OPINION: THINKPIECE - Exploit interest of business for the community

WILL DAVIES, a researcher at The Work Foundation in London

The south side of Chicago contains some of America's most shameful ghettos. Many of the roads and houses are crumbling, and there is no sign of the fast-food or retail chains that dominate American high streets.

In fact, there is little economic activity apparent at all, with the exception of three capitalist institutions: liquor stores, churches and charities.

Since when were churches and charities capitalist institutions, you ask.

Since around 1993, when a Harvard political scientist called Robert Puttnam first popularised the notion of "social capital", an expression aimed to capture the economic value and political power of trust. Communities, Puttnam argued, will prosper morally and economically if people trust one another to keep promises, return favours, and generally look out for one another.

The critical factor is a large dose of voluntary activity, which creates social networks beyond the family and the workplace which, besides being a moral good in itself, is an important economic resource. It is no surprise that America, with its vast voluntary sector, ranks 8th in one international social capital league table, above Britain and well above France and Germany.

The idea of social capital lacks credibility except where economic wealth is already fairly widespread. Puttnam's argument works when applied to middle-class suburbs, but the suggestion that local activism alone can generate wealth, while appealing to the American civic tradition, seems deluded. The important message is that wealth can be supplemented through voluntary activities, which is where the voluntary sector has most to gain.

Businesses are enviously eyeing the voluntary sector for this very reason.

But talented employees who are suspicious and self-interested won't perform for a company, no matter what they're paid. Businesses want strategic alliances with NGOs - such as giving staff paid leave for volunteering - in order to create trust, retain staff and borrow best practice. Chasing profit alone tears businesses apart socially.

Social capital investment is the luxury of an advanced economy, but a very welcome one. Charities must recognise social capital as their number one asset. But it's only an asset in the eyes of the wealthy, not in the eyes of the dispossessed.

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