Social businesses may provide a creative new way to help Haiti
Children dressed in school uniforms sit in rows listening to one of their classmates sing a song while snacks are passed around. Two years ago, before a devastating earthquake struck the island, they were in a different location in a building that has since been demolished on a nearby plot of land here in Léogâne, Haiti.
Now these youngsters and their families are getting another chance with the help of an innovative antipoverty effort that combines business tactics with social goals.
Such new approaches are much needed in Haiti. Even before a devastating 7.0-magnitude earthquake hit the country in 2010, it faced profound structural issues: ineffective government, widespread poverty, and little educational opportunity.
Only half the children in Haiti actually start school, and just 1 percent complete their education through the secondary level. One of the biggest obstacles is the cost, since public education is not the norm and the average family lives on less than $2 a day.
At the Henri Christophe School in Léogâne, the epicenter of the 2010 earthquake, paying the costs of administrators, teachers, teacher training, school uniforms, and facilities falls largely to charities or to families of the students, many of whom lost loved ones and their livelihoods in the earthquake.
On a recent trip to Haiti, I watched how Haiti Partners, a nonprofit group, supports the Henri Christophe School and six other schools in Haiti with money and training programs. This year, it has forged a partnership with the Grameen Creative Lab to help these seven schools create a more sustainable source of revenue than charity or family tuition payments: They are creating social businesses that will create money to cover education costs.
Grameen Creative Lab is a project of the Yunus Centre, which is led by the Nobel Peace Prize recipient Muhammad Yunus, and is supported by the Clinton Global Initiative. These high-powered backers have helped gather $4 million from a handful of investors. The money goes to Haitians who need small loans to run and start social businesses.
How Social Businesses Operate
Each social business in the Grameen project is owned by an association of local community members, which has a board of directors elected every two years. This structure keeps new members rotating onto the board. The association hires a full-time manager to run the business’s daily operations and hire staff members.
Social businesses are committed to paying fair wages and reinvesting the profits into further community development – in this case, paying for the schools. Ultimately, the social-business model is far more sustainable and empowering than simple aid and charity. Businesses give people the opportunity to improve themselves and their communities.
And because each social business is tied to a school, it is providing long-term economic support to its community. Each business is providing those living and working in the community with vital services and products that will help its residents rise above sustenance living to a degree of prosperity.
Selling Poultry and Bread to Educate the Young
Working with leaders from the seven schools, Haiti Partners and Grameen Creative Lab have identified two opportunities for new social businesses. The first will bring the four Haiti Partners schools in Léogâne, including the Henri Christophe school, together to start a poultry operation that will sell broiler chickens.
The second social business in development is a bakery for a Haiti Partners community school in Belle Platon on Gonâve Island. The community, which is located in one of Haiti’s most isolated places, has serious needs.
Community members in Bawosya, in the mountains four miles south of Port-au-Prince, have also started planning another social business to support Haiti Partner’s Children’s Academy, a school that is now under construction.
The Formula
As I consider the long-term structural challenges facing Haitians, I have a growing sense of confidence for the role social business can play here. As outlined on the Grameen Creative Lab’s Web site, the 7 Principles of Social Business offer a formula:
- Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization.
- Financial and economic sustainability.
- Investors get back their investment amount only. No dividend is given beyond investment money.
- When investment amount is paid back, company profit stays with the company for expansion and improvement.
- Environmentally conscious.
- Workforce gets market wage with better working conditions.
- …do it with joy.
This model has definite appeal in Haiti and other impoverished nations and might even be a model for communities in the United States. At the very least, it can serve as an inspiration for new approaches and ideas.
• This article was originally published by The Chronicle of Philanthropy.
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