Purdy (in dark shirt) observes transactions for
family planning products in
Ethiopia in 1999, I managed a social marketing program marketing a wide range of contraceptives, including condoms and family planning pills. Excited to see our work in action, I decided to get out of the office on a trip to Southern Ethiopia. There, during a visit with a pharmacist in a
rural town, our conversation was interrupted by the arrival of a woman who,
unruffled by the presence of a foreigner, marched up to the counter, asked for
package of contraceptives, paid her money and went on her way, a satisfied
moment was an eye-opener for me and showed the value of “social impact
enterprises,” organizations that leverage entrepreneurial spirit and business
methodologies to drive innovation and improve services in the social realm.
nonprofit and corporate programs that seek to address social needs for lower
income populations inevitably involve the idea of charity in providing products
or services. But freebies can be
problematic: people don’t value them and often suspect they are of inferior
quality. By contrast, paying even a
modest sum for a product or a service turns a “beneficiary” into a “customer.” Additionally, a purchased product is more
likely to be used.
social impact entrepreneurship changes lives and societies just as business
entrepreneurs change industries. It
combines a great but "disruptive” idea with the passion and unrelenting focus
of an eager entrepreneur. It assumes zealous
execution, focus on performance and results, adaptability, intolerance of
bureaucracy, and distaste for meetings and conferences.
seen this up close at DKT
International, where our transformative approaches “disrupt” family
planning in 18 countries that contain more than 50 percent of the world’s
people. By leveraging the power of the
private sector, we market and sell attractive, affordable contraceptive products
and services through normal commercial channels. We educate consumers on the choices that best
suit their needs. We train health
providers to provide services that they had previously not offered (such as
IUDs and implants).
do this in countries like the Democratic Republic of Congo (DRC), where the per
capita income is under $400, as well as Brazil, where incomes are closer to
$12,000. In both places, we charge for
our products and services, but in poor countries those charges are very small. In 2012 our revenue was $200,000 in DRC and $20
million in Brazil. In DRC, we need donor
support; Brazil has itself become a donor to cover costs of programs in African
countries like DRC. Similarly in 2012, Indonesia
helped fund a new program in Ghana while DKT Philippines funded a start-up
operation in Pakistan. Operations in
India, Mexico and Turkey should begin making contributions in the future.
quest for leveraging the efficiencies of the private sector has found us
stumbling on a cost-recovery and sustainability model that hints at the promise
of long term financial strength and, at the very least, a highly cost effective
investment for donors. Such results illustrate that doing good is
not incompatible with earning an adequate financial return. Indeed, 70 percent of DKT’s program costs are
recovered through product/service revenue (the balance came from donors) while providing
consumers with something they value.
social impact entrepreneurs, our country directors design and manage their
programs more as businesses than traditional non-governmental organizations (NGOs),
promoting family planning and safe sex messages through revenue generating
models tailored to reach communities that were inaccessible 20 years ago. In countries with higher per capita incomes,
this model delivers significant health impact to people of all income levels. In other countries, DKT’s modest revenue
generation and donor funds keep services affordable.
cross-subsidization we offer differently priced brands within the same product
category to maximize both health impact and cost-recovery. Subsidized affordable condoms or other
products sell alongside profitable premium brands. Even in poor countries like Mozambique, Sudan
and Ethiopia (where revenue funds a significant part of the program), some
level of cost recovery is possible. The
result: DKT’s cost per couple year of protection (the amount of contraceptive
protection needed for one couple over one year) is a remarkably low $2 per
in 2012, DKT programs prevented an estimated 8.2 million unwanted pregnancies,
2.6 million unsafe abortions, and more than 14,000 maternal deaths.
programs work because DKT’s country-level managers are entrepreneurs within a highly
decentralized organization. Some managers
have business degrees or experience. Others have worked in the nonprofit sector but
demonstrated an entrepreneurial spark. They
direct a combined field staff of 1,800 people and have wide autonomy to make marketplace
responses quickly. Our headquarters in
Washington has a staff of eight people – providing financial oversight and
administrative support without slowing down the enterprises overseas with
Essential to success: a relentless
desire to get the job done, to avoid bureaucratic time-wasting, to solve
problems, and, above all, to serve the customer. It’s only with the wisdom of hindsight that I
see that these facts were all brought home to me by that lady buying
contraceptive pills in a drugstore in Southern Ethiopia 14 years ago.
is the executive vice president of DKT International, a
non-profit, family planning social enterprise with offices in 18 countries.
Labels: Christopher Purdy, DKT International, family planning, social entrepreneurs