Prepared for Board of Directors

December 2, 2010

Shirley Li, Rachna Pande, Archana Raghavendra, Jenny Son

SmileTrain’s stated mission Our vision for India
•Provide safe and quality treatment of •Short term
cleft lip and palate, free of cost, to poor •Reach the “last mile”
children in developing countries •Long term
•Provide free cleft-related training to •Extend care beyond cleft by leveraging
doctors and medical professionals existing capabilities, while remaining
•Until “we have completely eradicated the sensitive to SmileTrain’s spirit and
problem of clefts” in children brand
•Give kids “a second chance at life”

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 Founded in 1999 when the co founders broke
away from Operation Smile, now operates in 78
countries
 Built on existing infrastructure by partnering with
local surgeons, hospitals and social organizations
 Efficient team includes only 43 employees
worldwide
◦ Technology to ensure quality & cost efficiency
 Cost effective
◦ “Per cleft surgery cost brought down by 90%”
◦ "100% of your donation goes to program - 0% goes to
overhead."

Source: SmileTrain website; Co founders speech

Interview with Mackinnon Webster

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Accountable Partnerships Accreditation
$250* per surgery
Training

Surgeons Hospitals Local NGOs

Patients

Cleft lip and palate surgeries

Source: SmileTrain website; Co founders speech
Interview with Mackinnon Webster
* Exact amount subject to local conditions, at the discretion of
regional directors
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 35,000 babies are
 Since SmileTrain’s India operations began born in India with
in 2000, the number of patients treated cleft palate/lip.
annually increased five-fold
92% of them cannot
 Partner with over 180 local hospitals, 250 afford surgery.
cleft surgeons, and social organizations
for 250,000 surgeries

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 • 500,000 cases treated
successfully worldwide
• Zero charge to patients
Treatment

• Accessible • Community
treatment clinics “no outreach
Accessibility Awareness
one has to walk programs
more than 100 km • Educational
to get treated” materials, flyers
Singular
focus on
cleft lip and
• Pre surgery care
palate • Augmenting
with nourishment existing skills
Empowerment
• Post surgery care, with state of art
Holistic care of local
give toys, food for training
doctors
poor

Safety &
quality
• Emphasis on safety
and quality of
Source: SmileTrain website;
Interview with MacKinnon Webster treatment
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  Acting as a payor and not a direct
provider, unlike other cleft
organizations

 Leveraging local available talent of

doctors in lieu of “importing” talent
to create a network of partners

 Standardized guidelines, or
protocol, for treatment of cleft

 Sophisticated use of electronic

medical records to maintain safety
and quality

 Excruciating focus on costs and

execution – very lean administrative
set up

 Breadth and depth of donor base,

and extraordinary fundraising
capability
Source: SmileTrain website;
Interview with Mackinnon Webster 7
• Tap diverse media channels to • “Franchise” cleft operations
raise awareness to partner hospitals
• Engage and motivate • Enable and empower
prominent supporters local health practitioners
and promoters Political – Strategic – • Achieve much greater
• Secure high-profile Resourceful Local coverage dollar-for-
pledges as revenue Marketing Partnerships dollar
sources

Cultural – Business
Mentality

• Maintain lean management & operating

structure but incentivize monetarily
• Set clear goals to scale up rapidly
• Leverage cutting-edge technology

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Reaching the last cleft patient is costly
•Geographic coverage handicapped by available partners
•Some population beyond reach of media channels

Growing network increases monitoring costs

•Coordination issues among partner hospitals
•Scalability heavily dependent on technology and staff

Decline in backlog creates incentive to shift focus

•Reaching patients on the margin – best use of resources?
•Prevention vs. treatment?
•Leverageable model to other services

Shift in focus may hurt SmileTrain’s brand

•Resistance from donors and other stakeholders who support
singular focus
•Transparency of business model and visibility of results
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 •Double outreach efforts through media and social workers
Reaching
•Provide incentives to people who refer cleft patient, combined with
the last clear goal-setting for partners
cleft patient •Stay at forefront of cutting edge technology for safety and quality

