Social Entrepreneurship: A Case Study From Brazil

Philanthropic and humanitarian organizations are increasingly turning to business models to achieve their social objectives. ‘‘Market-based approaches,’’ says the Acumen Fund, ‘‘have the potential to grow after charitable dollars run out, and they must be a part of the solution to the big problem of poverty.’’ Virginiabased Ashoka seeks to achieve social objectives by investing in individual entrepreneurs and ‘‘changemakers’’ in developing countries. An example is Fábio Rosa, an Ashoka fellow, who helped bring electricity to large parts of rural Brazil, cutting rural electrification costs substantially in the process. These organizations and many others have recognized that private business models hold important lessons for achieving social objectives and that, in the right circumstances, the profit motive can be harnessed to reduce poverty and advance human well-being. Thus, more and more nonprofits are looking to market-based techniques—techniques used by profitable businesses— to tackle nonprofit objectives. DKT International is a nonprofit family planning organization I founded in 1989, now directed by Chris Purdy. DKT has taken an unusual approach to mixing social objectives with profitability. It hires managers in new locations, or sends expatriate managers to such locations, to start projects in the social marketing of contraceptives and, where rising incomes allow it, DKT grows those projects into profitable local enterprises that become permanent parts of the local commercial community. This pattern has emerged only recently. When DKT began operations in 1989, most of the countries where it operated were too poor for project managers to consider profit potential, and that wasn’t the fundamental purpose of these programs anyway. DKT’s objective was to provide affordable contraceptives to the poor. We assumed that the contraceptives we sold through a system called social marketing would have to be subsidized indefinitely. However, this has changed over time due to the confluence of several factors: