Poverty Offsets – Local Commitment to Global Good

When a developer wants to build, in some areas she must offset her impact on the environment by planting trees. Companies that want to be carbon-neutral can purchase carbon offsets from other businesses. I propose a similar idea for public projects that are made possible by our incredible prosperity in the developed world – arts centers, sports stadiums, parks and sculptures. I call it a Poverty Offset.

In my home town of Dallas, we’ve created a fantastic cultural beacon for our Arts District: the AT&T Performing Arts Center. Renowned Dallas leader Bill Lively led the effort to raise $354 million over a nine-year period.  The Center houses four new performance venues and a public park, all designed by world-famous architects.  This amazing project is like a lens that has focused the city’s creativity, capital, leadership, culture, and expressive passion all in one dense area in downtown Dallas. The production is highly local and demonstrates what people can accomplish when they are able to harness their community resources.

I propose that we “offset” the local, resource-rich creation of such a facility with an equal attention and passion for the opposite side of the coin: the global resource-poor. As we amass such a powerful achivement of capital and creativity for Dallasites and the arts, let’s also amass an equal amount of capital and creativity for the poorest across our world.

I propose a Poverty Offset for the AT&T Performing Arts Center.  Let’s create a new nine-year plan – this time to invest $354 million of capital into sustainable social ventures worldwide that reduce poverty, create clean water solutions, reduce disease, drive renewable energy solutions, and enable education in those parts of the world that struggle most. Dallas has thriving social venture and arts communities that will be energized around such a grand project. The Center’s venues can contribute space and act as an event catalyst. The great philanthropists and fundraisers that made the Center possible can coordinate resources for this Poverty Offset as the next phase of giving. The entire city will be inspired as we know that the Center is now not just about arts and culture, but also about creating massive new opportunities for our world community.

Let me be clear: I’m not suggesting that we raise $300+ million in charitable donations or “give money away.” I propose that we use this project to motivate, direct, and leverage that capital into sustainable social enterprises that address global-scale problems.  Done in the right way, all $354 million would return to its sources in Dallas. One approach is the Good Returns model. There are many others we can incorporate.

Bill Lively has moved on to another big project: he’s now President and CEO of the North Texas Super Bowl XLV Host Committee. Cowboy Stadium cost over a billion dollars to create. What would a Poverty Offset for the Stadium and the Super Bowl look like?

If every stadium, arts center, arena, museum, and park focused equal attention on the resource-poor through a Poverty Offset, we would quickly create a trillion – yes with a T – dollar capital pool and see powerful, sweeping improvements in the lives of billions of people across the world – not through handouts, but through opportunities provided by sustainable social ventures.

My first career was as a classical pianist, so I have a deep love of music and art. I understand the importance of expressing our higher selves through arts, sports, and culture. But we must also express our higher selves by extending opportunity to those around us, so they too can have their own full expression of life.

Let us start here in Dallas with a Poverty Offset for the Performing Arts Center. Let’s get together and create a broad and clear strategy for this nine-year initiative and a way to measure our $354 million investment in the world’s neediest. Let’s rise to our highest selves, Dallas: use the great cultural gains we’ve made in the past decade as a launching point to become the world leader in global social philanthropy, the world’s clear example of how to scale social entrepreneurship to solve our greatest global challenges.

Salah Boukadoum
Citizen, Dallas

Good Returns = Good Incentives

One of the special benefits of the Good Returns model is that it causes all the parties in the model to be incentivized for desirable outcomes.  A quick recap of Good Returns:

A business invests 100% of profits into sustainable non-profit organizations each year, for a rolling one year term, in the form of an interest-free loan.  The non-profit uses the cost-free capital to increase the reach of its sustainable mission (for example, providing more microloans to women in poverty, or issuing more low-cost student loans in Africa, or providing low-cost medical services in Guatemala, or … ).  At the end of the next year, the original funds are returned to the business and the process repeats itself.

Here are some of the interesting structural outcomes that Good Returns creates:

Management is motivated to maximize profits. The company’s management team is motivated to drive the company’s bottom line, just as in any traditional capitalist business.  This incentive is a big advantage over non-profits, which often burn money and other resources because they are not required to generate profits to survive.

– Non-profit partners are motivated to become sustainable. The vast majority of non-profits are unsustainable – they must continually raise funds from donors in order to survive. In order for a company to invest in a non-profit and be assured of the return of capital, the non-profit must be sustainable, or at least have a segregated sustainable program. Good Returns will drive more non-profits to develop sustainable programs.

