Think of that organic, fair-trade chocolate from Bolivia you buy regularly, or a beautiful hand-woven sweater you got from a collective in Peru.
Now imagine if you could directly help the artisans and farmers behind these products with a small loan to improve their communities. By sharing the story with your network, the money might quickly multiply - it could grow large enough to cover a community handloom for the weavers in Peru, or even prevent deforestation. As the lender, you would develop a new relationship with both the brand you love and a community you support, while doing good in the world.
This idea, just launched as The Hoop Fund last Thursday at Hub SoMa in San Francisco, first came to Deborah Hirsh throughout her six years developing the U.S. market for Fair Trade Certified products at TransFair. She saw an opportunity to multiply the impact of fair trade using a similar model to Kiva's, where average-income folks give loans to lift people out of poverty. Funded by social entrepreneurs like Kevin Jones from Good Capital, Hoop connects consumers to fair-trade producers in “a global movement of connected consumers.”
“We want to share the stories that create demand for the fair trade premium by forming connections to the producers,” explains Jones. “People haven’t told that story.”
The Hoop team calls it an experiment in invested consumption: an analytical assessment of the impact we make from what we consume, with what we get in returns. Jones believes no one’s mixed consuming and investing before.
By sharing in production costs and connecting to the makers, the Hoop prides itself in "creating an emotion" that’s been missing in the marketplace. On its website you can meet the makers behind organic, fair-trade goods, see what is being produced, and make a loan.
“I think people will get a kick out of it,” says Jones.
Although conscious consumerism is catching on, many still avoid the higher cost of fair-trade products. But according to Jones, it’s the premium on such products that gives a community collective buying power. Profits stay in the community.
Big, fair-trade lender Root Capital fills a vital gap for established, fair-trade producers like coffee growers during pre-harvest season with large cash advances when money’s tight. But the Hoop strives to empower communities with small loans for capacity-building ── funding for proper equipment, better market pricing, water projects, or maybe a clinic.
Similar to other micro-lenders, a Hoop loan starts as little as $25 at 0% interest for an average of 2.5 years. But the Hoop goes for community enterprises working closely with established businesses, creating a global community cycle that benefits producers, consumers, and brands. Its first loans are going to growers of Alter-Eco foods, and weavers for Indigenous Design. Next on the horizon are fair trade sports, starting with a Pakistani business that makes soccer-balls.
Alter Eco CEO and Co-Founder Matthew Senard calls the model brilliant.
“We’re going to finance small projects that will be transformational for communities,” he says. “It goes beyond fair trade.”
For $25, you can help finance a seed bank to grow rare varieties of organic rice in Thailand, or help grow a botanical garden with medicinal herbs at a chocolate cooperative in Peru for AlterEco. You can sponsor a vocational school or help pay for a community handloom for Indigenous Designs in Peru.
“So much of what we’re doing has everything and nothing to do with the products we sell,” adds Scott Leonard, of Indigenous Designs. “The Hoop is about supporting the quadruple bottom line: the communities behind the products.”
At least 20 people invested in The Hoop Fund at its San Francisco Hub launch, and a guest has signed on to throw a fundraising dinner as an Ambassador. The Hoop now invites you to get on the site and see how you can participate in sharing the fair trade story.
“We can close the loop with a product we enjoy, buy it tomorrow, the next day, and pass it on to keep the hoop hooping,” explains Hirsh, “so it becomes viral.”
Teaser image is of fair trade coffee beans drying in the sun, by william.neuheisel.
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