Emerging Models of Aid: A Study of Social Enterprise Operations in Humanitarian Spaces
by
Kayla Musyj
A thesis submitted in conformity with the requirements for the degree of Masters Department of Anthropology University of Toronto
© Copyright by Kayla Musyj 2017 Emerging Models of Aid: A Study of Social Enterprise Operations in Humanitarian Spaces
Kayla Musyj
Masters of Arts
Department of Anthropology University of Toronto 2017
ABSTRACT
In this paper, I examine two social enterprises, Nutriset and Hippo Roller both of which have developed a product to address a humanitarian issue. These two companies are not non- profit organizations and therefore do not easily fall into the traditional categories and conceptualizations of humanitarian or development organizations. Conversely, they see their for- profit status as fundamental to their ongoing ability to provide aid and reduce suffering. Social enterprises challenge many common assumptions about humanitarian aid by using market logic to achieve humanitarian ends. Their complex business model and operation styles complicate the ideas and values that have come to characterize humanitarianism as a practice. I argue that in order to better understand social enterprises in the humanitarian aid arena, the established binaries that traditionally separate humanitarian aid and the market, gifts and earned income, and social goals and profit motives need to be rethought as companies like Nutriset and Hippo Roller combine elements from each of these areas in complex ways. When social entrepreneurship is analyzed through these binaries, important elements of their nature will be missed. Through an examination of these two companies, this paper contributes to the literature on social enterprise activity, and will analyze the larger patterns and business models of these companies through an anthropological lens.
INTRODUCTION
Helping malnourished children get back to standardized body weights or improving a community’s access to clean water are efforts that easily acquire wide public support. These efforts can reduce suffering by improving individual health and lessening the physical demand of gathering water in rural environments. Nutriset and Hippo Roller are two “social enterprises” that aim to reduce suffering in low-income countries through inexpensive, low-tech solutions.
The French company Nutriset has developed a pre-packaged peanut butter superfood by the
2 name of Plumpy’Nut which aims to help children suffering from chronic malnutrition. Hippo
Roller, a South African company named after the technology it created, produces an ergonomically designed wheelbarrow that allows users to transport water in the wheel rather than on their heads, thereby reducing the physical demand and the time that is traditionally spent gathering water. Notably, these two companies are not non-profit organizations and therefore do not easily fall into the traditional categories and conceptualizations of humanitarian or development organizations. Conversely, they see their for-profit status as fundamental to their ongoing ability to provide aid and reduce suffering.
Would public support for these projects fade if people knew that Nutriset and Hippo
Roller were generating a profit through their efforts? What if their proposed technical ‘solutions’, which fail to address the structural issues that create under-nutrition and poor access to clean water, were reducing the urgency and possibility of establishing more sustainable solutions? If the bad outweighs the good should these companies continue to provide aid even then? I argue that before answering these questions, we must understand who and what these companies are particularly because of the delicate spaces they operate within and the vital issues that they aim to address.
Companies like Nutriset and Hippo Roller are often referred to as social enterprises, and they have entered the humanitarian aid arena at a rapid rate beginning in the 1990s (Hopgood
2008). They are defined by their business model in which they pursue social goals using standard economic principles (such as profit maximization), and they aim to address areas that focus on environmental issues, health care, animal rights, LGBTQ rights and humanitarian issues (among others) (Bornstein 2004: 3-6 as cited in Nichols 2006). As such, they are often referred to as hybrid organizations due to their ability to recombine elements from multiple sectors, practices
3 and operation styles. I will be examining two social enterprises, namely Nutriset, and Hippo
Roller. While these two companies are only two manifestations of social enterprise activity, they were strategically chosen based on the fact that they operate within humanitarian and development spaces.
Social enterprises challenge many common assumptions about humanitarian aid by using market logic to achieve humanitarian ends. Their complex business model and operation styles complicate the ideas and values that have come to characterize humanitarianism as a practice. In this paper, I will argue that in order to better understand social enterprises in the humanitarian aid arena, we need to rethink the established binaries that traditionally separate humanitarian aid and the market, gifts and earned income, and social goals and profit motives, as companies like
Nutriset and Hippo Roller combine elements from each of these areas in complex ways. When we view social entrepreneurship through these binaries, we will inevitably miss important elements of their nature. Through an examination of these two companies, this paper contributes to the literature on social enterprise activity, and will analyze the larger patterns and business models of these companies through an anthropological lens. That being said, I must caution against applying the findings of this paper to social enterprises which operate in other domains.
METHODS
In order to examine the intricacies of social enterprise operations, I have interviewed employees from Nutriset and Hippo Roller. My interviews were completed over email and asked a series of questions, including how the company defines itself, how it compares to more traditional actors like NGOs and non-profits, if their operations are sustainable, and whether the company’s impact is long lasting or short lived. Each interviewee ignored my efforts to set-up a phone interview and, due to geographical constraints, in-person interviews were not possible.
4 This resulted in a series of back and forth emails between the interviewees and I. That being said, my contact Jordan, from Hippo Roller, and Addison, from Nutriset (both pseudonyms), were patient in explaining their organization’s positionality as a social enterprise and encouraged me to ask additional questions if I required clarification.
In addition to these interviews, this research project includes an analysis of publicly available documents, websites, media accounts and scholarly sources. With that said, I am limited by my geographic positionality which remains fixed in the city of Toronto. This ultimately restricted my ability to directly engage with my informants and observe the on-the- ground impacts of the company’s products. As such, I would urge future researchers to study the ways these products are used and conceptualized by the individuals that they have been made for i.e. malnourished children and women in rural Africa. Such research is important for gaining a larger more nuanced perspective on the operations of these social enterprises, a deeper view that is only achievable by witnessing these activities first-hand.
Using this material, I will begin by outlining the differences between social enterprises and more traditional humanitarian actors such as NGOs and non-profits in a section titled Non-
Profit vs. For-Profit, then I will discuss the emergence of social enterprises in the humanitarian aid arena. In the next section titled Humanitarianism vs. The Market, I will examine the business model of social enterprises demonstrating the ways that economic principles disrupt the gift economy that defined earlier humanitarian activity by blurring the boundary between a donation/gift and the sale of the good. I compare and contrast the gift economy that non-profits and NGOs operate within in which they receive gifts in the form of donations with the ‘earned income’ strategies of social enterprises. In this section I will also discuss how despite generating an ‘earned income’ (i.e. selling goods to produce a profit) and diversifying their income streams,
5 social enterprises are still reproducing some of the flaws of the charity model, specifically dependency, because they continue to rely on organizations that are funded through charity. The following section, titled Social Goals vs. Profit Motives, focuses on the affective drivers of social enterprises, namely care and compassion, and how these organizations maintain an ethics of care while pursuing product patents and attempting to scale up their operations. With these examples, we see a tension between hard and soft interests (De Waal 1997) as well as competition between proself and prosocial goals (Miller et al 2012). I argue that this tension and the oscillation between profit motives and social goals is a defining characteristic of social enterprises. In the final section, Consequences vs. Benefits, I will discuss the technical solutions proposed by social enterprises and how employing these technical solutions, rather than attending to the larger structural issues, has the potential to perpetuate a humanitarian crisis.
The title of each section is deliberately set up as a juxtaposition between two seemingly opposed terms and ideas. My aim is to show how these two conflicting concepts are blurred and recombined in complex and interesting ways by social enterprises. When we analyze social enterprise operations through a narrow lens we miss the ways these entities recombine these seemingly contradictory pieces. It is important to understand social enterprise activity if we want to understand this new generation of humanitarian actors and they novel ways they deliver aid.
NON-PROFIT VS. FOR PROFIT
Before commencing a discussion on social enterprises, i.e. for-profit companies with humanitarian aims, it is important to establish what defines non-profits, for-profits and non- governmental organizations, including where their operations converge and diverge. What defines a non-profit is the fact that these organizations do not distribute any surplus profits that are raised to employees or shareholders. All additional revenues must be put back into the
6 organization. Comparatively, an NGO or non-governmental organization is characterized by its non-governmental nature meaning that it functions independently from the government. Despite their non-governmental nature, they are still intertwined with governmental relations, often receiving governmental funding and attempting to alter governmental policies. There is an overlap between NGOs and non-profits, and some organizations are referred to as both non- profits and NGOs interchangeably, but only insofar as the non-profit maintains a non- governmental status. If the non-profit is a governmental body, it cannot be classified as an NGO.
For-profit companies operating in these humanitarian spaces complicate these definitions.
Like NGOs, they are non-governmental in nature, but unlike non-profits, they distribute revenues between employees and shareholders. However, for-profit entities in humanitarian spaces differ from other for-profit companies, such as Amazon or Starbucks, in more ways than one. Firstly, they operate in low-income countries, which are typically imagined as humanitarian spaces and they are attempting to ameliorate a humanitarian crisis with the development of a technical solution. Their operations are not a form of corporate social responsibility (CSR) because it is not a side interest, but rather their main goal, their purpose. Secondly, their business strategies blend charity and social business models, thereby abolishing the idea that humanitarianism and capitalism or humanitarianism and the market operate at different poles. Social enterprises can also be referred to as companies, and in this paper, I will be using the term social enterprise and company interchangeably when referring to Nutriset and Hippo Roller.
