Creative Capitalism

If you haven’t heard the new buzz term of “creative capitalism”, now is the time to take note of this revolutionary concept.

Creative capitalism is basically using a business model to fund social causes. By using profit making ventures, socially progressive programs can be implemented in a sustainable way.

For example BRAC, the largest non-profit in the world, runs businesses in poultry, livestock, fisheries, milk production, handicrafts, and beyond to fund 80% of their 345 million dollar budget that goes back into the development of Bangladesh and beyond. Not only does this pay for their programs in education, health, human rights, etc, but it also employs and empowers those who fall into the category of “ultra-poor”. BRAC has a 98.54% repayment on 4.6 Billion in microcredit loans in Bangladesh, 98% of which goes to women. For those women who are too poor to qualify for loans, they are eligible to get employment and training in these income generating projects that in turn fund development projects in their communities.

When you think about it, it’s hard to find a party that wouldn’t be all for this concept.

From a conservative stand point you basically have social welfare programs paying for themselves and not being a drain on society. In fact, the effective use of creative capitalism increases the overall productivity of a society and enables assistance to be offered without giving handouts.

From a progressive view, creative capitalism creates both sustainability and empowerment. By working from the inside and empowering individuals to be active in their own development, society benefits overall.

I believe, and hope, that creative capitalism will be the way development will occur more and more in years to come. It also creates less reliance on outside resources and enables developing nations to creatively solve their own development issues.

Also keep in mind that you can start small. As was featured yesterday, BRAC and the Grameen Foundation are both models for scaling up on small start-ups. In the case of the later, Muhammad Yunus started with $27 of his own money and has now served 6 million people. For more reading on this subject you can check out his latest book, Creating a World Without Poverty: Social Business and the Future of Capitalism

What does all of this mean for your personal finance pocketbook? The basic bottom line is that by following a creative capitalism model, we can fund more effective social programs without the burden of simply paying for such programs through taxes alone. Think about what a difference that would make.

Cheers,

Miel