FE Report

Noble laureate Dr Muhammad Yunus Wednesday emphasised the best use of charity to make the contribution bona-fide and sustainable instead of just throwing away money.

"There is nothing wrong with charity. But the problem is even if money goes out in most cases there is no return. It makes charity unsustainable," he said while speaking at the inaugural ceremony of a two-day workshop at the Bangladesh Enterprise Institute (BEI) in Dhaka.

BEI, an independent research organisation, has organised the workshop, the second of three under its Bangladesh Social Enterprises Project (BSEP), with a view to identifying the strengths and opportunities of companies doing business with the poor and address the challenges and threats, said Farooq Sobhan, president of BEI.

In his keynote speech Dr Yunus said social businesses should create a company to address various social problems like poverty, malnutrition and unemployment.

"You can set up companies. You can make profit, but you cannot take it. That is the main philosophy of social businesses."

"Social businesses are set up to solve problems, not to make personal gains out of it," he remarked.

He said the typical business worked on profit maximisation which meant making as much profit as you can. "But in social businesses, profit maximisation is not the ultimate goal."

"A traditional business makes money. It's one dimensional, which is sometimes driven by selfishness."

He said: "The social businesses are based upon selflessness. It means everything I do I do for others, not for me."

"Social businesses do make profit. But the owners cannot take them other than use the money for expansion and improvement."

The micro-credit guru said people should think of doing social businesses when they provide charity or grant.

"There is nothing wrong with charity. But the problem is even if money goes out in most cases there is no return. It makes charity unsustainable."

"If any portion of the grant or charity is invested for any project you will get something in return."

Dr Yunus thinks every social business entity needs to generate enough money for its own operation.

He said there could be social businesses in health sector as the country's bottom half of the population did not get proper health services from both public and private health care centres and hospitals.

"Diagnostic centres can be set up in rural areas. You have to make it cost-effective. People will pay for the services they receive."

"As a result, the people will get necessary services at lower price, jobs will be created and in the process the project will be sustainable."

The Grameen Bank chief said "Companies create fund for corporate social responsibility (CSR) activities for the causes which their main activities do not or cannot cover. But in most cases, the fund is used for image enhancement and public relations."

"He suggested a separate stock market on social businesses for active participation of companies in poverty alleviation, providing health cares and job creation etc.

"This can be helpful for genuine social business efforts."

"Social businesses must have an impact on targeted group. If you, for example, launch a project to bring children out of malnutrition, then after a certain period of time the impact has to be evaluated."

Representatives from government and non-government organisations and different corporate houses took part in the workshop.

The BEI in association with the Australia-based Foundation for Development Cooperation (FDC) and UK-based Libra Advisory Group has initiated the project with support from British Government's Department for International Development.