At Work & Economics 101 & Public Square & Theology 101

Can Entrepreneurs Change the Way We Do Charity?

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The Bible is very clear about a believer’s obligation to help the poor. Scripture is replete with commands to help the poor, to visit and care for the downtrodden, with curses pronounced on those who do not.

This command is at the root of Christian charity in general. This Christian impulse has carried over into the larger society, serving as motivation for American charity in particular. It has also played a part in broader Western aid policy towards the impoverished nations of the world.

After billions of dollars in foreign assistance to these nations, why are they still poor?

That answer is very complicated and has many layers. While I cannot explore all aspects of the issue here, I do want to examine what I think is the foundational element: the misunderstanding about two main types of charitable assistance.

Two Kinds of Assistance

There are two kinds of assistance: emergency aid and development aid.

Emergency aid is the provision of necessities of life in the immediate aftermath of a disaster. Wars, earthquakes, floods, and other disasters create severe disruptions, for which outside assistance is often essential to survival.

This sort of aid is temporary, and should end rather quickly, after a few weeks to a few months, depending on circumstances. Recovery and reconstruction should be the focus.

In contrast, development aid is the assistance needed for long-term development and growth. This is very different from emergency assistance. It is a longer-term commitment, taking the form of education, investment, and the development of entrepreneurship.

Recent History of Aid

One of the significant reasons that American aid, including that of the Christian community, has not had better results, is that much of it consists of emergency aid long after the emergency is over.

Take the case of TOMS Shoes‘ “buy one, give one” campaign, where TOMS donates a pair of shoes to third world villagers for every pair purchased in America. This sounds like a well-intentioned program, but unfortunately it is emergency-type aid in a non-emergency situation. Giving shoes to people is a response to a need, not a long-term solution.

What we are finding with this model of charity is that local shoemakers are being run out of business by the free shoes. The issue extends beyond the shoe industry, too. As Cheryl Davenport noted in a recent article about TOMS that was published in Fast Company,

 …an increasing number of foreign aid practitioners and agencies are recognizing that charitable gifts from abroad can distort developing markets and undermine local businesses by creating an entirely unsustainable aid-based economy.

The egg industry provides another example. In this video, Peter Greer, president of Hope International, tells the story of a church group that provided fresh eggs to a village in Kigali. This bankrupted the local egg producers. Then the church moved on to a new project and the village was left with no eggs.

What is to be Done?

The first thing we need to do is ensure we are engaging in the right sort of aid. A large part of American and Christian aid is emergency aid. We give shoes, provide clothes and food, build houses, and so forth. The result is often dependency: local providers go out of business, jobs are lost, and there is an expectation that the aid will continue.

The reality is we often give emergency aid in non-emergency situations, and this is destructive. People need help, but we in the West often do not know what sort of help.

We need to get personal and get to know these people and ask them. Our aid model is flying in and dropping cargo that we think will help. Jesus’ model was getting on the ground and dealing with individuals he met personally. On several occasions he asked the person, “What will you have me do?”

People need to be productive providers, and the primary way that happens is through business enterprises. We are commanded to work and earn our keep, and as Christians our aid and assistance need to reflect that reality.

There is no magic formula that guarantees results, but there are approaches that lead to better results. The first thing we need to do is get to know the people. Business is the way communities provide for their long-term needs, not aid, and so our approach should be to seek how we can help local entrepreneurs develop businesses.

Some examples include the African Bible University in Kampala, Uganda, a degree granting university run by missionaries and local Ugandans to train and graduate students. There is also the Business Development Center run by Regent University in two African countries that trains locals in business skills.

These are efforts that are providing the sorts of aid that makes a long-term difference.

True aid is helping others, in the name of God, to become productive providers. That is accomplished through entrepreneurship development like these programs, not with free shoes and eggs, regardless of how well-intended.

How can we use our resources and talents to truly help people break out of the cycle of poverty? Leave your comments here.

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