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Aziz Essayed 2013 Nissan


We just saw it out of the corner of our eye as we were bombing down a dusty road in the district of Kamwenge. Out here in Western Uganda, it’s so normal, that you’d just pass by without thinking anything of it. It was merely a pipe sticking up out of the ground overgrown by weeds. Unremarkable in its ubiquity. We slammed on the breaks and threw it in reverse, then jumped out of the van to see yet another broken well.

In this district, 43% of wells are broken.

We take clean water for granted. We turn a faucet and clean water magically appears. That’s not the case for over a billion people around the globe. Their daily routine includes filling up five jerry cans – 20 liters each – of water everyday and hauling them back to their homes to drink, cook, wash and bath with. If a well breaks, they have to use the next best option, which is a “scoop hole” – an open water source, like a stream or unimproved spring, of contaminated water. At such a scoop hole, I witnessed a group of women dipping their jerry cans into water that had a layer of diesel fuel sitting on the surface. This is the water that they will be drink and give to the very infants strapped to their backs.

Why are so many wells broken?

Imagine this scenario. Say you and your neighborhood of fifty households desperately needed transportation, but you didn’t have the money to buy a car. Then one day, out of the blue, somebody you don’t know comes from another country and gives you a car. There is great fanfare and people are taking your pictures. And then they’re gone, and you have a car. Which is great! You figure out how to use it and share it, and for the most part it works. Your lives are improved because you have access to transportation. But unfortunately, none of you have the knowhow or money to change the oil. So eventually, after a year or so, the engine seizes up and you can’t get it started again. So it just sits on the side of the road where it broke down. And you and your community are back to walking.

Digging a well is incredibly important (and more are needed), but it’s not enough. This sounds obvious, but is so often overlooked – wells need to be maintained, or, just like the car without an oil change, they will eventually break down.

The reality on the ground is that governments don’t have nearly enough resources to maintain all the wells, and NGOs have moved on to dig the next well. Digging wells is sexy. Donors get excited about that, but it’s way less sexy to ask donors support the maintenance of wells. So they just keep digging more wells. And they continue to break. The typical life for a well in this district is less than three years. The governments aren’t able to take ownership and the NGOs are unwilling. So the community must.

As a member of the board of The Adventure Project, a nonprofit focused on innovative solutions for poverty, I joined our team on this trip to search for the answer to one simple question… What does it take to ensure consistent, long-term access to clean water?

Enter Diana Keesiga.

Diana grew up in a small village in far Western Uganda close to the border of Democratic Republic of Congo. As a child, she, like so many others, had to resort to drinking from a scoop hole when her well broke. Due to her wit and hard work, she was able to attend great schools, where she rose to the top of her class. She earned a scholarship to the best university in Uganda where she graduated with a first-class degree in civil engineering. Rather than take a job in the capital city of Kampala, she chose to take a position with Water For People in rural Western Uganda to train and empower local entrepreneurs to take ownership and maintain wells.

Diana is working with the local district government to institute a “pay-as-you-fetch” system. Under this system, a water entrepreneur is granted responsibility for individual wells by the local government. He or she has the authority to charge a fee of 100 Ugandan Shilling (4 cents) per Jerry can, which is five percent of household income. The water entrepreneur has the responsibility to maintain and rehabilitate the well. Since a well needs to be completely rehabilitated about once a decade, half of the revenues are placed into a savings account that can only be tapped for this purpose.

A key aspect to the pay-as-you-fetch system is the installation of a low tech, but innovative piece of technology. Each of well is fitted with a tamperproof water meter that tracks the flow. This ensures that revenues are collected and the proper amount is set aside in an account for future repairs. Surprisingly, the transparent measurement of water flow at the source has never been done before.

The net result is consistent access to clean water. Last week one well broke down, but rather than being abandoned, it was up and running in a matter of hours. Wilson, a local resident commented, “when you transfer ownership from the government to a human being, he makes sure that the water keeps flowing, because if it doesn’t flow his family doesn’t eat.”

This approach creates jobs for the water entrepreneur catalyzing for upward social mobility for his or her family. Their children are healthy and stay in school and have better opportunities for the future. Most importantly, the community moves from dependence on NGOs or the government to independence.

