business

Building Sustainability: Lessons from Swazi Cotton

Building Sustainability: Lessons from Swazi Cotton

It’s a simple idea: provide smallholder farmers with information via SMS to improve farming practices and thus increase their yields. In fact it’s a concept that has been replicated by NGOs and MNOs across the developing world, with varying degrees of success. However, the real challenge in launching such a service lies in building a business model that is both commercially viable to the provider whilst remaining accessible to the poorest populations.

NYT: "A Quest for Hybrid Companies That Profit, but Can Tap Charity"

FrontlineSMS was featured in an article in the New York Times this week! You can find an extract of the article below, and the full piece can be found on the New York Times website here. "A new type of company intended to put social goals ahead of making profits is taking root around the country, as more states adopt laws to bridge the divide between nonprofits and businesses...

Charities seeking ways to reduce their reliance on donated dollars are increasingly developing programs that could be mistaken for businesses, and for them, such a structure solves a number of headaches. It gives them access to the capital markets, allows them to pay higher compensation levels and provides potential exit strategies, all unavailable to nonprofits...

Frontline SMS ... organized as a community interest company, or C.I.C.’s, the British corporate designation that has inspired many of the new hybrid in corporation laws passed in the United States. C.I.C.’s are required to have a social purpose like health care and their assets are locked, limiting what can be distributed to shareholders, employees and others.

FrontlineSMS was spun out of Kiwanja.net, a California nonprofit whose mission is to develop technology to help nonprofit groups deliver services. 'The value proposition is inherently defined in terms of social benefit,' said Sean Martin McDonald, of FrontlineSMS. 'That reduces a lot of concerns you might normally have from traditional financial investors by making it clear that your mission is primarily social, not primarily about making profits.'"

To read more check out the full article on the New York Times website here.