Part 3: Where our profits go

Right from day one, The Fabric Social team set out to create tangible long-term change for communities living in conflict and post-conflict areas. Needless to say, this is easier said than done. Not only is it struggletown for a new business to turn a profit in the first couple of years, sometimes the funding rug gets swept out from under you, and your bank account ends up looking worse off than humpty dumpty on her period.

Even if you're selling gumboots in a flood, with obvious and immediate market demand, most small businesses don't make any money. Surviving the first two years is an epic achievement, and this is especially true for typically unprofitable impact businesses. 

I should say from the outset, many social enterprises run as regular companies that then donate a slice of their profits to a cause. But I never saw it that way. As far as I’m concerned, that’s corporate social responsibility, and often a transparent attempt to improve publicity for slimy corporations.

Instead, we (perhaps foolishly) thought we could create something that is ethical from production all the way through to profit. We are a social enterprise because those who are disadvantaged are the very people who generate the goods that in turn create the profit. By our existence as an organisation, and through our growth, The Fabric Social generates sustained income and the group is no longer disadvantaged. We are not donating to a cause: we are the cause. 

I’ve spoken about it before, but social enterprise falls into a weird funding space. Angel Investors and Venture Capitalists aren’t usually interested because we are too small, and the way we run the business puts as much emphasis on sustainability and fair labour as it does turning a profit. To absolutely no one’s surprise, social justice is not the next Uber. 

Conversely, it can be hard to promise strong social impact outcomes while running a business on the smell of an oily rag. Which is why for us, many of our big dreams that we drew up on day one have been tempered with reality. We shall end all wars with our feminist supply chain! We shall end the economic isolation of all ladies everywhere! ISIS shall be defeated by sustainable silks! Not so much.

As a relatively new small business, The Fabric Social puts 45% of its income back into its social outcomes. In reality, this means that 45% of our sales revenue, and of the money we have raised through grants and donations, goes back towards production, and therefore into the pockets of our artisans so they can keep producing, and start planning and saving. The rest goes towards running the business - web hosting, marketing, postage, storage - all the boring stuff. 

Until this year, we haven't turned any real profit, and us Co-Founders haven't pocketed a cent. We don't get salaries - we instead rely heavily on a support network of dedicated volunteers scattered around the world. As someone who worked as an unpaid intern for many years it's my dream to be able to pay everyone a fair wage. But until we make the big bucks, the artisans come first. Even if I blow my own bank account to get the orders in, the artisans come first. 

I'm also acutely aware that without my wealthy friends, family and colleagues, none of this could have happened. It is much easier for us as upper middle class Aussies to drum up the cash to start a far fetched dreamy business. The 'anyone can be an entrepreneur' rhetoric is bogus, and I thank my well-educated white-skinned butt on the daily. 

Not long ago, many of our artisans worked in the fields during the agricultural peak seasons. They earned uneven, shitty wages for their craft - between $35 and $70 a month in a good month.  Now, our full time artisans are producing fabric for us bumper to bumper - come rain or shine. The Fabric Social being able to place consecutive orders has enabled this to happen. Feasting on my nest egg and a steady diet of mi goreng has totally been worth it. 

But sometimes when we are planning for long-term sustainable change a spanner gets thrown in the works. Earlier this year, before the monsoon season had started, the worst flooding in living memory hit the Assamese village where our weavers live. We immediately put out a call to our networks asking for funding to help the meagre aid efforts on the ground. This gobbled up what remained of our social impact fund, and now we are once again starting from scratch.

One really valuable benefit for our weaving community keeps popping up. It is fantastic we are finally in a position where we are generating income in a more consistent manner. However, quality control and orders are still placed using pencil and paper. Emails using 3G are patchy at best, and our field team is constantly traveling out to the weaving village to outline plans in person. Long story short, what our ladies need is some tailored, intensive business training in financial literacy, accounting, and all the boring admin tasks you learned without realising it when you were growing up as a digital native.

Without this key ingredient, we will never be able to remove ourselves from the picture. We want our artisan co-ops to be able to take orders from other international buyers, to be able to track and plan around the agricultural and monsoonal seasons, with greater orders and even greater lead times. There is a difference between plodding and flourishing, and we believe this is the key.

Apart from business training being at the top of our wish list, we have added another element to our social impact. Starting in spring 2016, for every sale The Fabric Social makes, we will help rid one square metre of land in Asia from landmines and UXOs. We are managing this in partnership with APOPO, an awesome grassroots organisation that works across the world to eliminate landmines, cluster munitions and other unexploded ordinance. A donation of $5 from every sale goes towards their Asia program.

And the coolest part is, they use highly trained rats (yes, RATS) to sniff out the landmines. Here is a link to their incredible Cambodia program.

I really like this as a one-for-one system. We aren’t pumping more crap into the world, but clearing things away that shouldn’t exist. Our peacebuilding dreams of day one are coming true in a tangible way. In trying to repair the damage caused by insecurity, we are burning the candle at both ends. 

When I'm applying for funding, I always start our applications with the phrase: “One of the greatest causes of poverty is conflict, and one of the greatest causes of conflict is poverty”. As a tagline, this has not lost any of its meaning to me. We are now at a point in history when there is more global conflict than there has been in 25 years, and more displacement than any time since World War II. 

As a peace activist working in the fashion industry, I'm not under any illusion that by buying a beautiful, sustainable silk dress, you are going to stop ISIS tomorrow. Nor am I under any illusion that as a Co-Founder I'll be buying diamond shoes any time soon. But I am trying my darnedest to put my money where my mouth is. Social enterprise is a complicated beast, and turning profits into transformational peacebuilding is a tricky business. But as far as I’m concerned, it’s the best business out there.

 

 

Photography shot in Assam by Sally Ride for The Fabric Social.  

If you'd like to learn more about our producers, you can read part one about how our fabric is made here, and part two about our garment construction here

Fi is the Co-Founder of The Fabric Social, a social enterprise working exclusively with women affected by armed conflict, displacement and other insecurity. The Fabric Social work to transform one of the greatest causes of poverty: armed conflict. You can shop, donate, or get involved here 

 


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