Hayllar and Wettenhall define social enterprises as “organizations trading/operating primarily for social purposes” (2011, 19). They cite their general characteristics as: “organized in an entrepreneurial spirit; production of goods and services; the pursuit of both social and economic goals” (Hayllar and Wettenhall 2011, 19). Additionally, it appears that most thinkers
7 agree that these actors (in order to be classified as a social enterprise) need to generate most of the revenue from the sale of their goods and services, and not from donations (Hayllar and
Wettenhall, 2011). However, this definition is complicated by Jordan (my primary contact at
Hippo Roller) who informs me that despite the fact that the business relies on individual donations, they do not classify themselves as a non-profit and are consequently unable to issue tax exemptions for the donations that they receive. All in all, these entities can be thought of as pursuing a double bottom line: social goals and profits. Their products are manufactured for individuals in low-income countries with the intent to improve social conditions and generate profits for shareholders. If, how and when these bottom lines conflict with each other will be explored further in the section Social Goals Vs. Profit Motives.
NUTRISET VS. HIPPO ROLLER
The French company Nutriset has developed a pre-packaged peanut butter superfood by the name of Plumpy’Nut, which aims to help children suffering from chronic malnutrition. While
Nutriset manufactures multiple products, Plumpy’Nut is by far their most widely distributed and
Figure 1. “Boy eating Plumpy’Nut on his own” taken by Virginie Clayessens
8 arguably the most well-known ready-to-use-therapeutic-food (RUTF). UNICEF defines RUTF as
“energy dense, micronutrient enhanced pastes used in therapeutic feeding…. Essential for the community-based management of children who are suffering from uncomplicated severe acute malnutrition and who retain an appetite” (UNICEF media files, 2013). UNICEF states that over
20 million children suffer from severe acute malnutrition globally and as estimated by the World
Health Organization, results in the death of 1 million children annually (UNICEF media files,
2013). As such, Plumpy’Nut has been widely adopted by a number of governments in an effort to reduce child mortality and morbidity caused by malnutrition in some of the world’s poorest countries (Nutriset, N.D, iLNis Project). What makes Plumpy’Nut unique is that no additional ingredients, cooking or preparation are required, making the product easier for families to administer. Furthermore, Plumpy’Nut can last up to two years and does not require refrigeration, which makes its transportation and storage easier and less costly. All in all, the simplicity of the product makes its adoption into the child’s diet easies, safer and more affordable.
The second example that I will be discussing is the Hippo Roller, a self-proclaimed business and social enterprise that has developed a product aimed at changing the transportation
Figure 2. “Kids with Hippo Rollers” from https://www.hipporoller.org/images/
9 of water. The company produces a large plastic barrel capable of holding 90 liters of water and is easily rolled in a wheelbarrow-like fashion. The plastic is durable enough to roll across uneven and rough terrain, thereby eliminating the need for individuals to carry heavy buckets of water on top of their heads. Its design, which “allows water to be placed inside the ‘wheel’ rather than carried above the ‘wheel,’” allows individuals to transport five times more water than they normally would (“Reinventing the Wheel” 2003, 47). Thus, the company claims that their barrel
“improves health and hygiene and makes more water and time available for education, household tasks and food production” (Hippo Roller, ND, “Simple Innovation”). Hippo Roller states that approximately 750 million people across the globe lack access to clean water. Among these individuals, the company targets women and children in rural Africa who, as stated by Hippo
Roller, traditionally have to collect 5 gallon buckets of water daily, which is physically burdensome and time consuming.
These two products operate at different ends of the humanitarian aid spectrum.
Plumpy’Nut is addressing an acute humanitarian crisis, often dealing with matters of child life and death. Comparatively, the Hippo Roller improves access to a vital life source, water, but it aims to improve social conditions and quality of life, not save lives in the way that Plumpy’Nut does. That being said, they are similar in the sense that they are both social enterprises that aim to address structural problems with technical solutions. Their approaches are object centered rather than people centered (Scott-Smith 2013). This means that they focus on the research, development, manufacturing and delivery processes of their humanitarian object rather than on the humanitarian issues or individuals themselves. Furthermore, by offering “solutions” to clean water access and child malnutrition in the form of products, these companies can be argued to depoliticize complex sociopolitical and economic issues that created the humanitarian crisis in
10 the first place. Political parties and local politics are irrelevant, people are understood as an undifferentiated mass and regional economies and industries are overlooked in order to produce an oversimplified development picture that is can be easily addressed with simple solutions
(Ferguson 1994). However, without acknowledging these sectors, the development projects inevitably fail to accomplish their original goal, and instead produce numerous “side effects” such as expanding state power (Ferguson 1994). The side effects as they pertain specifically to
Nutriset and Hippo Roller will be discussed in the final section of this paper.
While both companies work out of different countries (France and South Africa), both aim to address humanitarian issues on the African continent. Also, worth noting is the fact that
Plumpy’Nut and the Hippo Roller are too expensive to be purchased by the individuals who they have been produced for, i.e. children suffering from chronic malnutrition and women and children living in rural Africa. Plumpy’Nut costs $60 USD for a box of 150 packets. Thus, for the weekly supply of 3000 boxes needed for one city alone, the cost is fifteen thousand USD
(Irinews 2010). Comparatively, the Hippo Roller costs $125 USD, not including the water filtration cap or the steel frame that can be attached to the device to carry additional loads. One may then question how do the individuals who ‘need’ these products get access to them?
In the case of Plumpy’Nut, UNICEF buys the product and then distributes it to medical clinics in countries like Burkina Faso, Niger, and Ethiopia (among others). In addition to purchases from organizations like UNICEF, Hippo Roller relies on individual donations and corporate sponsorship in which the company allows others to brand themselves onto the barrels with their company logos and color. Thus, through UNICEF, individual donations and corporate sponsorship, both these companies can distribute their products to individuals who cannot afford them while simultaneously making a profit. This business model relies on donations and
11 “depends on non-economic values such as humanitarian sentiment” (Redfield 2012, 166). Does this still make them businesses? Nutriset is a self-proclaimed ‘family business,’ while Hippo
Roller refers to itself as both a ‘business’ and a ‘social enterprise’ in different section of its website. Both Jordan and Addison inform me that their companies are social enterprises in our interview. This concept of ‘social enterprise’ proves to be a useful concept for classifying these actors because it “straddles the divide between profit and non-profit sectors” (Hayllar and
Wettenhall 2011,17). Addison, my contact from Nutriset, states that, “Nutriset has an unusual mandate for a company and implements a unique socio-economic model with a humanist purpose”. Similarly, Jordan from Hippo Roller states that, “business principles comprise the
‘how’, and community upliftment is the ‘why’ we do what we do”. In this sense, Nutriset and
Hippo Roller can be understood as operating with complex business models where they rely on the services, donations and financial support of various stakeholders to pay for the product
(Andre and Pache 2014, 665).
EMERGENCE
This section explores the origins of social entrepreneurship, specifically in the humanitarian aid arena, focusing on where, when, why and how these entities emerged. I will show how increased competition, in addition to international funding cutbacks, placed an enormous pressure on NGOs to diversify their funding base in order to support their projects.
This created the conditions for social entrepreneurship to prosper due to their for-profit business model. Lastly, I will explore the role of neoliberalism and how this process facilitated the marketization of humanitarian aid as a whole.
The Westaphalian system of sovereign states is built on ideologies of non-interference in which each nation state manages its internal affairs free of external interventions. In emergency
12 situations, such as natural disasters, wars, or famines, humanitarian aid organizations transgress borders in order to provide aid to populations in need. As such, humanitarian aid organizations interfere with interstate affairs and transgress national borders in order to reduce suffering and save lives (Belloni 2007). Humanitarian aid attempts to fill the voids that governments and the international community at large have left through their inability to address particular social issues. The aim of humanitarian aid organizations is to reduce suffering and save lives, not to change the structural issues that led to the suffering in the first place (Barnett 2005, 724). This has led numerous thinkers to criticize the practice.
Critics denounce humanitarian endeavors for the reproduction of unequal power relationships between the West and ‘others’ (Fassin 2010), misuse of funding and ability to prolong wars (Terry 2002). Belloni argues that Western humanitarianism appears altruistic, but in reality, conceals the hidden and self-interested motivations of Western states (2007). Other authors, notably Terry, discuss the misuse of humanitarian funding and the way organizations have redirected donations in insidious ways (2002). Additionally, Terry argues that humanitarianism efforts can prolong war and empower dissidents. Firstly, when NGOs negotiate with leaders it reinforces the idea that these are in fact “legitimate” leaders. Secondly, humanitarian organizations can take over and undermine the role of the state as they deliver food, water and other humanitarian goods to local populations. Lastly, by healing wounded combatants, humanitarian organizations are allowing these individuals to return to fight thereby prolonging the war (Terry 2002). These actions among others, has led Belloni and others to accuse humanitarian efforts as “at best ineffective and at worst counterproductive” (Belloni
2007, 454). This sentiment is echoed by authors such as DeWaal who argue that “most current humanitarian activity in Africa is useless or damaging and should be abandoned” (1997), xvi). It
13 is important to note that De Waal was writing in 1997 and that recent developments in the humanitarian aid area are changing our conceptualizations of traditional actors, the scope and structure of their operations, and the outcomes.
