Tuesday, September 28, 2010

Beyond business as usual: ten principles to promote Nigerian social capitalism

Beyond business as usual: ten principles to promote Nigerian social capitalism

by Jacqueline Copeland-Carson

‘Wealth is not what a man has; it’s what he gives away.’

Ancient Nigerian proverb about philanthropy

The current recession has caused worldwide soul-searching about whether conventional capitalism is the right economic model for the 21st century. Cyclical and rapacious recessions and a dangerous depletion of natural resources, along with growing gaps between the haves and have-nots, increasingly threaten all countries. The remarkable growth in the non-profit and philanthropic sector across the world, even through the recession, is in part an effort to create alternative strategies and institutions to help communities failed by so many of the 20th century capital models. The West rarely looks to Africa for social innovation. However, some of the most promising models are coming from Africa’s emerging third sector.

While African poverty has grown over the past few decades, African wealth has as well. And a handful of wealthy Africans are beginning to take leadership roles in addressing their country’s social problems and transforming the destructive economic and political systems that cause them.

Often hidden in plain view of a mainstream media blindsided by Africa’s  undeniable challenges is an indigenous philanthropy and social innovation movement that is creating new models that, if promoted and encouraged, could create more sustainable development strategies and a compelling alternative to conventional capitalism that the world could emulate. The global press does a good job of highlighting the formidable political, economic, social and environmental challenges facing African countries. Indeed, conventional capitalism models that focused on extraction of wealth and natural resources without replenishing them have caused underdevelopment in Africa since the slave trade and colonial eras.

Despite its bad rap in the international press, Nigeria − along with Kenya, Ghana and South Africa − is one of the most promising social innovators in sub-Saharan Africa. Building on centuries-old giving practices, it is beginning to blend its traditional approaches with western techniques to create wholly new philanthropic and social investment models that could establish the new models of capitalism the country needs for sustainable development.

Businessman and statesman TY Danjuma has created Nigeria’s first indigenous foundation, using his personal wealth, and has hired a dynamic executive director, Thelma Ekiyor, who has international philanthropy experience. Using a social change giving strategy, TY Danjuma Foundation funds education, health and economic development. But it also recognizes the importance of promoting Nigeria’s philanthropy movement and creating a new business ethics through exemplary governance practices. The foundation also aims to support Nigeria’s traditional giving circles and promotes regulatory reforms that would encourage other wealthy Nigerians to give.

With pending, albeit controversial national legislation, Nigeria may be the world’s first country to require CSR. In addition, Nigeria has a growing number of social entrepreneurs who, especially with additional support, can create best business practices to resolve the country’s challenges.
But Nigeria still has a long way to go to build its emerging third sector into a tool to reform capitalism. Any effort to instil social principles into the profit motive of capitalist institutions − whether they are companies, foundations, NGOs, governments or social enterprises − is fraught with tension. Social capitalism is not a panacea for the breakdown of societies and markets. And Nigerian social capitalism is subject to the same pitfalls of social investment and philanthropy as anywhere else.

Ten principles to advance Nigeria’s social capitalism

The third sectors of western countries certainly have their challenges and need reform to advance more equitable capitalist practices. Nigeria and other African countries, since they are newer to the sector, can learn from the West’s mistakes. But Africa also has much to teach.  Here are ten tips that might help Nigeria and other African countries improve global social capitalism through its third sector.

1  Recognize, respect and reinforce indigenous Nigerian social capitalism philosophies, structures and practices

Build on Nigeria’s homegrown wisdom and institutions passed down by elders over millennia. Discarding them for Western approaches that seem more modern but sometimes don’t fit, or even make our predicaments worse, has been the bane of African development.

Although they may be unknown to mainstream philanthropy, Nigerians, like all Africans, have longstanding traditions of social enterprise, business ethics and philanthropy. We should document and practise them, mixing their best elements to adapt models such as foundations to African conditions and priorities. The West does not have all the answers to the world’s problems, and some of the most intriguing solutions are coming right from Africa.

2  Adapt appropriate business practices to the special conditions of social capital markets.

If you represent a corporation considering or already operating a social responsibility and investment programme, or even if you are a philanthropist who wants to use market tools to support NGOs, remember that most successful investors in business stay in for the long haul; they know their risk tolerance and they maintain diversified portfolios.

The same should be true for philanthropists and social investors. Because of the fear that a promising but unproven idea or leader might not work in the short term, some philanthropists and social investors avoid supporting new programmes and organizations.

It is difficult to predict the success of any organization. However, sometimes the least proven leaders or a new untested idea can have the greatest potential long-term social payoff by expanding justice and advancing social consciousness.

3  Develop appropriate measures of social impact for your business or philanthropy.

Social capitalism models must be willing to let go of measures of success that don’t work well where the market has obviously failed to provide social goods that society needs − such as access to basic healthcare, safe housing, clean air and water, and protection from violence − recognizing that these inequalities, which often play out across ethnic, racial, gender, religious or class lines, can be the most difficult to fix. Patient, early capital and a high-risk, high-reward investment posture are often required; a quick fix with quantifiable short-term results may not be possible.

4  If you have the financial means, create a well-managed, professionally run philanthropic or social investment organization or programme.

