My interest in promoting a culture of entrepreneurship is not limited to the for-profit sector. I've had the opportunity to befriend a number of social entrepreneurs over the past six years. These non-profit bootstrappers often follow a very similar path to their profit-oriented counterparts. While the parallels are remarkable, the hurdles to success are usually greater for the social entrepreneur. It is often far more difficult to raise money, foster an environment of economic efficiency, promote technological and operational change, and measure success in the charitable sector.
When a social entrepreneur's venture involves a paradigm-changing business model that deeply intersects with the world of government regulation, the odds can seem nearly insurmountable. The fear of long sales-cycles and faceless bureaucracy is sufficient to preclude most for-profit startups from venturing in the realm of the government. For my friend Aaron Pereira, navigating a cumbersome regulatory framework is one of the many challenges he has successfully overcome as he nears completion of a multi-year project to launch Vartana, a community bank for the non-profit sector in Canada.
Vartana is Aaron's second major social venture. I first met Aaron in 2000, shortly after he had developed the idea for CanadaHelps.org, an online donation portal for Canadian charities. Aaron, who had run a successful web development business as a student at Queens University, made the selfless decision to channel his entrepreneurial energy into a non-profit startup at a time when the allure of dot.com profiteering was difficult for most entrepreneurs to resist. The idea for CanadaHelps was born out of Aaron's frustration with traditional funding options. He correctly predicted that a web-enabled service to facilitate donations to any of Canada's 80,000+ charities would both simplify the donation process for donors and greatly benefit charities by offering them a zero-cost platform for receiving donations.
Common to most startup success stories, Aaron recognized an inefficiency in a multi-billion dollar market as an opportunity to build a successful venture. And in this case, successful is an understatement. At age 19, Aaron convinced two friends to join him in building CanadaHelps. He led a successful fundraising for startup capital in 2000, built a first-class board of advisors, and launched the donation portal the same year. Aaron recently sent me an email with the amazing news that six years after it's launch, CanadaHelps.org now generates over $20 Million in annual donations for thousands of Canadian charities.
CanadaHelps achieved several important objectives:
- they simplified the giving process for individual donors and developed a charity gift card product, which contributed to an increase in personal giving levels
- they significantly reduced costs for businesses by allowing corporations to outsource almost all of the administration of their corporate/employee giving campaigns
- they enabled every registered charity in Canada to receive donations online - an enormous advantage for thousands of small charities who do not have the expertise or resources to develop online capabilities on their own
Not long after building egan searching for his next startup idea. In 2002, he launched an even more ambitious undertaking - a plan to develop a bank to service non-profits. Building a financial institution from scratch is an enormously complex undertaking. Aaron and his team have raised millions of dollars and dedicated five years to this initiative. He is now nearing the launch phase for Vartana. This excerpt describing Aaron's venture is taken from his Ashoka Fellow profile page:
CSOs are vital to Canada's economy - employing over one million people in 2003 and comprising 9 percent of the GDP - but they are largely denied access to the credit and advisory services essential to their fiscal growth. The Community Bank will fill this void by creating the nation's only financial institution dedicated to the special needs of CSOs.
Aaron sees an opportunity where others see an unchangeable system. His Community Bank Initiative will provide the resources that CSOs currently lack: checking and savings accounts, short term credit, long term investment, financial advice and advisory products. He plans an innovative governing structure; the Bank will be governed by CSOs themselves, with investments from a variety of stakeholders such as foundations and others, with yields that are reinvested with tax benefits to sustain a sound financial base and support a motivated, competitive work force.
If you are interested in supporting the community bank, you can make a donation through CanadaHelps to Vartana (or any other charity in your area of interest!).
I'm grateful to have had the opportunity to provide Aaron with modest seed capital through my foundation for both CanadaHelps and Vartana. Aaron epitomizes the type of social entrepreneur I like to invest in. His accomplishments are a testament to the power of social entrepreneurship and will hopefully inspire others to follow in his footsteps.Back to Archived Essays