Freeman

ARTICLE

Foreign Aid the Voluntary Way

Enterprise Mentors Is Changing Lives Abroad

OCTOBER 01, 1994 by MENLO F. SMITH

Filed Under : Poverty

Mr. Smith is chairman of the Sunmark Capital Corporation in St. Louis, and one of the founders of Enterprise Mentors, located at 510 Maryville College Drive, Suite 210, St. Louis, MO 63141.

Over the past forty years, billions of tax dollars have been funneled into foreign aid programs. Such efforts have usually been more counterproductive than useful, a result that led one of the deans of Third World development to observe: “There are two things wrong with foreign aid; one, it’s foreign and two, it’s aid.”

Sizable portions of these funds have been siphoned off by those in positions of power, adding to their already prolific personal plunder. Little if any has found its way into the hands of those at the grassroots—the informal economy where the majority of those in developing countries struggle to eke out a livelihood. Such funds as have reached this level have more often produced dependence than self-reliance. It should come as no surprise that bureaucratic efforts to “help the poor” have met with so little success. The poor are usually that way because they are poor in spirit. The state deals in power and control, not freedom and inspiration, two absolute requisites for human progress.

People generally will put forth physical or mental effort only when there is reasonable hope that their condition will be improved as a result. The impoverished of the Third World have little reason for such hope. They are usually confronted with a number of dispiriting and discouraging barriers, including large-scale graft and corruption, lack of entrepreneurial know-how, absence of credit, mistaken traditions which squelch individual initiative, and a pervasive notion that success in life is determined by luck and connections rather than by personal effort. All serve to deprive them of the freedom of thought and action so essential to their progress.

It was against this background that a small group of American businessmen with experience in developing countries joined together in January of 1990 to establish The International Enterprise Development Foundation, a 501 (c)(3) non-profit organization more widely known as Enterprise Mentors.

The Foundation is guided by the philosophy that “a hand up, not a hand out” is the only way to benefit those who lack adequate sustenance. Nothing is given away. Some price, however modest, is always charged for materials or services, to help establish value for services rendered. More important, this preserves the self-respect of those served, a critical requirement if self-reliance is to be achieved.

The program focuses upon encouraging sound business practices by training and mentoring the owners of small-scale enterprises. Emphasis is placed upon the principles of free enterprise, including building of individual responsibility, initiative, and leadership. Also stressed are adherence to moral principles and obedience of the law.

Enterprise Mentors strives to make the program indigenous through the establishment of local operating foundations in the host countries. The first such foundation, Philippine Enterprise Development Foundation (PEDF), is headquartered in Manila and has its own staff and Board of Directors composed of many respected Filipino business and community leaders. PEDF works with a wide variety of businesses. Most have fewer than ten employees and many have only one or two. A second foundation has been established in Cebu City in the central Philippines, and a third in Davao City in the southern area.

Success Stories

When Reggie DeAro became involved with PEDF to develop a machine shop in December of 1990, he brought with him determination and training as a machinist. Through PEDF Reggie and his wife, Linda, received training and consulting assistance to help them devise a system for developing sales prospects and to establish accounting procedures, marketing, production, and management plans. The DeAros have now acquired land, built a sizable shop, and employ nine other people. In only three years sales have increased more than sevenfold. As a result, ten families are now more self-sufficient, and the DeAros have gained the skills and self-confidence to enable them to serve as community leaders and role models.

Another PEDF client, Vilma de los Santos, a mother of four, was struggling to augment her family’ s meager income by knitting blouses, baby dresses, and other garments on a small knitting machine, receiving about eight pesos (24 cents) per garment as a subcontractor. With help from PEDF she was able to obtain a small working-capital loan, and become formally registered as a business. PEDF then helped her develop contacts with major retailers, to whom she now sells directly. Vilma now has five employees in her business who earn fifty pesos ($1.50) per garment. Six families are now better able to meet their financial needs because of her entrepreneurial initiative.

The DeAros and Vilma de los Santos are only two beneficiaries of Enterprise Mentors Philippine operations, which have so far helped to create nearly 1,200 new jobs in this poverty- plagued country. Because each employed person supports an average of four additional people, the lives of nearly 6,000 individuals have been assisted in achieving greater financial security. This number will continue to grow. Plans are underway to expand Enterprise Mentors into a number of other areas including Brazil, Central America, Mexico, and Africa.

Guided by the scriptural admonition to “do unto the least of these,” to feed the hungry, clothe the naked, and help the impoverished of developing countries to help themselves, the people of Enterprise Mentors and their private voluntary financial supporters (no government funding is accepted) are making a real and lasting difference in the spiritual and material lives of those whom they serve.

ASSOCIATED ISSUE

October 1994

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