Expanding Your Reach; Empowering Individuals
One-year-old start up company Solar Sister is making big strides in improving the lives of African women and making a serious statement in the venture capital realm. This venture is not traditional by any means. By using cosmetics company AVON’s model of “business in a bag”, Solar Sisters helps to provide and distribute solar energy in Uganda, Sudan, and Rwanda. The organization empowers African woman, or “entrepreneurs” as they call it, by providing them a means of income through selling solar powered lamps to their villages, as well as providing rural African families a renewable light source. As 95% of homes in rural villages in Uganda lack electricity this mission is clearly an important one. It is clearly a catalytic change this company is providing as this organization is offering many people the most basic of needs, especially when considering Maslow’s higher archy of needs.
The business-in-a-bag model usually shares a common criterion. The organization provides entrepreneurs with ongoing training, offering financing or consignment models for entrepreneurs’ initial inventory. It will have systematized promotion and marketing strategies, such as branded uniforms and strict protocols that incorporate penalties for rule-breaking. Lastly, it helps entrepreneurs develop a reputation as authoritative service providers within their community. Though some of this organizations use micro-lending and mirco-financing, Solar Sister does not. They use micro-consignment meaning the entrepreneurs do not have to pay back and costs until they make a profit. This model helps to encourage and elevate the women, opposed to causing more grief as we’ve seen with mincro-financing.
When considering the market for non-profits and areas of new social ventures we see the trend shifting in a more sustainable direction. As The Wall Street Journal article “Strings Attached; Along With Their Big Bucks, Rich Donors Want to Give Charities Their Two Cents” validates philanthropy is no longer as simple as Warren Buffet’s style of “handing over tons of money to a trusted organization”. This is now considered to be “an old-school way of charitable giving”. So what are our other options?
In an interview Katherine Lucey, Solar Sisters founder, argues that the new market of non-profits is not just helping to improve lives, but providing the tools and the foundation needed for individuals to improve things themselves. This is a very basic structure of venture capital. Throwing money at the problem often does nothing. But providing funding or tools to help change the world may! This model is more durable and sustainable, “we are providing woman the opportunity to be entrepreneurs” Lucey argues. Solar Sister has developed 177 “entrepreneurs”, at least 50% of them are young entrepreneurs who will become tomorrow’s leaders in their communities and countries.
In organizations like Solar Sister, their business model has been designed for success. As the major issues arising in non-profits and social ventures are largely funding and marketing, Lucey feels your organization should inherently assist with this. Donations, fundraising, grants, etc can only go so far. Working with the business-in-a-bag model, this allows the sustainability and some of the funding of the organization to be pumped through the organization’s missions and efforts.
Just as in the theory behind catalytic philanthropy when a need appears you don’t try to change it with money but you must kill the root of the problem. In the example of Thomas Seibel, founder of Seibel Systems Inc, he did not just donate money to a cause, he started his own cause in a effort to change lives. This model is inherently sustainable. Just like Lucey, she saw a need in Africa and did not just provide money, but provided a platform by which hundreds could change their OWN lives.
The future and demand of social missions lies in addressing the root of problems, not just their effects. In order to be considered real catalytic philanthropists it is important that your mission is offering basic needs to humanity. I would argue that it is more important to provide say food for an African family than a library to an American university. That is a change that is truly helping make the world a better place, no matter the scale.