How One Social Marketing Organization Is Transitioning From Charity to Social Enterprise

The financing model of the U.S. non-profit social marketing organization DKT International has changed dramatically since it was founded 31 years ago. In the early days, DKT was reliant on donor funding, and most of its products were heavily subsidized in order to reach low-income and marginalized populations. However, over the last three decades, DKT has become increasingly financially sustainable due to a fortuitous combination of clever marketing, rising incomes, and the stable and often declining cost of procuring contraceptives. This has been especially true in middle-income countries like Indonesia, Brazil, and Ghana but also in lower-income countries and regions like Ethiopia and Bihar, India. Because all DKT programs sell products, they earn revenue. Through a mixture of cost recovery and cross-subsidization strategies, DKT has been able to simultaneously serve a wide range of income segments while generating sales revenue that can offset costs and even turn a profit in some countries. Such profits are reinvested in activities that educate and shift behavior or deployed to other countries to start up new ventures. This article describes the transition experienced by DKT, from charity to social enterprise, and profiles country examples in three different stages of financial sustainability, providing potential lessons for other non-profits. As generating resources for non-profits becomes more challenging, organizations may wish to explore ways to generate revenues and increase cost recovery by monetizing the products and services they provide.