Many consumers these days are in search of a way to not only support, but become more personally connected to a sustainable supply chain which provides them with products that do good. The Hoop Fund, recent winner of Hub Bay Area’s Venture funding, was formed with this type of conscious consumer in mind.
Co-founded last August by former Coca-Cola VP of global brands Mark Mathieu, fair trade expert Deborah Hirsch, and entrepreneur Patrick Donohue, the Hoop Fund is a crowd-funding platform where people can invest in fair trade, sustainable farmers and artisans around the world whose products include rice, chocolate, tea, clothing, handicrafts and cotton, among others. Currently, the site has 510 funders contributing a total of $11,500 to ten projects that are improving nine international communities.
Donohue expanded upon the change in buyer thinking that Hoop aspires to build when he told Fast Company, "When people start looking at their products in a different way and think about where things come from, they start pulling that into everyday decision-making. The impact we hope to have is a shift in consumer value where people can say, 'there's a shift because I invested in it.'"
Here’s how it works. Hoop creates the online space for entrepreneurs who do not have the financial ability to grow their business or carry out community-based programs. The website allows consumers to get to know the farmers and artisans in a personal way, to see the producers’ “wish lists,” and choose which specific projects they feel passionate about supporting. Most projects focus on building business capacity or funding needed for projects that will help the entire local community, ranging from enabling organic certification and increasing market access to purchasing equipment such as a knitting machine. As their website simplifies, "think pen pal meets investor meets farmers market.”
As a lender, you make your money back as soon as the loan is repaid, at which time that money can either be reinvested into another Hoop project or spent on products featured on Hoop’s website. Hoop then sends you (and your community of lenders) updates on your projects and gives you discounts on featured online products. Hoop makes a profit from purchases made by lenders after loans are repaid and also gets promotional fees from brands with which they partner. Producers pay zero interest on the loans they receive.
Hoop differs from other micro-lenders like Kiva, which is a non-profit that loans to individual entrepreneurs. Instead Hoop focuses on small and medium producer enterprises (SMEs) like farmer co-ops and artisanal apparel and handcraft businesses. The company partners with farmer-owned brands, fair trade brands and mission-oriented organizations who work with producer businesses that can provide traceability of product.
As Hoop explained on the 3P Podium, the “Fund Your Sweater, and Wear it Too” campaign in partnership with Indigenous Designs allows consumers who personally invest $25 to receive a $35 credit towards the purchase of any Indigenous Designs product plus a $10 micro-loan toward the women weavers project in Peru that provides women with vocational training. To learn more from Hoop co-founder Deborah Hirsch, watch this 3P interview.