In part 2 of the Jokers’ series [introduced here], I write about a specific character you’re very likely to meet in the developing world thanks to all the philanthropic money floating around.
He portrays immense concern for unemployed youth and other members of disadvantaged communities after recognizing an opportunity to make money by seeking grants to help them. The buzz words he markets himself by include, “Social entrepreneur,” or “Champion of the Poor.”
The interesting thing here is not that his entire business model is shaky because there is no real unique value proposition, and he highly depend on a philanthropic heart that believes his heroic story of how he’s helping ease the pain of the poor.
It’s also not that, when he does get funding, the project is badly executed with little impact on those disadvantaged communities and a big impact on his own bank accounts. What’s interesting is how, when you look under the hood, it’s obvious he cares little about these groups he’s claiming to help, especially when he actually deals with them directly. Another interesting thing is how he plays with his social impact numbers to get more funding.
How Much Do They Care…Really?
- On the one hand, he feigns concern for all those people at the bottom of the pyramid, yet his underpaid staff never get their salaries on time to make rent so if they’re living month-to-month, they’re always at risk of getting evicted.
- Also, when he goes out for fancy business lunches with partners, neither does he get the driver food nor does he release him to go find something to eat. Instead, the driver is told to wait in the parking lot for however long the meeting takes.
- Another anecdote I heard is how emotionally moving tales of how the solution he provides relieves the plights of single mothers juxtaposes with actual stories of female staff getting laid off every time one goes to maternity leave.
- Instead of truly helping solve the youth unemployment crisis as he claims, he exploits it by hiring ‘volunteers’ and compensating them in ‘experience and exposure’. I wish people could pay rent using ‘experience and exposure’ but unfortunately, that’s not how the world works.
- You’ll also observe that he tends to gravitate towards foreigners in every meeting, rather than the Kenyan participants.
Manipulating Social Impact Numbers
- He loves talking about registered users when his company provides a tech-based solution like an app. However, as we know in the startup world, there really needs to be a massive bright neon sign flashing with the following:
registered != active_users
In English, the number of registered users is not equal to active users. When someone says we have 1 million registered users, ask them how many are active daily, weekly and monthly, then start the real discussion from there.
- He includes social impact numbers from failed projects: This takes a lot of self-confidence to do, especially in a small ecosystem where people know each other. It also makes the assumption that people don’t do their due diligence. For example, let’s say his team was the subcontractor for a big project by a well-known brand, they would still use the brand’s name in selling pitches even if they failed to deliver, and the client is not even happy with them.
- He loves piggybacking on existing social media groups. Let’s say there’s a meetup/Facebook/Whatsapp group that’s doing great work on the ground. He would contact the admin, give a speech/presentation during one of their events, and then claim their mentorship has helped that group to grow even though that group was already growing before they met him.
- He doesn’t understand the meaning of “impacting a subset of”: They include the complete number of people impacted by a project regardless of their own contribution to the actual project. This is akin to the guy in school projects who attends none of the meetings, does none of the work, but prints and laminates the report his teammates worked on then comes to take credit for the entire thing on presentation day. An actual example from the workplace, let’s say there are multiple partners organizing a marathon with 5,000 people participating. Then you go with a box of 50 water bottles and distribute them. Then you update your website and write about how you’ve impacted 5,000 people.
- He is huge on marketing (digital and otherwise): If you’re a marketing consultant, these are the best clients to work with, because even when they’re cost-cutting in other departments, this is the one budget that does not get touched. It’s really the engine that makes this whole charade run; the nicely-produced videos, the professionally-taken photos, millions of likes on facebook, and twitter retweets.
He operates on the basic principle that there are far too many players in the market to fool, but I would like to believe that market forces will balance themselves in such a way that such people eventually wash out and disappear into oblivion.
There are a lot of debates on what actually brings this type of people into existence. One might argue that foreign aid shouldn’t even exist in developing countries to begin with. In his book, “Why Africa is Poor,” Greg Mills writes, “The way in which the world has preferred to deal with Africa’s poverty and development challenges has been with increased volumes of aid. As will be seen, no country has developed solely through aid.”
But this post is not about whether foreign aid is good or bad. It’s just about how people have come to abuse it.
Thanks to having met such characters, I’ve come to have genuine respect for people who make it clear from day one that they’re in the business of making money. Those who say, “We will care about you only if you pay us.”
At least they are being honest, and they’re not trying to play that tune of, “Give us money because we’re the champion of the poor.”