Leslie Forman
October 10, 2010 — By Leslie Forman

On “doing well & doing good” – a reaction from Mongolia

This adorable little girl lives at the ger camp in the Semi-Gobi Desert, the place where we rode camels.  I chose her photo to illustrate this post, because I think her stylish coat and practical boots exemplify the type of consumerism that improves the lives of everyday Mongolians. While I was in Mongolia, the insightful […]

This adorable little girl lives at the ger camp in the Semi-Gobi Desert, the place where we rode camels.  I chose her photo to illustrate this post, because I think her stylish coat and practical boots exemplify the type of consumerism that improves the lives of everyday Mongolians.

While I was in Mongolia, the insightful and prolific Akhila Kolisetty featured this quote from Jacqueline Novogratz, founder of the Acumen Fund:

You told me that you don’t like the phrase ‘Doing well by doing good.’ Yet, that’s what comes to mind for many when they think about social investing. What does it mean to you?

It implies that there are easy solutions. That the perfect way to change the world and end poverty is if we all can make a lot of money doing it. But when you look at poverty and what it takes to break through entrenched systems, high levels of fatalism, unbelievable levels of corruption, incredibly bad distribution, no infrastructure, you are not going to make a lot of money and serve the poor in a way that they can afford. You may make a lot of money and serve the poor in usurious ways that keep them poor forever, like many of the mafia services do, but if you want to provide systems that are fair and affordable, and that they can trust into the long term, building them takes a long time. Over time as you really hit scale,  you will make money, but we’ve been in some of our deals for six or seven years and we feel we’re just starting.

I like Akhila’s response, which includes these words:

At the end of the day, “doing good and making money” is all a myth that we have deceived ourselves into believing. And perhaps it’s a marketing tactic of social businesses. But I’m sorry, but you can’t do both. Sure, you can ensure your social business is sustainable, but you, yourself are not going to be rich. In fact, your lifestyle and salary will probably be comparable to the lifestyle of non-profit employees. There is no difference between the two. Joining a social business is not a way to get rich or make money – it’s ultimately simply another way to empower the poor and work towards social justice. And I hope we can change our language to reflect this truth.

Click here to read the rest, and while you’re at it check out the rest of her excellent blog, Justice for All!  I wrote her an email in response, which included these words:

I am writing this from Ulaan Bataar, Mongolia.  Good businesses in this country include cell phones, satellite TV, car repair products, warm coats, solar panels, tourism, stuff for kids.  All of this stuff makes life better for ordinary people, and makes money for the companies who sell it (though probably not a lot given all the things that Novogratz mentioned.)

The little girl’s coat and boots are probably imported from China, and purchased with cash brought in by hosting foreign visitors.  The family has lots of livestock, so it probably produces most of its own food.  But in this modern world, with solar-powered TV and foreign friends, a family cannot live on salty milk tea alone!

I’m curious to hear what you think :)