These recent changes are the outcome of a myriad of pressures that have been placed on humanitarian actors including increased competition and funding cutbacks. These pressures have transformed and molded humanitarian actors into their contemporary configurations. Chouliaraki observes what she calls the marketization of the humanitarian industry, which she defines as a restructuring process where these actors adopt market principles, including privatization, corporate management structures and an intent to generate profits. She suggests that increased competition is the main driver of marketization (2013, 6). She argues that there has been a colossal increase in the number of NGOs since 1985, which has resulted in fierce competition for funding and projects among these development actors (Chouliaraki 2013, 6). Cooley and Ron state that Western aid donors view competition among aid organizations as beneficial because it helps “cut waste” by improving efficiency (2002, 9). These authors caution against such optimism arguing that the environment that increased competition creates is not always beneficial and can lead organizations to internalize material incentives (Cooley and Ron 2002).
This will be discussed in greater detail later.
All in all, this increased competition has led non-profit organizations to seek alternative funding sources, often resulting in marketization (Chouliaraki 2013, 6). Similarly, Salamon argues that what has allowed non-profit organizations to survive during the 1980 government cutbacks was that they embraced market principles. Here he means that non-profit organizations began marketing their technical solutions and conceptualizing their clients as potential customers
(Salamon 2003). In this context, clients can be understood as individuals that would purchase the
14 humanitarian good. For Hippo Roller and Nutriset, their clients are NGOs and corporations who wish to purchase their product and then donate it to communities in need.
Thus, increased competition among development actors, coupled with funding cutbacks, has altered the humanitarian aid landscape and. This has led numerous organizations to adopt social enterprise business models and as argued by McGoey, has transformed philanthropy into a
“lucrative business opportunity” (2014). To illustrate this point, McGoey discusses the
Department for International’s Development’s (DFID) donation to Vodafone to establish M-
Pesa, a platform that allows individuals to pay their bills through their mobile phones (2014,
112-113). This donation in addition to a donation from the Gates Foundation led to the development of M-Pesa in less developed communities. This public-private partnership between
DFID and Vodafone increased low-income communities’ access to technology and generated an income for the company, Vodafone. As such, it is viewed as a win-win and “touted as an example of the benefits of providing governmental support to finance or corporate ventures”
(McGoey 2014, 113). Consequently, market principles have begun to flow in and through charity models with regards to the marketization of their organization in addition to their adoption of private sector management styles (Bajde 2006, 359). Furthermore, this flow of market principles into the charity sector works to blur the binary that has been established between humanitarian aid and the market.
Garrow and Hasenfeld argue that the merger between humanitarianism and the market occurred in conjunction with the rise of neoliberal ideologies, which put an emphasis on market solutions to social needs and worked to delegitimize the welfare state (2014). These authors specifically study WISE (Work Integration Social Enterprise), which are social enterprises aimed at providing training and employment opportunities to individuals who have difficulties in the
15 labour force. These organizations function in Europe and the United States and, as argued by
Garrow and Hasenfeld, attempt to solve social issues with market principles by helping individuals gain employment. As such, their social wellbeing is tied to their ability to participate in the labor force. By focusing on market solutions, these authors argue that WISEs undermines the welfare state and that it participates in the institutional work of neoliberalism (2014). In fact, neoliberalism has created the conditions and the environment from which social enterprises can prosper, which may explain the increase in social enterprises beginning in the early 1990s
(Sepulveda 2015). Johnson also argues that neoliberalism created the conditions for entities like social enterprises to flourish by leaving a void of unaddressed humanitarian issues (2011, 447).
This void was left as the nation state diverted funding away from social services, leaving issues like healthcare, childcare, education and housing to private sector management (Johnson 2011,
449). In sum, neoliberalism has led to increased security measures, private sector growth, an increased variety of products and services, exacerbated social inequalities and mass poverty
(Cross 2011).
Furthermore, the marketization of humanitarian spaces and actors has resulted in numerous shifts with regards to the execution of humanitarian operations. Cooley and Ron argue that actors are shaped and molded by the environments that they operate within (2002). They discuss how NGOs exist in precarious and highly competitive environments that cause them to make strategic choices. Consequently, when humanitarian actors operate in commercialized environments “its interest will be shaped, often unintentionally, by material incentives” (Cooley and Ron 2002, 13). In other words, they caution that humanitarian organizations may place their financial security and profit motivations ahead of their social goals. This may alter public perceptions of these actors because when these organizations put profit motives ahead of social
16 ones, the image of charitable organizations as more humane than their for-profit counterparts is obscured. This issue will be explored in greater detail in the following section.
HUMANITARIANISM VS. THE MARKET
Through a process of marketization, humanitarian organizations are disturbing the binary between humanitarianism and the market. In this section, I demonstrate how social enterprises, like Hippo Roller and Nutriset, are further deconstructing this binary by inserting themselves into both economies and strategically exploiting facets from both sides. I begin this discussion by conceptualizing and problematizing the way social enterprises fund their operations, arguing that the binary that exists between the ‘gift’ and ‘earned income’ strategies needs to be overcome to fully understand the diverse ways these entities generate capital. Humanitarian aid organizations are largely funded by gifts from individuals, corporations and governments while private companies support themselves with ‘earned income’ in which they market and sell their products and services to generate a profit. As will be demonstrated, social enterprises employ a unique funding scheme where they combine elements of the gift and earned income in order to fund their operations. I will also argue that their method of generating capital from both donations and the sale of a good ties them into complex webs of funding where they are but one node in
“humanitarian-corporate complexes” (Johnson, 2011).
As argued by Hopgood, Scott-Smith, and Badje, humanitarianism which is traditionally characterized by charity, the gift, and donations, is often understood in opposition to the market and capitalism (2008; 2013; 2009). This is because: “its voluntary ethos is opposed to the profit motive, it is driven by moral rather than monetary values, and its purpose is to identify and ameliorate suffering rather than being built on exploitation, as Marxists would argue about capitalism” (Scott- Smith 2013, 23). Recently, however, these seemingly separate domains have
17 become intertwined. Technological advancements, especially social media, have allowed for new forms of connection between distant communities thereby producing “novel forms of sociality” and solidarity (Bajde 2009, 74). These new possibilities of connection also provide possibilities for giving and the market provides the infrastructure that makes giving possible in the first place.
Firstly, the media provides the platform from which to market charitable giving and elicit donations for distant others (Bajde 2009, 76). Secondly, the internet provides the means to send donations across continents and enables individuals to help others from their computer desk.
Social enterprises are taking advantage of and using the market in new ways to benefit and forward their organizational endeavors. I argue that social enterprises blur this distinction between humanitarianism and the market by using market principles to achieve their humanitarian goals. They sell their products to, and rely on, donations from individuals, organizations, corporations and governmental bodies. As such, social enterprises blur the binary that has been established between a donation and the sale of the good as well as the dichotomy between earned income and the gift. In furthering this argument, I will outline the ways that traditional humanitarian actors fund their activities and how the social enterprise business models compare.
Traditional actors like NGOs and non-profits operating in the humanitarian aid arena often rely on donations or gifts from individuals, private entities or governmental bodies either in the form of money, time or volunteer labor. These donations are crucial for the operation of the organization and the distribution of products and services. In fact, it is this reliance on donations and gifts that Stirrat and Henkel argue has come to characterize and distinguish NGOs and non- profit organizations from for-profit entities (1997). Their method of obtaining capital via donations and gifts is often contrasted with earned income strategies, defined as “income derived
18 from selling products or services (Anderson and Dees 2006, 144). Some authors have argued that earned income strategies create self-sufficiency and that donations create a form of dependency as aid organizations are dependent on the financial gifts of their donors (Boschee and McClurg
2003 as cited in Nichols 2006). This argument implies that the dependency generated by donations, which is the main if not only funding source for non-profits and NGOs, is negative and that earned income, which characterizes the for-profit business model is positive. This is because donations make the organization vulnerable by tying the fate of the organization to the generosity of others, while earned income allows for self-sufficiency and independence.
Arguably, for-profit companies are also dependent and vulnerable in similar ways as non-profits because they are tied to the fate of their consumers.
Social enterprises combine both of these funding strategies, namely, gifts and earned income. Hippo Roller relies on individual donations and corporate sponsorship in which the company allows others to brand themselves onto the barrels with their company logos and color.
This marketing method is not intended to target the women who use the rollers, but rather is used to promote an image of the branded company as socially responsible. A Google Image search of the Hippo Roller produces images of the barrel decorated in the company logos and color of
BASF, a chemical company, and AEL mining services which produces and supplies explosives, mostly used in the construction industry. These companies attempt to offset the negative public image that is produced through their environmentally damaging practices by posting images of themselves “doing good”. This benefits Hippo Roller because they can achieve their double bottom line, namely, profit generation and improving water transportation for women.
