DKT was founded in 1989 on entrepreneurial principles — a mission employing social marketing to provide safe and affordable options for family planning and HIV prevention.
DKT’s strategy is inherently entrepreneurial because its social marketing approach uses the tools of the commercial marketplace to achieve a social purpose. It leverages existing infrastructure, incentives and strategies in the private sector to increase supply and demand for contraceptives. Branded contraceptives are attractively presented, heavily advertised and sold through regular commercial channels.
Many DKT country programs started out as subsidized programs with traditional donor funding but have since evolved into “social enterprises,” that cover a significant percentage of operating expenses with sales revenue. Depending on the per capita income levels of a given country, DKT is able to charge prices that can cover the base cost of goods or even provide a small profit margin. This margin helps keep these programs sustainable.
A number of factors contribute to DKT’s entrepreneurial approach:
Decentralization: DKT’s headquarters in Washington, D.C. includes a very small team that focuses on broad strategy as well as financial oversight. Technical support, fundraising, procurement, and other functions are fully delegated to field offices. As a result, country teams and staff are given substantial autonomy. This allows field offices to make decisions quickly, explore timely opportunities and develop culturally appropriate programming.
Financial Sustainability: DKT programs try to attain financial sustainability without compromising their social objective of delivering high quality, low-priced health products to poor people. This involves a three-step process — cost recovery, cross-subsidization and profitability. A number of DKT programs are now 100% financially sustainable and some programs have even used their profits to provide seed money for start-up programs in other countries. For more details see our White Paper on Innovative Financing.
“Customers” not “Beneficiaries”: DKT products and services are purchased — albeit at highly subsidized prices — and not given away for free. When a product is given away, it is often seen as being of inferior quality. But paying even a modest sum turns a “beneficiary” into a “customer.”
Rigorous Measurement: Every program is rigorously measured by yardsticks that do not permit obfuscation — the number of couple years of protection produced, changes in contraceptive prevalence and indicators such as maternal mortality. Results are made public for greater accountability. DKT publishes its Contraceptive Social Marketing Statistics annually.
A 2012 policy statement of the DKT Board of Directors captures its entrepreneurial spirit:
“DKT should seek to advance its causes in a pioneering and risk-assuming fashion. The tendency of all social service organizations is to become more cautious with the passage of time and, particularly, with the increase in size and donor constituency which normally occurs with successful organizations. It is the profound desire of the organization’s board that DKT not fall into this trap. DKT instead should maintain policies which are based on the willingness to take risks in the interests of providing family planning (and condoms) to those who want it.”
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“For Family Planning, Entrepreneurs Can Outdistance Charities,” Huffington Post, Sept. 16, 2013
“Social Impact Entrepreneurs Are Transforming Family Planning,” Inside Philanthropy, July 29, 2013
“A Personal View of Charitable Giving,” Huffington Post, Aug. 9, 2012