When it comes to international charities, Seattle is home to some of the biggest names in aid that cater to developing countries across the world. But a new model has arrived that is not about handouts, but about making a profit.
The idea behind Burro, founded in 2008 by Cranium co-founder Whit Alexander, is to provide high-quality and meaningful products to the Ghanaian people. Today this for-profit company has 200 resellers (locals who sell Burro products at their village), 5,000 clients, eight employees and a full catalogue of merchandise.
Burro began with just one product, a rechargeable battery. The company has since expanded their offerings to include chargers, battery-powered lights, reading glasses, irrigation pumps and much more based on demands. So far the products seem to be effective for the Ghanaian people, but Alexander has yet to find a business model that turns a profit.
“We’re still very much in what I call our pilot phase,” Alexander said. “I’ll be honest with you, we haven’t figure it out yet.”
A dirt road runs through the length of this small settlement and along either side are rows of houses constructed with a crude mixture of mud and wood. There is no electricity and the only water has to be hand-pumped from a well. During the day, few people can be found in the village because most are busy working on their farms. There is no official school, just a small structure used by the children who are unable to walk the four miles to the neighboring town.
This is the tenth village Brown has visited and at each one she has the same objective: give surveys, take photos and just simply talk to the villagers. All of this is done with the focus on Burro’s business model, to become profitable.
According to the World Bank, the population in Sub-Sahara African countries, which includes Ghana, increases by about 2.5 percent each year, the fastest rate in the world. The organization predicted that this area would make up 14 percent of the world’s population in 2020, which makes it one of the biggest untapped markets on earth.
But the question becomes why did Burro, and other social businesses like it, choose Ghana specifically?
Cole Hoover, the Co-Founder of Lumana, another Seattle-based organization that provides Ghanaians with micro-credit and business education, said, “There’s just a lot of hope in Ghana.”
“They’ve had two successful peaceful transfers of power, they’re getting some good infrastructure, they’re developing their IT and technologies base,” Hoover said.
Burro’s clients live off of less than $5 a day, which makes turning a profit somewhat challenging.
Alexander explained that his success markers come from discovering his clients’ essential needs and what they don’t have access to in their village. Burro then sells them the product, well made and at a reasonable price.
According to Alexander, it’s not about hastily giving something to them. It’s about giving them access to a reliable business suited to their needs and working with them for the ‘long haul.’
“There’s a level of integrity and respect you get right out of the starting gates when you’re trying to build an enterprise,” Alexander said, “when you’re dealing with people at a very different level than when you’re sort of the one who’s the beneficent.”
Alexander said the idea for Burro’s first product, the rechargeable battery, came from the fact that the people of Ghana spend more than $50 million a year on throwaway batteries. Today, he refers to this decision as “naïve,” and has adapted his company considerably since.
Burro has expanded to a full catalogue of other products, including a charging station for the batteries. But the one thing that hasn’t changed is Burro’s founding mission, to improve Ghana’s productivity or “Do More” as their tagline says. Alexander explained it this way in the catalogue, “you’re not going to see energy drinks or flat screen televisions.”
Jorge Rojas, civil engineer and University of Washington economics PhD student, explained that he has seen first-hand companies like Burro have a positive influence. Rojas said they often bring money into the country’s economy and create employment, which then improves the local’s welfare. But they can also create dependency.
“The problem that can happen is that these companies may change the culture of these people,” Rojas said. He has seen U.S. businesses work in developing countries and change the equipment and tools they rely on to get work done, thus creating dependency on the company’s products.
The difference is that Burro has a mutual dependency with the locals. Alexander explained that they relied on the villagers and chiefs to determine what products or type of organization would benefit the locals the most and then teamed up with them to create it. Today the only Americans in the company are Alexander, Brown and another intern.
It was through this partnership and the locals’ input, that Burro made the choice to add more products to its catalogue. And like any business, as they added more products they needed to also increase their revenue. So far, although the margin has gotten smaller, they haven’t closed the gap. One of the reasons is that people aren’t exchanging their batteries regularly.
“Right now, for the sense of growing the business, you register batteries for a certain amount of money and then you can exchange them for a charged battery for a much lesser fee,” Brown explained, who will be a senior math major at Skidmore College in the fall. “So the way we make money off of it is from people who exchange batteries regularly.”
Brown has found in her surveys of villages that the battery powered lights have made the biggest impact. Before Burro’s lights were available, villagers customarily used kerosene. Besides kerosene’s harmful effects on the environment and its high cost, it also coats everything with a black, oily soot.
“We had one shop keeper tell us that it will run out in the middle of the night and he can’t get anymore because everyone else is asleep,” Brown said. So the light allows people to keep their shops open later and, in turn, make more money. “Sometimes they’ll take it between their shop and home, and their kids will use it to do their homework at night,” Brown added.
Brown said these stories have shown her that you don’t have to be a non-profit to do good.
“You’re not doing it by begging the people in the U.S. to help these people in Africa,” Brown said. “You’re doing it by going out to these villages and giving these people what they need at a reasonable price.”