Social Impact through Profit

The consequence of corporations and for-profit ventures daring to step into a market traditionally reserved for non-profits and charities has the power to generate far-reaching social impacts.

The article, “How Misinformed Ideas about Profit Are Holding Back the World’s Poor”, makes and excellent point—for-profit companies are not taking advantage of those in poverty but actually lending them a hand to carve a new path [1]. Dealing with the poor is often thought to be the realm of nonprofits and charities, but corporations can often do an even better job at instigating social impact while simultaneously generating revenue. The case of Cola-Cola partnering with One Degree Solar is an excellent example of this synergy at work [2]. Cola-Cola saw an excellent business opportunity in marketing One Degree’s solar power kits to kiosk owners, and in doing so, all parties involved benefitted. Coca-Cola and One Degree Solar both successfully expanded into the Kenyan market, and Kenyans were able to earn more while getting access to electricity. Coca-Cola and One Degree Solar, both for-profit companies, were able to accomplish what the Kenyan government could not—that is, bring power to rural Kenyans and raise their standard of living. 

No one would claim that Coca-Cola had altruistic intentions when entering the African market, but their unique partnership strategy with One Degree Solar resulted in a positive social impact on millions. This illustrates the principle that for-profit companies who do business with poor communities can positively affect them.

But why were Coca-Cola and One Degree Solar so successful? Jamii Bora states that “The poor don’t need charity”, rather they need us to show them a better way of making money [2]. It is this principle that empowered the rural kiosk owners of Kenya—when they were shown how owning a Brightbox could help them increase revenue, they clamored for the product. If One Degree Solar had given their Brightboxes away for free, perhaps Kenyans would not have valued them as much. It is human nature to only value what we have worked hard for.

The positive impacts of allowing people to fight their way out of poverty through their own efforts instead of relying on charity are again demonstrated in the video “Fighting Poverty in Kenya by Selling Water Pumps to Poor Farmers” [3].  Spencer Michels states that he was previously a socialist and believed in change through charity, but after many failed attempts, he switched over a for-profit model. By not giving away water pumps, aptly named Super Money Maker, he has been able to convince Kenyan farmers of its value. The pumps are not cheap and the farmers save for months to be able to afford one. However, once they are finally able to buy and use the Super Money Maker, they commit to changing how they handle irrigation their small plot of land.  Through selling this product, Spencer Michels has spread positive social change and helped many Kenyan farmers raise themselves out of poverty.

[1] How Misinformed Ideas About Profit Are Holding Back The World’s Poor (Whalan,

Fast Company, May 8, 2013)

[2] Why Coke Is Bringing Solar Power To Rural Kenya (Fast Company, June 14,

2013)

[3] Fighting Poverty in Kenya by Selling Water Pumps to Poor Farmers (PBS Newshour,

July 13, 2010)