ENTREPRENEURSHIP & PHILANTHROPY: CAREER CHOICE or A JOURNEY
Speaker Series: Business School, Centennial College
Scarborough, March 18, 2013
By Aditya Jha, C.M., LL.D. (Hon.)
Hello everyone and welcome to today’s interactive presentation. I highly appreciative the opportunity to present my thoughts and through interaction hope to further develop my thoughts on today’s presentation. It is my intent that it will help start a debate in your mind and hopefully it would have some impact on your future career choices and your professional/ entrepreneurial journey.
These are my reflections from being a philanthropist running my own small private foundation, being a community activist, an entrepreneur, having been involved in major charitable fundraising campaigns and above and all being very passionate about bringing the nexus of entrepreneurship and philanthropy in mainstream organized discussion.
Entrepreneurship focuses on creation of wealth and philanthropy is generally seen as act of benevolence and distribution of portion of ones created wealth for social good. Philanthropy is motivated by the understanding that wealth of individuals beyond certain level should revert to society. The point I want to highlight is philanthropy nurtures and revitalizes economic prosperity. The discussion needs to focus beyond “duty to give back to society”.
All of us here could earn wealth only because we live under fortunate social circumstances. Let us not fool ourselves by giving all credit for our success to our talent, as we don’t create those favourable social circumstances by ourselves. Imagine for a moment that if we were left in Peru or Bangladesh or Liberia or Ethiopia then how much our talent could have produced for us in those nations– or if we were born into a poor Asian/African family. How much of talent we would have developed if we were part of those circumstances and geographies. Nobel laureate, Herbert Simon estimated that the “social capital” is responsible for at least 90% of what people earn in wealthy societies. I am trying to make a case here that all of have obligation to give and pay back to that “Social Capital” and ALL of us can “SPARE to Give” and give to the mainstream causes as we created our wealth in this country. We need to give to the “Social Capital” as that alone has allowed us to succeed. Hence the case- private wealth that was created in a community needs to be reinvested to the future growth of the society.
In 21st century, entrepreneurs and philanthropist or a combination of the two – radical entrepreneurs – have opportunity to shape more prosperous and a just world as Andrew Carnegie, George Peabody, Rockefellers, John Hopkins, and others shaped the last century. We also need to appreciate what Bill Gates, Warren Buffett, and likes of Ted Turner are trying to do through their philanthropy and more importantly further discuss the next stage that entrepreneurship-philanthropy nexus should go to.
Much of the success in world economy and democratization of prosperity in last three decades is due to entrepreneurship and changing dynamics of economics (knowledge economy) and what drives it. Economists have recognized the power of self-interest in creation of wealth. What we should discuss and ponder as how enlightened self-interest will dramatically impact our society and add a new dimension to entrepreneurship-philanthropy nexus. The romantic focus on altruistic motivation of philanthropy and looking down upon self-interest behavior is old school thinking and may be patronizing. One needs to recognize that enlightened self-interest craves for seeing pleasures of others as well as fulfillment of one’s own beliefs and ideology as its own interest. It is possible to regard philanthropic acts of an individual as an expression of a “sense of community with others”.
Entrepreneurs- individuals who take risks and start a new venture- are indispensable to economic growth and prosperity of the society. Entrepreneurship- the process of creating a new venture and assuming the risks and rewards- has been essential for our society. It is also important to connect entrepreneurship to innovation. Entrepreneurship and innovation are central to the creative process in economy and to promoting growth, increasing productivity, creating new products and creating jobs. Entrepreneurs sense opportunities and take risks in the face of uncertainty to open new markets, design products, and develop innovative processes.
Philanthropy should not be seen as to redistribute wealth from “haves” to “have nots”. We need to distinguish between redistribution and the creation of opportunity. Charity is about re-distribution while philanthropy is about wealth/ opportunity creation, fulfillment of passion/ ideas/ ideologies that impact good of larger society, sense of belonging to the community, and eradication of social scourge like poverty etc.