•Have pre and post surgery care teams visit patient’s neighborhood
Providing
•Rehabilitation
ancillary
•Broaden network to primary care providers, orthodontists, and speech
services therapists

•Leverage network of partners

Going
•Reparative surgery and prosthetics
beyond
•Annual check-ups, Primary care/referrals
cleft •Vaccinations, Pre-natal care, Obstetrics, Preventive care

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 “Aishwarya made goodwill ambassador of Smile Train NGO”, The Economic Times, November 1, 2009.

 “BBB Wise Giving Report for Smile Train”. Better Business Bureau. http://www.bbb.org/charity-
reviews/national/human-services/smile-train-in-new-york-ny-644. Retrieved November 22, 2010

 "DFS and partners raise US$300,000 for The Smile Train". Moodie Report, August 2, 2009.
http://www.moodiereport.com/document.php?c_id=1178&doc_id=19764. Retrieved November 22, 2010.

 "Freakonomics, Bottom-Line Philanthropy, the 'Soccer Boy' effect". New York Times Magazine, Stephen J. Dubner
and Steven D. Levitt, March 9, 2008. http://www.nytimes.com/2008/03/09/magazine/09WWLN-freakonomics-
t.html?ref=magazine. Retrieved November 22, 2010.

 “Making kids smile again with software”, by M. Somasekhar, Hindu Business Line, November 10, 2000.

 MacKinnon Webster phone interview. Program Officer of Smile Train. Conducted November 23, 2010

 The Official Smile Train Website. http://www.smiletrain.org/site/PageServer. Retrieved November 22, 2010.

 "Scaling Up Charity: Smile Train’s Brian Mullaney". Harvard Magazine, Nell Porter Brown, Sep-Oct, 2009.
http://harvardmagazine.com/2009/09/smile-trains-brian-mullaney. Retrieved November 22, 2010.

 “Smile Pinki wins best short Oscar”, BBC News, Geeta Pandey, February 23, 2009.

 Smile Train India Home Page. http://www.smiletrainindia.org/. Retrieved November 22, 2010.

 “Smile Train”. Guidestar Charity Check. http://www2.guidestar.org/organizations/13-3661416/smile-

train.aspx. Retrieved November 22, 2010.

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“Franchise” cleft • Instead of sending traditional mission teams from the U.S. or other developed nations
• SmileTrain India has 180 hospitals and more than 250 surgeons, who have now
operations to
performed 250,000 cleft surgeries in India
partner
• Partner hospitals chosen based on “maximum number of children for the minimum
hospitals amount of money”, pre-existing cleft operations, and “champions” for the cleft cause

Enable and • By providing free equipment, free education, training, and on-going financial support
empower local • Doctors, nurses “learn how to fish” and become self-sufficient cleft surgery operators
health • Doctors, nurses incentivized by SmileTrain’s flexible financial and frequent technical
practitioners support provided by 4 staff members under Regional Director of South East Asia

Achieve much • Due to India’s more established medical infrastructure and hands-off approach
• Cost-per-surgery reduced by 90% from mission team model (e.g. Project Smile)
greater
• 4 SmileTrain staff maintains constant communication and carries out frequent visits to
coverage
each partner hospital to assess patient needs
dollar-for- • Smile Grants cover transportation, education, and other expenses to facilitate care
dollar access and post-surgery integration into community

Source: SmileTrain website; Harvard Magazine; NYTimes; Interview with

Mackinnon Webster of SmileTrain

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Maintain lean management & operating structure but incentivize monetarily
• Globally only 43 staff with 24 based in the U.S.; Satish Kalra overseas all of South Asia
• With G&A ~1% of total expenses and fund raising ~18%, 80% of resources funneled
towards supporting partner hospitals (today, each surgery costs 12,000 rupees, with
flexibility allowed on a case-by-case basis, decided by Mr. Kalra)
• Retain business talent via market-rate salaries

