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Rescue Mission

Can American entrepreneurs help solve social ills?

Trained as an eye doctor, Jordan Kassalow had worked in more than 40 countries, helping treat river blindness and other ailments. "For [each person] who needed sophisticated eye care, there were 30 people who needed basic reading glasses," says Kassalow, 43. "There was a huge market failure, and a huge market opportunity to sell cheap reading glasses."

Kassalow believed entrepreneurs were best positioned to fill this niche. "Smaller companies can take cost margins [selling to the poor] that larger companies may be unwilling to take."

Along with partner Scott Berrie, 39, Kassalow launched Scojo Foundation, a nonprofit organization that identifies entrepreneurs in El Salvador, Guatemala, India and other poor countries; trains them to sell reading glasses; and helps them find small loans to start eyeglass-selling businesses in their villages. Scojo Foundation plans to help sell reading glasses to over 350,000 Indians within the next three years and has been recognized by the World Bank as an innovation leader.

Over the past five years, American entrepreneurs have increasingly focused on bringing social enterprise overseas. The reasons for the shift: today's traumatic global political environment drawing America's attention abroad; high-tech billionaires starting foundations and VC funds to aid for-profit companies that promote international social good; and business experts like C.K. Prahalad, author of The Fortune at the Bottom of the Pyramid, bolstering the idea that companies can make money selling to the world's poor.

Net Impact, a San Francisco-based clearinghouse for social-enterprise entrepreneurs, has more than doubled its number of member chapters in the past six years, while prestigious U.S. business schools, including Harvard and the Massachusetts Institute of Technology, now offer programs focused on international social entrepreneurship. The United Nations is catching on, refocusing some poverty reduction efforts from giving aid to boosting entrepreneurship.

KickStart, a nonprofit firm started by Martin Fisher, 47, and Nick Moon, 50, in San Francisco, has developed a niche designing low-tech agricultural equipment specifically for poor African farmers. KickStart trains small manufacturers abroad to make this equipment in bulk and trains small retailers to sell it. The retailers then sell the equipment to the farmers. Today, the firm has a staff of 174 in Africa and five in the United States. According to Fisher, the equipment allows farmers to make more than $30 million in profits each year.

During the Vietnam War, Lee Thorn served on a U.S. ship that launched bombing missions over Laos. Returning to Laos in 1998, Thorn was shattered by the extent of the bomb damage, and he vowed to help the impoverished country. But as a lifelong businessman, Thorn was skeptical about the ability of pure aid organizations. So he launched a for-profit company, Jhai, to seek entrepreneurial Laotian coffee-bean growers, form a cooperative, train them to pick the highest-quality beans, then market that coffee in America. His U.S. nonprofit arm, the Jhai Foundation, channels some profits from coffee sales to Laotian village development and funding for the farmers. "We played to Laotians' strength--the truly organic element of their coffee," says Thorn, 62. Jhai is doubling the amount of coffee it ships to the U.S. each year, with 2005-2006 sales projected at about $500,000.

Noting all this success, some foreign governments are searching for a few good American small-business owners to offer expertise and capital. Fisher notes that the government of Ghana is currently wooing KickStart. And Becky Rottenberg, Net Impact's new venture director, says the governments of Uruguay and Chile have welcomed Endeavor, a New York City-based social enterprise organization that helps fund entrepreneurs overseas. Says Rottenberg, "The U.S. is still viewed as the gold standard of entrepreneurial activity."

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This article was originally published in the August 2005 print edition of Entrepreneur with the headline: Rescue Mission.

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