S2: Kari Hughes of Buy The Change in Detroit #54

Buy The Change

Romy Kochan interviews Kari Hughes of Buy The Change in Detroit, Michigan.  Listen and learn about what inspired Kari to begin making a market for women entrepreneurs around the world. Kari discusses why she wanted to become a B Corporation and remain a for-profit company. She discusses the importance of acknowledging your successes over your gaps. Kari is a  woman on a mission to help make markets for inspiring women and mothers who are overcoming around the globe. A for-profit example of great social enterprise.

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Full Transcription:

Romy Kochan: Welcome to the Bonfires of Social Enterprise. This is Romy. On this episode, we learn from Kari Hughes of Buy the Change. Buy the Change is a for-profit social enterprise in the Detroit area that helps to make a market for women entrepreneurs around the world.

Kari, unfortunately, lost a daughter. We didn’t spend much time discussing that in the interview here, but I can tell you that she’s dramatically empowering women while she continues to heal her own heart.

I believe what you’ll hear is a woman with a mission to help, a woman making a big impact. Let’s jump right in now where I’m asking Kari more about the very basics of Buy the Change.

Kari Hughes: Buy the Change is a retail company. We sell accessories and home goods that are all handmade by women in the developing world. The two main benefits, I think, that we offer are the opportunity to have income and economic opportunity for our artists and partners around the world, but also the ability for our customers to have a direct impact on the lives of women on the other side of the world.

I think lots of times people want to have an impact, but they don’t know how, or they aren’t sure where the money that they donate, or spend goes. Every time we sell a product, we use the profit for sure, but a majority of that money to buy another product. It results in the direct income and all of the opportunities that income brings for our partner artisans.

Romy Kochan: Let’s go right to how you got started. What originally trigger tripped your heart, as I like to say, to do this?

Kari Hughes: I think most of the time in life there is 100 different paths that come together in 1 point of clarity that brings you to make a decision. I had worked in public health and in the non-profit sector for many, many years and had worked as a therapist at an organization that ran a shelter for women living in domestic abuse situations.

It’s just like all of these things that I was very focused on, women, and women’s issues and I was at a point in my life where I really had the freedom to do something that gave back at a higher level.

A friend recommended the book Half the Sky. It was written by Nicholas Kristof and Sheryl WuDunn and really motivated me. Their call to action was amazing. I knew I wanted to do something, but I really didn’t know how.

Then, I read another book called Global Girlfriend. It’s written by Stacey. I don’t even remember her last name at this point. I’m sorry. Her company is called Global Girlfriend. She documented how she did it. All of that together with my genetic wanderlust and the things that I had seen when I was traveling personally in the world, I just knew what I wanted to do.

I wanted to help give women opportunity. I think that every woman that I’ve met is so inspiring because of their talent for 1, but because of their resilience. They refuse to give up, and they refuse to stop hoping for better things and to have a better life for themselves and their children.

Romy Kochan: Yeah, I agree. So much of it, as you said so brilliantly and people say, “Well, I want to help teach a man to fish.” that whole parable. Very often they know how to fish really well, and they have their equipment already, but they may have barriers to a market, barriers like we’ve never seen. We can help make markets for them …

Kari Hughes: Exactly.

Romy Kochan: … which is leading to your organization.

Kari Hughes: Right, right. We made the decision to not go the non-profit route, to be a for-profit company, flat out company that had social change and empowerment. We decided to become a B Corp. I think partly because in Michigan social enterprise has been a little bit slower coming to Michigan.

A lot of people that we encountered didn’t have in their minds a category that was between being a profit focused for-profit company and a non-profit. We really wanted to be able to say, “There is a middle ground.” and we are part of that middle ground, that we are a woman-owned company working to empower women, but we don’t want to give grants. We’re going to run our business just like a for-profit company.

Romy Kochan: That keeps the theme for the people you’re buying from too. It helps role model that.

Kari Hughes: Exactly, exactly.

