Recently, some have questioned whether this country still needs to organise telethons (for example, L-Istrina in aid of the Malta Community Chest Fund and Festa ta’ Ġenerożità in aid of Id-Dar tal-Providenza) to collect funds from the public since government has sufficient funds to finance them. If we extend the argument slightly (it is my extension and not anyone else’s), then we should stop all public collections that NGOs resort to in order to finance their activities.
This triggers a number of considerations of what I consider to be economic in nature. At the outset I would like to put together, even though they are not the same, NGOs (non-governmental organisations) and social enterprises as they essentially operate on the not-for-profit concept and both types of organisations operate to create a better world, and that is what really counts. Together they form the third sector, which is not to be confused with the tertiary sector.
Being not-for-profit does not mean that they do not generate a financial surplus in their activities, but it means that they use the financial surplus they generate to fund social programmes and causes. They are both driven by a social mission, such as education, the environment or care for people with disability.
I believe that in our country we do not attach enough importance to the third sector in spite of the fact that it contributes to our economy and also generates social benefits. Students of economics know that an economic activity may cause social costs and social benefits.
For example, the construction sector is a cause of social costs because of the discomfort, noise and pollution it generates to the detriment of the population. On the other hand, the activities of the third sector generate a benefit to society because they enable people to work for a noble cause for the benefit of all society. They deliver services that help to improve the well-being of people.
There is as yet very little understanding of what a social enterprise really is as we have very few examples of them locally
Therefore, thinking that the government should be funding NGOs because there are the resources available is, in my opinion, a non-starter. This would mean making such organisations totally dependent on the state and the whims of the people in government. Just because we pay any tax due to the state does not exonerate us from contributing to NGOs and supporting social enterprises, because charity is a social value that benefits all society.
We need to appreciate that the country has already been through a sad experience before, when an NGO (I am referring to the MMDNA), which had been giving a community-wide nursing service under contract from the government for decades, was replaced by a private company.
One may ask about the value of the third sector to our economy. Apart from employing staff, NGOs also rely on volunteers, that is, people who work and not get paid for it. It would be a grave mistake to take this factor for granted as volunteering allows NGOs to operate with a lower cost base. Inputs are more economical from a cost point of view.
Another way of contributing economic value is through efficiency. The third sector is very often in a position to support larger numbers of clients with the resources available or to provide services that reduce the burden on expensive public services.
In Malta, the Social Enterprise Bill was presented in Parliament in November 2020, with the first reading being held on November 20. A White Paper was published some years ago. As such, there appears to be a willingness to develop the third sector further. However, legislation on its own is not enough. It is a question of attitudes and perceptions.
In this country we have a very positive attitude towards NGOs, as evidenced by the public collections held. But there is as yet very little understanding of what a social enterprise really is as we have very few examples of them locally. It is essential that we create space for third sector organisations to truly develop, grow and thrive as they contribute towards the common good, a fundamental requirement to have a sound economy.