An article in The Guardian features the innovations of two social entrepreneurs who founded start ups that utilize the people or resources being supported by the charity being invested in.

LUTA and Fight for Peace, launched by Luke Dowdney, are an interesting pair in that the designs LUTA sells are created by artists from the favelas of Rio de Janeiro. Fight for Peace’s mission is to encourage young people from the favelas to stay away from crime and violent gangs to instead focus on furthering their potential through participation in boxing programs. LUTA’s expressly states on its website its relationship with its shareholders is that Fight for Peace gets a minimum of £10,000 per year–the priority before shareholder profits are distributed.

More on LUTA’s shareholder agreement in relation to Fight For Peace:

http://www.luta.co.uk/supporting-fight-for-peace/

Fair Finance, founded by Faisel Rahman, gives personal and business loans to individuals in the London area who do not have the credit ratings to get loans through mainstream outlets such as banks. When Fair Finance’s initial grants and contracts were cut, Rahman went on to create Fair Finance Ventures so reluctant private sector lenders could invest in Fair Finance in a limited way and learn first hand why its loan methods are successful. This approach helped Fair Finance develop a sustainable platform for further expansion.

Link to The Guardian article, “Financing Social Entrepreneurs” by Mark Cheng, posted 6-8-12.

http://www.guardian.co.uk/sustainable-business/social-entrepreneurs-corporates-finance-collaboration?newsfeed=true

An aside, posted on Ashoka’s website (an organization mentioned in The Guardian article as having supported Rahman of Fair Finance) is a compelling argument as to why we should eliminate the prefix “non” from words that define citizen-based initiatives.

(excerpt):

Words matter—and being defined by what we are not certainly does not help. That is why Ashoka and a growing number of sister organizations have sworn off the “non-” words. Instead we use “citizen sector” and “citizen organization.” Why? Because citizens—people who care and take action to serve others and cause needed change—are the essence of the sector. We believe that when one or several people get together to cause positive social change, they instantly become citizens in the fullest sense of the word.

Link to: http://www.ashoka.org/citizensector