There is an estimated 1.4 billion people in the world living in extreme poverty.. One of the organizations who try to help this people who are living with less than $1.25 per day is Trickle Up. Trickle Up tries to provide extreme poor with resources to build sustainable livelihoods and exit poverty. Their goal is to empower poor people to develop their potential and strengthen communities by providing training and seed capital grants for launching or expanding microenterprises in partnership with local agencies.
Trickle Up was founded in 1979. The name came from the theory of “trickle down” economics. “Trickle down” theory stated that investing in business at the highest level of society, the benefits would eventually come or trickle down to the rest of the population. The founders of Trickle Up, Glen and Mildred Robbins Leet, thought differently. After visiting Dominica and seeing firsthand that this theory does not work, and only makes rich people richer and vice versa, they decided to do something about it. They gave $100 as grants to ten people to launch their own microenterprises and provided them with business plans. Leet’s reckoned that nothing empowers an individual to achieve their dreams more than trust and encouragement. They soon started a non-profit organization which provided dealt with poor individuals directly by providing grants and basic training.
Today, Trickle Up serves around 8000 people yearly. Each grant affects five people on average, which means that Trickle Up affected the lives of over 40.000 people all over the world. The organization targets specifically women and people with disabilities, with 90% of the grants being given to women. The targeted people do not have the reach to other ways of micro financing, and for most women that receive their grants, it was the first time ever that they had that opportunity at all.
Trickle Up partners with local organizations that share the same vision, values and mission. The partners help with adapting the program to fit local communities and also allow the delivery of organization’s programs. The partnership’s network has 30 local organizations in five countries: India, Guatemala, Nicaragua, Mali and Burkina Faso.
Trickle Up program consists of three basic inputs:
- Spark grants
- Savings groups
- Skills training.
Spark grants range from $100 to $250. As the target group is extremely poor, Trickle Up offers smaller amounts but as grants and not loans. Most people targeted cannot even qualify for microloans and most would not take the risk of getting a loan as their income is too low and insecure. The grants usually help people start a small business, such as rearing goats or ducks, which often helps them supplement other work activities they do to survive. The idea behind Spark grants is to help extreme poor to diversify their income and to stabilize it. This stability provides them with a base for building assets and surviving through crisis periods when they are out of other sources of income.
Savings groups are designed to help extreme poor in case of emergencies and to provide them with small credit that can bring more security into their lives (for example, a farmer would not need to pre-sell his crops when the prices are lower). Savings groups are voluntary, community based and self-managing groups of 15-25 individuals. They meet on regular basis to contribute to their savings which are maintained as a loan fund from which members can borrow. The maximum loan amount is set by the group as well as the loan terms. In some regions, the members open a bank account while in others that is not the case due to distances and costs. All Trickle Up participants join this program with less than 15% of them having any kind of savings before joining.
The link between education and poverty is already examined, and shows that people who live in extreme poverty usually have low education and practically no business skills. Trickle Up provides livelihood skills training in a way that is accessible and practical to these people. Training are tailored to meet local needs and connected to the livelihood activities of the people (for example, new farming methods to improve crops, how to improve the quality of the product, how to market it, basic business practices such as balancing accounts or how to be competitive, etc.). Members also receive information about Savings groups and health care services available to them as well as awareness-raising on health and hygiene issues.
Trickle Up model has a big success in addressing the problem of extreme poverty. Keep in mind that most of these people do not have proper clothes, every seventh person is constantly hungry and vast majority has only couple, if any, years of formal education. Yet, over 90% of new micro-enterprises survive past the first year with half of the families increasing their spending on education.
If you would like to help their cause, visit TrickleUp.org. Volunteering and internship positions are available and you can always donate money. Donating the difference between iPhone 4 and iPhone 5 can change the life of some family!