Romy Kochan: That is powerful. Just for the listeners who are unfamiliar with the B Corp, would you mind talking into that a little bit and for those that are not part of the US?

Kari Hughes: There’s a lot of terminologies involved, and it does get confusing. There is, in 30 some states now, in the United States where instead of being a C Corp, or an S Corp, or and LLC, you would be a benefit corporation. That is just your registration with the state, and it’s an IRS status.

That’s not available in the state of Michigan where I am, but there is also something called being a certified B Corp, which is done through a non-profit organization that is called B Lab.

There is where you submit all of your business practices and have to document that you are working toward social change and are considering all of the stakeholders in your company from producers, to customers, to employees, and shareholders if you’re a larger company than we are, and you are taking active steps to bring maximum benefit to everyone who is involved in the process along the way.

We are a certified B Corp, 1 of only a few in Michigan. We have been certified as being focused on social change over profit.

B Lab looks at the triple bottom line, which means that they don’t think making money in your business is a bad thing, but social change has to be as important, if not more important than maximizing profit in the course of your business practices.

It was a super good fit for us in helping to explain to people who weren’t familiar with this practice that we did get a certification.

Romy Kochan: While we’re on this profit and social change, this intermixing, we know that you have really got to be an Olympic athlete to pull that off. We have a lot of questions here that come into the podcast from our listeners about how do you do that initial discovery about what you really charge for your products or services?

That is a bit of a tricky trial and error initially. How did you, Kari, get started once you had the idea? How did you learn how to price it so that you could be self-sustainable?

Kari Hughes: To be fully transparent about this, I am not a champion at this. My passion was the empowering women piece. It’s been a long road of discovery and learning for me too. It’s still something that we work on all the time. I have made a lot of mistakes along the way but also gotten somethings right along the way too.

Because we were a self-funded startup from day 1, we didn’t have money to experiment with. I think that it’s a matter of listening to your customer and experimenting with different price points and seeing what your customer base can support and going to the highest level that you can.

I don’t know if that even answers the question because I’m in the learning phase. Even after five years, I would consider myself still in the learning phase about that piece of it as well.

Romy Kochan: I think you just encouraged everybody because I think it takes a minute for 1. There’s a truth that I’ve come to understand about social enterprise, in general, is that it takes a moment because it’s a fine tuning all the time. Even if it’s a product that people are familiar with, it takes even a bit longer if you’re offering up now a product that people even haven’t heard.

The industry is relatively new. For Michigan, especially Midwest, there’s some very traditional values here. People are peeking around and wanting to know about it and have a heart level curiosity, but they’re still trying to figure out the math of it.

Kari Hughes: There have been times where we tried to use a formula and just say, “Okay, what we paid the artisan for it plus what it cost us to import it and to get it here, that times 2, or that times 3. That pricing ended up being really much lower than what the market would support.

We found that we could go a little bit higher than that and maximize the profit that we made on that product, which would help us invest a little bit more in products that maybe we couldn’t have those kinds of margins on. We found that it just doesn’t fit any formula. We have to be flexible and put prices up sometimes and see what happens and put prices down sometimes and see what happens and go from there.

Romy Kochan: Yeah, that’s a great word. If I boil it down, every time we analyze one of these, or, we’re involved in the conversation in some way, whether it’s for our company, or for somebody else who we’re working with, it always comes down to some version of, “Okay, we’ve got human beings involved in this.” This is just not a robotic, or a tech because of their past, or their area they’re living in, or other barriers that they’re facing. Every situation, because of the human being involved in the social enterprise, makes each case different.

I feel like, broadly, I just want to share with everyone we’ve got to release ourselves. We’ve got to release ourselves because this is a human issue just as much as it is a business.

Kari Hughes: Right, right. One good example of that is our artisan partners in Haiti. Everything has to be brought in. Our markup is maybe only 50% of what products cost us to buy in Haiti and really know that we’re paying a fair living, not even a wage, because they don’t work for us, but a rate for those products.

