Investing in Scale

Investing in Scale

How iDE used flexible funding to help solve the sanitation crisis
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Tuesday, May 16, 2017 - 9:05am

CAMPAIGN: Global Engagement Forum:Online

CONTENT: Article

This is part two in a series highlighting the Lipman Family Prize. Read part one here, and stay tuned for part three.

In 2012, the Barry and Marie Lipman Family Prize named iDE as its inaugural prize winner. Each year, the top award is given to one organization that exemplifies leadership and innovation in the social sector, with a special emphasis on impact and transferability of practices. The Prize recognized iDE’s unique, market-based approach to addressing the global challenge of poor water and sanitation. Two other honorees, Komaza and MedShare, were also recognized in 2012 as game-changing organizations.

iDE’s founder Paul Polak once explained, “If you aren’t able to see a way to reach one million people, then it is not worth doing.”

Prior to iDE’s first interventions in Cambodia, baseline sanitation coverage was around 23 percent, with an annual growth rate of 0.923 percent. At that rate, reaching 100 percent coverage would take over 100 years. Globally, 2.4 billion people — 40 percent of the global population — lack access to safe drinking water and hygienic sanitation solutions. The resulting diarrheal diseases kill more children every year than malaria, tuberculosis, and HIV combined.

When the Lipman Prize was awarded in 2012, iDE had just started scaling up its market-based approach to expand access to hygienic toilets. At this time, iDE had already designed an improved toilet product and trained a network of local businesses to sell 14,000 latrines. In the absence of appropriate sanitation solutions, the local environment and water resources were becoming contaminated with pathogens. iDE responded with a strategy known as sanitation marketing, which takes a marketer’s approach to solving the problem. Instead of the traditional charity model of giving free toilets away, or simply building awareness about the health benefits of having a toilet, iDE sought to make something as taboo and unsexy as a toilet aspirational, affordable, and accessible.

Today, iDE has scaled up the sanitation marketing model to six additional countries in Asia and Africa, resulting in over half a million toilet sales globally and reaching more than 2.5 million people. How was iDE able to make this happen?

Design for scale from the beginning
iDE tapped into a mechanism built to be scalable: the private sector. By designing a product that people actually want and can afford, households decide to pay for their own toilet. By designing a business model that is financially sustainable, businesses and sales agents are motivated to produce and sell toilets. Prior to proving the effectiveness of this market-based approach, other NGOs as well as the local toilet business owners had had difficulty believing that poor people would actually invest their own, limited money into a latrine, especially because it was something that they refused to adopt when it was given to them for free. In the last six years, however, coverage in the Cambodian provinces where iDE is present has increased to more than 60 percent, with an annual growth rate of over 6 percent.

The Lipman Prize’s emphasis on impact helped spur iDE’s early thoughts around expanding the scope of our mission beyond sanitation. iDE began considering how we might extend the tenets of the market-based approach to making an impact in the areas of water, hygiene, and fecal sludge management, all of which contribute to diarrheal disease. The Prize connected iDE’s co-directors to investors and advisors in Wharton and San Francisco, whose advice and input helped advance the transition from a Cambodia-based sanitation program to what is known today as iDE’s Global Water, Sanitation, and Hygiene (WASH) Initiative.

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