The pay-as-you-fetch model is still in an early stage pilot, so, there is still a great deal to learn. As with any new innovation, there will be challenges along the way. But Diana is not content to sit idly by and watch her country return to the scoop hole. She is committed to charting a new course for sustainable access to clean water in Uganda for generations to come.

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The ethical shoe company is valued at $625m despite selling a relatively dull product and giving half its stock away – does Bain’s investment recognize that purpose can drive profits?

Last week, the private equity firm took a 50% stake in Toms, a socially-conscious footwear company valued at $625m (£377m). Toms pioneered the “buy one give one” model of conscious commerce. They give a pair of shoes to a child in need for every pair they sell.

Toms will use this capital to expand more rapidly than it otherwise would be able to on its own. Bain will bring operational expertise including a new CEO to oversee the expansion and leverage its experience growing retail brands such as Canada Goose, Michaels and Dunkin’ Brands.

So, has Toms sold out? With Bain Capital in control of half the company and running the management team, will Toms be able to stay committed to its one-for-one model? Blake Mycoskie, founder and chief shoe giver of Toms, thinks so. He said, “We need a strategic partner who shares our bold vision for the future and can help us realise it. We’re thrilled that Bain Capital is fully aligned with our commitment to One for One, and clearly they have the expertise to help us improve our business and further expand the scale of our mission.”

Those are nice sentimental words, but is it really in Bain Capital’s interest to retain the social mission of Toms? Isn’t their purpose at odds with making profit?

Traditional business thinking dictates that profit and purpose are at odds with each other, that doing good will cost the company money. Toms stands as a counterintuitive example of purpose actually driving profit. The company has sold and given away 20m shoes. With its least expensive shoe selling for $54, the company has generated over a billion dollars of sales.

Increasingly, consumers would rather do good with their purchases than give to charity. A recent survey from marketing company Good Must Grow indicates that for the second year in a row, 30% of US consumers plan to increase their purchases towards socially responsible companies in the coming year. Meanwhile, only 18% plan to increase charitable giving in 2014, a decline from 21% in 2013. A recent Nielson study also shows that consumers place a premium value on these products; 55% of global consumers are willing to pay more for products from companies that are committed to positive social and/or environmental impact.

Additionally, millennials – Toms’ target demographic – particularly want their purchases to have purpose. According to the 2013 Cone Communications CSR Study, 72% of millennials believe that they can make a positive social and environmental impact through their purchases and 51% check the packaging to ensure social and environmental impact. However, only 31% of millennials will conduct further research on the impact claims of a company they are buying from.

The “one-for-one” model is perfectly crafted for a millennial consumer who wants to feel good about their purchases but needs a clear, simple and tangible means of understanding the social purpose of the company through point-of-purchase marketing.

Though a new CEO will take the reins of day-to-day operations, Mycoskie, who still holds a 50% stake in the company, does not plan to abandon his post anytime soon. Instead, his focus will shift to expanding new categories.

So far Toms has expanded beyond shoes into sunglasses in 2011 (for every pair purchased, Toms will help give sight to a person in need), and to coffee in 2014 (for each bag of coffee beans sold a person will get clean water for a week, and for every cup of coffee sold someone gets water for day.)

A quick glance at the domains and the trademarks owned by Toms gives some indication of the vast array of products and services Mycoskie is considering including such as tea, cocoa, luggage, hotel services, news services, wearable technology, ticketing, credit cards, student loans, bicycles, water and wine. One of their trademarks is “You drink, we dig”, which might hint at a partnership with Charity: Water, with whom they have collaborated in the past on both special edition shoes and sunglasses.

The question remains whether Toms can translate the success it has had with shoes into other categories. Given its success at selling a relatively boring canvas shoe, it stands a good chance of infusing purpose into other boring products like credit cards and student loans thereby grabbing the millennial wallet-share.

Perhaps Bain Capital will retain the social mission at Toms precisely because that is what will drive higher profits. “As a firm and as individuals, we are strongly aligned with the principles of the One for One movement and its contribution to the global community,” said Ryan Cotton, a principal at Bain Capital.

Should they have taken a risk on a millennial consumer motivated by purpose to drive profit for years to come? Well, if the shoe fits, wear it.

Kyle Westaway is the author of the upcoming book Profit & Purpose and founding partner of Westaway Law. You can follow him on twitter @kylewestaway

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