We are going to continue to buy products from Haiti, but our profit margin for those is very, very small. Other countries, Cambodia for instance, we can do bigger markups on products that come from Cambodia and, so it all evens out.

We’re very aware at every step that it is. We would never say, “Oh, I’m sorry. We can’t work with you anymore because we can’t get a higher profit margin on the things that you make, or the wage that you need to get, or the amount you need to get per bag for us to be able to buy your products.”

Romy Kochan: Right, or a delay. Craziest stuff can happen in their villages and all of those things that you almost have to have space for and grace.

1 of the things that social entrepreneurs face a lot when they are helping to make a market for a social group, like yourself, is how do you do the best market discoveries by your clients so that you’re giving them the types of quality product that they want?

How do you do that discovery area? Are you doing it by seeing who buys what, or are you doing any formal discovery with your potential customers?

Kari Hughes: We do a lot of vendor shows in the Detroit metro area. We talk to them about what they like, what they don’t like, also, just how things sell online. Over the past five years, we’ve been able to get a feel for what our customer base is drawn to. That’s very stylish, very on-trend products that also have the social benefit built in.

We do not and will not ever sell anything that looks like it’s made for the souvenir or travel market. We know that our customers want unique, beautiful, high-quality products that they will use for a long time and will last.

Romy Kochan: We’re going to put your website up in the show notes here on the episode so the listeners can go right there. Let’s give them that web site right now.

Kari Hughes: It would be www.buythechangeusa.com.

Romy Kochan: While they might have a pen out, let’s also give them your social media places to find you.

Kari Hughes: Website is BuyTheChangeUSA.org   and  BuyTheChange on Pinterest, Facebook, Instagram, all, just Buy The change. That’s B-U-Y-T-H-E-C-H-A-N-G-E.

Can I say a little bit about the name of the company?

Romy Kochan: Yeah, that’d be great.

Kari Hughes: It’s obvious to me, but I found it’s not always obvious to everybody is that it’s a play on the Gandhi quote, “Be the change.” When we sat down to name the company, we had a lot of brainstorming and ideas on the table, lovely names.

We said, “You know what? We can make a difference in the world. Together, we can change women’s lives.” Why not just put it right out there in the name of the company that is buying these products changes lives? We decided on the name Buy the Change.

I think that it makes it super clear that we’re selling you something. We want it to be super clear from the very beginning that that’s how our little piece of world change is going to happen.

Romy Kochan: Love it. One thing I didn’t ask you about was the non-profit. You did, even though you’re a B Corp, a very for-profit focus regarding sustainability for Buy the Change. You did go ahead and set up a separate organization.

Kari Hughes: We did. We very much wanted to be about earned income and 1 of things that we said in our brainstorming was we won’t be giving grants. We won’t be writing for grants. The non-profit model doesn’t fit. After we did become a B Corp and started traveling and visiting women, what we saw is that they were using really old equipment, which is what was available.

In 2013, we made the decision to start a non-profit. The Buy the Change Foundation is a 501(c)(3). It is for the purpose of helping our partner artisans eliminate barriers to their own business success. Sometimes that is newer equipment.

Sometimes that’s equipment that they didn’t have before. We have paid for a roof. We had 1 group in Cambodia that worked out in a patio area. During the rainy season, they couldn’t work at all. We gave them a grant. Every time someone shops on our web store, buythechangeusa.org, or .com, we have both.

10% of that sale goes to our foundation, our non-profit foundation. Once a year, we put out a call to all of the women that we work with, with the help of non-profits on the ground there, so they can write and say, “I could be so much more productive if I had this, or if I could eliminate that, it would help me so much.”

So far, we’ve funded every request that we have received. If they had to save up from their earnings that they’re making to buy this equipment, we felt like it would defeat our purpose. They wouldn’t be able to use that money to feed and house their children and to send their children to school and all of the things that we really wanted to offer them by helping them expand the market for their products.

