Alfa Demmellash knows the challenges of systemic poverty first-hand. She moved to the United States at age 12 from Ethiopia, having spent her childhood with her aunt while her mother worked as a waitress and seamstress in the U.S., saving money to bring Alfa to America. After graduating from Harvard, Alfa co-founded Rising Tide Capital, a nonprofit that empowers entrepreneurs in low-income communities of New Jersey. Today, Rising Tide has helped more than 3,000 entrepreneurs to start and grow successful businesses in everything from construction to compost churning, creating thousands of jobs and a vibrant community of entrepreneurship in some of the most economically distressed neighborhoods in the state.
Scott Strode was suffering with a substance use disorder until he discovered that physical activity and an active community of others experiencing similar challenges helped him combat his addiction. But instead of identifying as addicts, his fellow gym-goers were identifying as athletes. He went on to found The Phoenix, a sober active community that uses peer-led group activities to aid recovery and shape successful new lives for those battling substance abuse.
By scaling programs like these – and better understanding what makes them successful – we can change the way people all over this country think about and approach breaking the cycle of poverty.
Innovation and entrepreneurship aren’t new ideas; anyone in the business community will identify them as our country’s engine of progress. But they haven’t been effectively applied across the social sector in the same way they’ve been applied to companies like Apple and Amazon. Instead, we’ve expected less of the social sector, allowing hundreds of billions in charitable giving and as much as $1 trillion every year in anti-poverty government programs go toward the same old, tired, and failed approaches. We’ve fought the War on Poverty for over 50 years, yet the poverty rate hasn’t budged.
Something must change. We can start by focusing on disruptive models and grassroots efforts that break the status quo. And to be successful, we need to change the focus from giving people in poverty what they don’t have, to utilizing what they do.
This method works, and as executive director of Stand Together Foundation, I’ve seen it transform thousands of lives. The Phoenix and Rising Tide Capital are two of over 150 nonprofits selected to be a part of our Catalyst Network. Alfa and Scott, along with other social entrepreneurs from across the country, participated in a six-month management course and one-to-one coaching to learn the same business philosophies and tools that have driven the success of businesses across the country for years. They also received financial support to help them scale.
Within two years of completing the program, The Phoenix had successfully expanded from seven cities to 45 – with relapse rates at half those of leading clinical programs. Rising Tide Capital, which boasts a 90 percent success rate in helping their clients launch sustainable businesses, has plans to share its model across the country with as many as four new markets by the end of the year.
Other organizations have seen similar growth. Hudson Link, which helps break the cycle of incarceration by providing college education in prisons, has expanded from one to six prisons in New York. Urban Specialists, an organization that utilizes the experience of former gang leaders and the formerly incarcerated to mentor at-risk youth, has now helped over 26,000 teens and children. And Thistle Farms, a Nashville-based natural body and home products social enterprise that employs women who have survived trafficking, prostitution, and addiction, has earned over $1.5 million income for survivors.
What can we learn from these incredible social entrepreneurs? First, the most effective approaches help individuals help themselves – tapping into their unique gifts to contribute to others. Welfare programs and handouts aren’t empowering; instead, they rob people of their dignity. People want to better themselves and their families. What they need are the tools and community support to get there.
Second, successful nonprofits are often led or staffed by individuals who have overcome the same issues they’re now helping others tackle. Not only do these individuals have unique experiences to help others, they represent a witness and testimony that change is possible. They offer hope.
Finally, we need to raise our expectations of the leaders of non-profit organizations. We need to find the social entrepreneurs who have figured out what works and invest in the ones that can do it better and bigger. This could be through financial support and management training. Or it could be through building a movement of partners, supporters and volunteers with relevant skill sets.
There is no one-size-fits-all answer to poverty. That’s why we need a bottom-up, not top-down, approach. We need a dynamic tapestry of entrepreneurship and innovation that changes the way people think about and approach poverty across the country.
Evan Feinberg is the executive director of Stand Together Foundation.