A sustainable model for supporting entrepreneurship in developing countries

Principal Topic Small and micro-enterprises are believed to play a significant part in economic growth and poverty allevition in developing countries. However, there are a range of issues that arise when looking at the support required for local enterprise development, the role of micro finance and sustainability. This paper explores the issues associated with the establishment and resourcing of micro-enterprise develoment and proposes a model of sustainable support of enterprise development in very poor developing economies, particularly in Africa. The purpose of this paper is to identify and address the range of issues raised by the literature and empirical research in Africa, regarding micro-finance and small business support, and to develop a model for sustainable support for enterprise development within a particular cultural and economic context. Micro-finance has become big business with a range of models - from those that operate on a strictly business basis to those that come from a philanthropic base. The models used grow from a range of philosophical and cultural perspectives. Entrepreneurship training is provided around the world. Success is often measured by the number involved and the repayment rates - which are very high, largely because of the lending models used. This paper will explore the range of options available and propose a model that can be implemented and evaluated in rapidly changing developing economies. Methodology/Key Propositions The research draws on entrepreneurial and micro-finance literature and empirical research undertaken in Mozambique, which lies along the Indian ocean sea border of Southern Africa. As a result of war and natural disasters over a prolonged period, there is little industry, primary industries are primitive and there is virtually no infrastructure. Mozambique is ranked as one of the poorest countries in the world. The conditions in Mozambique, though not identical, reflect conditions in many other parts of Africa. A numebr of key elements in the development of enterprises in poor countries are explored including: Impact of micro-finance Sustainable models of micro-finance Education and training Capacity building Support mechanisms Impact on poverty, families and the local economy Survival entrepreneurship versus growth entrepreneurship Transitions to the formal sector. Results and Implications The result of this study is the development of a model for providing intellectual and financial resources to micro-entrepreneurs in poor developing countries in a sustainable way. The model provides a base for ongoing research into the process of entrepreneurial growth in African developing economies. The research raises a numeber of issues regarding sustainability including the nature of the donor/recipient relationship, access to affordable resources, the impact of individual entrepreneurial activity on the local economny and the need for ongoing research to understand the whole process and its impact, intended and unintended.

Designing self sustaining support for micro-enterprises in sub-Saharan Africa : a pilot

Small and micro-enterprises play a significant part in most economies. However, in developing countries these enterprises have often been planned and implemented from a poverty alleviation perspective, rather than as entrepreneurial activities and growing businesses (Mead & Liedholm 1998, Toye 1993). This paper explores a model for sustainable support to micro-enterprises in a developing country context. Sustainability is critical if micro-enterprises are to grow. The traditional philanthropic model for funding micro-enterprises leaves local communities dependent on the priorities of donors which may not always be consistent with those of the community. Long term sustainability requires a move to a model that broadens the base of both economic and intellectual resources, that builds capacity as well as providing ‘start-up’ funding through mechanism such as micro-credit (Elkington & Hartigan 2008). Designing for sustainable enterprise development includes responding to the community’s priorities, investigating individual problems and solutions, encouraging agency and active involvement in goal setting, with on-going consultation and co-development of solutions. Recognising the importance of experimentation we have moved beyond existing forms to prototype new ways of working which provide continuity of financial and intellectual support for local initiatives. The paper reviews existing micro finance and microcredit practices and suggests a new approach to establish and support enterprises with financial and knowledge resources for sustainable business practices. Principles underlying such a program and the initial steps are described.

