Senior Lecturer, Deakin Business School, Deakin University
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Social enterprises all over the world are turning the tables on the traditional business model and putting community needs ahead of financial gain. Thankyou is a social enterprise that was founded in Melbourne in 2008. It sells bottled water, food and body care products, and uses the profits to support international community development projects.
‘We believe we can end global poverty in this lifetime, together. That’s why we give 100% of the profits from our products to helping people in need,’ says Thankyou co-founder and Deakin Bachelor of Management graduate Justine Flynn. After Thankyou’s costs are taken care of, profits go to its charitable trust, which distributes funds to pay for food, water and health and sanitation programs around the world. ‘Almost a billion people live in extreme poverty, while six billion people don’t. We reckon the six billion of us could work together to put an end to global poverty, for good,’ Justine explains.
To date the company has funded safe water access for 192,367 people, hygiene and sanitation programs for 302,814 people and 12.1 million days’ worth of food aid to people in need, as well as funding for long-term sustainable food projects. Over its seven-year journey, Thankyou has given in excess of $3.7 million to fund projects.
Despite their achievements, director and co-founder of Thankyou Daniel Flynn explains their retail competitors are fierce, and have billion-dollar investors and huge marketing budgets. To compete and scale up a not-for-profit business is incredibly difficult.
So how did Thankyou – in fact, how would any social enterprise – succeed? We put this question to Dr Fara Azmat from Deakin Business School, whose background is in social entrepreneurship and community development.
What an organisation like Thankyou lacks in money, they can make up for with great ideas and the power of social good. ‘In business there are tangible resources, such as equipment and money, and intangible resources, such as ideas and passion. A social entrepreneur is often rich in intangible resources and poor in tangible resources,’ explains Dr Azmat. A not-for-profit organisation can offer its customers the opportunity to help make the world a better place, which is invaluable.
Ideas and passion can be powerful things. ‘People ultimately want to help others,’ says Dr Azmat. ‘If you can convince your investors and followers of the importance of your cause, then the world is at your feet.’
As a 19-year-old Daniel started Thankyou with a group of friends and just one product – bottled water. Their aim? To help the 900 million people around the world who don’t have access to safe drinking water.
Dr Fara Azmat explains that ‘organisations like Thankyou start very small, but those small short-term changes can lead to large long-term changes with wide-spread and sustainable improvements for people.’ Thankyou now has grown to over 38 products on the market in major retailers, and some products out-sell their global competitors.
'Almost a billion people live in extreme poverty, while six billion people don't. We reckon the six billion of us could work together to put an end to global poverty, for good.'
Thankyou co-founder and Deakin University management graduate
Early on the Thankyou Water team was told they faced over $250,000 in start-up expenses and needed millions to fund marketing, but they caught an early break when a bottling company agreed to a first run of production, minus any upfront costs, and they secured a distributor. They experienced many setbacks though, including two recalls, trouble with bottlers and distribution deals with several major retailers falling through. Eventually were able to get their water stocked in Australia Post and 7-11, which meant they could pay back debts, and grow from there.
‘Someone like Daniel is able to take a simple idea, like bottled water, and work out how to sell a lot of it and create a sustainable business. Social entrepreneurs are a different breed of people – they are not discouraged by the challenges they face the way the rest of us might be, they have a different level of reliance,’ says Dr Azmat.
Thankyou’s done a great job of funding themselves in creative ways. Two years ago they managed to get their stock into two major supermarkets by asking Australians to upload a post to Coles’ and Woolworth’s Facebook pages, lobbying them to stock Thankyou. Eventually both retailers were overwhelmed with Facebook messages and agreed.
This year Thankyou launched a campaign to raise $1.2 million to support their new Thankyou Baby launch and expansion into New Zealand, selling a ‘pay what you want’ book about their company story, called Chapter One. They beat their targets, raising over $1.4 million in a month and selling 43,640 books.
Thankyou fund their growth in other ways, including social investors, who offer low interest loans to aid in capital costs, match donors, who partnered with them during start-up phase and gave $1 for every dollar the business raised, and angel donors who give to them directly, without tax deductions.
One of Thankyou’s great strengths is communications and branding. Their products and messages are distinctive and attractive, but going beyond that – they have brought fans together by having a distinctive voice and communicating regularly via social media and email.
‘Now is a wonderful time for social entrepreneurs because we are living in the age of social media. Thankyou raised over a million dollars in a month just by getting the word out online,’ says Dr Azmat. Organisations would not be able to do these things without digital channels to help them quickly reach millions of people globally.
Thankyou communicates in other unique ways. You get a product code when you make a purchase, and this allows you to track the difference you’ve made. After buying hand cream, for example, you might see how your contribution helped a sanitation project in Kenya. And while the Chapter One campaign was running, they set up a live-stream video so that people could see them packing and sending out books ordered. All of this effort to share their story with followers, builds support for their cause and means that when they ask something of their fans, the fans respond.
Critics of social enterprise say that while they can be a tremendous catalyst for change, they are often stifled by a hostile playing field that doesn’t support them. For example, logistics or political barriers might stop an enterprise from delivering resources to those who are most in-need internationally. Can these organisations actually reach the disadvantaged around the world? ‘I come from a developing country, and yes there are often many challenges for charities in the supply chain and dealing with government,’ says Dr Azmat. ‘And sometimes resources do not reach the people who are most in need.’
‘But even when social entrepreneurs fail, at least they have tried, and simply by trying they have raised awareness of the issue. We need to start somewhere, and if resources miss their intended mark in a country, if some help gets to the poor, then it was worthwhile.’
Senior Lecturer, Deakin Business School, Deakin University
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