What Makes a Social Enterprise?
Can you really change your employees’ lives for the better if they don’t have office chairs?
As the first speaker in the Harvard Franklin Fellowship Tech x Social Impact speaker series, we heard from Wendy Gonzalez, the current interim CEO at Samasource.
Samasource is a perfect case study in incentives — how can a social impact company really work?
Samasource’s founding principle is to ‘Give Work’ rather than aid to people in developing countries. Samasource primarily connects Fortune 500 companies which need AI classification work with workers in India, Ghana, and Kenya. Most of its employees are women. By Samasource’s own estimates, it has improved the lives of 50,000 people since its inception in 2008.
Samasource is a perfect case study in incentives.
Samasource hits all the conventional talking points around creating a sustainable social enterprise. It works with big name companies, focuses on female representation at every level of the company, and brings advanced technology to impoverished Africans.
But while Samasource does make more provisions for its employees than it strictly has to, especially in that it provides hotels for its employees during COVID-19 — how much praise do they really deserve if they won’t even provide reasonable ergonomic support for their office workers? And when they have their employees do jobs that have been proven to cause PTSD for less than an hour in US minimum wage per day — is that really laudable?
So even given their relative success —I am unconvinced that the Samasource model is one that we should encourage other companies to emulate.
At first glance, they seem to be providing a path to a better future for their employees, who largely have no experience with technology whatsoever. Samasource says that they are employing workers in AI and setting them up for future careers in technology. But the assertion that they are employing Kenyans ‘to do AI’ is highly misleading. While Gonzalez asserted that workers were being positioned to take on real AI work in the future, and to become dataset consultants, workers spend most of their time labeling objects in images, which is essentially a manual labor job requiring no skill or insight.
And how much of their workers’ progress should actually be attributed to employees’ learning through working at Samasource, and how much to just a living wage? Previously, Samasource had a partner organization, Samaschool, that gave employees technical training. Since Samasource has become a for-profit, that side of the organization has been discontinued.
The rationale for this, as explained by Wendy Gonzalez, is that Samasource is intended as a bridge employer; employees are not really expected to stay past three or four years. It is intended as a stepping stone rather than as a permanent career. Personally, this reads to me as a rationalization for not providing any real upward trajectory for employees. Gonzalez cites the possibility that workers will move on to become consultants for dataset quality and be able to advise on companies’ data labeling needs, but it is not clear at all how this follows from employees’ manual labeling experience. The primary form of learning and employee growth is at a much more basic level — they obtain mousing skills, and familiarity with and access to technology at all. To be fair though, the HFF fellows asked about similar organizations looking to ‘give work’, but Gonzalez pointed out that they all require much more extensive technical background from applicants. Samasource accepts applicants without any technical experience whatsoever, in particular, people who have never used a computer at all.
This works only because these employees have so few other options. Samasource only operates in places where the average wage is less than $2 USD per day. Previously, it had attempted to operate in New York, California, and Arkansas, doing retraining programs, which were much less successful at changing workers’ living conditions — most participants in those programs remained impoverished after the program. Samasource pays greater than the average wage in all the regions it serves. While the cost-cutting aspect of outsourcing the work itself is ethical enough, I am less convinced that the consequent saving on providing chairs, let alone healthcare, is all that justifiable.
But the structure of the organization itself demands these types of tradeoffs. Samasource recently transitioned from being a nonprofit organization to being a for-profit organization. However, the for-profit’s majority owner is a sister nonprofit. The founder of Samasource, Leila Janah, originally envisioned it as a for-profit, but at its founding, the ‘Give Work’ idea was not compelling to investors. When it became possible to do so, they transitioned. Gonzalez underscored the idea of a ‘double bottom line’ — measuring Samasource’s success both in terms of social impact and fiscal profits. This is legally implemented through the nonprofit’s majority shareholder status.
The level of detail with which Wendy Gonzalez oversees Samasource is formidable. Most for-profit CEOs would not consider their employees’ day-to-day experience with this level of granularity. There are quite clearly more moving parts in running a social enterprise than there are in running a pure for-profit.
Is Samasource enabling the white-savior complex?
But I’m concerned that Samasource is too much of a generator of feel-good, photogenic moments for the Fortune 500 companies employing its workers. The companies get to say that they are uplifting the lives of Africans, when in fact they are outsourcing boring, and in the case of content moderation, dangerous, work that Americans frankly don’t want to do. It smacks of the corporatized version of white Western girls ‘picking up random African children and posting them on Instagram’, as VICE put it. This turns something that is at best ethically justifiable into something that is deeply self-congratulatory.
The fact that the business model is totally dependent around providing less for employees is truly questionable.
Samasource doesn’t need to provide healthcare when it employs workers in Kenya. It doesn’t even need to provide proper office chairs.
At the same time, it’s important to recognize that Samasource is criticized more than most other companies when it is in fact doing more than most other companies. Companies that are trying to be ethical should not be reward with impossible standards.
How can we incentivize companies to do better?
One solution is the B-Corp (benefit corporation), as my fellow cohort member Austin noted, which defines the best interest of the corporation as including some social responsibility.
Gonzalez felt that that legal form may not go far enough in holding CEOs accountable for employee wellbeing, and felt that the majority-owner nonprofit form was better. After our conversation, I am left feeling that even the majority-nonprofit status may not be creating an incentive structure that is truly worker-first.
‘Doing good while doing well’ is a fraught concept, and understanding the subtleties of Samasource’s operations provides a lot of insights into how that can both succeed and fail in various aspects of a business.
As someone attempting to learn more about what it takes to run a social-impact enterprise, Samasource is the perfect first case study.
