I have always believed that most living creatures need to be nurtured for the early period of life and then left to fend for themselves. Gifts and grants to my non-profit organization, the Population and Community Development Association (PDA), have always been regarded as a kind of short and medium term mother’s milk. Venture philanthropy can play a crucial role in providing this ‘mother’s milk’.

One year after the founding of PDA in 1974, we established a profit-making enterprise to generate funds for our non-profit work. US$65,000, half as a grant and half as a long-term low-interest loan, was made available as start-up funds not by a traditional donor but by a modern-thinking US group which shared our philosophy of long-term financial viability for the non-profit sector.

Today PDA is the largest integrated development organization in Thailand, and 70 per cent of its budget is contributed by its group of 16 companies, all separate tax-paying legal entities, ranging from healthcare manufacturing to real estate, restaurants, hotels and travel. All were established with funds originating from the first venture philanthropy grant/loan.

We at PDA believe we have avoided the Belgian Congo[1] road down which most NGOs in developing nations are heading, innocently led by kind donor agencies which hope that one day these NGOs will somehow become financially viable, without teaching them or providing resources to achieve this anticipated milestone.

PDA strongly believes that sensible donors should assist NGOs with grants and loans to establish profit-making enterprises which will one day replace the donors. It is unrealistic to imagine we can survive and prosper in the long term from the generosity of others. In the USA more and more non-profits are generating income from business enterprises.[2] Thailand – and Asia– need to speed up their endeavours towards financial sustainability or be left stranded.

It is my hope that many donors will realize the dangers and futility of going down the Belgian Congo road and begin to establish venture philanthropy funds to enable non-profits to move towards financial self-reliance. While most NGOs are more than willing to try this new approach, donors tend to be overly concerned that the business ventures will not succeed. We do not expect them all to succeed, but we know from experience that many will.

1 When Belgium withdrew from the Congo hardly any social or physical infrastructure was left behind.
2 In the year 2000 an estimated $61 billion was earned by 14,000 non-profit organizations.

Mechai Viravaidya is founder and board chairman of PDA. He can be contacted at
mechai@pda.or.th

For more information
http://www.pda.or.th