09/22/2013 11:25 pm ET | Updated Nov 22, 2013

It Is Time to Get Rid of the Word 'Charity'

Click here to read an original op-ed from the TED speaker who inspired this post and watch the TEDTalk below.

Dan Pallotta is asking the right question: what prevents social innovation from scaling up? But he is looking for answers in the wrong places. He seems to be making a plea for bottling organizational models designed for large corporations and transporting them to the social sector. Surely, Mr. Pallotta is aware that we have evolved from the era of Alfred P. Sloan and have even made our way past the mainframe computer. The large corporation has delivered many wonderful things, such as scale, predictability and low prices, but it is not the first place one turns to for models of innovation, risk-taking and entrepreneurial creativity.

The social sector does need to solve the scale problem, but it must address the problem of innovation first. After all, this is a sector that must -- even in Mr. Pallotta's dream scenario of more generous compensation packages and marketing budgets - prepare to take on very large problems on rather small budgets. This means it will be essential to innovate in a way that maintains frugality and respect for the complicated and constrained context of the affected populations. While innovation without scale is a necessary starting point for such an endeavor, scale without innovation would be a disaster. The key to a successful endpoint, as most innovators know only too well, is to take many shots, fail frequently and learn how to adapt and pivot. For models of organizations that can do this well, it is better to turn to entities that are nimble and have been shaped by conditions of adversity. For this, check out the kids in the dorm rooms, the entrepreneurs with staged and limited funding, the residents of densely packed urban areas, such as the slum-dwellers in the most congested cities, or those with dreams to reach large audiences and have access to little more than a mobile phone or a computer.

This re-orientation towards dreaming big and, yet, remaining small will not come easily to the social sector. After all, philanthropy, broadly speaking, must evolve beyond its traditional origins in ultra-large organizations; these include religious institutions - churches, mosques and temples -- or foundations established by highly profitable for-profit corporations with the intent of "social responsibility" or those endowed with giant public relations budgets or robber barons seeking to do penance through philanthropy.

There are many contemporary social innovators that are taking a very different path and showing us that the sector can follow alternative routes to dreaming big while remaining small. Consider some examples:

The Profitable Non-Profits: These organizations, such as India's Aravind Eye Care, serves two parallel segments: one segment (the minority) that pays a premium price that generates a very high profit, which is used as a funding source to subsidize the primary service, given away for free to a second segment.

The Fishing Academies: The idea behind these organizations goes back to the old adage of teaching people how to fish instead of serving them fish on a plate. The result is a leaner organization that has more sustained impact. Many such organizations have begun to leverage commonly available technology to educate their "clients" and giving them the tools to solve their own problems. By moving the problem-solving closer to the source of the problems, the organizations can help ensure that the solutions remain relevant in context. Consider Abalimi Bezekhaya ("farmers or planters of the home" in Xhosa), an organization that combats poverty in multiple slums in Cape Town through a network of organic "micro-farms." Abalimi teaches local communities to grow organic vegetables first for survival, then to sell surplus produce to markets outside of the townships, with the goal of generating a livelihood. Abalimi provides ongoing training, technical advice, cheap bulk inputs, irrigation, and other services.

Matchmakers of Unneeded Resources to Unmet Needs: Adversity produces constraints which in turn produces excess resources that are under-utilized. Several innovative ideas exist across the developing world: wastewater is captured and reused in the village of Yoff in Dakar, Senegal; bricks are made from cow dung in Indonesia; discarded materials are combined with either concrete or polymer to create new materials to make prefabricated elements in Sao Paulo; and a recycling industry flourishes in the Dharavi slum in Mumbai.

Master Orchestrators: There are organizations whose skills lie in identifying the right-sized communities and then making a longer term commitment that can actually be sustained. This is followed up by co-opting and training a network of volunteers and involving the key stakeholders in the community to lend support. Pratham, whose mission is to ensure that "Every Child is in School and Learning Well", does so through innovations in teaching and learning techniques, using them to demonstrate improvement in learning levels, by annually measuring learning levels and training an entire volunteer network that does the actual work for them.

Master Motivators: There are some organizations that are outstanding at motivating others to come up with practical and scalable solutions to social problems - often through modest prizes. We have been inspired by one such social innovator with big dreams to launch a collaboration with the founders of the One Acre Fund. We recently launched the Fletcher D-Prize, Poverty Solutions Venture competition, at Tuft University's Fletcher School. Our prompt is simple: "If You Had $20,000, How would You Fight Poverty?" We have established a series of distribution challenges that student teams will compete to solve. I look forward to seeing what will turn up.

In summary, Mr. Pallotta is barking up the wrong tree. The solution lies much closer to the ground, at the level of the very grass roots. In fact, I would advocate getting rid of words such as "charity", which keep us trapped in an outmoded mindset. They reek of patronage and keep us wedded to a legacy of religious dogma and guilt, and to a bygone era of patriarchs and robber barons. Indeed, the way we think about charity may not be wrong. Thinking in terms of charity is wrong.

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