Pro­fes­sor Scott Allard has a new book out that exam­ines the changes in the “safety net” over the last 40 years. In “Out Of Reach”, Allard sur­veyed over 1,500 non-profits that work to pro­vide ben­e­fits to the poor. With the sur­vey results Allard argues that assis­tance pro­grams have become unre­li­able over the years.

In an accom­pa­ny­ing essay, Scott Allard looks at social enter­prise and the chal­lenges it faces on improv­ing the state of the poor. We found this com­men­tary at TPM Cafe.

As Arthur Brooks notes, social enter­prise and social entre­pre­neur­ship are becom­ing increas­ingly cen­tral to community-based antipoverty strate­gies. One’s first reac­tion may be to dis­miss these approaches, par­tic­u­larly if the pref­er­ence is for gov­ern­ment to bear the respon­si­bil­ity for alle­vi­at­ing poverty. Our safety net, how­ever, is highly depen­dent upon pri­vate non­profit orga­ni­za­tions for the deliv­ery of assis­tance to the poor. Much of the fund­ing may come from fed­eral, state, and local gov­ern­ment sources, but much of the help is pro­vided by non­prof­its. This is a rel­a­tively new devel­op­ment in the his­tory of our safety net. Today, entre­pre­neurs work­ing through pri­vate non­prof­its and foun­da­tions are devel­op­ing some of the most inno­v­a­tive and suc­cess­ful strate­gies for alle­vi­at­ing poverty.

It is my opin­ion that social enter­prise can­not replace the pub­lic safety net, but I think it can become a more impor­tant and sophis­ti­cated com­ple­ment to exist­ing gov­ern­ment safety net programs.

To say that we need to cul­ti­vate enter­prise and entre­pre­neur­ship among the poor could be taken to sug­gest that the poor do not work. Yet, as we know, most poor per­sons work, many more than one job, which they bun­dle with income from infor­mal work and social net­works to get by. Sim­ply nav­i­gat­ing the uncer­tain­ties of the low-wage labor mar­ket and safety net, demands that poor fam­i­lies are entrepreneurial.

So where does social enter­prise fit into the safety net? We could think of social enter­prise as help­ing poor per­sons start and cul­ti­vate their own busi­ness. Over time such efforts could cre­ate jobs and reduce the sig­nif­i­cant prob­lem of asset poverty among low-income populations.

Increas­ingly we see non­profit orga­ni­za­tions using social enter­prise strate­gies to cre­ate job oppor­tu­ni­ties for dis­ad­van­taged pop­u­la­tions, strengthen com­mu­ni­ties, and gen­er­ate new rev­enue streams that sup­port other pro­grams of assis­tance. It seems to me that these nonprofit-driven approaches to social enter­prise hold much promise — not only do they pro­vide mean­ing­ful help to peo­ple in need, but they pro­vide employ­ment oppor­tu­ni­ties and are able to attract pri­vate philanthropy.

Like

Unlike