Asia

Reporters sans frontiéres (RSF) has repeatedly declared Asia to be the most demanding continent for journalists and their news organizations to operate in, and in some countries, even simply to survive in. The many reports issued by RSF and other global agencies regularly show Asia to be the region in which the largest number of murders of journalists occur per year, even when Asian–Arabic states and Central Asia are not included in the definition of ‘Asia’. The reports describe numerous physical, legal and economic threats as well as serious political repression and restrictions that journalists face as they attempt to function as watch-dogs, agenda-setters and gate-keepers for their societies. The statistics and examples provided within these reports, however, do not provide the full picture. Most Asian nations also host vibrant media cultures in which journalists play an important role in supporting social and democratic processes and activities. This chapter outlines the political and economic influences on Asian journalism; the impact of new technologies; the debates about philosophies such as 'development journalism', 'peace journalism' and 'Asian values'; and the influence of the so-called 'envelope culture' or practices of gift-giving and bribery that pervade journalism in some countries. To illustrate how these principles affect journalists' practice, the chapter presents a comparison of the starkly contrasting situations in India versus North Korea (Democratic People's Republic of Korea). The chapter also describes issues affecting countries as far afield as China to Kazakhstan, including a short case study of journalism during the so-called Saffron Revolution in Burma in 2007. The chapter concludes with suggestions about how training and aid for the Asian should be contextualized to take into account the specific cultural, economic and political factors that shape and limit the media’s performance, and how journalists might be best placed to negotiate around them. Such training needs to be sensitive to valid variations in perceptions of what kind of governance and journalism best serves development, without serving politically motivated rhetoric.

Philanthropy for Indigenous causes : more than a 'cup of tea'?

In the face of improved First Nation outcomes in many western nations, Australia is still dealing with a seemingly intractable gap between the quality of life of its Aboriginal and Torres Strait Islander peoples and the non-Aboriginal and Torres Strait Islander population. Philanthropy in Australia provides a smaller proportion of funding for community projects than is the case in other countries and Aboriginal and Torres Strait Islander causes have been significantly under - represented as recipients. This paper reports on a qualitative study aimed at understanding the issues affecting the decisions and actions of grantmaking organisations and individuals who wish to support Aboriginal and Torres Strait Islander causes in the current Australian context. The aims were to build on the limited research in this arena, add to the future research agenda and contribute to practice and policy insights for Australia and beyond. The study found that while government funding programs are perceived as output driven, inflexible and dogmatic - ‘a cup of tea mob’- participants see the Australian philanthropic sector as capable of addressing the complex Aboriginal and Torres Strait Islander ‘problem’ with more innovative and independent thinking. From the point of view of contextual impacts, success criteria, barriers, structural imposts and emotional involvement, the practical experience in grantmaking for Indigenous causes of participants in this study reflects that found elsewhere. However the focus of many grantmakers on organisational rather than community capacity and the potentially elitist emphasis on established relationships continues to hamper Aboriginal and Torres Strait Islander access to philanthropic funding in Australia. Further, if the strategic changes currently visible in the sector are unsupported by a depth of policy and a proactive transfer and distribution of skill and knowledge they may be unsustainable.

An examination of tax-deductible donations made by individual Australian taxpayers in 2007-08

Each year, The Australian Centre for Philanthropy and Nonprofit Studies (CPNS) at Queensland University of Technology (QUT) collects and analyses statistics on the amount and extent of tax-deductible donations made and claimed by Australians in their individual income tax returns to deductible gift recipients (DGRs). The information presented below is based on the amount and type of tax-deductible donations made and claimed by Australian individual taxpayers to DGRs for the period 1 July 2006 to 30 June 2007. This information has been extracted mainly from the Australian Taxation Office's (ATO) publication Taxation Statistics 2006-07. The 2006-07 report is the latest report that has been made publicly available. It represents information in tax returns for the 2006-07 year processed by the ATO as at 31 October 2008. This study uses information based on published ATO material and represents only the extent of tax-deductible donations made and claimed by Australian taxpayers to DGRs at Item D9 Gifts or Donations in their individual income tax returns for the 2006-07 income year. The data does not include corporate taxpayers. Expenses such as raffles, sponsorships, fundraising purchases (e.g., sweets, tea towels, special events) or volunteering are generally not deductible as „gifts‟. The Giving Australia Report used a more liberal definition of gift to arrive at an estimated total of giving at $11 billion for 2005 (excluding Tsunami giving of $300 million). The $11 billion total comprised $5.7 billion from adult Australians, $2 billion from charity gambling or special events and $3.3 billion from business sources.

