This piece was inspired by a tweet from the Big Chief, Nigerian investor Victor Asemota. In a short tweet he mentioned the inefficiency of philanthropy, which made me think about my own journey as I move away from being a traditional charity and work towards creating an investment vehicle for young Cape Verdean entrepreneurs.
In this article I will explain how I experienced the same inefficiency during all these years working with Sonvela and how I expect it to change now that the approach will be completely different. Solving this inefficiency issue is one of the main reasons why I've decided to switch to this new model with Sonvela, and it will be an important part of its success in the future.
Once you donate a certain amount of your hard earned money to a charity, and they spend it, it's basically gone. Yes, a lot of charities do great work. I believe Sonvela has done truly important and crucial things in the past. But, as I learned that the hard way during Sonvela Arte, donations make you dependable. Especially as a small organisation, this is a huge problem.
Large charities never run out of cash, but small charities always have financial challenges, which I've experienced myself. These same large charities and foundations, are non-profits that are operated like big corporations. Income from donations are spend on publicity campaigns in order to attract even more donations, which is an investment. This tells me that they do understand the value of it but don't take the same approach when it comes to how they operate, which is very concerning, in my opinion.
For me, I remember always thinking what now? As a solo (and volunteer) charity operator, it was not easy dividing my time between work, and all the things I needed to do for Sonvela, such as fundraising. Usually it could take me weeks or months to raise small amounts of cash, which would later be spend in a few days max.
“Foreign aid is taking money from the poor people of a rich country and giving it to to the rich people of a poor country.” – Ron Paul
A few years ago, as Akon was on his mission to improve the lives of millions of Africans, there was a very important question that went viral on social media. Because Akon achieved to deliver electricity to so many people in a short time frame, people on social media were rightfully asking what all these large charities have been doing throughout the continent in all these years.
I believe the main issue here is that these organisations are not solving problems in the long-term. They focus on helping people, in most cases with basic needs, but apparently have not been able to ask crucial questions in last decades of delivering aid across the African continent. There is no urgency in making a real and lasting change for these organisations, who have been so wildly appraised and funded for so long.
The issue with the 'give a man a fish' approach is that you will need to keep up with this cycle, and you'll probably see growing demand. Growing demand is not a problem for large charity organisations, because they have huge financial support. The demand is usually even used to bring in new and more donations, by referring to the demand as the problem that needs to be solved.
This is not about criticising both small and large organisations that do beautiful work helping others in need, but you truly have to wonder what has been done with billions of dollars and euros over so many years when one man comes in and does something that was not possible for many large charities over multiple decades.
It makes sense that small organisations have trouble getting to the root cause of the problems and the consequences of what they're dealing with, but large organisations that have the means to employ highly educated people and create big teams need to raise the bar. It might be better to use a hybrid approach, where organisations experiment with both for-profit and non-profit initiatives on order to get to certain solutions.
Although I'm now clearly choosing a different path this is not to say I will never touch charity again. I still believe in the power of giving, and think that there are situation in which charities can provide the solutions needed. With elders for example, or when working to provide for our children.
However, this inefficiency issue needs to be dealt with. And the way to do it is with a clear focus on real problem solving, which is one of the reasons for focusing on the tech & startup scene in Cape Verde. The ability of a new generation of founders and entrepreneurs to solve the country's most critical problems and bring them to the market will make all the difference in my opinion, and I cant wait to see it all happen.