Jose Arocha’s blog

The following is my comment to the post by Erik Sundelof ’s "Is a for-profit social venture impossible?" at the Reuters Digital Vision program blog

I think there may be many reasons why we are
better off being a for-profit as an alternative to a nonprofit in the
pursuit of wide and deep social impact. In my building of TAVOS, I
realized through the business planning of the social enterprise that
there were two ways to cover the high costs of a Latin American-scale
deployment: either dedicate my life and one of the others to
fundraising and not work directly with the people I want to serve or
look for income-generation strategies to make every community unit of
the initiative sustainable. I decided for the latter. Some of my
reasons were:

1. I rather devote myself to care of the people I want to serve and
let the market dynamics push my organization to listen, than devoting
my life to fundraising to end up detached from the end beneficiaries.

2. The communities I am trying to serve are highly entrepreneurial.
50-60% of the economy in Latin America is informal. That means that
Francisco in Catia, a low-income suburban neighborhood in Caracas,
wakes up every morning thinking how he will make it to bring food to
the table the next day. Francisco and 100 million other Latin Americans
are better served by bringing opportunities they could use to tap into
their spirit than by bringing charity that will leave them highly
vulnerable if the funding gets dry.

3. A for-profit will make the social impact sustainable and scalable
if we are serving well the needs of the target population. If we are
failing, the market will tell.

4. Embedded in my last comment, the for-profit approach forces
better learnings of the market and customers than the nonprofit
approach.

I do agree that there is a challenge in leading and executing with
integrity a hybrid social/business-mission venture. But I think that it
holds true for any enterprise today. There is also an interesting
discussion about for-profits with organizational and governance
structures that "lock" their social mission, for example: a parent
nonprofit or member association. But that is a whole new discussion.

Cheers,
jose

I grew up in a country in crisis. Inequity, poverty, misery were always part of my daily live. They were my neighbors, my classmates, my baseball pals, my borrowers, my friends. I grew up in a middle class avenue that crosses through, still now-a-days, a numbers of barrios with houses hosting families of dignity but with neither access to decent social services, nor jobs or good education opportunities.

I grew up in a country in crisis. I never saw prosperity in the news. All I saw, all I heard, all I read, all I remember is about the misery of the inner human condition. Communities frustrated by the continuous broken electoral promises. Communities vulnerable and dependent of the gift of the electoral turn with their hidden agendas. Communities impacted by the frequent waves of the oil economy. Communities waiting for the bureaucratic machinery to reach the end. Communities excluded of any access to decent social services. All I heard was corruption. All I read was lack of hope. All I saw was no future.

I grew up in a country in crisis. But I am learning that we can flip the page.

Since the early days of 2004, I have been working with a number of people from different parts of the world who have given me plenty of hope. Every one of us, in our own communities, alone or together, is starting to realize our little piece of this puzzle of human development. I have been very fortunate to find empathy and resonating goals. Now I have partners and volunteers to materialize our piece of the puzzle. We call it TAVOS.

TAVOS responds to the need of the communities where I grew up and to the need of many communities in similar situation worldwide. TAVOS envisions an environment that helps neighbors realize their own power for change. TAVOS will do for social services what microfinance has done for financial services. TAVOS will be a sustainable system that helps neighbors work together and materialize their access to the social services in need. The mission of TAVOS is to help neighbors in these communities aggregate and coordinate their actions so they can help themselves and others.

I grew up in a country in crisis. But my daughter will grow up in a country building its good future. This is my life commitment.