Business models for good part II

Business models for good are business models for companies that want to create impact. With the use of one of these models, you are contributing to a solution of a social problem in the core of your business. For commercial companies, like TOMS, who was one of the first to use the business model “one for one”; for foundations who want to grow, like Dance4Life, who laid the foundation for explosive growth with their business model “social franchising”; and for social entrepreneurs, like Peerby, who enables neighbours to borrow or rent things from each other with their multisided platform.

This second part of the series “business models for good” is about the business model social franchising and describes how Dance4Life managed to scale their impact by using social franchising.

 

Dance4Life, Tanzania dance

 

Dance4life is empowering young boys and girls to take personal leadership over their sexual lives. They do this by means of an international program developed by and for youngsters. Jael van der Heijden, Executive Director of Dance4Life shares why empowering young people is key and explains how social franchising enables Dance4Life to grow.

During the International Aids Conference in July 2018, Jael shares the story of 16 year old Olivia from the outskirts of Nairobi.

Jael van der Heijden, Executive Director of Dance4Life at the International Aids Conference

 

 

Olivia her dream is to start a beauty parlour. But she dropped out of school when she got pregnant. She now lives with her family, including her 1 year old son. A young person like Olivia does not think about prevention of HIV or pregnancy. She is more thinking about how she can get some sponsors to make her dream a reality. These sponsors are older men she has sex with and that give her things like a mobile and sometimes money.

Unless we actually spent more time to understand Olivia and empower her to reflect on her own ambitions and challenges in life, we are not really making sustainable change for her.

Jael: “In 2016 we decided to take a moment to reflect on our work. We realised that we mainly send money and that we were spending less time on better understanding Olivia. Our partner abroad would receive money and would do as they were told. We did not critically look at the purpose of this transaction anymore. So we asked ourselves what intervention is most effective?

 

Empowering instead of educating

Unsafe sex is one of the fastest growing health risks for young people worldwide. When you want to educate youngsters about sexuality and discuss taboos, an ordinary classroom is not the most suitable place to do so. Dance4Life developed a program where young people are trained to empower their peers.

 

In August 2018 the Journey4Life started in Jakarta. Nina and Oonagh from Dance4Life travelled to Indonesia to contextualize the Journey4Life curriculum for the needs of youngsters in Jakarta.

 

Jael: “We work with young people and encourage them to involve others, because we know that empowered young people make healthier sexual choices in their lives. This is a crucial difference with many other programs.”

This only works in combination wit the availability of for example condoms and hospitals. Dance4Life works with various partners such as the Gates Foundation, who enable scalability and a sustainable future.

 

Why social franchising?

Jael: “Social franchising is a way to scale. It is not entirely new. Internationally it has been used for a long time, for example for scaling local private clinics and financial literacy. It has however not yet tackled social impact problems.

Social franchising is not yet widely used, but is upcoming. Many NGOs (non governmental organisations) are looking for new models. What role do you have as a local NGO? What other role can you fulfil besides sending money? How can you guarantee that you can scale as effective as possible?

We already had a few partners who took care of their own funding and the relationship with these partners was much more on an equal basis. These partners asked for specific expertise from Dance4Life on Youth engagement So they could increase their impact on young people. This was way more effective. And this is what we were looking for.”

 

 

How does it work?

“In the regions where we would like to be active, we have a regional liaison looking for partners based on the profile of franchisees. This person is also looking for investors and sponsors. They are employed by Dance4Life and are responsible for creating demand.

When a franchisee is interested in running the Dance4Life program locally, we can help them raise funds. Once they have the funds, they can start with the program. Some already have funds of their own and can start right away.

The main reason why a franchisee wants to use the Dance4Life program is because we work with a proven method that is innovative and ground breaking. We work together with young people and at the same time make the program very attractive for young people. Another important reason is that the franchisees have complete ownership and the last reason is that they become part of a global network.”

The franchisee pays Dance4Life a start-up fee for which they receive three workshops on how the program works. The Dance4Life program can be entirely tailored to their needs. Once all is set, the franchisee pays an annual fee to run the program and to use the knowledge and expertise of Dance4Life.”

 

Funding

Do these fees cover all the costs?

Jael: “The start-up fee is covering the costs of the training. The ongoing support is covering approximately 20% of the costs. For the remaining 80% we actively search for investors who belief in our method and our work. We have a Friends4Life network, our exclusive business network, and receive money from the National Postcode Lottery.

We use these funds to support the franchisees, set up a training academy, and continuously innovate and do research. We are always looking for partners who can help us in these specific areas. We have a clear business plan on how we are going to finance our plans, but of course we are always looking for investors who are interested in innovation.”

 

Problems

Which problems did you run into when implementing the social franchise model?

We started in 2017. The main challenge was changing the current network. Especially the partners who are still receiving funds from Dance4Life. We want all these partnerships to be converted in 2020 because running two parallel tracks is costing an enormous amount of time. In the end it took us a year extra to get where we are now.

Looking ahead we want to grow the number of franchisees from 14 to 60 in 2030. But we are not there yet. We expected to have grown already by now, but we will not reach these goals. The system however did not change. We started flat but will grow over time.”

 

Advice

What is your advice for other NGOs or social entrepreneurs who want to use social franchising to scale their business?

Jael: “First or all, believe in your product or concept! And look very carefully at what you want to scale and what the minimum requirements are. Take your time to develop your goal. We got support from a company who is specialised in that. They have toolkits available and supported us with workshops.

You really have to have a clear strategy and develop a clear offer. What does your partner profile look like? What exactly are you offering? It costs a lot of time to do the steps well. It has taken us a year.

After that you have to develop the tools and write the manuals, this has taken us another year. When it was all ready, we ran a pilot in 5 different countries, based on these results we are now ready to roll out globally. In total this has taken us 2,5 years.”

 

 

“The motto of social franchising is recruit hard, train well and manage easy.”

 

The power of social franchising

The motto of social franchising is recruit hard, train well and manage easy. We now invest much more time in finding the perfect partners, but it definitely pays off. Once we have found a partner that meets our criteria, we can really take off. Social franchising enables us to truly scale our impact!”

 

Business models for good

This was the second article in the series “business models for good” where Dance4Life shows that cooperation with the target market and the right partners is key to successful growth.

In the first article TOMS showed how they, like Dance4Life, innovate their business model by listening carefully to the needs and wants of their customers.

The last article in this series is about Peerby, a multi sided platform where neighbours can borrow or rent things from each other. A multi sided platform is a perfect business model for social entrepreneurs that focus on community building.

 

Are you ready to start?

I have created a free checklist for you to start a successful business with impact. If you tick off all the boxes, you have laid the perfect foundation for your business for good.

 

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This story has first been published in The Startup, Medium’s largest entrepreneurship publication followed by +445,678 people. A revised version of this story was originally published in Dutch on Frankwatching, the most popular marketing community in the Netherlands with 450.000 followers.