Inspiring Capital advisor Susan McPherson always has great ideas - we loved reading her latest in the Harvard Business Review about lessons we can learn from philanthropists in emerging markets:
In developing economies, local philanthropists are acting more like investors.
I have noticed these same trends in my work and travel abroad, whether in Lebanon, Brazil, Mozambique, South Africa, or elsewhere… While many lament the weak culture of giving in these countries - partially as a result of weak or nonexistent tax benefits - I share Susan’s observation that the charitable giving that does happen is more rigorous in many cases. Donors know the context in which recipient organizations are working, and so they have realistic - and high - expectations for how they use the money.
Another way in which I’ve seen developing markets to be more evolved than the US in social enterprise is that for-profit entrepreneurs are more aware of and committed to the impact their business has on their community, whether employees, customers, or just neighbors. For example, 7455 is a new fashion label established by young residents of Langa, the largest township outside Cape Town. Even in their first year of business, when they were selling t-shirts from the trunk of a car, they donated costumes to the local youth dance troupe. At the end of the season, they gave their overstock to a local orphanage and senior home. This early stage generosity, long before 7455 was an established brand or profitable business, certainly offered marketing opportunities for the brand. But there’s no doubt that it was also an unnecessary, generous choice.
Add sustainable capitalism to the list of topics about which we should learn from smart, young leaders in emerging markets!