Dowser - The Site for Solution Journalism

PROBLEM:
Overeager and undiscerning donors nearly hamstrung the D.C.-based recycling collective, Bikes for the World (BfW), in its infancy. International development professional Keith Oberg, had created BfW to solve two problems: The developing world lacked affordable, eco-friendly transportation, and cheap production methods had led to a glut of unwanted bikes in the U.S. In response, BfW began shipping used bikes to grassroots groups in impoverished countries. #

The outfit sent its first container of bikes to Ghana in 1997, and continued to grow steadily, enlisting civic groups and bike stores to spearhead collection drives. Yet Oberg found that many donations were “rusty junk” scarcely worth fixing up and shipping out. Meanwhile, shipping expenses drained the organization, and reconditioning costs taxed its partners overseas. #

RESPONSE:
Two years after founding BfW, Oberg began requesting that donors pay $10 per bicycle to offset prepping and shipping costs. Charging donors was counterintuitive, but effective. The quality of donations soared, as those looking to unload clunkers were reluctant to pay. Also, donors began responding to BfW’s call for well-crafted mountain bikes suited for travel on developing world roads. BfW even attracted some bikes valuable enough to be sold at vintage collector events, raising thousands of dollars for the organization. #

The higher-quality bikes also gave BfW the bargaining power to charge small fees to the overseas partners who received the shipments. Not only did this provide revenue, but it helped assure that the bikes would be put to good use. In the past, overseas groups who didn’t pay for shipments would sometimes abandon containers that were held up in customs, rather than shelling out for port storage. #

RESULTS:
“The best indicator of our success is that partner organizations ask for our bikes again and again [despite shipping costs],” Oberg said. In 2008, for example, BfW collected and distributed over 10,000 bikes in seven countries. BfW is so successful that other bike-collecting charities have begun subcontracting their shipping to BfW. #

One unanticipated benefit of charging for services is that BfW has been forced to become more transparent. Donors and recipient organizations alike raise questions about how their money is spent: How much does it cost to ship a bike? Could it be done more cheaply? “The experience has taught us the importance of accountability,” Oberg said. “There is still a tremendous subsidy in our model, but there are financial and pricing incentives to quality and efficiency built into the program, and that’s an important part of social entrepreneurship.” #

Photo: Shapes Life Foundation #