Beyond donor funding
sustainable social businesses
for health impact
Strong health systems need
consumer-powered social businesses
In many ways, the establishment of PSI’s Social Business Unit (SBU) goes back to our origins.
PSI began selling mail-order condoms to support sexual reproductive health and rights (SRHR) programming in low-middle income countries. We used business and marketing discipline and behavior change communications to promote healthier lives.
PSI began selling mail-order condoms to support sexual reproductive health and rights (SRHR) programming in low-middle income countries. We used business and marketing discipline and behavior change communications to promote healthier lives.
Our first transition from a fully donor-funded program to a social business started in Paraguay in 2003, then Latin America in 2010, South Africa in 2012, Cambodia in 2015, and India in 2016.
These social businesses were disparately managed by traditional NGO project management teams until 2018 when SBU officially launched.
Through the transition, we’ve shifted managing our work from a donor budget to a profit and loss statement through a social business model.
What do
social businesses do?
Like a traditional commercial business, a social business seeks to earn income through the sale of products and services. However, it also aims to achieve health and social impact for people in vulnerable situations, thereby creating a double bottom line.
What makes a social business consumer-powered?
Consumer insights drive PSI's social businesses from start to finish. Their voices, from product exploration, to design, launch and sale, ensure that products not only meet consumers’ needs but exceed their expectations.
For example, our human-centered design work in Kenya and Ethiopia revealed that there is no consolidated resource for women to learn about contraceptives, abortion, and how to have a happy and healthy sex life. Most women learned about contraceptive methods through Google, friends and medical professionals. Consumers also shared that they lacked platforms that could support their SRHR throughout their lifecycle.
We responded by designing VIYA.
sustainable social businesses
support resilient health systems
By providing affordable products and services, social businesses can redirect consumers, who have some ability to pay, back to the private sector. This reduces the burden on already overtaxed public systems.
Social Businesses reduce the reliance on external Subsidies. Self-generated funds allow PSI to operate with greater flexibility, aligning solutions to consumer and market needs, effective allocation of limited resources and a more targeted application of subsidies. What we offer is a direct reflection of what consumers want.
PSI consumers are our largest source of funding. In 2021, the Social Business Unit achieved the following impact:
$32.9M+
revenue earned from a combination of grant funding and consumer sales
21
markets consumer sales
93%
self generated revenue
For example, in Central America, a combination of private foundations, young philanthropists and self-generated funds are using a market-driven approach to decrease rates of unplanned, teen pregnancies.
Through cyber-educators (online peer educators trained in behavior change communication) and a digital chatbot, youth can access comprehensive sexual and reproductive health and rights information and receive referrals to high quality, affordable, products and services.
Youth feedback is used to improve product and service delivery. By creating a positive first experience with the health sector, youth are set up for success, not only as lifetime consumers of SRHR products and services, but as advocates for comprehensive SRHR choices for youth. Listen in.
Building a
Consumer-powered
social business
Each social business is managed in the market by a national team and a small global team provides cross-cutting support and strategic leadership for all businesses.
Our staff brings diverse skills together to create new, seamless experiences that meet evolving consumer needs at different life stages.
We set up our businesses and innovations with a long-term financing model as part of the design process.
We plan activities that either generate revenue or create an environment that facilitates future revenue generation or long-lasting impact.
“The benefit of working on online platforms is the immediacy of gathering insights and being able to co-create informally. By gauging interest in our Instagram stories and asking consumers what kind of content they’re interested in receiving, we create a two-way dialogue. So we’re using these channels not just to talk to, but listen to consumers and allow them to speak back to us, directly.”
— Jorge Rivas, Regional Corporate Services Director, PSI Central America.
Transitioning donors to a
sustainable social business
Transitioning a traditionally donor dependent program to financial self-reliance takes time (think: 10 years) and a clear understanding of the potential opportunity. Not all programs can or should be transitioned to a social business.
Plus, external financing from donors, philanthropists, corporates and investors is still needed in some categories and markets to support innovation, consumer marketing and social goals of the businesses.
We offer four ways to make the transition:
1
Have a committed team of entrepreneurial leaders who can balance business and social objectives. Only commercial and you risk losing the social. Only social and you miss the critical scrappy business mindset. Our best businesses are run by committed teams who own the business and the results.
2
To stay relevant, go where your consumers take you. Design, iterate and scale solutions alongside the people you serve.
3
Start with the end in mind. A Theory of Change and a multi-year costed business plan that maps out both expected social impact and timeline to financial self-reliance
4
Partnerships are key. Our consumers have told us that the market is a confusing place to navigate. And as a social business, there is no value in reinventing the wheel or competing where there are already actors meeting our consumer’s needs. We see value-based partnerships as critical for both, meeting our consumer’s needs and for the viability of the social business.
DID YOU KNOW? VIVE condoms and lubricants began as a donor-subsidized brand. Once donor subsidization for free condoms decreased, PASMO’s marketing approaches resulted in a 17 percent increase in VIVE sales since 2018.
Our
impact
In 2021, PSI's Social Business Unit worked across 21 countries to achieve:
50.9M
digital consumers reached, in partnership with Meta (formerly Facebook)
5.7M
Consumers Reached with Products and/or services
137M
health products sold
45k
pharmacies in our network
Invest in
Self-sustaining impact
Consumers need stronger mixed health systems across the public and private sectors that can continue to provide quality, affordable and integrated care, well after a donor-funded project ends.
And while we’re proud of our growing self-reliance, the journey to self-reliance still requires the support of bold, brave and innovative investors and partners to build out the evidence, systems and processes that set up and catalyze social businesses for success.
Investments are needed for innovation and growth, and to ensure that social businesses can continue to meet the needs of consumers for whom price and access are barriers to use.
Join us in supporting health systems to build the foundation for self-sustaining impact. To explore how, email Marcie Cook, Vice President, Social Business at [email protected].