In an effort to better understand their business model I asked Jordan, my contact at Hippo
Roller, whether Hippo Roller relies on donations to function either from individuals or for-profit
19 companies and if the answer was yes, it would mean they had adopted a charity model rather than a business model. The response I received was vague, and did not work to clarify the issue that I was attempting to sort out. Jordan said, “yes, we do rely on individual donations- but mostly those are people buying for specific people they want to donate to. Although we accept donations, we are not a non-profit organization, and cannot issue a tax exemption certificate for donations received. That is why we position ourselves as a Social Enterprise – social mission and goals, operating on business principles” (emphasis added). Even with this clarified response, I was still questioning how social enterprises generate profit, but I was limited by my ethics board, whom agreed that I could pursue this topic if I avoided questions that asked intimate company details. Additionally, I worried that my project would begin to raise suspicions if I asked questions pertaining to company profits and would result in their withdrawal from the project leaving me with no interview material at all.
A closer examination of Nutriset is helpful in clarifying how these entities generate income. Nutriset relies on organizations like UNICEF to purchase and then distribute their product, Plumpy’Nut. This is because Plumpy’Nut is too expensive to be purchased by the individuals that need it the most. Thus, Nutriset is generating an ‘earned income’ by selling its product to UNICEF while simultaneously relying on the donations of others (voluntary contributions from individuals, governments, private companies, foundations), which have funded UNICEF’s operations. Without the donations from others, UNICEF would not have enough capital to buy Plumpy’Nut and fund Nutriset operations. When we try to understand social enterprise operations through a limited lens which views donations as creating dependency and earned income strategies as creating self-sufficiency we miss the way these entities blend and blur boundaries to create unique funding schemes. Social enterprises like Hippo Roller and
20 Nutriset operate in intricate webs of funding and target a plethora of different actors to fund their operations and purchase their products. Nutriset’s role is to produce Plumpy’Nut, their business strategy is to sell this product to a plethora of aid organizations whose goal is to aid children suffering from malnutrition. This funding strategy allows them to diversify and expand their income streams across numerous actors and organizations, which frees them from depending on a few donors. That being said, Nutriset is still dependent on organizations which are funded by donors.
Nutriset can be understood as one node in a complex stream of funding, beginning with donations from individuals and governments directed to non-profits and NGOs, which then buy
Plumpy’Nut. Johnson refers to this intricate web of actors as a humanitarian-corporate complex, defined as “those networks of nongovernmental organizations NGOs; transnational corporations; philanthropical foundations and private donors; and international governing bodies” (2011, 447).
He argues that these humanitarian-corporate complexes are the main source of aid and development for developing countries and often use technical solutions to address humanitarian issues (Johnson, 2011. 448). As such, they see histories of imperialism, colonialism and neoliberal restructuring, which have resulted in a myriad of humanitarian issues in the developing world, as “design challenges” that need to be addressed with innovative technosolutions (Johnson 2011, 459). The growth of these humanitarian-corporate complexes has occurred in conjunction with neoliberal restructuring, and has come to fill the void left by state cutbacks.
Johnson’s definition of humanitarian-corporate complexes mirrors definitions of public- private partnerships, which the World Health Organization (WHO) defines as “a collaboration between public and private-sector actors within diverse arrangements that vary according to
21 participants, legal status, governance, management, policy setting, contributions and operational roles to achieve specific outcomes” (as cited in Kraak et al., 2011). Kraak et al. argues that these have been the preferred methods of governments to address social issues since the 1980s (2011).
However, problems often arise in these partnerships as different actors possess divergent values, goals, and motives (Kraak et al, 2011). For example, numerous food and beverage companies have an interest in increasing their profit margins, which they can achieve through this process of
“co-branding” with NGOs. PepsiCo donated over eleven million dollars to YMCA to promote physical activity in children (Ludwig and Nestle 2008). This campaign inexplicitly states that it is a lack physical activity and not diet that contributes to obesity. While the sugary soda may not be in line with the healthy diet values that YMCA may be trying to promote, the YMCA accepts the partnership because of the financial gains it will incur. Consequently, divergent values are concealed in the interest of profit maximization. These concerns are echoed by Ciccone who states that “if health is indeed a global public good, then the increasing influence of the private sector on its production and distribution is cause for alarm” (2010, 50). Both Ciccone and Kraak et al. call for a governing body to oversee the formation and operations of these public-private partnerships.
Conversely, Street highlights the benefits of public-private partnerships specifically through her examination of nutritional programs for developing countries (2015). She argues that often times, the private sector possesses the skills, resources and manufacturing capabilities that governments do not. These tools should be taken advantage of in order to deliver crucial products and services to communities in need. In our interview, Addison discussed Nutriset’s capabilities and performance stating that they consistently supply more than the demand with the highest quality products, implying that the company is ready for any crisis. This is important
22 because most humanitarian crises are unpredictable, and by stating that they have an abundance of Plumpy’Nut ready, Nutriset shows that it is prepared for emergency situations. This preparedness results from the company’s investment in both manufacturing and storage facilities, an expense the public sector may be unwilling to channel resources into. However, Street finishes her article by suggesting that the reliance on fortified foods in general is cause for concern and questions why we would rely on these products rather than address the structural issues that created the problem of malnutrition in the first place (Street 2015). This last issue will be elaborated on in the final section of this paper.
DONATIONS VS. SALE OF A GOOD
In this subsection, I aim to discuss the way social enterprises blur the boundary between donations and the sale of a good. In order to do so, I describe my experiences navigating both the
Nutriset and Hippo Roller websites to make a donation and how their website design and the accessibility of their donation pages compares and contrasts with traditional humanitarian actors such as World Vision and the Red Cross as well as corporations like Amazon. I show how social enterprises are changing the way we think about donations and the gift with regards to humanitarian aid by allowing an individual to purchase a product and donate it.
If you wish to donate to Hippo Roller you may click on the ‘store’ section of their website (www.hipporoller.org). From there you have the ability to add a Hippo Roller to your cart, they are priced at $164.80 CDN, but before you can successfully add it to your cart you must choose whether you are buying one for yourself or donating. If you are buying for yourself you can proceed to the next step and checkout, if you are donating to someone else you must select one country from a list of 180 to donate to, each with their own additional shipping and tax costs. It is interesting that the website includes 180 countries to choose from as they state
23 multiple times on their website that they are aiming to address clean water access in rural Africa.
As I select a random country, a pop-up appears on the page that reads “BULK ORDERS: We offer bulk discounts. For a free no-obligation quote contact [email protected].” I am disconcerted by the fact that I can get a ‘discount’ on a product that I am sending to improve the transportation of water in low-income communities and I question why they would not offer this discounted price in the first place given that their product deals with something as vital as water and access to it. However, I am reminded that I am not dealing with a charity but a private entity that is attempting to generate profit and that offering a discount on bulk order works in their and the buyer’s financial favor. Bulk discounts set up an agreement between the buyer and the seller where the buyer receives a substantial discount on the product if they buy a higher quantity. It benefits the buyer because they receive a discounted price, and it profits the company because it allows them to sell a greater amount of goods than they normally would.
Consequently, the entire ‘donation’ process is more similar to buying a product from a company like Amazon, as both Amazon and Hippo Roller possess a shopping cart and option to select a shipping destination. Additionally, Hippo Roller provides you with the option to include
“special instructions for the seller”. Like the products on Amazon, the manufacturing cost of the actual barrel, in addition to the profit that the company makes from the sale of one barrel, are undisclosed. Furthermore, as a social enterprise, Hippo Roller can legally distribute excess profits generated by your donation to employees and shareholders.
To access a donation page which does not require the purchase of a Hippo Roller you have to scroll all the way to the bottom of the page to a section titled ‘individual contributions’.
In this section, you have the option to donate $25, $50, $100, $125 or ‘other’ amounts of money.
With a donation of $25 you are able to benefit two people for five years, with a $50 donation you
24 can benefit four people for five years and so on. How the individual is to ‘benefit’ is not elaborated upon and with the price of an individual Hippo Roller being $164.80 CDN, it is unlikely that a donation of $25 will provide two individuals with a Hippo Roller.
In an attempt to locate the ‘donate’ section on the Nutriset website I stumbled upon the careers page where one can send their resume for a potential position with the company. This shows how difficult their donation section is to locate and that donations are not a common practice for this social enterprise. In order to ‘donate’ to Nutriset you must request a quotation based on your organizational capacity and program goals. This section asks you to provide personal information including your name, title and job description. Furthermore, you need to provide information about your organization, the purpose of your program, program details, which product you would like to purchase and your delivery preferences. Thus, in order to donate/purchase Plumpy’Nut you need to work for an organization with the aim of aiding children with acute malnutrition. This contrasts with NGO websites like the Red Cross and
World Vision which have clearly titled sections that say ‘Donate’ and do not require that you are part of larger collective.