Social entrepreneurs use their business ventures to serve the public good. They use market forces in strategic ways to promote social improvements. Philanthropists add value by directing their capital and resources to the ventures that removes the barriers or addresses the viability gap in democratizing prosperity.
While charity is necessary to relieve the symptoms of the social problems on immediate/ short-term basis but charity doesn’t provide lasting solution. Most often we use charity to avoid recognizing the problem and finding a solution to it. Charity only perpetuates problem by taking the initiative away from those impacted and temporarily benefitting them from charity. Charity allows us to go ahead with our own lives without worrying about the fundamental issues causing the problem and thus perpetuates need of charity.
The central theme of today is to present before you one possible career choice- Radical Entrepreneurship- how to create wealth by delivering public good. The idea of becoming a Radical Entrepreneur is creating a venture to harness the profit motive to achieve social good. It is beyond the idea of advancing the good of the society as an integral part of one’s business strategy. The Radical Entrepreneurs will find ways of harnessing the profit motive to achieve social good.
It is my considered opinion that Entrepreneurship in coming decades will be a pervasive vocation in individual’s life at one time or other. The world of business is moving towards the world of entrepreneurs and mass of entrepreneurs. There are two great forces of nature: self-interest, and caring of others. Capitalism harnesses self-interest in helpful and sustainable ways, but only on behalf of those who can pay for it. Philanthropy and government aid channel our caring for those who can’t pay, but resources run out before they fully meet the needs. We need environment and motivation that draws in innovators and entrepreneurs/ business in a much better way than we do today to fulfill the twin mission- making profits and also improving lives and saving environment which doesn’t fully benefit from market forces. To make the system sustainable, we need to use profit incentives wherever we can. When profit is not possible, there needs to be another market based incentive- recognition that enhances company’s reputation and appeals to their customers and attracts good people to the company. Recognition becomes proxy where profit is not possible and an added benefit where profit is possible.
The challenge is to design a venture where market incentive, including profits and recognition, drive the change. For this to work, it will require government, businesses and non-profits to work together to stretch the reach of the market forces so that businesses can make profit or gain recognition doing work that would ease world’s inequities.
Radical entrepreneurship takes interest in fortunes of others and also ties it to entrepreneur’s interest-in ways that help advance both. The hybrid outcome of profit and concern for others serves a much wider circle of people than what can be reached by profit or caring for others alone. If we give people chance to associate themselves with a cause they care about, they will pay more, and the premium so collected can make an impact. That is how the RED campaign was born. How we make market forces respond not only to “demand” but also to “need” is what Radical Entrepreneurship is about.
We are living in exciting times- we need to find Radical entrepreneurial ventures and hopefully some of you will become radical entrepreneurs in finding business models that meets needs of the poor of the world and environmental well-being and at the same time generates profits and also market useful incentives for business. This opportunity is open ended but passionate effort to answer this challenge will help change the world.
The terms Philanthropy and Charity are used inter-changeably. However, I would like to submit that we need to see giving beyond the paternalistic attitude- that I am more able and you are needy and hence being a good human being I am helping you. It is not primarily about helping others rather it is about giving your resources to what you are passionate about. As result of giving to your expanded self, what is happening is others are directly and indirectly benefitting. It is about giving to your expanded self and passion but the major beneficiary of that is the society and larger community.
I wish to share my own personal example and some time it does give me a guilty feeling for what I am going to share with you. I have found that one’s philanthropic deeds and giving, if it is organized and impactful and sustainable then one is not only serving her passion and expanded self but you may also indirectly materially benefit in significant way. I won’t be standing in front of you having the opportunity to speak before entire business class but for my philanthropic work and philanthropic persona. I doubt I would have been even considered by the Ryerson University for the Honorary Doctorate but for the work I have done for the aboriginal community and my partnership with the Ryerson University for the aboriginal projects over the years. I have no doubt that my receiving Order of Canada is aggregated outcome of all the work I have done with the universities, the Canadian aboriginal community, my leadership role with the community organizations and my philanthropic giving to the several mainstream causes: be it Roy Thomson Hall, Trillium Hospitals and like. It has allowed me to interact with who-is-who of the Canadian political and corporate world. It has opened doors for me, which otherwise would not have happened. My question then-Is philanthropy not about giving to your expanded self and even to your material self? Helping others is the bi-product as your expanded-self touches beyond the physical boundary of your family and your vested interests.
