I have blogged quite a bit about Ten Thousand Villages on my personal blog as I volunteer with the organization on a regular (usually weekly) basis. Today I thought I would post an entry on the WasatchGirl blog instead as not only do I enjoy the volunteer experience, I find the business model to be intriguing.

First, I post about Ten Thousand Villages as the Salt Lake location has recently moved. Due to the unfortunate Sugarhouse development, Ten Thousand Villages had to re-locate and as of today is open in its new location at 1941 South 1100 East (two store fronts north of the Sugarhouse post office). I would urge all readers to go and check out the new store as there is lots of new merchandise.

Second, the business model of this non-profit is interesting. Ten Thousand Villages was formed in 1946 and has grown from a grassroots organization (in the back of Edna Ruth Byler’s car trunk) to a very well established company with 160 branches dispersed throughout the United States. The company’s mission is fair trade and partners with more than 100 artisans overseas, providing them a fair wage in advance for the merchandise they supply. The materials are shipped to the United States and are sold at branch locations that are managed by (at least in the case of the Salt Lake store) two full time paid employees and one part time paid employee. The rest of the work (running the cash register, checking in merchandise, assisting customers, stocking the store, etc.) is done strictly by volunteers. Not only has this organization succeeded in running a retail store based around volunteer employees, but it has grown in the process.

I find the model to be interesting because:

1. The payment of artisans in advance provides the necessary capital for the artisans to work without needing to take out a loan or boot strap their operations
2. The default rate of artisans not providing merchandise (though unknown to me) must be low for the organization to continue payment upfront in environments with very little legal protection
3. Prices of merchandise are still reasonable even with the higher cost of goods, most likely being offset by not needing to pay volunteer wages
4. People will volunteer their time, enough to operate a retail operation, if they believe there is a good cause backing the organization.
5. The company has found a way to combat a social ill on a on-going basis.

To circle this back around to the venture capital perspective, there are a handful of successful for-profit organizations that are focusing on social issues (i.e. Tom’s Shoes which has been bootstrapped to date). Financing such start-ups are a number of foundations and social venture capital firms, a handful of which are listed below:

• Social Venture Capitalist: Acumen Fund, Benentech, NESsT Venture Fund, New Profit, Calvert Social Venture Capital Funds, VentureSome
• Foundations: Echoing Green, Philanthropic Ventures Foundation, Ashoka, Google.org, Equity for Africa, Charitable Venture Foundation, Social Venture Capital Foundation, Entrepreneurs Foundation , Village Enterprise Fund
• Microfinance shops: Unitus, DrishTree, SKS Microfinance
• Other: Enterprise Works Business Development, SocialVC Business Plan Competition, Yale Business Plan Competition