The role of NGO’s in Entrepreneurship

In recent years, much criticism has been voiced on the role of non-governmental organizations in development. Too much involvement and an attitude of charity would lead to a waste of money. The economist Collier has referred to this attitude as “the headless heart”. But he also points out that this attitude is strongly related to a kind of refusal to be well informed. People want to feel good by doing well. Apparently the money was easily spent. Due reflection takes more effort.

From community development to entrepreneurship

So there is some truth in the criticism. A beautiful and illustrative example is the distribution of electric lights. Charities have distributed them more than once for free. Always good, right? Well, often not. Because it is nice that everyone now has light, but maybe there was a shop nearby that also sold lights. Probably. That shop doesn’t sell anything now. It is to be hoped that the shop was not specialized in lights, because in that case it may be bankrupt. In any case, there is no need for lights for the time being. The store earns less. But what is perhaps even more annoying: the distributed lights do break down sooner or later. How will they still be available now the store doesn’t sell them anymore? Doing well without thinking is often counterproductive.

But even when people think about it, things are not always successful. We tend to sell our own ideal to others as the solution for them as well. In the past, a lot of effort was put into community management. That movement was quite strong when the social democracy in Europe was also politically very strong. A great deal has also been achieved in education and health care. Health posts, health workers, schools, – where governments do not take their responsibility, non-governmental organizations rightly fill the gap. It was and is also a way of circumventing corrupt regimes. Now that can also be turned into an normative ideal and therefore become counterproductive. Because sooner or later one also needs the cooperation of the government and in the same way that one has to convince the people in the villages to do things differently, one also has to deal with government officials.

Community building also often leads to tackling other common issues such as water supply, electricity supply, dam construction and so on. This means that a village community must somehow assume joint responsibility for maintenance and operation of such facilities. Despite much talk about community, a village community in Africa or Asia is no more a tight community than in the Netherlands. Every village has its own issues. And often such differences and the mistrust and lack of cooperation run along family lines, sometimes castes. A lot can be done about this by means of training and learning: one can also learn to cooperate and to create trust. Were all these efforts effective? So many projects have failed. So maybe they were not. However, they can still be effective in the longer term: perhaps all these initiatives have created something of a civil society – more confidence in and cooperation with each other. Change is slow. And you never know when the penny drops. But effective in the sense that a project could continue without external support, that is something that rarely happened.

When funding declined in the 90s and after 2000, entrepreneurship slowly became fashionable. Microcredits and entrepreneurship would help people to make progress, such was the promise. Don’t give people a fish, but a fishing rod – that adage is still often quoted. But has entrepreneurship become fashionable because people in Asia and Africa asked for it? Or did we ourselves in the West move from a more socialist political phase to a neoliberal one – so that we again sell the cultural product that is currently fashionable to others as a normative ideal for them as well.

Entrepreneurship and capacity

Both the old ideal of community building and the new one of entrepreneurship overlook that people’s mindset and attitude are most difficult to change. That is why often entrepreneurship courses make the same mistake as the earlier community building strategy. We think we are at the forefront, for instance in the Netherlands, and we therefore think we know how to do it and we think they do not know it abroad, and now we are going to explain it to them. It is not even pride or arrogance, but it is even deeper. In the current scientific paradigm, it is a dominant practice to reduce all problems to knowledge or ability, theory or practice. One can transfer theory, knowledge, or one can explain and demonstrate how it works in practice. And that means that if we see a lack of development, whether through entrepreneurship or community building, we reduce all problems to the prevailing scientific paradigm, that is, knowledge or skills. The question of how people change or should change and according to what rhythm and how their inner experience and perception can absorb such change, their mindset, has no place and this scientific paradigm. That is because it cannot be divided into theory or practice. It is something third. So community building projects pass by as well as courses on entrepreneurship, without having much of an impact. The word mindset that is widely used is an illustration of this. Because it is made up of two elements, “mind” and “set”. These indicate the theoretical and practical side of our own functioning, respectively. It is actually a replacement word for the human soul, the inner life. But the current understanding of science has no idea of the soul. A farmer who has always learnt everything from his father has no inner sensibility for a theoretical explanation of how to deal with a new type of seeds. If he has to decide what to grow, he will not look at what the market demands. That is not in his bloodstream, or his soul (which is also something different from genes). Similarly with issues like waste collection or hygiene. Theoretical entrepreneurship courses do not address that problem, even if an incubator is included in the entrepreneurship program. We are dealing here with slow processes, which may suddenly sometimes speed up (that also happens!), but only when the person involved is ready for it. Then the penny drops.

Entrepreneurship or charity?

Social entrepreneurship might help? Certainly! If social goals are considered important, a company may pay more attention to capacity building. The employees can be trained, change can be practiced, which is a very good thing. But there are some limitations, because it is also time consuming. And time is money. At some point, even a social minded company must also reach its limits. Well, in that respect NGOs and companies may complement each other. Sometimes it already takes place. NGOs can invest in capacity building and companies can benefit from it and take it further. Strategies for entrepreneurship and community building are therefore not mutually exclusive. They could help each other and that is the way forward. A lot of organizations came into the world as charity and are conducted further as a business. Only think of hospitals. That means that entrepreneurship and charity are not at odds. They are two phases of the same process.