For Chris West, director, Shell Foundation (SF), charity requires professional management and a business-like model to be effective. ?No matter how much philanthropic money is there around the world, there would never be sufficient money or reliability of money to solve the problem of scale. So the starting point for us was scale being a big issue. To do things that go to scale, we have to look to exit from subsidy and find a service that can be paid for by the end user. It?s about treating the poor as consumers and about delivering the goods in a value driven manner,? he says. In an interview with FE?s Sukalp Sharma, West explains why having a business like approach to philanthropy is a must for it to succeed.
Tell us something about your business like ?enterprise-based? approach to meet challenges in the social and development sectors as opposed to traditional philanthropy.
Just like an angel investor, we get in at a really early stage and we stay with the social entrepreneurs as long as we can add value. We provide money in whatever form it?s suitable which typically is in the form a grant, because it allows the entrepreneurs to almost accelerate the growth of their businesses without taking on a debt. We?ll help them take on staff, develop systems, test products and services, absorb some of the risks and then jointly figure out how best that business can be taken to scale and grown to make it self-sustaining.
So that would mean that conventional charity and philanthropy practices are flawed in some way?
Charity in general has a history of being rather short term in provisioning. It?s only providing money, which is necessary but not sufficient. What we are trying to do with this enterprise approach is to show that working like a business in tackling development issues is a more scalable and sustainable approach to solve problems of energy access. The conventional model has been one of ease on both sides. It?s easy for people to write a cheque and it?s easy for people to ask for only money. We need more people playing that high-risk angel investor role to crack these problems.
How well do the activities of Shell Foundation gel with the core activities and business of Shell Group? Is that the reason why you are involved only with energy related issues?
We made a very deliberate decision to focus on big global development challenges related to the energy industry. We are more likely to be able to leverage resources from the company if it?s an area wherein the company knows something. If we were working on something else, say education, I couldn?t have leveraged anything really from my corporate parent. And that would have meant that we would have lost the value that we could bring. The concept of core alignment is really quite important. A lot of corporate philanthropy has been far removed from the core activities of the companies, which doesn?t really make any sense.
There has been a debate in India over whether CSR should me made mandatory with a certain target to be achieved by companies. What is your view on the contention?
It is for India to decide what it should do. But if I step back to take a view on it, I have no difficulty in principle with accountability, either through a mandated target or otherwise. But my gut sense is that the best people who do it understand the value it adds and that has nothing to do with anyone telling them to do it. Money is necessary but not sufficient. So if we mandate on a financial giving target, I?m not sure that it?s going to have the impact that one would want to achieve through such a regulation. So, making it mandatory may be just a part of the answer but not the answer in itself.
How do you evaluate your contribution and the performance of the programmes you support, considering that micro-level programmes are technically diverse?
We created our definition of scale which is essentially around large numbers of people benefiting from the project, have we leveraged more than what we have invested from a third party, do we have a competent entrepreneur, are the customers starting to pay for it? So we came up with five definitions of scale and then we can go back to each definition and see if we have been able to achieve it. We have our own impact targets for jobs created, livelihoods enhanced, carbon reduction and leverage. Everyone in this sector needs to get into performance matrix that look into efficiency of support and that would allow them to figure out the efficiency and efficacy of their support. That also brings more transparency as there is a colossal amount of money in this sector.
Are you thinking of expanding to other areas of the social and development sector in India?
We are really focusing on four big issues in India at the moment ? tackling indoor air pollution, access to energy, sustainable transport and sustainable cotton. That?s quite a lot already. I?d be very hesitant about starting something completely new. I think focus is something that is particularly required in the social sector. No matter how well we do or how big we are, we?ll only be able to tackle just a fraction of India?s developmental challenges. What I would like to see others doing and adapting is our business like approach to tackle these challenges.