Disrupting Charity: How Social Business Can Eradicate Starvation
There is an international consensus that malnutrition is the single greatest source of poverty, ill health, and underdevelopment in the world today. While progress has been made in treating starvation, a staggering one in every four children in developing countries still cannot access essential micronutrients needed for their growth and development. But one doctor is working to change this.
Steve Collins, a doctor who has been researching alternative treatments for malnutrition in Somalia since the ‘80s, discovered that the most effective methods were driven by demand and involved the community.
“[In Somalia], I observed that there was no data being gathered by the program staff in the feeding center because they were too busy supplying services,” he says. “This struck me as a major issue limiting progress, so I began collecting data on all the adults we treated.” A few months into his research, Collins used the data to make changes to treatment regimes and mortality rates at the center dropped from 75% to 20%.
Building on this data-driven approach, Collins founded an independent research consultancy, VALID International, in 1999, to roll out his findings on the treatment of starvation using Ready-to-Use-Food (RUTF) products—calorie-dense, oil-based pastes with essential nutrients—in communities. The results proved successful and in 2007, VALID’s model was adopted as a best practice by the World Health Organization. It is now in use in over 60 countries, delivering treatment to over 3 million starving children and saving tens of thousands of lives per year.
“The process of change and innovation is a messy one,” Collins explains. “Mistakes can happen, and in the development world, when mistakes happen, people die.” According to him, the charity-based model of development is failing to address the root causes of malnutrition. Moreover, charities and aid organizations were heavily reliant on external resources to do good, so they cannot afford to make mistakes and this limits their ability to innovate.
Disrupting the charity model
The alternative to charity is a model that encourages risk and innovation: the social business, where revenue streams are 100% aligned with social impact. Collins argues that with this approach, organizations can focus on impact rather than image.
Following the success of VALID International, Collins established a second organization, VALID Nutrition, in 2005 to develop products for the new RUTF market that he had helped create. The organization produced pre-cooked nutrition pastes made from a combination of grains, pulses, oil, vitamins, and minerals, which can be stored safely for up to one year without refrigeration. This was crucial in helping those in remote locations, which often lacked reliable electricity, access food. The organization also supported local production; it used ingredients that could be locally sourced, thereby strengthening local industries and expanding a local workforce.
Furthermore, the organization is structured as a self-funded social business, which has a steady stream of revenue from the sale of RUTF products to the United Nations and other NGOs, as well as government agencies in India.
Unlike traditional aid and development models that are wholly dependent on public funding or charity donations, VALID Nutrition combines humanitarian investment (from its clients in the development sector) and ethical trading (via their local production) to create a viable and self-funding business.
Although Collins helped revolutionize how malnutrition is treated, the problem is still widespread: Chronic malnutrition still affects an estimated 177 million children worldwide. To reach more at-risk children and adults, he insists that treatment must expand beyond the development sector. At the moment, there are no affordable products that are easily available to consumers but VALID Nutrition plans to change that by selling specialist food products to retailers so that consumers can access food directly.
Collins hopes to show that selling complementary foods through retail channels can improve health while generating financial return for investors: “The 3 dimensions of the evidence we need are: 1) Can we generate demand among low-income consumers to actually part with their cash for our products? 2) Will this have a positive impact on lowering chronic malnutrition? 3) Is it profitable?”
To date, the issue preventing action at scale has been the absence of evidence on what market-based mechanisms work best, and this is what VALID’s latest research seeks to show. If it can prove that this approach works, VALID has the potential to shape the retail market for malnutrition solutions on a massive scale. “If we succeed, this could be a genuinely disruptive, game-changing approach,” says Collins.