Making CSR Work Against Poverty

I have to admit: exploring the role of poverty alleviation in CSR is indeed a ‘tricky’ idea. Beyond mere pure philanthropy (some of which is sadly more like photo-op sessions), ‘what can corporations do to seriously address the poverty issue’ is one of those proverbial million dollar questions. Still, here is an attempt to put across some potentially workable ideas.

These ideas are more specific to Pakistan, and to similar developing economies, than to the developed world. Moreover, readers are requested to bear in mind the notion that – to paraphrase James March, a top management name of contemporary times – when it comes to the pursuit of ideas, relevance should become irrelevant to foster inventiveness.

Without further ado, here are some of the ideas, which the CSR community can deliberate upon .

TEACH ‘EM HOW TO FISH

Understand – and practice- that it?s better to teach a man how to fish than to feed him fish seven days a week. How can this be translated into practice? Well, the answer lies in reducing focus on conventional corporate charity and stepping up on vocational training activities in areas where the companies operate.

In present day Pakistan, the trickle-down effect of skills is still limited to sub-managerial or lower-level operational staff. For example, a lot of top engineers working in far-off plants in the sparsely inhabited areas still come from the urban centres. Had the corporations in question invested in adequate vocational training centres in areas where their plants are located, the local population could have benefited more.

Corporations can also divert some of their charitable funds towards activities that help develop the local economy at a grassroot level – an inherently more ‘sustainable’ initiative. Since, companies don’t necessarily have the capacity to roll out such programmes individually; perhaps, a better idea would be to join hands with specialised organisations such as the SME Bank or the Small and Medium Enterprises Development Authority (SMEDA).

National ‘Trainee’ Hunt Program

On a related note, when it comes to hiring new employees as a part of Management Trainee Programmes, here?s an interesting experiment to take a cue from: the IBA’s National Talent Hunt Programme.

Before conducting its entrance test, the Institute of Business Administration, takes in about 40 students, on merit, from the destitute sections of the society. It then imparts them the necessary knowledge to clear its entrance test, gives them an orientation of the developed world and also works on their personal development and overall grooming by giving each of them individual attention, on a case to case basis.

Although, an IBA-like talent hunt programme maybe too much to ask from a single corporation, given that firms are not charitable institutions, what they can do instead is join hands with their respective industry associations and/or with educational institutions like the IBA to promote young talent from amongst the poor masses.

Similarly, a CSR programme aimed at poverty reduction should also involve an active HR department. The HR department should identify gems from the existing set of employees, provide them periodical training and then promote them to senior positions over the course of years, even if the employees are originally hired as low-level clerks or are otherwise a part of blue-collar staff.

Battling Mindless Consumerism

While most of the ideas discussed so far revolve around the premise that ‘education is the best tool against poverty’, my last suggestion is somewhat more radical.

I doubt it will be received warmly by the CSR stakeholders, partly because it will affect their sales turnover and partly because it is somewhat contrarian to the conventional economic wisdom under which the economic status of a person is measured by what he/she consumes. Still, here I go.

We all know that marketing is a standard business activity that a firm undertakes to increase consumption of its goods and services by achieving enhanced awareness. The trouble begins when aggressive marketing induces excessive consumption with or without undergoing the phenomenon of ‘conspicuous consumption’ i.e. the whole Keeping-up-with-the-Joneses theory.

While this has significant side effects on the lives of rich or middle-class consumers, it has a grave impact on the wallets of poor consumers.

Psychologically motivated by the fancy advertisement campaigns, the desire to directly or indirectly consume more than what their incomes allow, the ‘conspicuous consumption’ hits hard on poor peoples’ bigger-picture options.

Often, they even get caught in debt traps, as their consumption exceeds their incomes, whereas in fact they could be saving more from such ‘extravagant’ spending to provide health and education to their children or invest in their respective small scale businesses or even save for a rainy day so that when misfortune strikes them, they have some kind of cushion to lean against.

The Law – & Spirit

But perhaps it is too much to ask a firm to devise a marketing methodology that does not induce the poor to consume and consume. And consume.

In fact, on a retrospective note, the whole idea of expanding CSR to the next level may turn to be just a dream.

The reason: as long as CSR is voluntary, it is unlikely to be streamlined as a standard practices. However making CSR compulsory will require a change in laws and government regulations. But since the governments’ and the politicians work under the shadow of big business – to paraphrase the great American philosopher, John Dewey – there is little hope at the moment to dream such dreams with our eyes wide open.

    Author Information

    Sohaib Jamali is a financial journalist from Karachi.

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