Living Goods is a non-profit organization founded in San Francisco with operations in Uganda, Kenya, and Myanmar, and Washington, DC. Its goal is to build sustainable community health systems at scale. Living Goods operates networks of independent entrepreneurs who make a living by selling medicines and products to poor people that can help improve their health, wealth, and productivity. Living Goods borrows from successful direct selling models like Avon Products, Amway and Tupperware. The project aims to be fully self-funded at scale. Living Goods was founded by Chuck Slaughter in 2007.
Objectives
Living Goods focuses on three prevailing problems with health systems in the developing world: 1) the shortage of front-line health workers, 2) the inadequate distribution of basic health products in both the public and private sectors, and 3) the failure of innovations like clean cook stoves and solar lamps to reach scale. It is largely recognized that each of these problems increases in severity at the “last mile” where the need is greatest. Using a double bottom line business approach, Living Goods aims to:
Save 20% of poor families on basic health products and daily necessities
Create incomes for thousands of entrepreneurs
Increase access to innovations
Scale impact via global replication of the Living Goods direct-selling model
Operations
Direct Selling System
Living Goods franchises its brand and business model to women who work as independent, self-employed ‘Avon-like’ agents. The women receive training, a below-market inventory loan, and a ‘Business in a Bag’ including branded uniforms, signs, and basic health and business tools—including a smartphone loaded with Living Goods apps. Living Goods supports agents through networks of branch-warehouses. Agents serve their clients via door-to-door visits, home-based stores, mobile technology and community meetings. Each agent serves approximately 700 people.
Products
The organization focuses on a short list of diseases that account for over two-thirds of child mortality but can be prevented and/or treated at very low cost, including malaria, diarrhea, respiratory infection and neo-natal sepsis. Living Goods also acts as a distribution platform for new pro-poor products designed by smaller companies who face challenges distributing in these markets on their own. Listed below is a sample of the items in Living Goods’ product mix: Pro-Poor Innovations: Solar lanterns, clean cook stoves, slow burning briquettes. Prevention/ Nutrition: Water filters, fortified foods, bed nets, condoms, vitamins, iron, safe delivery kits, family planning. Treatment: Malaria treatments, de-worming pills, diarrhea treatments, basic antibiotics. Fast-Moving Consumer Goods: Diapers, sanitary pads.
Distribution
Living Goods uses their buying power to create a streamlined supply chain. Avoiding fragmented and inefficient supply chains keeps product costs down for customers. Some Living Goods prices are 50% below the prevailing market price. By controlling distribution the organization is able to keep stock levels consistent and avoid the circulation of counterfeit drugs.
Mobile communications
Every Living Goods agent uses a smartphone. Living Goods uses mobile communications to monitor, increase sales, provide health information, and drive prompt treatment. SMS is used to broadcast product promotions. Agents also send SMS messages to report on treatments in their community. After clients are registered they receive a free sequence of personalized, automated treatment adherence reminders. Clients call or text their agent for help, if they want a visit, or if they need advice.
Replication
Living Goods is attempting to build the field of micro-franchising and direct-selling to the poor. The organization works with NGOs, consumer businesses, governments and other social enterprises to adapt and replicate its open source model. Living Goods states that it takes inspiration from Mohamed Yunus, the creator of Grameen Bank, whose ideas were used to create thousands of microfinance institutions around the world outside of Grameen itself. Living Goods has a dedicated advisory services team for organizations that need technical assistance rolling out the model. Partners include PSI, Brac, and Marie Stopes International.
Charity evaluator GiveWell singled out Living Goods for special recognition in 2009 because Living Goods was cooperating with the Abdul Latif Jameel Poverty Action Lab to perform a rigorous evaluation of its program. In 2011, Tobias Pfutze, an Assistant Professor of Economics, participated in GiveWell's "Find the Best Charity" experiment whereby he would spend about ten hours researching the best charity using GiveWell and then allocate $2500 to the charity or charities. Pfutze allocated the entire $2500 to Living Goods and explained the rationale for his decision to GiveWell in an interview. GiveWell followed up with a blog post discussing some of the issues raised in the discussion. In October 2014, GiveWell announced that it intended to make a $100,000 grant to Living Goods, and simultaneously published an "ongoing review" of Living Goods as well as a blog post about it. On December 1, 2014, GiveWell announced its top charities and standout charities for the year. Living Goods was among the standout charities, alongside Global Alliance for Improved Nutrition's Universal Salt Iodization Program, International Council for the Control of Iodine Deficiency Disorders, and Development Media International.
