Are non-profit organizations and philanthropy an answer to the enormous array of the world's ills?

Since this topic usually evokes strong emotions and a lot of debate, I would start off by saying that I thought so till a few years back.

I must confess that I am a techie and I had no idea of how business models worked till sometime back.But now that I have had an exposure to how businesses work, I reckon sustainability and large impact can only be had if the social enterprises are for-profit. I think an important distinction here would be between "for-profit" and what I choose to call "for-profit-only" organizations. As the names suggest, the former can be a social enterprise, but it would be difficult to imagine the latter being social.

I remember reading Muhammad Yunus's autobiography (Banker to the poor). He had mentioned that he was of the opinion that philanthropy cannot solve most of the world's pressing problems. While starting to lend out small loans too, the loans were specifically lent out to women (because they admittedly were more responsible) . Women were also interviewed to figure out who amongst them was most resilient. This was done to improve the chances of a payback. And so Grameen to-date does well on its loan paybacks than most other banks. And that is because they never started out with the intention of doing charity. They wanted to help the poorest of the poor to fight poverty (and resilience is required to fight) not to do charity. As discussed in class, research also shows that people value things more if they pay (even if it were a small amount) for them than things which they don't pay for.

Given that people who want to solve problems at the bottom of the pyramid go the for-profit way, they need to pay great attention to the first of the 4 A's - Affordability. The upside for the social enterprise is that it gets to apply this low cost high volume strategy in mature markets as well.