The Path From Charity to Profit
Tuesday, May 31, 2011
By Tina Rosenberg
On Tuesday I wrote about Kedai Balitaku, a for-profit company started last year by the development group Mercy Corps in Indonesia. Mercy Corps took this unusual step because it realized that its programs to educate mothers about nutrition were not changing what mothers fed their children. Healthy food is expensive, and the crowded conditions in the Jakarta slums mean that many families have no place to cook or eat. So they buy their children the cheapest street food, which is usually either sweet or deep fried. Kedai Balitaku, which usually goes by the name KeBal, aims to become a chain of street carts selling low-priced healthy food to children.
KeBal is a social business – one that exists primarily to achieve a social goal. It’s easy to see why the social businesses model has become a popular strategy for attacking the problems of the poor. The impulse to create a business rather than employ traditional nonprofit work comes partly out of the notion – right or wrong – that charity creates dependency and that without the discipline of the market it often doesn’t work. Development groups, moreover, are always looking for ways to make their projects live on once they’ve moved to other things. Creating a business is one solution.
