investors have only one objective: To see the monetary value of their investment grow. Thus, the managers who report to them must strive for one result: To increase the value of the company, by increasing company’s profits.

Companies that profess a belief in CSR always do so with this proviso, spoken or unspoken. In effect they’re saying , “we will do the socially responsible thing-so long as it doesn’t prevent us from making the largest possible profit” This gives the clue than regardless of CSR mission, when companies profit targets conside with social goals, undoubtly profit wins at the expense of social problems.

Therefore, both approaches ade used create social benefits but can not provide sustainble solutions to many social challenges. As result, countless number of country problems remain unsolved. Yet one dimensional entrepreneurs who seek to maximize profits claim that they are solving social need. Its true that banks make loans to bankable persons, but how about poor people with no colaterals. How can these unbankables access loan ?  Its true that many companies have developed renewable energy accessories, but at ongoing price rural households can afford to buy ? And so forth.

According to Amatya Sen, an Indian Economics Nobel Prize Winner he emphasize that creating products or services only is not enough, we must ensure access. For example, providing public transport only is not enough we must ensure that this service is accessible to all people including disabled.

And this is where the new concept of Social Business comes in.

Don’t miss out to read next part of this article.

Social Business in Tanzania: What It Is and What It Is Not (Part Two)
Thank you ! 

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