Lifting the lifegiving dollar : case samples of creative practice in health and medical research philanthropy

This study aims to stimulate thought, debate and action for change on this question of more vigorous philanthropic funding of Australian health and medical research (HMR). It sharpens the argument with some facts and ideas about HMR funding from overseas sources. It also reports informed opinions from those working, giving and innovating in this area. It pinpoints the range of attitudes to HMR giving, both positive and negative. The study includes some aspects of Government funding as part of the equation, viewing Government as major HMR givers, with particular ability to partner, leverage and create incentives. Stimulating new philanthropy takes active outreach. The opportunity to build more dialogue between the HMR industry and the wider community is timely given the ‘licence to practice’ issues and questioned trust that applies currently somewhat both to science and to the charitable sector. This interest in improving HMR philanthropy also coincides with the launch last year by the Federal Government of Nonprofit Australia Limited (NAL), a group currently assessing infrastructure improvements to the charitable sector. History suggests no one will create this change if Research Australia does not. However, interest in change exists in various quarters. For Research Australia to successfully change the culture of Australian HMR giving, the process will drive the outcomes. Obviously stakeholder buy-in and partners will be needed and the ultimate blueprint for greater philanthropic HMR funding here will not be this document. Instead it will be the one that wears the handprint and ‘mindprint’ of the many architects and implementers interested in promoting HMR philanthropy, from philanthropists to nonprofit peaks to government policy arms. As the African proverb says, ‘If you want to go fast, go alone; but if you want to go far, go with others’.

Socially responsible investment in market downturns : implications for the fiduciary responsibilities of investment fund trustees

This paper investigates whether Socially Responsible Investment (SRI) is more or less sensitive to market downturns than conventional investment, and examines the legal implications for fund managers and trustees. Using a market model methodology, we find that over the past 15 years, the beta risk of SRI, both in Australia and internationally, increased more than that of conventional investment during economic downturns. This implies that companies acting as fund trustees, managed investment schemes and traditional institutional fund managers risk breaching their fiduciary or statutory duties if they go long - or remain long - in SRI funds during market downturns, unless perhaps relevant legislation is reformed. If reform is viewed as desirable, possible reforms could include explicitly overriding the common law to allow all traditional funds to invest in SRI; granting immunity to directors of trustee companies from potential personal liability under sections 197 or 588G et seq of the Corporations Act; allowing companies acting as trustees, managed investment schemes and traditional institutional fund managers and trustees to invest in SRI without triggering a substantial capital gains tax liability through trust resettlement; tax concessions for SRI (eg. introducing a 150% tax deduction or investment allowance for SRI); and allowing SRI sub-funds to obtain “deductible gift recipient” status or the equivalent from relevant taxation authorities. The research is important and original insofar as the assessment of risk in SRIs during market downturns is an area which has hitherto not been subjected to rigorous empirical investigation, despite its serious legal implications.

Is providing micro-credit social responsible?

Micro-finance, which includes micro-credit as one it its services, has become big business with a range of models – from those that operate on a strictly business basis to those who come from a philanthropic base, through Non Government organisations (NGOs). Success is often measured by the numbers involved and the repayment rates – which are very high, largely because of the lending models used. The purpose of this paper is to identify whether the means used to deliver micro-credit services to the poor are socially responsible. This paper will explore the range of models currently used and propose a model that addresses some of the social responsibility issues that appear to plague delivery. The model is being developed in Beira, the second largest city in Mozambique. Mozambique exhibits many of the characteristics found in other African countries, so the model, if successful, may have implications for other poor African nations.

Should funds invest in socially responsible investments during downturns?

Purpose: This paper investigates whether Socially Responsible Investment (SRI) is less sensitive to market downturns than conventional investments; the legal implications for fund managers and trustees; and possible legislative reforms to allow conventional funds more scope to invest in SRI. ----- ----- Design/methodology/approach: The paper uses the market model to estimate betas over the past 15 years for SRI funds and conventional investment funds during economic downturns, as distinct from during more ‘normal’ (non-recessionary) economic times. ----- ----- Findings: The beta risk of SRI, both in Australia and internationally, increases more than that of conventional investment during economic downturns. Traditional fund managers and trustees in Australia are therefore likely to breach their fiduciary duties if they go long - or remain long - in SRI funds during economic downturns, unless relevant legislation is reformed. ----- ----- Research limitations/implications: The methodology assumes that alpha and beta in the market model are constant. This is the subject of ongoing research. Second, it categorises the state of the market into ‘normal’ economic conditions and downturns using dummy variables. More sophisticated techniques could be used in future research. ----- ----- Practical implications: The current law would prevent conventional funds from investing in SRI. If SRI is viewed as socially desirable, useful legislative reforms could include explicitly overriding the common law to allow conventional funds to invest in SRI; introducing a 150% tax deduction or investment allowance for SRI; and allowing SRI sub-funds to obtain Deductible Gift Recipient status from the Australian Tax Office and other taxation authorities. ----- ----- Originality/value: The accurate assessment of risk in SRIs is an area which, despite its serious legal implications, is yet to be subjected to rigorous empirical investigation. Keywords - SRI, market model, GARCH, trust fund, fiduciary duties, market downturns, Australia.