I asked my contact at Nutriset where and how one could make a financial contribution to the company. Addison replied stating that Nutriset does not have a donation program in place, but if I were to donate I could visit the website of their US partner Edesia (see https://www.edesianutrition.org/). Edesia is licensed to manufacture Plumpy’Nut and it is part of the ‘PlumpyField’ which according to the Nutriset website is a network that aims to “improve access to innovative nutritional solutions meeting international quality standard through local production, close to the populations requiring them”. However, Edesia operates out of Rhode
Island which does not require the use of RUTF (RUTF is reserved for the most acute cases of
25 malnutrition and emergency feeding). The other members of the PlumpyField operate in countries like Burkina Faso, Sudan and Niger (among others). This satellite organization is interesting because unlike Nutriset, Edesia has non-profit status meaning that it is tax exempt in the United States and that it by law it cannot redistribute profits made to its shareholders. As a non-profit, it enables individuals to make a donation to help Edesia to “extend our reach to even more vulnerable and malnourished children worldwide” (Edesia Donate, https://www.edesianutrition.org/donate/). The donation page mirrors that of the Hippo Roller with predetermined donation amounts to choose from including: $50, $100, $250, $500 and
‘other’. It diverges from traditional organizations like the Red Cross and World Vision in that it has a tip section where you can “add 8.00% to maximize your impact” because “Adding a tip helps Edesia cover the processing fees and admin costs associated with your gift”. Scrolling further down on the donation page reveals that a $50 donation provides one box of RUTF, which is enough to rehabilitate one child.
Overall, Nutriset and Hippo Roller lack transparency regarding how much of the donation is used to directly help individuals in need and how much is redistributed among shareholders. This lack of transparency is contrasted with organizations like World Vision which clearly indicate what portion of your donation is going where and how it will be used by the organization. On the World Vision website, there is a pie chart which clearly outlines how much of your donation goes towards programs (85%), management (6%) and fundraising (9%) (World
Vision, “Give a Goat” https://donate.worldvision.org/goat). The pricing on the Hippo Roller website is more insidious, as the manufacturing cost and the sale price of the product are undisclosed. This leaves the donator alienated and potentially suspicious (as was I) of the entire process. I question how others who wish to donate a Hippo Roller would feel about the design of
26 their donation page. Would its similarities to a shopping webpage create a comfortable sense of familiarity or would it do the opposite and lead one to see their attempt to capitalize on a humanitarian good as distasteful or abhorrent?
Similarly, Nutriset and Hippo Roller’s profits generated from the sale of the good/donation are undisclosed. Nutriset claims that it reinvests its profits back into the company; however, as noted by Rice, one of Nutriset’s internal documents showed that the company “paid out millions in dividends,” meaning that a significant sum of the company’s profits were distributed among shareholders (Rice 2010).
By blurring the boundary between a donation and the sale of the good, social enterprises operating within the humanitarian aid arena “disrupt the non-profit conventions of the aid world that figure humanitarian concern through charity and the gift” through their ability to redistribute excess profits (Redfield 2012, 60). However, unlike World Vision, the amount or percentage of turnover that is earmarked for these areas remains private. Consequently, these entities problematize traditional conceptualization of humanitarian aid and the way funding strategies are executed by NGOs and non-profits. They diversify their funding base by accepting donations from individuals, private companies, organizations and governmental bodies and supplement their income through the sale of their products. That being said, as my informants reveal, these organizations remain heavily dependent on organizations like UNICEF who is the primary buyer of Plumpy’Nut. Because UNICEF relies on donations, it ties the fate of Nutriset to these donations as well. This makes Nutriset one node in complex web of funding, donations and earned income strategies. In sum, social enterprise operations take elements from the market, the sale of the good, humanitarianism and donations and recombines them in unique and profitable
27 ways.
SOCIAL GOALS VS. PROFIT MOTIVES
This section will explore the affective impulses that drive social enterprise operations, specifically, care and compassion. Using the work of Pedwell (2012), Miller et al (2012), and
Andre and Pache (2016), I show how these affects can drive social enterprise operations and orient the enterprise towards its social goal. This is accomplished by influencing the social enterprise’s commitment, cost-benefit analysis and thought process (Miller et al 2012). Secondly,
I discuss ideologies around humanitarian aid and the expectation that actors in this arena act altruistically, caringly, and compassionately towards the individuals and communities they claim to help. I show how this expectation is challenged at certain moments, specifically when the enterprise tries to scale-up or patent its product. In these moments, there is a tension as the enterprise’s affective impulses and social goals collide against its profit motivations. Ultimately,
I argue we cannot define social enterprises as wholly committed to their social goals or profit motivations, rather it is its oscillation between social goals and profit motivations that defines the social enterprise and the ways that it operates.
Both Hippo Roller and Nutriset promote this image of themselves as caring or compassionate towards their cause and the individuals they aim to help. This ethics of care comes through in numerous interviews with Hippo Roller’s Executive Director Grant Gibbs. In various interviews published online, Gibbs discusses how growing up on a farm the inventors of the Hippo Roller, Pettie and Johan, witnessed the daily struggle of gathering water. Motivated by their empathy and memories of past struggles, these individuals created the Hippo Roller with the goal of improving clean water access and ultimately the lives of those who use the product.
Gibbs himself discusses his decision to leave the IT sector because he was “looking for a more
28 meaningful purpose in life”, which is when he made the decision to board the Hippo Roller
Water Project (The Water Network 2017). The affects that motivated both the product development and the employees to join the company largely revolve around an ethics of care, compassion and empathy. These narratives support the idea that it is affects of care and compassion and not a desire for money, power or prestige drive social enterprise operations.
Similarly, Addison from Nutriset tells me that it was Nutriset’s mandate of nutritional autonomy for all that drew them into the business and is sure to clarify that it was not because Nutriset is a company. In my interviews with both Hippo Roller and Nutriset employees, an ethics of care and compassion are communicated through their personal stories, reasons for joining the company, and the product’s creation.
Numerous authors agree that social enterprises are characterized by an affective impulse that both guides their actions and works to set them apart from traditional entrepreneurs (Dees
1998, 2007 as cited in Miller et al. 2012; Andre and Pache 2016). In fact, it is argued that an affective disposition is crucial for achieving social goals in general because it drives action by connecting individuals with others (Alexander and Mohanty 1997as cited in Pedwell 2012). In this sense, affect can be understood as “sticky”: “Affect is what sticks, or what sustains or preserves the connection between ideas, values, and objects” (Ahmed 2010, 29). Through its ability to “stick”, affect drives, pushes and pulls individuals towards each other, objects or causes, as is communicated by both Addison, Jordan and Grant Gibbs.
Elaborating on this idea, Pedwell argues that “creating social justice is not simply a
‘rational’ exercise, but rather one that involves, and perhaps depends on, the generation of affect” (Pedwell 2012, 168). More specifically, Pedwell is referring to empathy, which she defines as a “humanizing emotion” because it indicates an affect of care or concern (2012, 165).
29 However, she cautions that affective impulses like empathy may be selfish attempts to “augment the moral and affective capacities of development professionals” rather than create a space for cross-cultural understandings and social change (Pedwell 2012, 173). Furthermore, when individuals are categorized as the “empathizer” or the “sufferer” this can exacerbate social inequalities rather than improve them (Pedwell, 2012). Here, Pedwell illuminates the way care and compassion can serve to benefit the ‘caring or compassionate individual’ rather than those who were originally to be helped. As such, she cautions against viewing such affects as totally altruistic.
Conversely, Miller et al. focus on one specific affective response, namely, compassion, arguing that this “prosocial motivating emotion” stands in stark contrast to “proself motivations” because it drives one to help others (2012, 617). These authors argue that compassion challenges the rational cost benefit analysis, which is dominated by self-interest because it puts emphasis on the gains of others despite the personal risks that one may incur. Miller et al also claim that compassion may reposition inaction as too high of a cost due to the emotional toll that would be generated by not helping: “high levels of compassion increase the perceived benefits of acting and the perceived costs of not acting and decrease the relative weight of the costs of acting”
(Miller et al. 2012, 623). This parallels Pedwell’s argument, which aims to highlight the ways that such affects can be construed as self-oriented (2012).
Andre and Pache identify ‘care’ as the driving force behind social entrepreneurship
(2016). Care and compassion are almost identical affective impulses, as both connect one individual with other humans, non-humans, objects or causes. Care, as demonstrated by Andre and Pache, can be broken down into constituent parts. They state that “care is pursued by social entrepreneurs both as a goal and a process”, which makes them a unique breed of entrepreneurs
30 (2016, 664). They take this concept of ‘care’ and break it down to illustrate multiple factions of the practice: ““Caring about” refers to an attentiveness to the needs of others. “Taking care of” refers to taking some responsibility in relation to those needs. “Care giving” is about working to fulfill the needs, and the last phase, “care receiving,” is about listening to how the care was received in order to know whether the need has actually been fulfilled” (Andre and Pache 2016,
661). In this sense, Nutriset can be said to ‘care about’ child malnutrition because it recognizes and is attentive to the needs of underweight children. Nutriset then transforms this disposition into action through ‘care giving’ as it works to bring children back to an ideal weight with its product Plumpy’Nut. It is important to break down the affect of care into its constituent parts because, as discussed by Andre and Pache, there is a difference between caring about and taking care of. The former is simply an affect whereas the latter implies that an action is taken. Both
Nutriset and Hippo Roller engage with various factions of care by taking care of the issue they care about either through the development of a prepackaged peanut butter superfood or an ergonomically designed water barrel.
