IXL Social Enterprise Case Studies Education January 2012 | Page 12

Revolutionizing the way to make education affordable for everyone
Everyone who worked in Toyota was trained in
the “Toyota Way.” Because of this, the company
ensured that vehicles were made with the same
level of quality wherever it was made.48 Toyota
only uses one label “Made by Toyota” not “Made
in the USA” or “Made in Japan.” Should OLPC
think about offering similar training to ensure
that quality and delivery of their offering remains
consistent?
Could OLPC also consider how they can
negotiate tax breaks with local officials to ensure
they leverage economic advantages?

Are there new business models that will
sustain OLPC?
Recently, Kane considered the prospect of
taking OLPC for-profit. As a for-profit company,
the OLPC Association could target socially
responsible investors to raise capital. This
could give OLPC some financial flexibility to
overcome barriers it has encountered in dealing
with various governments. For example, OLPC
requires bank-backed letters of credit before
starting to manufacture laptops, which puts
tremendous pressure on governments to promise
a large amount of money upfront—a difficult
constraint given national politics and budgets.49
With more capital and additional flexibility
concerning that capital, could OLPC change this
requirement and use lease arrangements? By
allowing governments to pay for the laptops over
time, they could decrease their initial outlay and
resistance to purchasing laptops.
For Kane the question is how might OLPC be

structured as a for-profit institution? What are
other viable business models for OLPC? Are
there other ways to find funding? For example,
are there ways that OLPC can tap into the capital
markets or socially conscious investors? Given
that Africa is doing well, what are the ways
OLPC can help African countries gain access to
capital markets for education initiatives?
Utilizing for-profit tools to advance social
good has already been done, specifically in
the healthcare industry. Between 1992 and
1998, more than a hundred non-profit and
public hospitals converted to for-profit status
mostly through acquisitions by investor-owned
corporations.50
Financial instability was the most common
reason for these hospitals converting to for-profit,
according to a Commonwealth Fund report.51 In
the report’s eight case studies, the conversion to
for-profit for six hospitals failed to solve their
financial issues because they did not have a
long-term plan in place and focused instead on
short-term fixes. As an institution considers this
step, having the right business model in place to
ensure financial stability and attractive returns
for investors is critical.
A related concern is how to the goals of the new
stakeholders—the investors—should be aligned
with the goals of the non-profit and defining
governance. For hospitals who converted, there
was a fear that services previously provided for
free, or for very low fees, would now become
unaffordable. According to the report, these
concerns were unfounded.52

Can OLPC get 10 million laptops to children
in 5 years, drive the industry to make laptops
more affordable, and improve education with
its principles?
Arboleda says “At this time, there are a billion
children in the world and unless something
dramatically similar to what we are doing can be
accomplished, they will never be able to go further
than the obscure medieval-like environment they
have lived in now. And they will never participate
in the world’s knowledge and economic
systems.”53 Kane believes that despite all these
changes and the uncertainty in explo