Handout Economy

Handout Economy

We all think we are doing fantastic things when people are asking us for money on the high street but during the trip I was able to visualise the legacy of badly managed aid.

During the second week, we were fortunate enough to go to a fantastically managed orphanage called Makaputu, providing a home to 49 young people. We were introduced to the centre last year but this year partnered with an American team that was working with some of the young people to look at their entrepreneurial attitude. Our team went in and delivered a session on creative thinking and basic business model canvasing. Both techniques to assist in them taking their business to the next level.

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After delivering the session, we were kindly asked by the centre if we would like to join them on a food handout into the local townships, an opportunity I jumped on. It was a real insight into the aid culture in the townships, Graham the outreach manager from Makaputu, showed us into the most at risk households.

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We were shocked to find about 10 children sleeping on 2 single beds, in a room no bigger than what would be considered a box room in England. This was a challenging concept further challenged by the fact that in this tiny house they had two TVs, DVD player, video player and some sort of music player. It was a really difficult concept to deal with as they don’t have enough money for food but will spend on luxury items.

This finding was then compounded when we arrived at the community centre. This centre, Graham informed us, might deal with around 40 families, that could be up to 10 people per family (although it is difficult to know for sure). The people that were there when we were talking to them had no ambition to earn money or get a job but were instead complacent to rely on the handouts. It was a highly frustrating concept for me.

The truth is there are many organisations doing fantastic things with the donations that are given but please think before you give to organisations who are simply providing a product to a foreign country. Often their is a deeper problem than the most visible one which relies on organisations like World Changers and Makaputu who change mindsets to see real change within the economy.



August 19, 2013 at 11:09 pm

Hi Peter!

Congratulations on the wonderful work you have done for the past couple of years! The SA challenge is surely just one of the past and many oncoming successful peaks.

To move on, I have read your posts with great interest and must admit I have found it quite inspiring to see how hard you try to sum up your thoughts and reflections on this novel experience whilst encouraging the rest of the people to challenge themselves and see the world as you have just experienced it.

The funniest part is that most of us (me included) often fall fool of giving out free fish instead of teaching the people who need it most how to fish or providing a framework within which they will be capable of doing so. Should it be because this is the quickest and easiest way to makes us feel moral and good about ourselves while ignoring the real cause of the problem or is it because longer term thinking is costlier and requires sustained commitment and we just cannot be bothered to do all the thinking involved in assessing such a complex situation? Would it not be wiser and more effective to support NGOs that advocated for structural economic and political change instead of the ones concerned with the` here and now` and the perpetuation of the status quo?

This being said, there are a few good books of opposing stances I happened to have read on aid and its problems and I feel they might be of some interest here: `Poor Economics` co-authered by Esther Duflo and Abhijit Banerjee, `A new understanding of poverty` by Kristian Niemietz, `Dead Aid` and `How the West was lost`, both written by Dambisa Moyo. To stay on the same lines, it would be interesting to hear what books influenced or are currently being read by fellow social entrepreneurs on the subject.

Finally, it is my hope this suggestion will come in handy and help you expand further on your current experience and ideas. Keep up the great work!

All the very best,


    August 22, 2013 at 5:53 am

    Thanks for the kind words and books to read. I have been trying to read more recently. Currently working through the Lean Startup.

    Interesting questions you posed. With the first one I would definitely agree its so much easier to tackle the obvious problems. I am writing out a model at the moment to try and show the team when I get home.

    In regards to the second one, I think supporting current organisations is vital like you said but I think a mixture of government and grass roots support. You need the top level support in order to get the infrastructure to work for other organisations within the economy. I am going to write a blog post on it soon.

    hope your well.


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