Advice to Charities: Start a Business by Theresa Tan

I refer to the article “Advice to Charities: Start a Business” by Theresea Tan in ST (Need online subscription) on 5th August 2005.

Dr Mechai Viravaidya, founder of one of Thailand’s largest NGOs, the Population and Community Development Association (PDA), is a social entrepreneur. In his social entrepreneurship model, he took part of the funds to start a business to generate revenue for the PDA.

I quote one of his comments from the article

“This is one reason why wages in the non-profit sector don’t match those in the business world, he said. Staff working for the PDA’s business arm earn less than similar employees employed in the private sector, said Dr Mechai. But staff at both the PDA’s business and non-profit operations are paid the same.

‘Both are doing good work. Our business people know what we are doing and where the money goes.’

Note that the profit motive is used in the social entrepreneurship model to align the staff towards generating more revenue for the non-profit operations. It is also clear where the revenue are channelled towards to, hence there is accountability to the public for scrutiny. It is important to note that social enterprises are adopting the profit making model as well as making their accounts transparent.

For more interest in social entrepreneurship, please look at an earlier entry in the blog.

yours sincerely,
sgentrepreneurs Editorial Board