– “Mission-fudging” is eliminated. In many traditional for-profit social enterprises, the management team must be incredibly strong in its convictions about the mission, because every dollar spent on the mission is one less dollar in profit, which results in lower compensation for the management team.  It’s simply not realistic to count on large numbers of people to give up personal gain for mission on an ongoing basis.  Under Good Returns, every extra dollar of profit is an extra dollar toward mission, not taken from it.

– Investors will come. In its first year in business, Soap Hope had more than 45% month-over-month revenue growth on a fraction of the marketing budget that a traditional startup would require.  How did we achieve this growth? By the passion of our customers for our mission – they communicate virally to friends, family, and through online social networks. If a company can create significantly more leverage from its marketing budget, it can drive higher return on capital for its investors. We plan to prove this assertion through the financial results from Soap Hope and other early Good Returns companies.

I’m curious to see what else we will learn about the structural benefits and drawbacks of the Good Returns model over time.  Please share your thoughts and experiences with me.

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Many people have asked how they can help. I ask for and welcome your help:

  • Purchase your all natural soap and body care products from Soap Hope – it’s less expensive than in the store, even with shipping
  • Use Soap Hope for corporate gifting and personal gifts
  • Connect me with national radio and tv personalities if you have those relationships
  • Write about Soap Hope on your blog
  • Share the Soap Hope fan page on your Facebook wall
  • Tweet about us as often as you are willing

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Coming Soon:

Non-profits: I’ll be writing a post for you about many different types of programs that non-profits can implement that are all sustainable.

Investors: soon I will write a post about how down the road dividends will be insured against loss while they are doing their one year of service.

Good Returns: My intention is to develop Good Returns as a stand-alone organization that provides certification for sustainable non-profits, financing programs to mediate timing differences between companies and non-profits, an insurance guarantee for invested funds, a brand that companies can use to attract and retain customers – I’ll discuss this and more in an upcoming post.

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Thank you for your loyalty and support!

Regards,

Salah Boukadoum
Co-Founder, Soap Hope

One Billion Dollars Toward Ending Poverty – Let’s Do It

A reporter asked me today what my goals are for Soap Hope, and I gave her the answer that most of my friends know by now: to teach 1,000 small businesses the Good Returns Model and thereby raise one billion dollars for anti-poverty microloan initiatives.

I’m pretty sure this reporter was shocked – she said, “How much?!,” and actually sounded a bit disappointed. I think she felt I was being naive. Others have told me to start with a more “realistic” goal.  I’d like to show you how I believe it is reasonable to raise a billion dollars for microfinance over ten years, with just a few key numbers:

50 small businesses just like Soap Hope
In each of 20 American cities
Each generating $100,000 in profits
Each lending their profits interest-free to a microfinance institution for just 1 year
Over a 10 year period.

50 businesses x 20 cities x $100,000 x 1 year interest-free loan x 10 years = 1 billion dollars.

Let me share some key milestones and goals with you:

  • 2009 marks Soap Hope’s first full year in business
  • I first discussed the Good Returns model in public in the summer of 2009, just a few months ago
  • We’ve already had two small businesses in Dallas spontaneously ask us for help in implementing Good Returns in their own companies
  • In 2009 we’ve formed partnerships with three non-profit microfinance institutions
  • In 2010 we’ll be launching an organized effort to teach Good Returns to businesses
  • Simultaneously we will define sustainability programs that help nonprofits become ready for Good Returns style investments
  • In 2011 we’ll be working to form an insurance fund that guarantees the return of Good Returns investment capital to participating businesses, virtually eliminating participants’ risk

One billion dollars may sound like a big number – but when you break it down, it’s right within our grasp.  If you read my last post (We Need 166 More People To End Poverty Worldwide) you know that there are six million people in poverty in the Dominican Republic.  One billion dollars is just about what it would take to give each of them a microloan.

1,000 Good Returns businesses generating one billion dollars toward ending poverty through microfinance – I don’t think it’s naive at all. Let’s do it!

Regards,

Salah Boukadoum
Co-Founder, Soap Hope

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Please help us eradicate poverty: tell someone you know about Soap Hope right now.

shop: SoapHope.com
learn: Soap Hope Learning Center
facebook: facebook.com/soaphope
twitter: @soaphope

e-mail: info@soaphope.com
phone: 888-893-SOAP

Soap Hope Bar Soaps
Some Soap Hope Bar Soaps

We Need 166 More People (to End Poverty Worldwide)

I recently met a remarkable man named Steve Brookshire, an entrepreneur and philanthropist in Dallas, Texas. Steve’s passion since 2005 has been ending poverty in the Dominican Republic through microfinance.  He channels his efforts through the nonprofit group Esperanza International.  Esperanza is one of only a few microfinance institutions worldwide that has reached sustainability: through years of persistent effort in the Dominican Republic, Esperanza now earns as much as it spends in its programs that lift people from poverty on the island.