While the affective impulses of care and compassion may drive prosocial goals, the affects of competition and ambition may drive the proself goals. Prosocial goals are the humanitarian aims of the enterprise, for Nutriset it is treating children with malnutrition, and for
Hippo Roller it is ameliorating the transportation of water. Proself goals refer to the goals of the organization including its profit maximization and struggle for power. As such, other affects including competition, ambition and drive for financial success may undermine or challenge affects of care and compassion by driving the proself goals of the company. The presence of these divergent affects creates affective contradictions and it is these affective contradictions that differentiates the affective impulses of social enterprises from traditional humanitarian actors.
31 While non-profits do need to concern themselves with financial sustainability, they do not possess the same drive for profit maximization that social entrepreneurs do. Their legal status as non-profits prohibits the redistribution of excess profits among shareholders, which can mitigate and soften affects like competition, ambition or drive for profit maximization. Affects of competition and desire for money, power and prestige are more pertinent with regards to social enterprises because they can redistribute profits among their shareholders. This means that employees can benefit financially from the enterprise’s financial success. As such, social enterprises must grapple with their affective contradictions, which present themselves at different moments of the social enterprise life cycle. I will discuss two of such moments, namely, the process of scaling up and product patents. During these processes affects of care and compassion collide against ambition, competition and drive for profits.
Cross cautions that “objects” like Plumpy’Nut and Hippo Roller “might express an ethics of care as it moves or circulates but it is also designed to express an ethic of commercial or economic interests”, which according to Miller et al may be in tension at different moments of the social enterprise life cycle (2013, 371; 2012, 632). For example, Andre and Pache question the ability of social entrepreneurs to maintain an ethics of care while scaling up their operations.
By scaling up these authors are referring to a process where the enterprise increases the reach of its product, service and operations to other geographical locations (Andre and Pache 2016, 660).
For example, the Executive Director of Hippo Roller, Grant Gibbs, discusses the importance of expanding operations in multiple interviews (The Water Network 2017; Change Makers, N.D.;
Empowering People Network 2014). What concerns Andre and Pache, is that in the process of scaling up, a social enterprise may favor the needs of its shareholders over their beneficiaries thereby abandoning their ethics of care (Andre and Pache 2016, 665). In other words, social
32 enterprises may prioritize their profit motivations over their social mission. Grant Gibbs can be observed trying to offset some of the concerns related to scaling up by stating his intentions “to introduce solar rotational manufacturing in sunny countries for a zero-carbon footprint and to reduce transportation (shipping) costs to remote locations. This will also create local employment and support local economies” (The Water Network 2017). Gibbs continues this particular interview emphasizing the need to keep manufacturing close to communities in need
“as shipping remains the single most costly element of distribution” (The Water Network 2017).
Despite this focus on keeping distribution close to communities in need, he also mentions that
Hippo Roller has “a presence” in countries like the United States and that they “have a measure of representation in North America, Europe and Australia” (The Water Network 2017). This statement is an attempt to rationalize the process of scaling up and balance the tension between prosocial and proself goals which manifest in this process. It could be argued that in such a circumstance the social enterprise still ‘cares about’ i.e. is attentive to the needs of others, but has temporarily suspended its effort to ‘give care’ in favor of generating profits.
This concern is reiterated by Alex De Waal who distinguishes between the hard and soft interests of humanitarian actors. Although his focus is primarily on NGOs and non-profits operating within these spaces, his ideas can also be applied to social enterprises. De Waal defines soft interests as “the stated aims of humanitarian institutions” such as their mission statement and goals. Nutriset’s soft interest would be “nutritional autonomy for all” which is repeated in multiple sections of their website (De Waal, 1997, 66). Hard interests, contends De Waal, are institutional demands by which he lists career security, prestige and expansion as examples
(1997, 66). Thus, there is the image of the humanitarian institution that is projected to the public, what could be conceptualized as the external face or its public persona, mission statements, etc.
33 This face competes with the internal face, which can be defined as the inner workings of the company and its ‘business’ goals. In order to illustrate his point, De Waal employs the economic theory of Gresham’s law which in its most simplified version states that “bad money will drive out good money”. Applying it to the humanitarian aid arena, De Waal argues that “in a situation of unregulated private humanitarian activity, ‘debased’ humanitarianism will drive out the
‘authentic’ version (1997,139). What he means is that organizations that funnel the most resources into marketing and media coverage receive the greatest donations and funding. Other organizations, which prioritize aid over funding suffer financially. In sum, “the agency which is more media-aware will prosper at the expense of those who grapple with the problem of making aid a genuine service to its target group” (1997, 13). Thus, De Waal ultimately argues that the hard interests of aid organizations prevail because it is the organizations that prioritize their hard interests that succeed (1997, 139).
This is concerning because it challenges the dominant ideology which expects the soft interests to prevail, particularly in the humanitarian aid arena where actors address matters of life and death. Social enterprises complicate this ideology with their blatant double bottom line: financial sustainability and social goals. These entities do not try to disguise the fact that they generate profits, this is part of their nature and one of their distinguishing features. As such, they challenge the idea that humanitarian aid cannot be caring and profit driven.
This tension between prosocial and proself goals is particularly visible when a social enterprise patents its product, which throws into question their ethics of care and where it lies.
Nutriset has patented its product Plumpy’Nut in over thirty-five countries arguing that the patent is in place to maintain the product’s integrity. Other organizations scrutinize Nutriset’s patent arguing that they could manufacture the product for 80% less, thereby increasing the number of
34 children that are treated (Arie 2010). These organizations are Breedlove and Mama Cares and they have taken Nutriset to court over their patent, which they argue is so extensive that it limits the production of any nut paste (Rice 2010). Presently, there is no information on the organization Mama Cares, which means that they have either merged with another organization or dissolved their operations. Breedlove, however, is an active non-profit organization that processes and delivers food in emergency situations. Its food plant processes grain and vegetables and then partners with other organizations to deliver the food products to populations in need. Breedlove and Nutriset operate in similar humanitarian spaces, the main difference being that Nutriset’s product Plumpy’Nut is specifically aimed to treat children, while Breedlove targets individuals of all ages. It is conceivable that this lawsuit was motivated by a competition over the market in which Plumpy’Nut dominated and Breedlove wished to control. As such,
Breedlove’s motivations to sue Nutriset over its patent cannot be viewed as a self-less action divorced from Breedlove’s business goals. In defense of his patent, Nutriset’s director Michel
Lescanne argues that the nutritional integrity of the product would be compromised if others began to manufacture it at a reduced cost.
It is undeniable that Plumpy’Nut is saving thousands of lives with its unique blend of fats, proteins, vitamins and minerals and it is conceivable that changes to the patented recipe in an effort to reduce costs would result in less effective results, i.e. less children who are successfully brought back to standardized body weights. Additionally, Lescanne argues that the patent is in place to sustain manufacturing companies that work out of countries like Ethiopia who have begun producing Plumpy’Nut locally (Arie 2010). His rationale being that without the patent, larger companies or organizations would saturate the market and lead to the erasure of these smaller local ones. In Lescanne’s statement, we can see an effort to revert to an ethics of
35 care which was threatened when others questioned Nutriset’s patent. However, in this case it is not a care that is oriented towards malnourished children, but to factory workers in Ethiopia whose income Nutriset is allegedly trying to protect. I see this statement as a genuine argument that would likely materialize in the event that Plumpy’Nut’s patent deteriorated. The peanut butter superfood would be outsourced to countries with lax labor laws and the ability to manufacture the product at a substantially lower cost, sell it at a lower cost and would consequently wipe out Nutriset’s smaller production plants as stated by Lescanne. On the other hand, Lescanne’s statement can be read as Nutriset’s attempt to justify its profits, by arguing that if it was not for their monopoly on the market, these ‘other’ factory workers in Ethiopia would lose their jobs. This monopoly on the market is also a monopoly on life because it dictates who can save life and reduce suffering. Ultimately, this limits the number of individuals or organizations that can intervene in these spaces and the solutions that they can put forward.
Furthermore, if Nutriset is devoted to its mandate of “nutritional autonomy for all” then one may question why the company possesses a patent that places stark limits on the development of this peanut butter superfood. In an attempt to assuage the claims laid against the company’s patent system, Nutriset released a press statement discussing their on-line patent usage agreement, which allows organizations, companies and non-profits to “produce, market, and distribute products covered by the patents” (Nutriset Press Kit, 2010, 2). However, only organizations and companies operating in countries where Nutriset already has a patent can obtain this license, all of which are African countries. This system of patent licensing can also be read as Nutriset’s attempt to develop strong manufacturing facilities before its patent runs out this year. These satellite companies, which operate out of numerous African countries like
Burkina Faso, Ghana and Kenya (among others) are in Nutriset’s best interest because they
36 reduce transportation costs and time. Additionally, the stronger and more developed its manufacturing plants are, the less likely they will be overrun by larger corporations once the patent deteriorates.
