Unique Business-Ministry Model Thriving
From Maji-Tech Executive Director David Bueno
WorldServe has embarked on an innovative journey to meet the desperate need for clean water. By committing its unique resources, such as the experience of Christian business persons, WorldServe is developing a business model that achieves important economic, social, and transformational goals in developing countries. Maji-Tech, the resulting water solutions company, was established in Tanzania to test this new strategy.
WorldServe’s water initiative is a response to the increasing demand for potable water in Sub-Saharan Africa. The effects of scarce water resources are felt throughout society. Rural populations are forced to migrate in search of water, overpopulated urban centers are experiencing health and hygiene problems, and businesses that depend on water are limited by the high cost of such a limited commodity. A closer look at the water crisis reveals the need for an integrated approach that can address multiple areas of need. The challenge, however, is to stay focused enough to provide an efficient response. WorldServe has chosen to focus on a private sector initiative that allows water resources to be managed by a sustainable model founded on good stewardship principles.
Maji-Tech achieves its development goals through a unique strategy by emphasizing sustainability. Economic development will provide long-term benefits if it can raise business standards, and in our case facilitate more efficient water management solutions. The aim is to compel the local water economy to become more efficient through ethical competition, which in turn makes potable water more accessible to everyone. To avoid subsidizing inefficient water initiatives, and thereby undercutting a fledgling industry, WorldServe requires that Maji-Tech expense its real costs and generate a reasonable return. This ensures that long-term improvements are achieved within the water industry, as opposed to short-term consumer gains that may debilitate the emergence of an efficient private sector method of providing water solutions.
But economic development is just the beginning of WorldServe’s objectives. Randy Barton, WS Board Member, expressed it best: “Maji-Tech leverages its sustainability to achieve its social and transformational objectives.” Specifically, this means that Maji-Tech makes sure that communities with limited resources and Kingdom-building entities (such as Bible colleges, schools, and churches) directly benefit from the water initiative. This is done by taking the revenue from drilling projects, and using these funds to provide discounted wells for areas in great need of clean water. Clearly, WorldServe’s commitment to those needing clean water goes far beyond the revenue it generates. WorldServe also partners with other not-for-profit organizations to raise funds and provide technical expertise to address water scarcity in communities with limited resources. Figure 1 highlights how WorldServe selected its strategy.
This comparative analysis shows why a blended approach (including both for-profit and not-for-profit water drilling projects) works best for WorldServe’s objectives. If funds were invested strictly in a for-profit venture, many water wells would be drilled in the private sector, which would help the economy as a whole, but would neglect the communities that most need access to water. However, if we simply donated the monies for water projects, we would only be able to impact a limited number of communities for a short period of time. Finally, if we discount all revenues (at cost) in order to provide a cheaper service, once the equipment broke down we would not have the resources to continue the services. For this reason Maji-Tech created a formula that aims to allocate 25% of its capacity towards discounted wells, 30% of its revenue for purely social or transformational initiatives, and the remaining 50% is reinvested in the program to ensure its long-term viability. The exact percentages may be adjusted as more financial data becomes available. WorldServe facilitates this innovative strategy by providing Maji-Tech access to capital. This allows Maji-Tech to invest its revenues in social and transformational projects without limiting its capacity for growth. Figure 2 demonstrates what this blended model looks like in financial terms.
Maji-Tech is still young in its development phase, but the initial results are encouraging. The initiative in Tanzania has great upside, and we are presently examining the potential to expand this strategy to other countries. We depend on God to continue to guide us on how to best use the talents he has entrusted us with, so that we may faithfully share His love and grace with more people.