It is not only the funding that you can provide, but also the example you set, of Nigerians supporting Nigerian social enterprise and philanthropy, that will help create a social capitalism ethic focused on giving back for social change. As a wealthy foundation, you are also in a better position to speak out for public policies that benefit the poor and vulnerable. Hold yourself accountable, creating publicly available reports on your funding as well as the success of your grantees.

Don’t keep your money to yourself, creating a prestigious-sounding foundation that does little. Create investment strategies to grow your foundation’s capital and consider socially conscious investment strategies that reward companies with ethical practices and a positive social impact, while reflecting your foundation’s mission. These approaches will set a new model of social responsibility and build confidence in the NGO and social enterprise sector, encouraging more investment that the country so desperately needs. Harness the power of the internet to create socially responsible, innovative enterprises that promote the public good while creating new economic opportunity for yourself and others.

5  Remember you don’t have to be rich to be a philanthropist or social investor.

It is the small everyday acts of compassion and justice of everyday people that ultimately build a nation. Time, talent and courage matter as much as treasure in promoting social change. Everyone can treat their neighbour with empathy. Everyone can donate some time. We all can donate some money − no matter how little − to a worthy cause, or share ideas. In fact, do not discount the power of ‘poor people’s philanthropy’ − the small amounts of money pooled over many people over time. It is the basis of every successful social movement in history, including the American anti-slavery, African liberation, civil rights and anti-apartheid movements, to name just a few. And it can be the basis for a Nigerian social capitalism movement. The key is to be more strategic − have a vision of a better future, create a mission and strategy to achieve it, and then pool resources across the community to make the vision real. A thousand acts of kindness and collective action can and do move nations.

6  Walk the talk of social equity.

A Nigerian proverb says: ‘You can best coil a fish when it’s fresh.’

Nigeria’s social capitalism movement is just starting and now is the time to learn from others’ mistakes and create institutions that are more effective and sustainable, building our communities and even the nation.
If you represent a company, foundation, NGO or social enterprise, it is critical to have ethical and equitable organizational practices that treat men and women fairly; try to represent Nigeria’s ethnic and religious diversity in its governance as well as in its vendor base and, in some way, create opportunities for the country’s increasingly disaffected youth. Even if your organization is small or in a start-up phase with few resources for a grant or social investment programme, setting a good example of social responsibility and reporting it to the broader community can go a long way towards establishing an inclusive, tolerant and just culture of giving and society.

7  Remember that the third sector is more than an industry; it is a movement.

As third sectors advance, becoming more professionalized, they can lose their souls, becoming overly professionalized and fragmented, separated from the experience of society’s most vulnerable and divorced from their founding values and mission.

Nigerians should retain and strengthen the porous lines between philanthropy, social investment, corporate responsibility and social activism that seem to be a potentially distinctive feature of its emerging third sector. Respect for dissent, a focus on system reform and collective action will not only help strengthen the sector but also maximize its potential to promote more just and responsible capitalism that more sustainably develops the country.

8  Support the women.

As the old African saying goes: ‘Give a man a fish and he will feed himself; give a woman a fish and she will feed the nation.’

In all societies, women are the primary caretakers of vulnerable people − the sick, elderly and children. The international development literature shows that when women become financially stable and successful, they tend to reinvest that money in the immediate and long-term advancement of their children and families, as well as having high levels of community volunteerism. Whatever donations you give, or whatever social enterprise programmes or philanthropy programmes you establish, be sure to include women as it will help accelerate development.

9  Create more confidence in Nigerian NGOs.

Nigeria’s emerging social capitalism movement would be more successful if, as in other African countries, governments established regulations to encourage and monitor social benefit activities but also to protect the free speech of foundations and NGOs that speak out for social justice. There needs to be government-provided financial or other incentives (perhaps fund-matching programmes, as tax offsets may not be feasible due to the challenges of even collecting taxes in Nigeria) to encourage wealthy people to create foundations that truly serve the public, as well as rules to promote ethical practices among NGOs.

10  Remember to live all that is good about Nigeria.

Many Nigerians have, unfortunately, bought into the unfair international stereotype of the country as overrun with greedy, untrustworthy, cold-hearted capitalists who will do anything to make a quick buck. This is only one side of the equation. Nigerians are especially enterprising people. Use this enterprising spirit to recognize that each and every social problem of this country is also an opportunity waiting for some of that old-fashioned ‘can do, against all odds’ Nigerian spirit and know-how. And remember that this spirit extends to Nigerians living abroad, who annually give almost US$10 billion to family and causes in Nigeria. Recapture all that is good about Nigeria and the future can be bright. Fixate on what is wrong with Nigeria and you will unwittingly perpetuate it.

In conclusion

Building on old traditions and new practices, Nigerians can forge a more just capitalism, a uniquely Nigerian brand of social capitalism that profits the country. But believing in Nigeria’s social capitalism potential is not enough to make this movement real.

As another Nigerian proverb says: ‘The people of a community are responsible for making it better and if the community goes bad, the people are accountable too.’ Only Nigerians can make this possibility of a new path to capitalism a reality, joining the billions of voices across the planet who say that business as usual continues destruction of our countries, our communities and, ultimately, our planet.

Jacqueline Copeland-Carson is President of Copeland Carson & Associates, a global social development consultancy. Email jcc@copelandcarson.net

This article is excerpted from an address delivered on 1 May 2010 to The Platform, a community action convention, sponsored by Covenant Christian Center of Lagos, Nigeria. Go to www.copelandcarson.com for the full speech.