These entrepreneurs aim higher than the bottom line
South Florida’s social entrepreneurs use business methods to improve education, environment and living conditions.
06/06/2012 5:00 AM
06/06/2012 8:50 PM
Amid South Florida’s flashy consumerism wave, a vastly different breed of entrepreneur — aimed at solving social problems — is quietly gaining momentum.
Take Navroze Mehta and his daughter Sonali Mehta-Rao, who became increasingly aware that master craftsmen in India were losing their livelihoods because they lacked a global market for their products. The pair doubted a donation would make a substantive difference.
So in late 2010, they created MyMela, an online site that brings the crafts to audiences worldwide, and at the same time, they say, pays the artisans a living wage.
The concept, Mehta said, is to make a social impact through social entrepreneurship.
“It’s a system to empower them to do what they are good at and provide assistance,” said Mehta, founder and chief executive of MyMela, based in Boca Raton. “But you are not putting out a helping hand. You are joining a team and making it a bigger solution.”
Unlike traditional business aimed primarily at generating profits, social entrepreneurship combines a vision and passion for doing good with a business approach.
Some new ventures, like MyMela, have recently launched; others with longer histories are expanding their reach. Often they are founded or backed by innovators who have already made their fortunes elsewhere and now want to focus their efforts on bettering the world.
The movement is growing, insiders say. B Lab, a nonprofit which certifies such purpose-driven companies, counts 535 worldwide — up from 370 at the end of 2010, currently representing $3 billion in revenue.
Social entrepreneurs also gain support and networking through Ashoka, a 30-year-old Washington, D.C.-based non-profit organization that nurtures 3,000 social entrepreneurs in 72 countries, said Lorena Garcia Duran , its South Florida director. The organization opened its first office in Miami in February to help support Ashoka’s interests in the Americas, and recently held its first Miami summit for its Ashoka Support Network.
Among those attending, in addition to Mehta and Mehta-Rao, was Felipe Vergara, co-founder and chief executive of Lumni, which creates funds that finance college educations while providing a return to investors.
The business grew up out of his own childhood experience, when a close friend couldn’t afford to go to college. “Getting a good education is a very important thing and I wanted to find additional solutions for people to go to college,” Vergara said.
Lumni works like this: Each investor puts $50,000 or more into the investment funds, which are then used to pay for students’ tuition. Many of the investors are in South Florida, he said. The funds’ average return last year varied between 5 percent and 11.5 percent, said Cristina Mendia, country manager for Lumni USA.
Students can apply for the funds online, and are interviewed before they are selected.
Since its inception 10 years ago, Lumni has funded educations for a total of 2,500 students, who have attended colleges in the United States, Colombia, Chile and Mexico, Vergara said. U.S. students have received an average of $15,000 in funds.
After they graduate and get a job, the students begin paying back a specified percentage of their incomes each month over a fixed period, Vergara said.
“What I like is it reduces the risk of the student and it also allows people to invest in the education of the community,” he said. “For some people, instead of putting money in the stock exchange or different investment options, they can invest in improving the human capital of their community.”
Hans Hickler, founder and chief executive of Parkland-based Ellipsis Advisors, who also attended the Ashoka summit, also believes strongly in embedding a social agenda in business. He has invested in Lumni, as well as other social entrepreneurial ventures.
“Business has to be an integral part of making the world a better place,” Hickler said. For him — and many other social entrepreneurs — the bottom line is based on three factors: profit, people and planet.
Creating social change drove Eduardo Balarezo to found Lonesome George & Co., an apparel firm whose designs promote awareness and conservation, and whose revenue is partly used to fund Outward Bound and Ashoka programs. The Outward Bound programs teach such skills as leadership, resourcefulness, teamwork and compassion by taking individuals out of their comfort zones, he said.
It all started because Balarezo, who founded the Ecuador Outward Bound program and sits on the board of the nonprofit’s parent, realized it needed access to recurrent income rather than depend on philanthropy and grants.
So he created Lonesome George, named for the last surviving tortoise of its kind in the Galapagos. Headquartered in San Francisco, the company’s distribution center is in Doral, and it sells from stores in Ecuador and a showroom in Berlin, Germany, as well as from its website, lonesomegeorge.net.
Lonesome George is the spark Balarezo used to develop what he calls an “academy of agents of change.” Ten percent of Lonesome George’s revenue goes for scholarships, which pay 75 percent of students’ Outward Bound program and Ashoka youth program in the Galapagos, Balarezo said. This year, he expects 23 students to graduate from the program.
Balarezo, who lives in Key Biscayne and attended the Ashoka summit, is bringing his “agents of change” model to San Francisco and Berlin, and hopes to bring it to Miami as well, next year. Hickler is also an investor.
“It’s about leveraging professional and personal assets into creating social impact,” Balarezo said.
In that way, Mehta of MyMela, which translates to “artisans’ fair” in Hindi, has used his company and website, mymela.com, to empower hundreds of artisans in India since its founding 18 months ago.
With 600 different items, MyMela also sells goods made in India to stores including Cubavera in Miami Beach; the Ritz-Carlton and the Yoga Center, both of Key Biscayne; and Levenger’s catalog. The website also allows customers to make micro-loans to craftsmen.
“It’s a way to allow people to buy beautiful products, and also make a difference in the world,” Mehta said. “Making a social impact — that is the concept.”
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