Social entrepreneurship may be a solution to building and sustaining health care services in developing communities
Poverty and health care in developing communities sometimes seems unmanageable and the interventions and funding models employed don’t always result in long-term success. A relatively recent approach to creating sustainable change involves the concept of ‘social entrepreneurship’, which seeks to merge a business approach with a social goal. An example of this is empowering people and communities to build health care services and sustain them through the income generation opportunities that arise.
Traditionally, business practices have been rooted in profit generation, driven by economic logic, and have considered social good out of scope or a peripheral focus.1 At the other end of the scale have been charitable organisations, which rely solely on funding from donors and philanthropists to pursue a social goal. Yet both of these approaches face increasingly challenging environments. With private enterprises not generally concerned with social inequities, and other issues such as limited environmental resources and fair working conditions concerning the public, consumers are increasingly calling business to account.2
On the other hand, not-for-profits are operating in an environment of competition for donor funding, a demand for sustainability, transparency, value for money and a non-reliance on welfare systems.3 Significantly, many struggle to upscale interventions due to the funding challenges, which thus limits their scope and reach.
If you believe that every life has equal value, it’s revolting to learn that some lives are seen as worth saving and others are not…
To address these issues, ‘social entrepreneurship’ has been used as an innovative approach for dealing with complex social problems and needs. It blurs traditional boundaries between the government, private and non-profit sectors, emphasising hybrid models of profit and non-profit generating activities, in order to address a social goal.4
The Argument for Social Entrepreneurship
Microsoft’s Bill Gates, in his commencement speech to Harvard University in 2007, made an eloquent argument for social entrepreneurship:
“If you believe that every life has equal value, it’s revolting to learn that some lives are seen as worth saving and others are not… We asked: “How could the world let these children die?” The answer is simple, and harsh. The market did not reward saving the lives of these children, and governments did not subsidise it. So the children died because their mothers and their fathers had no power in the market and no voice in the system…
“We can make market forces work better for the poor if we can develop a more creative capitalism – if we can stretch the reach of market forces so that more people can make a profit, or at least make a living, serving people who are suffering from the worst inequities… If we can find approaches that meet the needs of the poor in ways that generate profits for business and votes for politicians, we will have found a sustainable way to reduce inequity in the world”.5
NGOs generally recognise that solutions based on grants and donations cannot be scaled up easily. Social entrepreneurship offers a way to scale up initiatives by using business practices such as economies of scale, sharing the task of achieving a mission by collaborating with individual entrepreneurs, and offers a pathway to an unrestricted income stream.
The argument for businesses to assume social responsibility has proceeded from the belief that businesses are vital centres of power and decision making and should be responsible for the consequences of their actions, and not solely concerned with economic gain.6 Yet, apart from this moral impetus, there also exists a business impetus. Approximately 65 per cent of the world’s population earns less than AU$2,000 a year, representing a large market that is a source of growth for companies.7
Long-term solutions have to be self-sustaining, and an effective way of doing this is to generate income from them. To do this, allows organisations and beneficiaries to fulfil their social obligations, create new markets, and derive economic benefit.
Social Entrepreneurship in Eye Care
Eye care is a sector of health that is particularly suited to social enterprise. Unlike other areas of medical care, eye care is provided by private entrepreneurs in many countries. Indeed, many of the success stories in social enterprise come from eye care. The following are examples where social enterprise approaches can
be applied to eye health.
Micro-entrepreneurship is an approach taken in developing communities where people, often women, are empowered to start their own small business to generate an income for themselves and their families. Most often, these small businesses encompass agriculture (e.g. farming or raising livestock). However, other sectors include retail (e.g. stalls or door-to-door selling), production (e.g. making clothing or shoes) or services (e.g. tailoring, transportation or restaurants).8,9 Often micro-credit organisations (see below) provide the financing for micro-entrepreneurs to start their business.
Social franchising is derived from the highly successful commercial franchising seen all over the world, for example McDonald’s. A proven social change project is turned into a franchise and then quickly replicated. The central franchisor documents their processes and then franchisees adopt the approach and
are given support to establish themselves. This allows them to set up a successful business much faster, with reduced risk, while maintaining quality. The critical difference with social franchising is that the franchisor, rather than creating profits for shareholders, aims to create benefits to society by empowering
This is a concept that the Brien Holden Vision Institute has developed and applied with optical shops. The aim is to design a model and develop a network of local health practitioners to be able to manage standardised, quality controlled, optical shops that provide affordable care and reach underserved communities. Practitioners will gain association with an established brand, assistance with site selection, equipment purchase and training, marketing and access to standard operating procedures, stock control systems and bulk buying power. In return, providers commit to a standard set of operating procedures
to ensure quality, and a price structure that allows them to earn a small profit, while making services affordable to their communities.