We can do that and skip that whole step of having them remain at ground 0 to be able to move forward. There’s a page on our website right now that says, “Buy the Change Foundation.” They can click on that, and there’s a donation page. We are in the process, right now, of putting together a separate website for the foundation. It’s on our list of to do things. It’s in process.

Someone could donate directly to the foundation on that page. There’re some tee shirts on there they could buy too. If someone just wanted to donate and not buy anything, there’s a donate button on that page.

Romy Kochan: Very good. I’m always trying to highlight the easy route. We, of course, want everyone to buy the product. We dream big for us. How would Buy the Change look like if you had your way?

Kari Hughes: As I traveled around the world and sat down with the women that we work with, and built relationships with them, met their children, and seeing where they live, I’m just more, and more inspired to work as hard as I can to sell as many of their products as I can.

My dream would be that I could say to all of the 100 plus women that we’re working with right now, “I can buy everything that you could make. You don’t have to wait for a quarterly, or a bi-annual order.” in the way that it fits in with your culture and fits in with your daily life and the responsibilities that you have and every single 1 of them I can pay you for.”

With the ladies that make our Kantha products in India, two different groups, we’re to that point. We get a shipment every single month. They can basically sew exclusively for us at this point, but there are so many other women in different parts of the world that we’re not there yet. That’s my goal is to say, “Don’t worry. You can plan ahead because this money is going to be coming your way.”

If I can have all of these visions and write these lists and think about everything that I want to do, but I have to be really careful about not letting that make what I have done feel like not enough.

Even on the days when things don’t happen at the level that I had dreamed that they could, or that I wanted them to, I still have made a difference in the lives of the women that I have purchased products from and sold products for and sent money to.

I remind myself every single day that every little piece does make a difference, and that it does matter, and that as much as I want it to be more, and am committed to making it more, what it is is good enough and is okay.

Romy Kochan: I think we women can take the bait of that sometimes. Got to do more. Put on our cape.

Kari Hughes: Right and as we’ve traveled and sat down with women and had conversations with them, it’s even more so. It is no longer numbers. It is living, breathing human beings in their homes seeing how much it matters to them and how much life changing power it has. It’s easy to say, “I want to do more.” I think you can be a dreamer and be very practical at the same time.

Romy Kochan: Yes. That’s powerful. How about your own family? I have a feeling this is inspiring your own family.

Kari Hughes: My kids are grown. I’m a little bit older than I think your typical bootstrap start up person who tends to be a millennial, I think. They are very inspired. Family and friends have all said, “This is just amazing, what you’re [doing 00:18:47].

We have had amazing support in the Detroit metro area, online too, and around the country, and around the world. Especially in our area, we have had people who have gotten on board and helped us spread the word and have been amazing, unofficial partners to Buy the Change.

We’re just going to keep going and sell a little bit more each year and travel, and visit our ladies. We’re always open to new partnerships. We’re going to continue to growing organically and see where it can take us.

Every product we sell has made a difference. From people who are working to be social entrepreneurs and to do something, you can’t look at the problem as a whole. It’s just so overwhelming. If you break off a piece that you can handle and just do it the best that you can do it, we can string all of those little pieces together, and it does make a difference, a lasting difference.

Romy Kochan: Wow, powerful. Thanks for that encouragement. That got me just now. I feel a little taller. Very good. Hey Kari, we really appreciate it and would love to stay in touch and keep this dialog going.

Kari Hughes: Thank you so much.

Romy Kochan: Big thanks to Kari Hughes of Buy the Change. I hope you walk away from this episode understanding that you don’t have to have everything figured out. Life in the social enterprise just doesn’t work that way.

However, please keep your eye on your own bonfire like Kari does. Remember that the bonfire represents the business part of your social enterprise. You can’t walk too far away from your own fire in an attempt to help someone that your own fire goes out. There is truly a lot to balance.

Let’s close out this episode like we usually do, with a Detroit artist curated by Assemble Sound. Please meet again, Tim Shumack with his song, Born to Fly. Talk to you next time.

End of Transcription

 

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