Ever since Kären van der Veer, ND, was a child, she felt called to help people. That’s part of why this naturopathic physician and single mother of two started Karmalicious, a social business that donates 100 percent of its clothing profits to women’s charities abroad. All Karmalicious clothing carries the motto, “You are beautiful and you can change the world.”
“When we were young,” Dr. van der Veer said, “few of us had heard of businesses like Newman’s Own or Tom’s Shoes, for-profit companies that donate millions of dollars to charities each year. I believe we will see social enterprises more and more, and that some day companies that don’t donate a good percentage of their profits to charities will be the exception rather than the rule.”
Social business is a term first defined by Nobel Peace Prize laureate Muhammed Yunus. A social enterprise is distinct from a nonprofit, in that it makes a profit to further its reach and expand its social mission. According to a 2010 survey conducted by ORC International, 85 percent of consumers have a more positive image of a company when it supports a cause they care about; 90 percent of consumers want companies to tell them the ways they are supporting causes; and 83 percent of consumers say they would choose a social businesses if they had the option.
Joanna Wasmuth, CEO and Founder of Erase Poverty, a cause marketing firm that donates 40 percent of its profits to micro-lending organizations, says she believes the consumers can be “cause shareholders” and believes “Americans are very compassionate, particularly in hard economic times. In tough economic times, we don’t have a lot of time and disposable income, but we can use our consumer dollars to make a difference when we buy our coffee, clothes, bread etcetera.”
Van der Veer agrees that socially conscious purchasing is an easier way for many to contribute in tough times. “In this economy, people who are philanthropically-minded may not be able to contribute $1,000 to their favorite charity,” said van der Veer, “but they may feel they can afford a $45 sweatshirt or a slightly more expensive spaghetti sauce – this way, they get something they need, but they also contribute to a worthy cause.”
Cause marketing is another term that’s been gaining traction, particularly with the negative attention big business has received in recent years. Wasmuth told us “cause marketing is the process of using your business approaches and channels to not only build your business but help support a cause. A perfect example is the (Red) campaign, which donates funds from the sale of its merchandise to fight AIDS in Africa.”
But with so much need and so many worthy causes, how do these business owners determine where to put their money? After lots of travel and research, both van der Veer and Wasmuth believe that funding micro-loans to women starting small businesses is the best place to invest their profits. Karmalicious donates their profits to five established organizations, including those that contribute to battling the sex trade, HIV/AIDS and two that provide micro-loans to female entrepreneurs, but van der Veer believes they’ll be moving more toward micro-lending in the future.
“The studies all show that micro-loans create the most development, impact the most people and break the cycle of poverty for generations to come,” said Wasmuth. Van der Veer and Wasmuth both cite many studies illustrating the power of microloans to change entire communities. Both women were also influenced by the World Bank’s 2001 study, “Engendering Development Through Gender Equality in Rights, Resources, and Voice,” which argued that promoting economic gender equality is crucial to combating global poverty.
Van der Veer came to her mission to start a successful social business through a long process, including years of HIV work, giving “you are beautiful” talks to cancer patients as a physician and even by observing her children’s innate self-love. “Some of my reason for starting this company is personal,” said van Der Veer. “I needed to be able to show my children what a woman is capable of and what their mommy is capable of, since I’m their primary role model. One of the first things my daughter learned to say is ‘you are beautiful and you can change the world’ – I want everyone to believe that.” FBN
To learn more about Karmalicious, visit www.karmaliciouscc.com; for Erase Poverty, visit www.erasepoverty.org.