Small Farmers. Big Change.

By Daniel Fireside, the Capital Coordinator at Equal Exchange

Many people in the SRI (Socially Responsible Investing) world are familiar with the pioneering work that Equal Exchange has done to bring Fair Trade coffee, chocolate, tea, bananas and other products to the United States. We take great pride in the fact that our success has challenged those who thought there was nothing one could do to address the systemic inequities of global trade.

However, we’re about more than just changing the way people buy and sell what goes in their shopping basket. For 25 years Equal Exchange has been turning a host of conventional business models and practices on their heads. Pay farmers above market prices. Increase your suppliers’ market power by providing affordable credit and helping them form co-operatives. Spend time and resources to educate consumers. Encourage them to care about farmers and families they’ll never meet. Make sure there is no exit strategy. Entrust complete control and ownership of the company to the people who work there. Share your knowledge and business model with competitors and even encourage them to enter your category and compete for your customers. Don’t dodge your taxes.

And it’s been working pretty well: over $40 million in annual sales, growing product lines, and fanatically loyal customers and partners.

But there have been countless social enterprises that make a splash, take off, and then…cash out. To get the capital to go big, you need to open up to outside investors, or sell the company to a global conglomerate that’s looking for a socially responsible branding opportunity, or maybe just reward the visionary entrepreneurs and early investors who got the venture off the ground. That’s the story with Burt’s Bees, Ben & Jerry’s, Tom’s of Maine, The Body Shop, Green & Black, Stonyfield Farm, Dagoba, and countless others. That’s how the system works, right?

In the SRI world, we’re told that the job of the entrepreneur and investors is to turn an exciting, idealistic vision into reality. Hopefully, you won’t have to compromise your initial social vision when you’re faced with the harsh realities of the marketplace. And when you do relinquish the reins to outside investors or the new corporate owner, you just have to have faith that they’re still in it for the right reasons, and will do the right thing no matter what signals they get from Wall Street.

We’re trying to show that there is a different way to raise capital, and that you don’t have to put your social mission at risk. We hope it will inspire others in this still evolving field of social entrepreneurship.

Read more here.