Finding My People: Believers in the Intersection of Business Value and Social Value
Sandra Butler is the Senior Manager for Global Business Strategy at the Consortium for Affordable Medical Technologies (CAMTech) at Massachusetts General Hospital.
It bothered me that never once did I need to calculate a financial return on investment for my donor while managing a $22 million USD grant budget. The donor required tracking programmatic spending in proportion to operational costs, but monitoring and evaluation generally included how many meetings we held and how many men vs. women attended. Monitoring and evaluation did not include a financial metric to indicate whether the amount spent yielded the results sought.
Global health is traditionally a grant-funded, non-profit space, but I have always felt a gravitational pull towards a private sector approach to achieve true sustainability. That has made me an outlier in the global health space and the recipient of half-joking comments from self-proclaimed ‘traditionalists’ about ‘selling out’ because of my belief that both ‘business value and social value’ can be achieved simultaneously, to borrow language from FSG’s Shared Value Initiative. The traditionalists believe any consideration of a financial return dilutes the mission, and worse, makes you a horrible human for wanting to achieve a financial return. I believe employing a blended financial model and engaging the free market is not only possible, but critical, to achieve sustained impact and positive health outcomes in the populations served.
Catherine Cheney of Devex, David Bohigan of Overseas Private Investment Corporation (OPIC), Liz Diebold of Skoll Foundation and Premal Shah of Kiva discuss “Leveraging Public-Private Partnerships in Emerging Markets.”
Fast forward six years since managing that $22 million USD budget, and I have found ‘my people’ attending Social Capital Markets (SOCAP), a gathering of over 3,000 people who also believe there is an intersection between ‘meaning and money.’ SOCAP gathers everyone from grant-makers and non-profits to venture capitalists, impact investors and for-profit, mission-driven companies that are demonstrating a financial return is possible while delivering on their mission. The believers and do-ers at SOCAP are a subculture that crusade the message and demonstrate that for-profit companies can be mission-driven, and mission-driven companies can be profitable. These companies are not only seeking impact by how they spend their money, such as corporate social responsibility programs that spend profits from other business units, but the best of these companies are making an impact in how they make their money in their core business. This is a subtle yet important distinction.
The intersection of social value and business value can be difficult to navigate, particularly in the global health space, as end-users of the goods or services are often unable to afford these goods or services. This creates a business model that is fragmented and more complicated than a business-to-business or business-to-consumer model, as a third party tends to subsidize, or cover costs entirely, for these end-users, usually in the form of a grant mechanism.
Grant mechanisms certainly play an important role, but integrating the ‘invisible hand’ of the market into these solutions is an important feedback loop that grant mechanisms do not have. In the free market, consumers vote with their dollars, and a company will know if its product is filling a need or is missing the mark via its sales numbers, among other metrics. A grant is finite in length, sometimes arbitrarily ending due to ear-marked funding, and does not include the same feedback loop engaging the end-users in an active conversation around what is working and what is not, as happens in the private sector. There is a role for both, but I argue true, sustainable impact will only take place in the latter.
I know that’s not easy. Attending SOCAP and engaging in the ‘meaning and money’ debates confirms to me that no one has cracked this nut entirely; there is no ‘one size fits all’ business model to employ to achieve both purpose and profit. It is critical to continue the conversation and to champion examples that navigate to this fickle intersection successfully. In doing so, the number of financial tools to deploy for sustainable impact expands, and hopefully, the number of half-joking jabs from the traditionalists drops, and us believers can be vindicated.