Through Nutriset’s patent deployment we see the company’s social goal of treating children suffering from chronic malnutrition in tension with its profit motive as it tries to maintain a monopoly of the ready-to-use therapeutic food market (RUTF). This tension also presents itself on the company website under the “shared vision” section where Nutriset states:
“practicing a price policy that is as honest and fair as possible, while allowing producers to cover all of their costs, investments, development and optimization of products” (Nutriset, N.D.,
“PlumpyField Network’s Charter”). Cases such as these illustrate the affective contradictions present in social enterprise operations. The classification of these entities as caring or compassionate is largely based off of the image and statements that they publically promote of themselves, which is biased and purposefully created to work in their favor. For example,
Nutriset tries to put forth an image of itself as caring and compassionate by consistently referring to itself as a “family business” or “enterprise familiale” (the Nutriset website is in French). This emphasis on ’family’ also came through multiple times in my interview with Addison and was cited as one of the reasons they wanted to work at Nutriset.
Additionally, one may question what other affective impulses are driving decisions and actions. There are a plethora of other affective impulses that guide the company’s actions and thought processes, affects which may be beyond capture, decipherability or one’s that are purposefully hidden in the background. One such example may be the competitive spirit of social enterprises which may be motivated by a desire for money, power or prestige.
37 It is possible to argue that the social goals and ethics of care of these organizations are undermined by both their patents and potential to scale up. However, one may also question whether such a grand conclusion can be drawn based on a few controversial cases. What can be said here is it that this tension between profits and social goals, as well as affective drivers, is an integral part of social enterprise operations. In fact, Cross suggests that we should understand these humanitarian goods as operating in “an endless process of negotiation and debate over its meaning, characteristics and attributes” (2013, 371). The affects driving social enterprises overlaps with, but is not the same as the affect that drives or characterizes humanitarian work.
This is because they are pursuing two bottom lines, namely, financial sustainability and social goals, and must consequently balance this tension throughout their life course. While it can be argued that at specific moment, they may favor one aspect over the other, it is shortsighted to state that this characterizes them. Rather, it is the oscillation between these two poles that makes them social enterprises. This presents itself in the name of the entities ‘social’ and ‘enterprise’, the social relating to the prosocial goals of the operation and the enterprise relating to the entrepreneurial proself aspects.
CONSEQUENCES VS. BENEFITS
This section explores the humanitarian aid arena’s obsession with technical solutions and the ways that these techno-solutions, specifically Hippo Roller and Plumpy’Nut, have become fetishized. Secondly, I trace the consequences that materialize from the use of these products while also noting some of the unexpected benefits. This is done in order to show that these products are not used in a vacuum but generate very real side effects for the populations that they aim to help.
38 Both Nutriset and Hippo Roller argue that their humanitarian efforts have a long-lasting impact. Addison tells me that because Nutriset saves children, the company produces a long- lasting impact for the child and the family. Addison also extends these benefits to the community and the country arguing that a healthy child “can live their lives at full potential and contribute to building their communities and nations”. Similarly, Jordan states that Hippo Roller has a long- lasting impact because “not only does easier access to water alleviate the daily struggle, it also frees up more time to attend school, seek employment, or perform other tasks in the home. This has a much larger impact on quality of life, and creates opportunities to break free from the poverty cycle”. Here Jordan puts emphasis on the ‘free time’ that is gained from using the Hippo
Roller and how if used in the ‘correct’ ways, such as attending school or seeking employment, a long-lasting impact will materialize. Hippo Roller claims it is giving individuals a tool for success, but that it is up to them to succeed, which works to take the blame and pressure away from Hippo Roller and place the responsibility on the individual.
While these social enterprises claim to create a long-lasting impact through their ability to pull individuals out of poverty, neither critically engages with the larger structural problems that created the humanitarian crisis in the first place. In fact, by producing and selling technical solutions, social enterprises reduce and depoliticize complex histories of oppression, contemporary power relations and structural adjustment programs. That is that their Band-Aid solutions ignore and have the potential to perpetuate the larger structural issues that produced the humanitarian issue in the first place rather than resolve the issue in question. Consequently, one may question why such large amounts of capital are funneled into the research and development of products that do not aim to fix the problem over solutions that do. The obsession with technical solutions for systemic problems is not a new phenomenon, in fact it has been discussed
39 at length in development circles (most notably in James Ferguson’s Anti-Politics Machine 1994).
Thus, this is not a characteristic of social enterprises, but rather humanitarian aid at large, which has largely focused its efforts on “sedating” a crisis not preventing or solving it (Belloni 2007).
These technical solutions are often construed as “magic bullets” and as argued by numerous others have undergone a process of fetishization (Scott-Smith 2013; Cross 2013).
After conducting numerous interviews with aid workers in Maban, Sudan, Scott-Smith observed that Plumpy’Nut was consistently conceptualized as a magical silver bullet solution that was totally divorced from its means of production (2013). Plumpy’Nut is literally a mix of peanut butter, fats and milk products which makes the magical qualities attributed to the product even more peculiar. Scott- Smith argues that the only unique aspect of the product itself is its packaging and its separation into measured portions (2013). The danger in fetishizing the product, he argues, is that it is viewed as a “miracle solution” which creates these unrealistic expectations with regards to child malnutrition recovery rates. Additionally, with such an accessible ‘solution’, Plumpy’Nut may be decreasing the urgency to develop long-term solutions that deal with the root cause. Conversely, Cross argues that we will miss so much if we are only to view these products through the narrow lens of fetishization (2013, 384). Instead, he argues, we should examine the way these products tie together and assemble different knowledge systems, materials, people, and ideas (2013, 384). For example, looking at the object through the lens of the designers can reveal the way the object is strategically marketed in order to attract investors. Cross shows how this ultimately ties together different people and organizations from micro-finance organizations to social investment funds as they attempt to invest in the product
(2013, 385). This approach allows for an understanding of all of the different parts and values that are attached to the object and how it allies diverse actors at different moments of its life
40 cycle. However, lifting the veil and unpacking the process of fetishization may work to debunk some of the fantasies that have been deliberately constructed around these products, and ultimately reveal them for what they are i.e. Band-Aid solutions.
Furthermore, these Band-Aid solutions have the potential to produce negative consequences on their own, thereby exacerbating the situations that they aim to ameliorate.
Critical questions to ask in places that rely on Plumpy’Nut and the Hippo Roller include: how is the citizen’s relationship to the state changed when they rely on a private company’s products for their food security and access to water rather than national or local policies? When using a
‘technofix’, is there a reduced pressure on the government to create long term food security or water supply systems? How does the introduction of private companies in matters related to health alter the government’s role? Does this ‘technofix’ approach undermine development goals and food security initiatives focused on long term sustainability? How is the health of children impacted when they use Plumpy’Nut longer than the recommended time frame? In order to answer these questions, ethnographic research is needed to study the ways in which both
Plumpy’Nut and the Hippo Roller (or similar social entrepreneurial products) are used, conceptualized, and viewed within local contexts by a variety of actors. That being said, some of these consequences and side effects have already been observed by others working directly in the field and observing the product’s usage first hand.
Firstly, India banned the use of Plumpy’Nut in fear that people would become too dependent on the superfood and halt their consumption of local food sources (Arie 2010). When a ‘solution’ such as Plumpy’Nut is easily accessible and attainable at little to no cost, there will be a decreased reliance on local food sources to fulfill the child’s nutritional requirements. India sees Plumpy’Nut as a major threat to local agricultural practices and has opted to work on longer
41 term food security solutions rather than rely on this ‘technofix’. However, this must have changed since the time of Arie’s writing because India now has a satellite production site called
Nutrivita which is part of the PlumpyField (Nutrivita is very similar to Edesia which was discussed earlier). Consequently, India’s national attempt to limit the availability of a RUTF created by a private company has been undermined by the introduction of this satellite organization. The first section of Nutrivita’s website states that “most of the raw materials used in the manufacturing of our products are sourced locally. This local sourcing in an additional output for the local economy” (PlumpyField with Nutriset, N.D., “Nutrivita”). It is conceivable that because Nutrivita uses local production facilities, raw materials, and local labour force, that it is now in India’s best interest to use the Plumpy’Nut.
Other consequences related to the use of Plumpy’Nut revolve around physiological changes that occur with prolonged use. Zita Weise-Prinzo, a technical officer at World Health
Organization remarks that she can see physical changes in children who consume Plumpy’Nut past the recommended time frame as indicated by their puffy cheeks (Arie 2010). These examples reveal that Plumpy’Nut has the potential to produce real consequences and side effects in both the local and national contexts. While, these unintended consequences do need to be studied further, the aforementioned observations poke holes in the altruistic narrative that
Nutriset appears to be promoting.
