Many organizations do not seek to generate revenue to enhance sustainability, often because they do not innovate anything new in the field of profit generation to secure sustainability. Lessons can perhaps be drawn from the experience of grant institutions with microloans that can be applied to the current trend. While social projects are the newest tool in poverty reduction programs, a fundamental concern arises regarding the role of the public sector and its direct impact on combating poverty through the promotion of sustainable entrepreneurship.

This leads us to question the ability of the public sector, which may participate institutionally by providing grants, to advise and master ways of investing in a social project if it operates within a different model. Currently, social projects represent a newer group of institutions that do not fall under the traditional public or private sector framework, and they do not primarily rely on fundraising; they provide a product or service that transforms the social value of that product or service into monetary value.

Essentially, social projects embody both economic and social standards. By definition, fundraising cannot be the primary driver of a social project because the product or service it provides is costly, and its concept of success is tied to sustainability. For example, some nonprofit organizations address a gap in health services by collecting a database to support efforts to enhance health activities, such as blood donor data. These organizations revive activities and sell tickets to raise funds, but they are not entirely profit-driven; they seek to obtain financial donations, thus continuing the pursuit of financial independence, which imposes limits on how these organizations can expand. This is a fundamental aspect of entrepreneurship.

Some of these organizations have evolved to possess a strategy for helping startups generate their own revenue, and one suggestion in this area is to utilize the pool of hidden talents within informal economies and engage the candidate who wins funding to achieve that. Labor in the informal economy can be a potential partner for social entrepreneurs in selling goods and services through creative collaboration.

The strengths of these organizations lie in their ability to secure financial resources and access excellent expertise, depending more on institutional knowledge than on local nonprofit organizations leading the charge in their countries. This represents a fundamental criticism of governance-improving approaches and reminds us of the international community's poor approach to the concept of social projects, which recalls the previous pitfalls witnessed during the microloan wave in the late 1990s when donors and governments invested substantial funds in microloan institutions and expected high returns.

Thus, drawing on lessons from the microloan experience, organizations must consider in their strategies for combating poverty the workforce and local talents that underpin the informal economy. If there is no integration between the informal local economy and local nonprofit structures, social entrepreneurship remains far from implementing innovative market-driven solutions to address social problems.

Source