DEBATE – Donations vs. Sales
By Deborah Jordan Brooks (Associate Professor, Dartmouth College)
Last Updated: 20 December 2018
Entrepreneurs and donor-based organizations working on MHM issues tend to support one another. That said, as in any field, grumbling about the deficiencies of the various models of product delivery are heard from time to time.
Analyzing these critiques can help to show how donor-focused and profit-focused organizations actually tend to support each other’s missions quite well, revealing the relationship to be impressively symbiotic / complementary for the most part.
Critiques of the donor-based model I have sometimes heard from entrepreneurs about donation-based models of sanitary product distribution include:
- Creates dependency.
In the view of some, women should be empowered to buy their own menstrual hygiene solutions, rather than needing to depend on outsiders to obtain them.
- Lack of choice.
Donations usually force women to use a specific type of product, or return to traditional methods. Choice is rarely part of the donation process, which can miss an opportunity to empower women.
- Wasted donations.
When pads are donated to schools, they sometimes go to girls who aren’t even menstruating yet. That can seem wasteful to some entrepreneurs, who have a hard time imagining good products going to waste.
- Lack of cultural sensitivity.
Cultural sensitivity is always key to the efficacy of donation efforts. However, cultural practices around menstruation can be hard for outsiders to find.
Not-for-profit organizations vary in the degree of cultural awareness they bring to the table. Some organizations are started locally, while others are started elsewhere while placing local individuals into the organization in leadership roles, and building strong partnerships with local leaders. In contrast, some organizations manage that process of cultural understanding poorly, and create tensions with local communities in the process, while wasting opportunities to make their work more effective. Many of the latter organizations do not stand the test of time.
In contrast, most entrepreneurs who start their work within their own countries tend have a clear cultural awareness of the communities they serve. That can help to ensure cultural compatibility, and to increase the probability of success for a given organization.
In contrast, some critiques I have heard of MHM entrepreneurs include:
- Not enough MH education provided with products.
Many entrepreneurs do some educational outreach in schools or community groups as part of their work. However, for-profit entrepreneurs also often can’t risk spreading themselves too thin with extensive non-profit outreach, because then they can end up putting the profitability and long-term success of their businesses in danger.
In contrast, education itself can often be a “deliverable” for an NGO — something they show their boards and their donors that they provided in fulfillment of their core mission. As such, NGOs working on MHM often have the luxury of investing more heavily on puberty education in the developing world than entrepreneurs, especially newer ones that have to show immediate profit in order to survive.
- Lack of environmental sustainability.
The pads produced by entrepreneurs are often disposable, rather than reusable (that is partly because the initial purchase price for reusable products often makes then difficult to sell to lower-income communities, and also because the marketing costs for introducing a new type of product to a market can be formidable).
Additionally, most disposable products also nonbiodegradable, which can present trash disposal challenges in low-income communities (however, as technologies are putting higher and higher levels of compostability into financial reach, that is starting to change). Like many non-biodegradable disposable pads around the world. some disposable pads are made with ingredients that hurt the environment through degradation and/or through improper disposal by burning.
As such, donor organizations working in MHM sometimes have mixed feelings about entrepreneurship focused on disposable pads when it may cause environmental harm.
- Low-quality products sold by some
In any unregulated market (and to some extent, even in those that have regulations), product quality tends to vary considerably. Shoddy products with low price points can sometimes sell reasonably well in low-income markets. However, to the extent that those products can cause adverse health incomes, or aversion to commercially sold menstrual products more generally, the existence of these products can be cause for concern.
- Manufacture abroad by some
Some entrepreneurs create pads locally, while produce them abroad (often in China, or sometimes in India). Some feel that pads should only be produced locally, in order to guarantee close quality oversight and to increase jobs in the home country’s manufacturing sector. Others find that local production is too expensive and/or corruption prone to create a viable product for a low-income market, and decide to move their production abroad, in order to maximize their market by keeping the price point low. They usually can only do so with a good deal of trips to oversee the process abroad, often with some challenges and frustrations along the way.
Is there an answer as to the best manufacturing location for every entrepreneur? Not here at IMHER. All else equal, most would agree that local production would be ideal for everyone concerned. However, all else rarely equal in practice. With unwillingness to prioritize local jobs over the value of increased low-cost menstrual product availability to low-income women, IMHER supports those entrepreneurs who move their production abroad, if that is what they need to do to obtain financial stability and success.
How to bridge the divide?
Despite occasional mild grumbling, in most cases, organizations and entrepreneurs working on MHM usually realize that they are each other’s best partners.
First, in relatively few cases are donor-based and for-profit operations actually competing for “market share.” Donor-organizations are often trying to reach higher need, lower income individuals than entrepreneurs, even among entrepreneurs focused on low-income women. They tend to focus specifically on the lowest income individuals, and sometimes those in catastrophic straights like humanitarian crises. For entrepreneurs to be able to sell their wares, there has to be at least some disposable income available for the purchase. In practice, that tends to rule out those in the lowest income strata. This division of labor between entrepreneurs and NGOs tends to allow for complementary distribution of products.
Second, the reality is that most donor-based efforts can never come close to meeting overall need by women in a given community, or certainly in a given country. In many cases, NGOs distribute pads in a given school, leaving the needs of mothers, sisters, aunties, and friends at other schools and in other nearby towns unmet. They justify doing so on the basis that meeting some need is better than meeting no need. But still, donor organizations, despite their truly heroic efforts to reach as many girls and women as possible, are still only meeting a tiny proportion of the products desired by low-income populations in the developing world. That can introduce market opportunities for entrepreneurs, especially when NGO’s invest in education around the instruction of new menstrual products (i.e., washable pads or menstrual cups) into a community, potentially creating market demand that would not have existed before without expensive advertising campaigns.
Third, rather than manufacturing their own products, NGOs often choose to distribute products manufactured by local entrepreneurs as part of their offerings – often distributed as menstrual kids during educational outreach efforts, and often referred to as “social enterprise” programs. In other words, many non-profit organizations are engaging in entrepreneurship; the difference between that and regular entrepreneurship is that any profits typically (but not always) flow to the individual doing the work, rather than to the organization that set it up.
Finally, smart multinational NGOs often reach out to local product entrepreneurs in order to build partnerships and to improve cultural sensitivity in their work. In return, entrepreneurs often benefit from those relationships, by staying tapped into the international MHM community of innovators.
Bottom Line
Donor-based and entrepreneurial MHM product distribution efforts complement each other in most cases, with much to be gained by close professional relationships between them.