As our societies are becoming more prosperous and more democratic; the instruments of wealth creation are no longer aggregated in the hands of governments. Even people at the lowest strata of the different geographies are exposed to what is available there in the world to enjoy. All are aspiring to be able to use the fruits of prosperity and all want a chance to have it. Governments cannot provide those infrastructure and conditions alone. There is a greater need for public private partnership to address this massive social need and social giving. There is a viability gap that needs to be addressed and provided for in a collective way.
I am a great admirer of private giving and especially, the great support it has provided in creating world class institutions in the western world and the massive support to life threatening causes around the world. One of the most notable things about private giving is that it is not beholden to lobbying or political considerations of public giving or major wastage caused by large-scale bureaucratic not-for-profit/ charitable organizations. Private philanthropists are free to venture where the governments and politicians fear to tread. However, you may be shocked to know that the wealthiest individuals of the world give only 9% to charitable causes and at the same time 2% for their pets and rest go to their kids. The legendary Warren Buffet says he believes in giving his children enough so they feel they could do anything, but not so much that they could do nothing or need to/ motivated to do nothing. Let us pause over this the statement that I said just now – how the New Canadians think about our accumulated wealth? How do the trained but not tuned fundraising professionals of Canada think about this and approach the aspect of demographic dividend as Canada is inching towards becoming majority country consisting of minorities.
I have been active in the world of sharing my fortunate circumstances only for the last eleven years and have picked up some experience that I would like to share with you
- Be active with the cause that you give to – where you are actively involved with your money, time and talent and to a cause that you are passionate about there will be multi-fold impact than the paternalistic mode of giving where you just cut a cheque;
- Your presence and involvement allows stringent control, oversight and the cause benefits immensely from your insight that you have accumulated by virtue of being so successful;
- Philanthropy owing to affluence in our society has given rise to a new business, that is, Business of Philanthropy, which in many cases leads to wastage akin to running large bureaucratic type of organizations and in the long run, and harms the cause of philanthropy. Large number of third-world philanthropic delivery and even in Canada is disgusting and wasteful. In the developed world there is this mentality amongst the people involved in fundraising and project execution team that for doing something good you need abundance of resources. People who give majorly are very frugal in their own life and therefore they accumulate wealth; but, it is amazing that their own generous giving resulting of frugal accumulation is managed with affluent mindset resulting in avoidable wastage. Hence, my strong suggestion, that, be active with your giving and choose projects that you are passionate about. Your entrepreneurial presence will do much good than what your money alone will do.
- Before I become active with ‘giving’, I looked at giving as charity to others. Now, I see giving as charity to myself. You are giving to your expanded self, your passion, your talent to make change and to your obligation to pay-back to the favorite social circumstances so that those circumstances are sustainable for yourself, your kids and for all, that you care about.Last but not least, I would like to make a case that we should support mainstream Canadian philanthropic projects in a major way, and international projects as well as projects in your country of origin with a lesser portion of our total giving. Most of the successful New Canadian professionals and entrepreneurs here have done relatively better than those who have been in Canada for generations. We have become successful by delivering mainstream services to the mainstream people. Then why should our giving be mainly to ethnic causes? There could be the logic, that Canada is a rich country; but let’s look at the plight of the unfortunates in Canada, and the need of philanthropic dollars to support our universities, hospitals, opera, museums, environmental causes, etc.
Let me end my thoughts by repeating revered Indian spiritual guru Swami Vivekananda’s statement: “They alone live, who live for others”.
Thank you and have a meaningful life.