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Call it Conscious Capitalism, call it Social Entrepreneurship, but in this age of faceless multi-national corporations there is a movement to business that partners with communities rather than undermining them.

When New Mexico Tea Co. needed financial capital, they called on their extensive social capital:

Edwards owns New Mexico Tea Co. near Albuquerque’s Old Town. It sells a wide variety of bulk loose leaf teas. When his bank turned him down for a line of credit recently, he turned to the loyal customer base he has built over four years.

He sent an e-mail to the 3,800 people on his newsletter list in an effort to raise $5,000. Within about 48 hours, he had raised $10,000, made up of $4,500 in “microloans” and $5,500 in gift cards that can be redeemed starting in December for slightly more than their cost.

“You don’t really know how much the community cares about you until you ask for help,” Edwards said. “Most of them had never done anything like that. But most had never been asked.”

via Loyal customers infuse New Mexico Tea Co. with green – New Mexico Business Weekly.

Imagine: a single mother brings in her two kids. After the service she’s gone, and her kids are still there. The police ask the church to keep the kids while they look for the mother…who never turns up. This is how REHEMA Daycare and School started, and they’ve provided education to over 600 children!

When I visited Kenya in February I recorded a long interview with Erastus, the founder of REHEMA. Here is a quick clip about those 2 kids.

In many underserved communities, however, neither the invisible hand of the government nor markets cater to even the most basic needs of their members, resulting in structural and behavioral barriers to the community's growth and development. These barriers are addressed by products and services engineered by social entrepreneurs.

Social Entrepreneurship is an emerging and evolving concept. This article from an Indian Summit called Sankalp 2010 provides a great snapshot. It talks about what Social Enterprise is, an example in Mumbai of the “Dabbawallas,” and the need it fills.

via Reporting from Sankalp 2010 | Blog | NextBillion.net | Development through Enterprise.

Observing partners of The 1010 Project in Kenya, as well as listening to our indigenous leaders, I’ve discerned three elements that must be present for a social innovation to succeed.

  • Aptitude: A social entrepreneur’s skill or competency which they are offering to their community and to the marketplace.
  • Business Acumen: Knowledge of basic business principles and strategies
  • Capital Investment: Resources for startup costs, including financial, intellectual, and human capital

In metaphor format, if the entrepreneur and their skill is a Computer, Capital is the hardware and Business acumen is the software.

Development at times has focused primarily on the third element, Capital Investment. And it is true that  hardworking, creative social entrepreneurs in impoverished countries have remarkable aptitude but often lack access to basic capital.

However, as Michael Nyangi of LOMORO reminded me in February, many of these community leaders have not received the kind of business knowledge we take for granted in the United States. The average American would have a primary understanding of concepts like budgeting, marketing, and finding your business “niche.” In my experience, the same assumptions cannot be made in the developing world.

The 1010 Project, where I am Executive Director, has received attention for its unique development model. Recently I met with an African now living in Denver, who asked: “How did you come up with this model focused on social entrepreneurs.”

It’s simple. We didn’t come up with it.

We came to this model by listening to our partners, by observing the creativity and innovation of the poor in solving their most pressing issues.

So if there is an essential posture for effective international development, it is: “listen to those whom you seek to serve.”

Do you agree or disagree? Why? Leave a comment below:

We had these challenges too

Recently a friend asked about African culture, and specifically our Kenyan Social Entrepreneurs: “does their laid back attitude actually contribute to their poverty?” Now I know this friend well enough to know he was genuinely asking, not trying to pass judgment. In answer to this question, I present to you: a washing machine.

When I see that pile growing in my laundry basket I feel a dread come over me. I will have to budget time to address the burgeoning pile or risk wearing gym shorts as my underpants (not that I’ve ever done that).

I will have to throw the clothes in the washer, be around an hour later to move them to the dryer, and…the part I always screw up…remember to take them out of the dryer before they are a wrinkled mess (sorry honey). Oh ya…and folding. So, all in all about 30-45 minutes of work spread out over a 3 hour period.

Now let’s contrast this process with the work of a prototypical Kenyan social entrepreneur named Joy:

  • Water: the more fortunate might have indoor plumbing which works 3 or 4 days out of the week. The less fortunate go to a community filling center, and can only purchase what they can carry (this is almost certainly a woman doing this work)
  • Bucket or tub: pour the water in the tub
  • Soap: If you’ve ever washed your clothes camping, you know hand washing isn’t glorious. There’s no hand-friendly organic soaps available, and you certainly can’t afford the luxury of gloves
  • Hands: It strips your hands of oils, and getting out those tough spots requires more than a little elbow grease
  • Drying & Folding: Drying is done on outdoor lines, which leaves clothes stiff…not to mention the rain conspires to set back the drying process several days

All in all, I have to guesstimate, a 6-8 hour process spread over 3 days. “Ok,” you say, “they have a harder time washing their clothes.” But this isn’t an isolated incident, this is every basic task of living

  • Without online or telephone banking, going into town to check your bank balance could take 2-4 hours
  • Getting to the market for food could be a 30 minute to 2 hour walk
  • Preparing food over a charcoal fire, with most elements starting from “scratch” could take 1-2 hours
  • If a child gets sick, and you can’t afford health care, everything else could go on hold for days

Now imagine you are trying to run a social venture with the rest of the time you have left? If you are trying to be productive and task-oriented, how long would you last? Is being strictly task-oriented unquestionably a good thing, even in our culture? The fact is, the utter lack of what we would consider “basic infrastructure” conspires to complicate every basic task.

Every time you throw some clothes in a rinse cycle, remember the cycle of poverty and ask yourself how you can responsibly intervene.

If starting a business is like climbing a mountain, then starting a business intended to make the world a better place is like climbing a mountain with a 200 lb backpack in a blinding snowstorm.

…Competitors can take short cuts and cheap shots and not worry about collateral damage.  But not “social entrepreneurs” out to better the world – we have the usual startup challenges, then spend countless hours designing new business models to support social welfare and planetary health, worry constantly that our model isn’t perfect, and then often pile on costly alternatives to the exploitive, cheap solutions our competitors use.

Fortunately, few social entrepreneurs realize the madness of their journey when they start.  We forge ahead, confident we can better the world, blind to the pitfalls that lie in our path.

Read more from this amazing article at: Trailblazers for Good – Lessons from Care2. As a social entrepreneur it was profoundly encouraging to me.