Is it possible to marry the nimbleness and innovation of a social entrepreneur with the reach and experience of a big, established nonprofit institution? Can a seemingly traditional relief charity embrace cutting-edge strategies for tackling hunger and poverty?
Delivering the inaugural address in the Institute for Business & Social Impact’s Distinguished Lecture series, Gayle said CARE had no choice but to change. Founded shortly after World War II, initially delivering its famous Care packages of food relief, CARE now operates a wide range of programs in 86 countries.
But times change. Donors were increasingly besieged by appeals from competing causes. Big donations of $150,000 or more were hard to come by. People were still generous about donating for relief from specific disasters, but CARE needed a new model for tackling entrenched hunger and poverty. About 30 percent of CARE’s work is still in emergency response, but more than two-thirds of its money now goes to programs aimed at long-term solutions to poverty.
That’s a more complicated objective. Instead of being a direct provider of services, the organization now works primarily as an enabler. It has substantially reduced its own staff, putting more of its effort into working with other agencies. But its key strength remains its long-standing local presence and deep understanding in countries that need the most help.
Part of the new strategy, Gayle explained, is to focus at the intersection of business and social enterprise. Many corporations see big opportunities in developing nations, such as those in sub-Saharan Africa. They want to “do well by doing good,” both as part of a market-entry strategy and as a way to build long-term goodwill with customers and employees. That’s especially important in countries where the middle class is expanding and where today’s low-income families are likely to have steadily more buying power in decades to come.
The problem, Gayle said, is that companies often have little knowledge about local culture or the economy. CARE, with its deep roots and relationships, helps identify useful projects and find people to carry them out.
In many cases, this is classic social entrepreneurship. In Egypt, CARE teamed up with Danone, the French yoghurt giant, on a project to buy more milk from household farms – most of which are run by women. It was a way to increase farmers’ incomes and help them improve their milk quality – a benefit to Egyptian society as well as to the company. Up to that point, local dairy production had been fragmented and couldn’t deliver the volumes or consistent quality that Danone needed. Part of the problem was that household farmers were being drained by local dealers, who monopolized the trade.
Working with CARE, Danone set up a system of milk-collection centers that provided storage, analysis and accurate weighing, as well as training to boost productivity and quality. By 2012, the first two collection centers were collecting 4.5 million tons of milk per day. Today, Danone gets 20 percent of its dairy needs in Egypt from local household farmers. You can read about the project here.
Gayle talks about a “golden triangle” between civil society groups, business and the government. Governments can provide initial funding, policy frameworks, and regulation. Nonprofit social enterprises can provide local expertise, mobilize volunteers, and foster distribution networks. For-profit businesses can bring investment, buying power and access to global markets.
Here at the Institute for Business and Social Impact, we focus a lot of attention on innovative social-venture start-ups. Start-ups are inherently innovative and flexible. They tap into the latest strategies, take advantage of new technologies, and leverage new market trends. Berkeley-Haas students have launched more than a few thriving social enterprises, including Fair Trade USA and Revolution Foods.
But social-venture start-ups don’t have scale and infrastructure, which is crucial to having a real impact. Gayle drove home the point that bigger and more established nonprofit institutions, such as CARE, can provide a crucial link. They have decades of on-the-ground knowledge. They have local organizations and well-developed relationships. In a word, they have trust – an often crucial ingredient for any project.
It’s a long way from the days of delivering CARE packages, and proof that social entrepreneurship and enterprises come in all shapes and sizes.