The Portsmouth, NH based nonprofit organization Social Ventures Foundation (SVF) is shifting the paradigm of poverty reduction by offering the poor a self-help “Business with a Purpose” business model.
“The development of sustainable businesses that can rapidly scale and provide jobs for the poor to deliver essential products and services for the poor, provide the best solutions to address the myriad of problems facing 3 to 4 billion people in developing nations today,” Executive Director Marc Blumenthal explains.
In identifying, promoting and facilitating investment in scalable startups that meet the unmet challenges of poverty reduction, SVF promotes vetted startups in its biweekly “Poverty Watch” newsletters and its annual virtual “EndPoverty Virtual Summits.”
At age 19 Blumenthal’s entrepreneurial endeavors started at the University of Pennsylvania, with his first startup, the American Book Club. As the company’s first hire, he negotiated all publisher book deals and earned enough money to travel to Europe and Asia in his Junior year abroad. This ignited the entrepreneurial fervor as he went on to investment management, education, and technology innovation as well as in Medical Devices, Plasma Fusion, and Aerospace start-ups.
He established the Social Ventures Foundation in 2017. To facilitate the investment in scalable sustainable startups that the SVF has identified, the foundation is in the process of establishing the EndPoverty Fund, a B-Corp investment holding company which is currently under formation.
This business model, is what Blumenthal compares to as a “Berkshire Hathaway investment model for ending poverty.” Leveling the playing field for startups focused on poverty-reduction, SVF introduces investors to an alternative to charitable giving by offering to buy EPF shares or donate shares to the SVF to hold and retain in perpetuity. After the startups are vetted for social impact, global sustainability and scalability proof, an EPF independent fund manager will finalize an investment decision based on sound investment practices – including ROI.
SVF enables innovative programs to meet critical domestic and international poverty reduction challenges with “prepackaged, small-scale micro-franchise models in health, environmental sustainability and agribusiness.” This unique “Micro-Franchising business model meets the unmet challenges of the poverty reduction space,” Blumenthal explains.
First “Test Bed” – Haiti
As the poorest nation in the Americas, Haiti is one of the “most challenging countries to conduct business, in the world.” With 80% of Haiti’s population living on less than $2 per day, eating 1.5 meals per day – the country had a 37%+ unemployment rate in 2017.
But SVF is focused on helping 60% of Haiti’s population that is undernourished and vitamin deficient and to elevate the vitamin and protein deficiency in Haiti which is caused by food insecurity. It’s what causes 22% of Haiti’s population of 15-24 years of age, 1 in 5 children stunted and more than half of the children and nearly half of all women of reproductive age anemic.