The aim is:
The creation of wealth for the franchisee, which in turn will have an effect on his or her family, as often these are individuals who lack the resources to set up their own optical unit.
A locally owned business, owned by a health professional, which in turn decreases issues of burn out and health sector workforce distribution.
Continued, sustainable access to spectacles, which improves lives through access to affordable and high quality eye care and, therefore, increases educational and employment opportunities.
For Profit Social Businesses
For profit social ventures are entrepreneurial organisations that are legally incorporated as for profit entities, explicitly designed to serve a social purpose for making a profit.11
This is probably the most well-known social enterprise concept, which started to gain traction in the 1970s. Microfinance is often defined as financial services for poor and low-income clients offered by different types of service providers. These institutions tend to use new methods developed over the past 30 years to deliver very small loans to unsalaried borrowers, taking little or no collateral.
More broadly, microfinance refers to a concept where low-income households have permanent access to a range of high quality and affordable financial services offered by a range of retail providers. These services include savings, credit and insurance, in order to finance income-producing activities, build assets, stabilise consumption, and protect against risk.12,13
Cross subsidisation has been used in social business circles to use higher prices paid by clients for premium services or products, to subsidise lower cost services and products for those living in poverty, without compromising on the services and product quality.
For example, at a vision centre, high value items such as higher cost spectacle frames and sunglasses can be used to build an equity fund to subsidise other activities or other users of the service such as funding outreach or those who cannot afford spectacles. Aravind Eye Care in India is one example of how cross subsidisation has been used in eye care. A core principle of Aravind is that the hospital must provide services to high and low-income earners alike, yet be financially self-supporting. This principle is achieved through high quality, large volume care and a well-organised system of cross subsidisation.14,15
Social entrepreneurship is a concept that tries to bridge the gap between private enterprise and purely charitable organisations. While social entrepreneurship is not a panacea for solving all social problems, it offers a new approach and a new tool in tackling complex social problems, including those in eye care. Effectively implemented, social entrepreneurship can allow organisations and beneficiaries to fulfil their social obligations, create new markets, and derive economic benefit.
Stephanie Looi is the Global Service Development manager for the Brien Holden Vision Institute and Project Manager for the Vision CRC Vision Centre’s Effectiveness Project. An optometrist with a Masters in Public Health, she is involved in advocating for, planning, implementing and evaluating sustainable eye health projects throughout the world.
Sebastian Fellhauer is the Social Enterprise Coordinator for the Brien Holden Vision Institute. He developed the Institute’s social franchise model along with other entrepreneurial initiatives such as a micro entrepreneurship approach and partnerships with private sector optometrists. A business graduate from Germany, he has extensive experience in emerging markets in Africa and Asia and in 2010, was selected as Mercator Fellow for International Affairs.
1. Marchand R., Creating the corporate soul: The rise of public relations and corporate imagery in American big business, 1998, p3.
2. Hopkins M., Defining indicators to assess socially responsible enterprises. Futures. 1997;29(7):581–603.
3. Chew C., Strategic positioning and organizational adaptation in social enterprise subsidiaries of voluntary organizations: An examination of community interest companies with charitable origins. Public Management Review. 2010;12(5):609–34.
4. Johnson S., Young social entrepreneurs in Canada. New Academy Review. 2004;2:49–70.
5. Gates W., Harvard commencement speech transcript. Network World, 2007.
6. Carroll A.B., Corporate Social Responsibility: Evolution of a Definitional Construct. Business & Society. 1999;38(3):268–95.
7. Prahalad C.K. and Hammond A., Serving the world’s poor, profitably. Harvard Business Review. 2002;80(9):48–59.
8. Nongbri T., Empowering women through self-help groups: a case study of three Naga villages, Manipur Rome: International Fund for Agricultural Development (IFAD); 2000, www.ifad.org/gender/learning/sector/finance/7.htm (accessed 23 Jan 2014).
9. World Vision New Zealand, How Microfinance Works 2012, www.worldvision.org.nz/Portal/micro/HowMicroWorks.aspx#.UuC3EdJ9JPE (accessed 21 Jan 2014).
10. Berelowitz D., Richardson M. and Towner M., Realising the potential of social replication. International Centre for Social Franchising, 2013.
11. Dees J.G., Anderson B.B., For-Profit Social
12. Morduch J., The Microfinance Promise. Journal of Economic Literature. 1999;37(4):1569–614.
13. Consultative Group to Assist the Poor. 2013, www.cgap.org/ (6 Jan 2014)
14. Natchiar G.G et al, Attacking the backlog of India’s curable blind: The Aravind eye hospital model. Archives of Ophthalmology. 1994;112(7):987–93.
15. Aravind Eye Care System. Aravind Eye Care System 2011. Available from: www.aravind.org/Default.aspx.