Steve has a laser-like focus on the issue of poverty in the Dominican Republic.  He views it as a truly solvable problem: he believes it is possible that through diligent and focused effort in the DR, groups like Esperanza can eliminate poverty on the island in his lifetime.

There are six million people beneath the poverty line in the Dominican Republic. Steve is determined to use his energy, relationships, and creativity until these six million women, children, and men have adequate nutrition, education, healthcare, infrastructure, and economic opportunity.

I’m not suggesting that Steve will single-handedly transform the island.  There are many people and organizations doing innovative and often difficult work there. Esperanza alone has hundreds of leadership and staff in the U.S. and in the Dominican Republic.  I’m simply suggesting that we need more Steve Brookshires – people with sustained energy, focus, passion, determination, and a vision for the end of poverty in a corner of the world.

There are one billion people worldwide in poverty.  When I first saw that number, I despaired.  I thought, that number is so big – how can we ever hope to solve the problem?  But my encounter with Steve has made me realize that the challenge, while difficult, is manageable.  One billion people in poverty is 167 Dominican Republics.

If you meet Steve, you will know as I do that he will see the end of poverty for six million people in his lifetime.  The world needs 166 more people just like him, to take up the mantle one group of people at a time.  So here is my call to action:

The presence of poverty in our world is unacceptable.  The problem demands our attention, our resources, our energy, and our continued action until all human beings have the essentials of life: food, water, education, basic healthcare, and the opportunity to be self-sufficient.  Be like Steve Brookshire – dedicate a portion of your life to ending poverty in our world. Hold a vision of economic opportunity for six million people. Share that vision so that it spreads to others in your community. Take consistent and disciplined action on behalf of six million people.  If 166 of you do that, we will see the end of poverty in our lifetime.

If you aren’t sure where to begin, start by learning more about microfinance and how it transforms lives:

Esperanza International
Grameen Foundation
The Chiapas Project
The PLAN Fund

I welcome your thoughts.

Salah Boukadoum
Co-Founder, Soap Hope

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Please help us eradicate poverty: tell someone you know about Soap Hope right now.

shop: SoapHope.com
learn: Soap Hope Learning Center
facebook: facebook.com/soaphope
twitter: @soaphope

e-mail:  info@soaphope.com
phone:  888-893-SOAP

Soap Hope Bar Soaps
Some Soap Hope Bar Soaps

Soap Hope

My last business was a 60-person technology firm.  It was “all business” and had no consciousness other than serving customers and providing its employees with a good place to work.  I sold it in 2005 to a publicly traded company. I decided then that I would change my focus to creating businesses that are aware of, and responsible to, our world community.

Soap Hope (www.soaphope.com) is my model company that shows how a business can have a fully-integrated social mission, be environmentally responsible, and also make a profit.  Soap Hope invests 100% of its profits every year into nonprofit organizations that provide microloans and business training to women in poverty, enabling them to create businesses that lift them and their communities into sustainability.  This is not a handout or a charity – all the funds are repaid (interest-free) after they have been leveraged for their social purpose for a year. Our shareholders delay their profits by one year, and the company is thereby able to transform the lives of women around the world.

Soap Hope sells top-quality goods online from boutique makers of all natural body care products.  We have among the best products and prices in our industry.  We carry only products that are 100% all natural, no artificial colors or aromas, no parabens, and always cruelty-free.  We continually evaluate and improve our environmental and social impacts.

We don’t have the marketing budget of a big “unconscious” corporation – we need help in getting the word out about Soap Hope.  If you feel that our mission is worthy of support, we would appreciate anything you can do to let people know about our products and our purpose.  If you have ideas for us about how to reach more people, I welcome your advice – please e-mail me!

I’ve asked you in this post for support, contacts, and advice. Let me also offer the same to you: if I can assist you with your mission and purpose, please let me know how I can be of support.  I thank you!

Regards,

Salah Boukadoum
Co-Founder, Soap Hope

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Please help us eradicate poverty: tell someone you know about Soap Hope right now.

shop: SoapHope.com
learn: Soap Hope Learning Center
facebook: facebook.com/soaphope
twitter: @soaphope

e-mail:  info@soaphope.com
phone:  888-893-SOAP

Soap Hope Bar Soaps
Some Soap Hope Bar Soaps