Set clear goals to scale up rapidly

• Expansions and penetration pursued with business “precision”. Every fiscal year begins
with target setting (on # of surgeries to be performed in the year)
• Since India operations began in 2000, # of patients treated annually increased five-fold to
50,000
• Donors are treated like shareholders; cleft children are “nonperforming assets”

Leverage cutting-edge technology

• Continuously train and increase efficiency of local operators via “virtual surgery lab”
• Monitor quality control of local operators through digital imaging and “grading” by U.S.
cleft experts
• Reduce delay and facilitate knowledge sharing across sites via digital medical records –
Indian hospitals especially good at “before and after” photos

Source: SmileTrain website; Harvard Magazine; NYTimes; Charity evaluator

Guidestar; Interview with Mackinnon Webster of SmileTrain

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Tap diverse media channels to raise awareness
• Outreach teams are led by trained social workers that create trust with families of patients
• Psychosocial impact of clefts is brought home in Smile Pinki an Oscar-winning short
documentary film in 2008 about SmileTrain India
• According to co-founder Mullaney, a major motion picture is in the making

Engage and motivate prominent supporters and promoters

• Bollywood megastar Aishwarya Rai named in November 2009 as SmileTrain’s first Goodwill
Ambassador
• Former President of India, Dr. APJ Abdul Kalam talked about “the success of SmileTrain, the
virtues of doctors and the need to reach a million Indian children still suffering from cleft and
palate defects” In July 2010

Secure high-profile pledges as revenue sources

• DFS Group, the world’s leading luxury travel retailer, raised an US$300,000 for SmileTrain
following an extensive campaign across its global network to raise funds and visibility for the
cause in 2009
• Global events such as the $1M event 'The Bombay Revelation', centered around five Bombay
Sapphire Gin hand-made crystal bottles in 2008

Source: SmileTrain website; Harvard Magazine; Interview with Mackinnon

Webster of SmileTrain

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 Reimbursement, free equipment
+ & training, Smile Grants to
Indian providers
Investment in medical R Note: positive reinforcement (labeled R) and negative
infrastructure by providers + reinforcement or “balancing” (labeled B); + and –
Positive Returns indicate positive and negative correlation, respectively
from Infrastructure
+ Access to cleft +
Availability of patients No. of cleft surgeries +
physicians and medical performed
staff + R
Physician +
Empowerment Learning across the
+ organization
Investment in Demand for cleft
+ training treatment
Network of Partner
+ R + + +
Providers
+ Learning increases Coverage (Patients
Safety and Quality
safety quality and served / Dollars spent)
coverage +
+
Positive Press and
+
+ Word of Mouth
+ Donations
Ability to monitor safety
Social Appeal R
and quality at low cost
+
+ R Technology
+ promotes Lean
Celebrity
Investment in cutting
Bandwagon
+ edge technology
Engagement of R Awareness among
prominent supporters
+ Ability to tap diverse Outreach + cleft patients
media channels +
Investment in
outreach efforts
 - Backlog
No. of cleft surgeries -
performed
B Cost of reaching cleft
+
patients on the margin
Reaching the last
cleft patient is costly +
Access to cleft Ability to monitor safety Attractiveness of providing
population and quality at low cost other services with better
+ R coverage
-
Decline in backlog
creates incentive to shift
- focus
B +
Network of partner Coverage
providers +
Growing network +
+ increases monitoring Shift in focus to services
costs with better coverage
+ B
Donations + Positive Press and
Shift in focus may hurt
Word of Mouth -
Smile Train's brand
Note: positive reinforcement (labeled R) and negative - Transparency of business
reinforcement or “balancing” (labeled B); + and – indicate model and visibility of
positive and negative correlation, respectively results
Resistance from donors and -
other stakeholders who support
singular focus on cleft

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 We also have a number of systems in place to monitor and detect potential
fraud. Ideeinc, SmileTrain’s fraud detection software, scans every record that
is uploaded to our patient records database for potential red flags and will
notify our staff if a record matches previous records based on facial
recognition or name and birthday repetition.
 Ideeinc also sends a notification if it cannot detect signs of surgery on a
patient record or if a photo appears to have been altered (via Photoshop,
etc.).
 We also look for clues like if the before and after picture are taken within a
few minutes of each other. The system is quite sensitive and has managed to
catch photos that were re-uploaded under multiple patient names, even
when each record contained unique metadata or is uploaded at different
hospitals.

