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Posts tagged ‘Social Effects’

Unintended Consequences of Changing Your Aid Dollars Annually

Adopting different causes every year cannot be considered Corporate Social Responsibility, and is actually detrimental to the development of poor communities.

In Singapore at least, corporate understanding of CSR is weak, and I can confidently say that most companies consider that giving to a charity is a fulfilment of their CSR obligations (yes shoot me now). But if you think that’s bad, it gets worse. Companies here seem to think jumping from charity to charity serves the company’s interest best by being seen to contribute and satisfy consumer trends (Cue Aceh 2004, Poverty Alleviation 2005, Environmental Conservation 2006, Climate Change 2007, Burma 2008, Climate Change 2009, Haiti 2010, and Japan 2011).

In addition to getting it wrong (giving to charities is corporate philanthropy, and is just a small part of what CSR entails), these seemingly altruistic and well-intentioned actions actually end up doing more harm than good.

It’s well known among development practitioners and academics that it takes at least 5 years to see real progress and that you’d be lucky to see it in 3. (Sure, we’re all looking for that silver bullet, but take any claims to that with a pinch of salt). Yes 5 years. At least. Development is hard work, and there are so many variables involved. You don’t get PhDs in a year, or expect to become a C-suiter in the company if you have joined as an executive the year before, or expect to speak fluent Mandarin after only picking it up in the year before.

But you might still think its ok. As long as corporations give to charities and poor communities everyone wins right?

Well you’re wrong, at least most of the time. It may work for relatively short time-span projects, like building new schools (Don’t even get me started on the problems of fixating on building schools as the solution to education!), wells for access to drinking water, or a complete vaccination program, but sadly, most of development has a longer time-span.

Take funding a child’s education for example. It’s extremely popular for many NGOs to offer you a choice of funding a year of a child’s education for $x/year. Research also shows that the ROI of education is 5 years. This means that it takes at least 5 years before the child and his/her family can see an increase in the child’s income. Also consider the factors working against a child going to school; pressures to help out with subsistence agriculture; pressures to find an odd job to supplement household income; distance of school to home, amongst others.

Let’s put ourselves in the shoes of a subsistence farmer from a poor village in a low-income country, which mind you, has not had the benefit of education, and may be a stranger to the concept of education beyond village elders teaching what needs to be taught. Now this foreign agency comes over and waxes lyrical about the benefits of education, and offers to foot the bill, but that means taking the child away from your income or labour computations. You may think “Well ok, why not, it’s free anyway and they will earn more in the future”. Everyone will have to work harder because you now have one less pair of hands, but hey, it’ll be worth it.

Fast forward a year, and the same agency comes back to tell you funding has stopped, and because you can’t afford to foot the bill, please withdraw your child from the school. Armed with this one year of basic education, your child goes out to see if he/she can find a better paying job, only to realise that he/she gets paid the same amount as anyone who has not been to school. Guess what? By the time your next child comes, or when your child has children, they probably won’t send them to school because to them, schooling increases personal hardship and has no benefits.

The same analogy extends to health vaccinations, where you see your child in pain and feeling weak after the vaccination, and inadequate funding means the child does not get the full treatment and therefore is still prone to the disease. You’re not going to send your next child because to you, it does nothing against the disease and increases personal suffering.
The lack of full funding is also why many NGOs’ community development projects terminates at the pilot stage or cease halfway through the full project term. It’s cruel to raise hopes and deliver disappointment.

We can already see this in the mind-sets of people living in failed or failing democracies. So much is promised with democratisation in the beginning, only to end in the swapping of one democratically elected despot for another with no real benefits for the common man. You lose faith, and it’s so much harder to convince you the next time round that democracy works, only that the implementation is wrong. The culprit? A certain government who practically shoved democracy down many emerging nations’ throats without actually seeing the whole process through, just as long as it’s a democratic government and not a communist one.

(Pardon me, I have digressed, and let me return to my point)

So I argue here that NGOs who run projects without making sure they have the full funds available or the possibility to call on the full funds to see the project through are behaving selfishly and doing a great disservice to themselves and others in the industry. And the corporate strategy of jumping from one cause to another annually just reeks of corporate irresponsibility, and it’s antithetical to the corporate responsibility it claims to be. This is not CSR. Nowhere close. It’s like saying Iceland is in the tropics.

CSR essentially means that a company behaves ethically and considers the social effects and environmental effects with its every action. You have to think about what your trend chasing is doing to the wider community, and if you persist with your trend chasing, then you can be sure I will be exposing your act of corporate irresponsibility.

If you are serious about your CSR or philanthropy; if it comes from the heart, is strategic, well-planned, and is not a trade-off with corporate interest but in fact supports your organization and the community you want to invest in, your consumers will be able to see it, and will respect you for it, even if the cause you adopt is not en vogue this season.

Benson Tan is the Managing Consultant of Global Causeways, a Corporate Social Responsibility, Philanthropy and Development Consultancy operating from Singapore. You can reach him at or follow him on Twitter, or both.

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