The Intersection of Doing Well and Doing Good

I have discussed impact investing and one version of what it might look like.  The January 14 issues of Forbes describes another model.

VisionSpring is a non-profit organization formed to address unemployment in the developing world by providing corrective lenses to people who are unemployable due to poor eyesight.  They have trained some six thousand local salespeople to fit basic reading glasses for the potential workforce.  The article states that VisionSpring has distributed 600,000 pairs of glasses in seven countries.  Thus the social aspect of the venture, promoting employment in third-world countries, is being accomplished directly and indirectly.

The finances of VisionSpring still resembles a charity.  Revenue of $290,000 was dwarfed by charitable contributions of $1.7 million in 2010.   However, there are signs that sound business decisions are being pursued and applied.  The cost of a pair of eyeglasses has declined from nearly $20 per pair in 2005 to under $8 in 2010, partly as a result of changing the organization's distribution model.  The company has opened its first optometrist's office in El Salvador, serving clients who need glasses beyond the drugstore readers, with higher margin product.  VisionSpring is also investigating new sourcing for its product through strategic partnerships.

The model for this type of social investing is definitely in the venture capital/private equity mold.  The capital sources are funding the long-term growth of the organization until it becomes self-sustaining.  The measure of success is the amount of funds that are diverted from maintaining the social safety net for the local that become employed as a result of the introduction of VisionSpring versus the capital and time invested in growing the organization to sustainability.