Ethical Economics in Tegucigalpa, Honduras
Every Thursday, thanks to a content partnership with brother-sister duo Journey of Action, we’ll be exploring Gen Y changemakers–and how they fit in with the rest of the world. *Due to some technical issues, this video was a little late. We promise they’ll be every Thursday.*
- A new world order that combines traditional economics with social ethics
- A hybrid of technology, design and social responsibility
- The future of business
And the essence of Tegu, the premiere, for-profit toy company featured in the video above. They sell magnetic wooden block sets at $70 – $150 a pop, but the core of their mission is a three-pronged attack to social problems in Honduras: unemployment, education and deforestation.
This definition of ethnomics comes from business magazine Fast Company, which championed the term with the 2009 launch of a vertical of the same name. But you can see it in a range of organizations remixing the traditional non-profit legal structures and revenue streams.
Thirty years ago, any mission that focused on social impact would have filed taxes as a 501c3 non-profit, and its funding, most likely, would have come from governments, fellowships and philanthropists. Thanks to an explosion of revenue streams, and a willingness to experiment, recent years have produced for-profit social entities, B-Corporations, Social Business, Hybrid Models, Leveraged Not-For-Profits. They’re all variations on a theme, trying to find the optimal way to maximize both sustainability and impact.
Arguments for and against each type of structure are ubiquitous. Many argue that hybrid or for-profit structures are more sustainable, have an easier time attracting capital, boast a higher rate of retention for employees, and thus create more impact (Make sure you check out this interview the Yale School of Management conducted with the CEOs of Zipcar and BiddingForGood. It’s quite good.) Others argue that for-profit models can’t possibly meet both investor demands and prioritize social good. And still others have cited 2011 as the year when people stop arguing about for-profit versus non-profit, and instead build bridges and share knowledge that creates the most impact.
Whatever the theory, Tegu is part of a bona fide on-the-ground global trend experimenting with profits and impact. In East Africa, Barefoot Power has built a network of Solar Entrepreneurs to sell solar lighting to towns and villages across Uganda. In rural India, E-Health Point uses broadband and the allure of cheap, clean water to provide healthcare services. Maternova is a global, for-profit enterprise that fightsmaternal mortality by selling obstetric tools to midwives and providers and licensing a mapping tool that lets groups keep track of their facilities.And of course, there is the controversial, yet visible, TOMS Shoes.
Tegu’s particularly innovative model addresses a range of social issues with a myriad of strategies. It’s a web of corporate social responsibility, local empowerment and citizen contributions that, we hope, will provide a wealth of ideas. The video is a little over 4 minutes, and touches on Tegu’s essentials. For more information on their work and strategy, please visit their website.
And for more Gen Y changemakers, check back here every Thursday!