Yaso Thiru on Goonj - breaking the social enterprise mold
Goonj distributes 60 tonnes of clothing every month to the poorest parts of rural India. The organisation collects discarded clothes, processes it through its value chain (which employs a community of hundreds for the sorting, cleaning and tailoring), and distributes it as clothing, sanitary pads or other useful items through a unique community self-development scheme.
The JFC group was struck not only by the immense impact Goonj creates, but also by the fact that one of the leading social initiatives in India is not chained to a concrete business model. Instead, its operations are flexible, fluid and constantly evolving, anchored by the core value of dignity. Yaso Thiru, Associate Professor of Accounting and Management at Alaska Pacific University, shines a light on the uniqueness of Goonj's approach.
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Not just a piece of cloth
Goonj was a deeply moving and jaw-dropping experience. In hindsight, the idea seems simple: fill the basic but chronically overlooked human need for clothing. The group’s reactions as we tried to frame, label, and rationalize Goonj’s activities said much about us and how we see the world.
What is most fascinating about Goonj is how its single most important resource –the piece of cloth – is used for consumption, motivation, behavior modification, education and profit making in very direct ways. Dignity to the recipients is in having access to that piece of cloth at the right time, form and manner. Goonj’s website does no justice to this fascinating feature and philosophy that drives its activities.
Charity or social enterprise?
Anshu Gupta is innovative, solves problems, and creates jobs; he is an entrepreneur. Does that imply, then, that Goonj is a social enterprise? To quote someone in the group, Goonj presents no enterprise model. The conclusion I came to is that the characteristics that we were grappling with to define/understand Goonj is in fact the management style (of Gupta). Not that it matters to Gupta. He cares less how Goonj is labeled. He calls it a guided democracy.
The group’s attempt at understanding the nature of Goonj (as a charity or social enterprise) centered on how it chose to run the organization. Goonj seems to have no use for plans, strategies, fund raising activities (although they are beginning to do this with their recycling enterprise and they will accept donations), board and personnel development (an exception is skill building for the beneficiaries), which are serious preoccupations for any organization.
Scale, salaries and loyalty
Scaling up is a serious and inevitable consideration for social enterprises today. Founder Anshu Gupta explains Goonj wants to scale “as an idea rather than an organisation,” intentionally capping the number of India offices at twelve. He expressed pride in this decision (“one must know what to say no to”).
Gupta claims that they do not worry about where money will come from to pay salaries to staff next month (he told a story in which the staff offered to forego salaries so the organisation could buy a generator they needed). Seeing such a relaxed attitude toward finance in an organization of this size is unusual, if not shocking, to the outsider.
Gupta’s confidence that his staff will continue to come to work for him even if they have to skip a month’s pay is revealing of the conditions of the local labor market: the lack of alternative labor and lifestyle opportunities for its employees. Though they are clearly loyal to Goonj, I’d think that if the employees were to find alternate gainful employment with better pay, they would be in a tight spot - would they stay or would they move on? I'm concerned that Goonj may not survive without a financial strategy.
I walked away with much admiration for the work Goonj is doing and their values-based operating principles. I found many others in the group to have similar reactions.
For Yaso’s India travel blog see http://yasoinindia.blogspot.com
