Fifty-one years ago: MEDA applies to become a non-profit organization

As part of celebrating MEDA’s 70 years of investing in entrepreneurs, The Marketplace magazine looks back at significant events in the organization’s history. Fifty-one years ago, MEDA’s board decided that seeking non-profit status in the US would help to further MEDA’s mission of creating business solutions to poverty. For its first 20 years, MEDA operated as an investment club, with businesspeople financing its development projects. Canada Revenue Agency records show that MEDA first received charitable status in Canada in January of 1983, a few years after MEDA set up its first Canadian office in Winnipeg, Manitoba. The news release below was issued by the Mennonite Central Committee News Service on April 6, 1973. Thanks to the MCC archives in Akron, PA, for sharing this.

Mennonite Economic Development Associates (MEDA) unanimously decided to apply for nonprofit status at its annual meeting on March 28 and 29. The organization, designed to help small businesses in underdeveloped countries, was set up on a (for) profit basis because the members felt such a status would decrease the stigma of charity. MEDA aid was intended as a business proposition, not as relief. The new nonprofit status will more adequately reflect the actual operations of MEDA; no profits have been made and distributed to shareholders.

Most investors did not expect returns when they joined MEDA. They simply desired to share in an effective manner funds and business know-how with people overseas. When MEDA becomes (a) nonprofit, supporters will receive tax credit(s) for contributions. Most members do not believe nonprofit status will negatively affect their relations with the overseas projects. “We still expect our businesses to be profit-making,” explained Lloyd J. Fisher, executive director. “And going nonprofit does not mean we will not make a profit. It means we, as MEDA members, will not take profit.”

Edgar Stoesz, Mennonite Central Committee Latin America director and major speaker for the meeting, shared his thoughts on the process of development. “The object of development is people,” Stoesz said, “and involves people in community. Much development planning does not recognize the importance of collective action. When one or several members of a small group are helped to achieve a standard of living beyond the reach of others, they are often rejected by the community. The solidarity of the group is weakened.” Stoesz also emphasized that development is a sequential process, and that Americans too often short-circuit the critical educational stage.

“Development is achieved through institution building,” Stoesz noted. “Institutions aid in problem-solving, are instruments for collective action, and add permanence and stability to a process. It is important to distinguish relief activity from institution building. Institutions help to establish an indigenous process which generates its own energy.” The initiative and responsibility for development activity must come from within the receiving system, Stoesz told MEDA members. “Untold damage has been done by well-intending workers who have suggested answers before they understood the questions.”

Stoesz pointed out that development should be an interdisciplinary process. Religious, economic, political, social and cultural aspects of development should at some point come together. Development activity itself should be studied and learned from, Stoesz concluded. “Let it not be said that in a century characterized by brutal wars and refugees, we played with development as though it were a hobby. Development is the will of God, and that makes it Kingdom business. Scripture tells us that God loved the people of the world so much that He gave His only begotten son. Let us love those people too.”

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