An innovative Czech social enterprise shows how cities might help their homeless and turn a profit.
PRAGUE, Czech Republic – “Down there you’ll see the State Opera, to your right you’ll see the Wenceslas Square. And over there, a prostitute was beaten to death for refusing to give the client what he wanted…”
Incongruous, but incongruity is what you get with Pragulic, a Prague-based social enterprise, which is taking on the city’s homeless as tour guides. Karim, a former male prostitute and Peter, an ex-police officer, are leading a group of around 20 tourists (mainly Czech, with a small contingent of Germans) through the underside of the Czech capital. Pragulic is only one of a handful of homeless tour organisers around the world. Besides its original idea, Pragulic’s focus on financial sustainability and strong business models shows how social enterprises are reacting to a growing demand for them to present themselves as credible businesses.
Pragulic’s first goal is to help its guides. Our guide for the evening, Karim, is wearing a trench coat in the baking summer heat. His eyes disappear sometimes into his Kiss-esque eye make-up and he looks like Gene Simmons gone shopping. The tours are built around the personal histories of their guides, and Karim’s focuses on prostitution: over three hours, he points out spots for “quick sex” and describes beatings from clients with grueling details (broken legs, noses). With his nails painted blue and his hands encrusted with rings, Karim, real name Karel Lampa, is still the theatre performer he once was.
“This is a very natural job for them – they know the places. It’s a kind of therapy from them,” says Tereza Jurečková, one of three Czech students who founded Praguliclast year and who trained the group’s five guides personally for three weeks.
Pragulic’s tours have significant material benefits for its guides, with 50% of the ticket price going to them and the rest to keeping the project running. According to Pragulic, all guides are now earning more than a living wage and are able to afford temporary accommodation.
But the tours also have a psychological effect harder to measure. Karim’s tour is frequently interrupted by our second guide, Peter, who lost his home and his wife after he stole money to finance a gambling addiction. Peter competes with Karim for centre-stage, both clearly enjoying the unaccustomed attention – the tour is a performance.
“It’s similar to watching a movie. I was surprised how a person with such a difficult history can think in such a calm way,” says Marek Dargaj, an auditor from Prague, on the tour for the first time. “I was thinking a lot after the tour, about raising my kids, about the risk of finding myself in a similar situation.”
The impact of the tour cuts both ways: for the tourists, it exposes them to a world usually kept at a distance; for the guides, it’s a form of therapy, a way to recover a sense of dignity and self-value.
“When being on the street, being a prostitute, you lose your dignity. Keeping at least some dignity is crucial,” says Karim. “I like people’s interest, the questions they ask. I want to help people understand what life on the street is like.”
“You Can’t Work For Free”
What distinguishes Pragulic from some of the other homeless tour initiatives is its ambition to scale. Having already had a measurable impact on the lives of its guides, the next step is to make Pragulic a self-sufficient business, generating financial as well as social returns, and run according to professional management and accounting standards. Part of this is presentation.
“It’s not charity work for us. We’re trying to make it a very professional service,” says Jurečková, who, like the other three founders, still works as a volunteer without a salary.
The group plans to rapidly develop the project over the next three months, introducing a range of new services and products with the aim of reaching market-level salaries for all involved and economic sustainability.
Chief among the new services set to launch next month is the “Homeless Accelerator”, a “structured support program” designed to boost the monetary and non-monetary benefits for the guides, including access to a psychologist. Pragulic estimates that the value of the program for its guides will amount to $29,000 in received benefits in its first year.
September will also see the rolling out of “Homeless Life-style Experiences”, where guests pay to spend the night on the streets. Another called “Luck”, where customers pay a small donation online and receive a “surprise item,” found by a Pragulic guide on the street and delivered to their house by post. Some of the ideas come from the guides themselves: Peter’s tour features a competition to collect cigarette butts off the street – the winner gets a CD and the haul of fag-ends goes to a homeless friend.
Pragulic has used its plans and business-centric approach to attract impact investors, with whom they are now in negotiation. Social enterprises like Pragulic are responding to the demand for not just credible ideas, but credible management, which many investors say is still lacking in the impact sector. This concern becomes all the more urgent as major capital funds start looking for impact investments. Speaking on the side-lines of the recent Partnering for Global Impact investment conference, one major impact fund manager told us:
“Most of these [projects] don’t need just money, they need management expertise and mentoring. The easy question I ask all of them is, ‘So, have you been paying yourself?’ You know, you got to pay your rent, got to pay your bills, you gonna get married and have kids someday. That’s part of the cost , you can’t just say I’m going to work for free for ever– that’s not sustainable!”
Out of the Box, Out of Prague
Its detailed plans for development have already helped Pragulic to win the Future Fidelity Impact Prize award for social impact. The award grants the project US$13,400, which the enterprise intends to use to grow and begin exporting the project to other European countries.
A number of European cities have already contacted the group and Pragulic hopes their experience could be marketable to those looking to launch their own homeless tours. The founders are currently deciding whether to export Pragulic as an free open-source provider or to follow a franchise model, where new operators would receive training, materials and advice in return for payment. The second offers a more obvious business model, and is suited to Pragulic’s funny presentation techniques, such as the “Homeless Life-style Program”.
As part of this, Jurečková is considering producing a box (literally a box) with promotional material and instructions on how franchises should proceed in recruiting and training guides. The hope is that this can provide a blueprint for other homeless tour-agencies.
Plans for expansion depend on stabilising the Prague operations, but Pragulic’s central idea is replicable – it’s easy to imagine homeless tours in almost any European city. In the Czech Republic, Karim has steadily become known nationwide:
“People travel from Ostrava [3.5 hours from Prague] to see my tour, to listen to me,” says the guide. “They do not have to come and they come, they do not have to come back and they go for the tour again. It gives me energy.”
If Pragulic’s plans succeed, people may no longer need to travel for the experience.
Lenka Parkánová contributed reporting from Prague.