Similarly, Crabbe cautions that Hippo Roller may overdraw from limited water sources due to its capacity to carry large quantities of water at one time (2012). Johnson also cautions that techno-solutions like the Hippo Roller have the potential to defer “public-spirited discussion among affected communities regarding their shared challenges … and stall a broader political solution that might require more substantial redistribution of wealthier and resources” (2011,
42 464). Thus, these Band-Aid solutions may be decreasing the ability of these communities to demand the implementation of water systems from their political leaders or create the solution themselves. This is because the presence of these products reduces the urgency to create long term solutions, which means that they assuage the affective responses of the communities to the point where they no longer drive action and change. Furthermore, these potentially damaging consequences are often overshadowed by the moral credibility and value that these social enterprises acquire, credibility that is normally attached to other humanitarian organizations.
Thus, even with detrimental consequences, social enterprises continue to be perceived as “doing good” in the world.
These concerns are reiterated by numerous authors including Choudry and Kapoor who discuss the potential of NGOs to undermine local or international movements as they decrease the pressure put on governmental bodies to create change (2013). This implies that the consequences produced are not unique to social enterprises, but other humanitarian actors as well. Similarly, Terry cautions that humanitarian action has the potential to subdue feelings of outrage and ultimately eliminate the possibility for challenges to power, revolts and change
(2002, 46). Choudry and Kapoor argue that these actors often accept and perpetuate capitalist systems that they operate within rather than trying to change them (2013, 6). In fact, social enterprise operations rely on capitalist and market structures to sell their products, trying to change the system would be counterproductive for these actors.
Johnson argues that the products touted by social enterprises like Nutriset and Hippo
Roller “often carries out the neoliberal project’s core ideological work of managing class contradictions and promoting market logic” (2011, 454). Each product’s insertion into a community, he argues, is a form of “soft cultural imperialism” (Johnson, 2011, 463). By soft
43 cultural imperialism” Johnson is referring to a process where the more powerful and/or wealthy entity imposes its culture and ideology on the weaker community, in this case it is market principles. Furthermore, he argues that historically when colonizers entered a new area they were subjected to push back from local militaries, communities, governing bodies and resistance movements, but these new humanitarian designers are actually using these systems to push their mission forward (463). This is evident through the Hippo Roller’s “partnerships” with community leaders to create smooth product transitions without generating conflicts among members regarding who gets access to the roller and when. In an interview, Gibbs notes that
“identifying beneficiaries is determined by the leadership of each individual community and varies from project to project” (Change Makers, N.D). This ensures that Hippo Roller is not responsible for picking and choosing who gets access to the barrel and that they are not at fault if conflicts arise.
There are numerous consequences or side effects that materialize through the implementation and use of technical products like Hippo Roller and Plumpy’Nut to address larger systemic issues. That being said, there are also ‘unintended’ benefits that have been observed through the use of these products. For example, Gibbs cites multiple uses of the Hippo
Roller that were inconceivable during the production process. Firstly, he discusses how the
Hippo Roller can save individuals from landmines. He claims that when the roller is pushed over the mine it can absorb the shock and save the individual’s life (Change Makers, N.D). Gibbs is careful to mention that despite these benefits, the product would never be marketed as a
“demining device” (Change Makers, N.D). Secondly, when addressing issues of recycling and waste with expired plastic barrels, he discusses how individuals have been seen to cut the barrels in half and use them as a springboard for their gym classes. Lastly, Gibbs states that he has
44 observed a change in traditions where women were typically assigned the role of ‘water gathers’.
Now excited by the introduction of the Hippo Roller, men have begun to take on some of the duties, which frees up more time for women especially (Change Makers, N.D). However, questions arise as to how this change may impact a women’s socio-economic value in their societies if they are no longer the primary water carriers. Furthermore, if men become the primary water carriers, does this also give them the power over the water’s usage? While I do not have the answers to these questions, I hope to raise skepticism over these claims of gender empowerment.
Redfield argues that we have been conditioned to expect that people will live and that we grow emotional when they die (2010, 169). This creates an acceptance for humanitarian action that aims to foster life, which can be extended to include the action of private companies working in the humanitarian aid arena (Redfield, 2010, 169). Nutriset is a private company that aims to help children suffering from chronic malnutrition, in this sense they are fostering the lives of children. Their efforts are accepted and even celebrated because they are saving lives.
The fact that they are making a profit off their endeavors is often ignored or overshadowed by the heroic imaginary they employ, heightened by each child whose body weight they increase with their prepackaged peanut butter superfood. Similarly, Hippo Roller is decreasing the physical effort that water gathering demands and increasing the amount free time for those who use the barrel. It is the fact that they are saving and improving lives, that makes their efforts hard to question and critique. Can you tell an organization to stop feeding malnourished children or improving people’s access to clean water just because they may be reducing the possibility of more long-term solutions? Responding to this very question of: “what if the harm outweighs the good?” Terry states that “few aid agencies are ready to abandon the humanitarian imperative and
45 stop providing aid even then” (2002, 25). Perhaps due to their affective impulses that guide their action despite the consequences.
This is one of the questions that plagues humanitarian aid and is the core paradox: “that global inequality, which humanitarianism seeks to alleviate, is simultaneously its very condition of possibility” (Chouliaraki 2013, 22). More specifically, social enterprises rely on the existence of humanitarian issues for their existence and profits. This means that there is an incentive for these companies to perpetuate rather than fix the crisis that they are addressing. This makes it even more important to study the actions and operations of social enterprises because not only does their existence depend on the humanitarian crisis, they need it to generate profits. To put it bluntly, Hippo Roller needs water to be difficult to gather or there would no longer be a need for their product, and Nutriset relies on the existence of malnourished children to run its business. In fact, Nutriset prospers off this humanitarian crisis. In 2016 the company sold 43.5 tons which brought in a revenue of $132 million USD for the company (Purdy 2017). That being said, this is not the company’s profit, and a significant amount needs to be subtracted from this sum to account for employee wages, hydro, rent, etc. What this number does illustrate is the vast quantities of Plumpy’Nut that flow out of the business and the large sums of money that flow into the company.
Brown argues that we are paralyzed by the idea that in order to create real systemic change that we need to overthrow the capitalist system and introduce a socialist reorder (2014).
This imaginary is paralyzing because it is unlikely to happen anytime soon, therefore we must work with the tools and circumstances that we have available at this moment in time. The present structural conditions defined by government cutbacks and the increased presence of private actors has created a space for market interventions, which has consequently been utilized by
46 social entrepreneurs. Their hybrid nature allows them to take elements from both the charity and business sectors and recombine them into a unique business model. Social enterprises are able to benefit from their mixed nature in numerous ways. Social enterprises do not have the same legal status as non-profits and are therefore not subject to the same regulatory requirements.
Possessing a different legal status allows these entities to distribute excess profits among shareholders and employees. This may attract individuals to work in for these companies because it allows them to "do good" and generate a "decent living" (Steckler 2014, 355). Additionally, without the same reporting requirements, this allows social enterprises to make grandiose claims without having done any studies to prove them. For example, Hippo Roller claims that the product “improves health and hygiene”, “improves morale and personal dignity”, and frees up
“more time for economic activities” without citing any studies that were done to prove these claims. Thus, the lack of reporting requirements empowers these entities to make bold statements, which can be used to elicit donations and corporate sponsorship.
CONCLUSION
Social enterprises are populating the humanitarian aid arena at rapid rates and bringing with them new approaches for tackling humanitarian issues such as child malnutrition and clean water access. Their unique approach to humanitarian aid combines market principles with social goals in complex ways, ultimately altering the way humanitarian aid is traditionally conceptualized, managed and administered. This was demonstrated in the first section of this paper Humanitarianism vs. the Market, which explores the funding strategies of social enterprises as well as the second section Social Goals vs. Profit Motives, which demonstrates the ways that profit motivations may undermine or appear to undermine social goals at various points of the social enterprise life cycle. Both sections draw attention to the for-profit nature of
47 social enterprise operations, which is an issue that is unique to social enterprises because unlike non-profit entities they can distribute their excess profits to shareholders. This is particularly alarming in the humanitarian aid arena because it implies that actors are able to generate profit off the suffering of others. In fact, because these entities are functioning within the humanitarian aid arena, it is even more pertinent that they are studied in-depth. In order to examine social enterprise operations, we must move away from the binaries that have been established between humanitarianism and the market, donations and earned income, social goals and profit motivations. Social enterprises, like Nutriset and Hippo Roller are abolishing and recombining these seemingly separate domains in complex ways and if we continue to examine these entities through these limited lenses we will miss important elements of their nature. These actors are problematizing our ideologies around humanitarianism. Furthermore, they are expanding the role of and the domains that for-profit entities function within thereby opening up new possibilities for private sector involvement.
While the final section of this paper alluded to the some of the larger socio-political consequences that these products may generate such as reducing the pressure on governments to produce long term food security solutions, I remain limited by my geographic positionality in the city of Toronto. As such, I urge future research to directly engage with these products and entities in order to examine the on-the-ground impacts that they generate.
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