- Correspondence from Mackinnon Webster

November 24, 2010
 SmileTrain takes the safety of its patients and the quality of its surgeries seriously.
As safety and quality are our #1 priority, we have a number of protocols in place
to ensure only the best surgeons are our partners and only the best care is being
provided to our patients. These processes include, but are not limited to, the
following:
◦ All surgeons applying for partnership are vetted through a review of their curriculum vitae
and photographs of 3-5 past cleft patients.
◦ All new partners must sign SmileTrain’s Safety & Quality Protocol to confirm future
adherence to all outlined standards of care.
◦ To receive funding, all partners must upload medical records with pre and post operative
photographs to SmileTrain’s online database, SmileTrain Express (STX). These records are
then manually reviewed and graded by SmileTrain’s external medical consultant. This
tracking of medical outcomes is called SmileTrain’s Quality Improvement (QI) Process.
◦ As outlined by the Protocol, all life-altering events during/after a SmileTrain surgery must
be reported to SmileTrain Headquarters. Detailed documentation must be submitted within
a certain time period, followed by a thorough review and summarization of the events by
the Medical Advisory Board (MAB). This is called SmileTrain’s Sentinel Event Process.
◦ Mid-career training is provided to all partners in the form of conferences, workshops and
hands-on training. This is offered by SmileTrain’s Education and Training Grant Program.

Source: SmileTrain website

 This Protocol was developed by the SmileTrain’s Medical
Advisory Board (MAB) in 2000 and has been continually
audited for improvements. The Protocol has requirements on
the maintenance of medical records; review of medical
results; reporting of sentinel events; selection of healthy
patients; administration of pediatric anesthesia; maintenance
of operating space; and monitoring of post-operative
patients. As of January 2010, it includes the Surgical Safety
Checklist, as developed by WHO, Harvard School of Public
Health, and World Federation of Societies of Anesthesia.

Source: SmileTrain website

 This is a system by which the first ten lip and five palate records for each newly registered surgeon is manually
reviewed by a medical consultant through STX. Those who successfully pass the initial review are transferred
into the established surgeon pool where 1% of their annual total records are reviewed on an ongoing
basis. Surgeons who receive poor scores are subject to further review.

 If a new surgeon receives an average failing score for their 10 lip records, or if they fail 2 out of 5 palate
surgeries, the identified surgeon is relegated to a second round of record review. In round 2, 10 more lip and 5
more palate records are reviewed. Those surgeons who successfully meet ST criteria are transferred to the
established surgeons group.

 If the surgeon fails their 2nd round, then the Chairman of the MAB reviews their records and makes a
recommendation as to whether further training is needed. If needed, a final set of 10 lip and 5 palate records
are reviewed after the training is complete. If the surgeon is still receiving failing scores, then he/she will be
brought to the MAB to determine the next steps to be taken.

 During the QI Review, records can be flagged as problematic. A surgeon with a flagged record will receive an
email notification and must explain the issues raised by the reviewer. Generally, the primary surgeon responds
to the queries in an expeditious manner and the record’s questions are resolved without further review. In this
setting the flag is removed when the review is complete. In the event that a record’s issue remains open for
review even after the response of the surgeon, then the record in question is presented to the head of the MAB
for final review and recommendation. (To date 3 cases have taken this path.) SmileTrain reserves the right to
hold payment for further surgeries uploaded by the surgeon in question until all case related issues are resolved
are resolved by the MAB or its emissaries.

Source: SmileTrain website