Poverty Is Changing, So Should Corporate Social Responsibility

Global poverty has declined to about half the level it was in 1990. But that doesn't mean companies should halt philanthropic efforts. Instead, corporate social responsibility should evolve to reflect the needs of today's "middle class poor."

We have some positive and revelatory news on poverty which can aid your company with its corporate social responsibility (CSR) initiatives. And it's not just about giving and grantmaking--it's also about training a future workforce and having a positive impact on your bottom line.

The success in the war against poverty is very much due to the long-term success of China and the Chinese economy, social programs in Latin America, and African economic growth.

There has been extreme growth in the numbers of "middle class poor." Those who no longer earn $2 per day, but about $12-$50 per day, can spend more for better nutrition, health care, and education.

In the realm of CSR, it's important to think about this rising class of poor who will want different types of support and philanthropy. Education will need to be more advanced and use technology which is equally as cutting-edge as that found in the U.S.

In the past, literacy was a goal. Now, a goal is to become equal players in the workforce. Impoverished people know that if they are educated according to the needs in the marketplace, they can get hired. They don't have to move out of their own country. They can do data entry, customer service, and answer technical questions.

This can provide a tremendous opportunity for your company. The need is for education to move beyond reading and core competencies in specific knowledge, to actual skills. Skills that are much more than traditional warehouse and factory jobs require. That means your giving can not only help poor people attain needed skills, but also possibly become future employees for your company. If you help the bottom line of the community, you can help the bottom line of your company.

At the same time, extreme poverty reduction policies mostly impact the poorest of the poor. Though their numbers are diminishing, they cannot be neglected. Philanthropy's range will continue to exist, from direct handouts to providing opportunities to learn advanced skills. You can focus on one or the other, or both.

As the world changes, it's necessary for us to examine our philanthropic investments. We may decide to continue investing in education, yet revisit the programs in which we invest, or our methodology in how we invest, or the results we expect.

Below are some interesting, inspiring statistics about the changing and diminishing face of poverty. I know you will join me in celebrating them, and ask what your company can do to make the market of poverty non-existent in the near future.

The Diminishing Face of Poverty

In 2010, global poverty was half its 1990 level.

Half the long-term rate of decline is attributable to China's growth.

660 million people have come out of poverty since 1981.

East Asia had the highest incidence of poverty in the world in the 1980s: 77% of the population lived on $1.25/day. By 2008, it dropped to 14%.

Africa has seen the largest recent turnaround in poverty. While the number of people in poverty almost doubled from 205 million in 1981 to 395 million in 2005, by 2008 it fell by 12 million. This is the first time less than half of Africans are below the poverty line.

The number of poor people has decreased in Latin America and in eastern Europe and Central Asia since 2000.

Sources: Pamela Hawley, UniversalGiving, The New York Times; The Economist

[Image: Flickr user Amir Jina]

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