Can social enterprise help 700 million who lack access to clean water?
Traditional divisions between NGOs, charities and businesses are blurring with new collaborative projects on water.
The problem of global water access is as intransigent as they come. Some 768 million people – more than the population of Europe – still lack access to clean water. Likewise, this year’s Millennium Development Goal target of halving the number of people without sanitation will be missed by 8% – that’s half a billion people.
The traditional charity solution has been to turn up, drill a well and leave, presuming the problem’s solved. Jenny Lamb, a sanitation engineer for Oxfam, explains that without the training or market infrastructure for upkeep and maintenance, such pumps “often become neglected and then unusable”.
There are signs, however, that business, NGOs and charities working in the WASH arena are increasingly converging around a model that they can all agree on: social enterprise.
A new multi-sector report, Water for Women, showcases water social enterprises that offer local employment and reinvest profit in upkeep and maintenance. One such trial in Nigeria, launched in December 2014 and backed by Oxfam and Unilever’s Sunlight soap brand, has established two water centres in the heart of urban communities, where water is pumped and sold at a low cost, alongside food and household products.
Hanneke Willenborg, vice-president of Sunlight, describes social enterprise as “beacons of change. They are flexible, entrepreneurial … and guarantee that there is a big interest to maintain it because salaries and income are dependent on it.”
Unilever couldn’t establish these without NGO help, says Willenborg, “because there is a need for a combined capability. We are very good at branding, we are very good at selling products, but we don’t have the capabilities to train the people on the ground, set up payment structures, maintain the assets … that we need [NGO] partners for.”
Another emerging WASH social enterprise is NextDrop in Bangalore, India. In many South Asian cities, water is intermittent, sometimes appearing for 45 minutes a day if at all. NextDrop offers a text service that tells users exactly when the water will run each day. Free for users, it is paid for by the utility companies, who in turn receive user data from NextDrop. Its service now runs in Bangalore, Hubli-Dharwad and Mysore.
“In a city like Hubli-Dharwad, women can spend around 20 hours a month waiting for water,” says NextDrop CEO Anu Sridharan. Across India as a whole, it’s estimated that women spend 150m work days every year fetching and carrying water. Sridharan and her co-founders considered setting up as a charity, but decided that “high growth, high volume is very conducive to the for-profit model as opposed to the non-profit grant model”. The scale of the challenge, she says, demanded it.
Perhaps surprisingly for an international NGO, WaterAid supports this view too. Timeyin Uwejamomere, urban technical support manager at WaterAid, argues that “to achieve universal access we have to move from the ‘charity approach’ … of giving people things, towards enabling people to invest for themselves. So investing in social enterprises specifically helps to ensure sustainability of services, because they know how to keep the books, how to maintain facilities and how to communicate with customers.”
The interest for big business, of course, is not entirely altruistic. Areas with poor water access mean low demand for Unilever’s products. Bottom-of-the-pyramid markets represent $5tn of untapped spending power and a massive growth opportunity. Even Oxfam now talks in these terms. “We used to set up ‘in kind’ provision, whereby we provide aid assistance”, says Lamb. “Whereas now we are pushing more towards a ‘cash in markets’ approach – rather than moving commodities from Europe into Africa, say, we are working on developing local markets.”
Willenborg describes social enterprises as “the pathfinders for our business”. The water centres already sell Unilever products alongside water. “I don’t think we should be apologetic about having to make money”, says Willenborg. “For me, the key challenge is the other way around – how do we make these models more profitable? Because you are definitely going to get more people involved when there is money to be made.”
She admits that having only two water centres “is not a repeatable model”. The hope is to have 20 by mid-2016, “then we can say this is ready to be repeated in other countries. But … building small social enterprises on the back of water access points is an idea that can be scaled.”
Separately, Oxfam and WaterAid have begun trialling water kiosks in Uganda, Kenya and Cambodia, including water paid for by a ticketing system and a pre-paid voucher system similar to a pre-paid phone. It is too early to be able to assess such pilots adequately, says Lamb, but she believes “it is about building from the bottom up … [S]ocial enterprises work by getting recognition, buy-in from the community, which can lead to buy-in from government and national policies.”
While NextDrop’s text message service is consumer-facing, the company’s ultimate goal is global water access: “Our business model is really around the utility companies”, says Sridharan. “We are providing tools to help the utility get more equitable distribution … a smart grid, getting information and providing information.” She believes this could be adapted to other sectors, such as power and transportation.
WaterAid doesn’t want to see more private sector ownership, says Uwejamomere, “but we do want to see more efficiently run public services … social enterprise can run efficiently, produce excess revenue over costs and re-invest that excess into expanding the business. That’s what we want to see, and we want to see government utilities moving that way, not waiting for donor stipends.”
The above article by Tim Smedley first published on theguardian.com in March 2015.