ABSTRACT
In the preceding chapters, we have been rather adamant that foreign aid or corporate or individual philanthropy by themselves have not always been successful in alleviating poverty, particularly in the poorest sectors of the globe. However, although our primary intent is to argue that for-profit initiatives can serve the economic interests of blighted communities as well as the interests of the multinational enterprise (MNE) involved, alternative examples exist of hybrid models involving partnerships between public institutions, nongovernmental organizations (NGOs) and private enterprises. This chapter will focus on these and other initiatives that create economic value-added in poor communities. These enterprises are not merely philanthropic in intent; most require capital gifts or loans, and all involve public-private partnerships, NGO involvement and/or community-based enterprises. Most are social entrepreneurial
ventures with an aim to improve the well-being of various communities. We shall conclude that these hybrid models are most successful when they enable individuals or communities to engage in economic development, when they enable people to become self-supporting, and when they provide actual results in the form of poverty reduction. As Kasturi Rangan of the Harvard Business School has observed,
[t]he private sector brings a performance-driven culture when addressing any market. The poor are no different. Once management has figured out the business model, bringing the operation to scale is a necessity for their own bottom line. . . . At the same time it would be a wild dream to believe that private sector investment [alone] is going to save the world. Unless the appropriate government [or NGO] actively participates as investor, regulator, or guarantor, there will not be the rush of private entrepreneurs to participate in this market. We believe that much of private sector efforts will come through an enlightened approach involving partnerships (Silverthorne, 2007).
