Costa Rican Nonprofit Revolution


Publicado el 04 de octubre de 2016 en la plataforma británica de negocios inclusivos Practitioner Hub.

-A small country with the potential to become the regional hub for social enterprises in the Americas-

A small country in the middle of the Americas is trying to connect with the global tendency of NGOs /Non-profit management.

Costa Rica is a pioneer around the world in terms of social innovation. After founding in 1969, its first non-profit sector umbrella organization: The Voluntary Organizations Federation (FOV), a national body for NGO’s based on voluntary and philanthropy, that developed projects with the support of international cooperation, especially US AID during Cold War times of cooperation abundance for Latin America.

During those years, the country lived a boom of non-profits (foundations and associations) were created by hundreds every year, with almost none supervision of public institutions or stakeholders. This explosion conducted us to a kind of jungle-law paradigm, where there are hundreds of NGO’s doing the same thing, fighting the same cause, in the same place, competing for the same resources and without any added value (there are more than 12.000 foundations and associations legally registered)

Costa Rican organizations are living a revolution, as the country is declared a middle-income country, international cooperation does not irrupt in as it used to be. CSR is making its effort to stop non-strategic philanthropy and donations that cannot be linked to the value chain of companies. If that was not enough, public funds given by Government to some organizations by special laws or agreements (more than $86 millions financing around 263 organizations during 2016) is no longer a model of income as it was on the past (a deep tax crisis is ahead)

In this scenario, the Non-profits have been looking for new ways to assure a sustainability model, and this is where Social Enterprise came to the stage. The use of #SocEnt concept is a relatively new trend in Costa Rica; however, the country has some great examples of organizations founded during the ’80s and ’90s that did not call themselves “social enterprises” but are a sustainable model since it beginning. To quote an example, FUPROVI – The Housing Promotion Foundation, was founded in 1987 with the mission of contributing to improving the quality of life of low-income sectors, through the management and development of housing projects and community building for low-income groups. Now, after 29 years of work, FUPROVI has served more than 25 000 families with more than 109 built projects and running projects around the country, becoming one of the Costa Rican authorities regarding housing state of the situation by publishing every year the National Report on Housing and Urban Development.

There is no special legislation about social enterprises in the country; however, in 2013, the Government approved a decree to promote social enterprises, including as part of the definition:

-The sustainable, innovative production model, self-funded and whose objective is to help solve social problems.

-No distribution of profits for partners or investors.

-Meet the needs of the poorest or vulnerable population through utilities

-Profits reinvested in the project to help reduce poverty and social inequality.

-Employment generation for people with many limitations to enter the labor market; and produce goods and services that are sold at affordable prices for the benefit of families in poverty.

Many things are still pending to do in the country to develop a healthy social enterprise ecosystem. It is necessary to empower young social entrepreneurs wishing to create innovative models to solve social or environmental problems by creating new organizations, but also intrapreneurs that want to make changes within their non-profit or in NGO’s where they work.

Costa Rica has the main ingredients to become a regional hub for social enterprises, catalyzing resources, and know-how from around the world to impact Latin America from its waist. A few weeks ago, the country became one of the first countries around the world to sign a national-multisectoral agreement to accomplish the Sustainable Development Goals. Public institutions are more and more interested in developing public-private alliances to promote social enterprises as a model to reduce extreme poverty and solve social problems. Private companies are more aware of the importance of win-win longterm relationships with NGO’s that can demonstrate sustainable models; regional agencies as the Interamerican Development Bank, are looking for ways so that Costa Rica can tell this starting-success story.

Strong social performance and rich history in democracy and peaceful (Pura Vida) lifestyle are two of the best country conditions to develop social enterprises, and from here spread the virus through all the region.

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