Micro-business community responsibility – approaches, motivations and barriers

Micro-businesses, those with fewer than five employees, have a significant impact on the economy. These very small players represent 89% of all Australian businesses and, collectively, they provide 17% of the nation’s private sector employment. They are ubiquitous in Australia as in many other nations, embedded in local communities and therefore well placed to influence community wellbeing. Surprisingly, very little is known about micro-Business Community Responsibility (mBCR), the micro-business equivalent of Small Business Social Responsibility (SBSR) and Corporate Social Responsibility (CSR). Most national data available on business support for community wellbeing does not separately identify micro-business contributions. In this study an exploratory approach informed by business ethics theory was taken. Data from 36 semi-structured interviews was analysed to examine perceived mBCR approaches, motivations and barriers. The sample for this study was a mix of micro-business owner-operators situated in suburban shopping areas in Brisbane. Three types of mBCR emerged. All types are at least partly driven by enlightened selfinterest (ESI). However of the three mBCR types, two combine ESI with other approaches. One type combines ESI and philanthropic approaches to mBCR, and the other combines ESI with social entrepreneurial approaches to mBCR. The combination of doing business and doing good for many micro-business owneroperators, suggests mBCR may be a significant, yet unrecognised component of the third sector social economy.

A socially responsible model of micro-credit delivery to support sustainable community development in emerging economies

Micro-finance, which includes micro-credit as one of its core services, has become an important component of a range of business models – from those that operate on a strictly economic basis to those that come from a philanthropic base, through Non Government Organisations (NGOs). Its success is often measured by the number of loans issued, their size, and the repayment rates. This paper has a dual purpose: to identify whether the models currently used to deliver micro-credit services to the poor are socially responsible and to suggest a new model of delivery that addresses some of the social responsibility issues, while supporting community development. The proposed model is currently being implemented in Beira, the second largest city in Mozambique. Mozambique exhibits many of the characteristics found in other African countries so the model, if successful, may have implications for other poor African nations as well as other developing economies.

An examination of tax-deductible donations made by individual Australian taxpayers in 2008-09, ACPNS Working Paper 54

Each year, The Australian Centre for Philanthropy and Nonprofit Studies (CPNS) at Queensland University of Technology (QUT) collects and analyses statistics on the amount and extent of tax-deductible donations made and claimed by Australians in their individual income tax returns to deductible gift recipients (DGRs). The information presented below is based on the amount and type of tax-deductible donations made and claimed by Australian individual taxpayers to DGRs for the period 1 July 2008 to 30 June 2009. This information has been extracted mainly from the Australian Taxation Office's (ATO) publication Taxation Statistics 2008-09. The 2008-09 report is the latest report that has been made publicly available. It represents information in tax returns for the 2008-09 year processed by the ATO as at 31 October 2010.

Review of Collaboration and Interdisciplinarity in the Republic of Letters : Essays in Honour of Richard G. Maber, edited by Paul Scott.

This volume brings together a number of essays that seek to explore the nature of early modern scholarship, ostensibly with special regard to the themes of interdisciplinarity and collaboration. As one might expect, the essays thus cover a gamut of topics – political manoeuvring, philosophical debates, gift-giving and dramatic performance – and each study is important and useful in its own right. As a whole, however, this collection serves more as a starting point for an exploration of its themes, than as an authoritative overview of the subject at hand.