Global Sustainability: the Delicate Dance between For-Profits and Non-Profits

Last year, I read a white paper that changed my view on the social impact space. Written by the Monitor Group, this four-year study started with the belief that "the next microfinance" solution is out there, and it can and will alleviate global poverty. To find it, Monitor honed in on three questions:

- Who will serve the poor as customers?
- Who will engage them as workers or producers?
- And how will that service, or that engagement, occur?

Click here to see the study.

In sum, Monitor identified seven different business models that, if employed by the right corporations, are long-term solutions in the quest to end global poverty. The most interesting additions to the paper were case studies of how the adaption of these private sector models have worked successfully in even the poorest areas of the world.

This was a revelation to me. Big Fortune 500s and VC-funded start-ups alike could engage the poor as customers, make a profit, and they'd be doing a great humanitarian service. That prompted me to join a start-up called CURE Pharmaceutical, a health venture that is attempting to do what Monitor outlined. I believed this to be the answer to global sustainability.

But there problem; I started to discount philanthropic effort. In my mind, the alleviation to global poverty rested in the hands of for-profit businesses. I didn't think non-profits were all that necessary anymore.

However, after some time studying the space, I came to the realization that non-profit businesses needed to exist, too.

For-profit models simply don't work for some social issues. Take AIDS, for instance. AIDS patients take ARV treatments so often that, if living on $2 per day, patients would never be able to afford these treatments in a for-profit model. AIDS test kits are similar. In order for maximum prevention, devices like this need to be given away for free, and this is done by philanthropic organizations.

So I find myself realizing that maximum social impact will be reached by a mix of for-profit and non-profit activity. It's a delicate dance. Though, I must say, I think a lot more emphasis needs to be put on for-profit firms serving the base of the pyramid. Right now, it's probably 20% for-profit and 80% non-profit; it needs to be something more like 60% and 40%.

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