Tiny Grants Give Poor Entrepreneurs a Big Lift
Seeing little aid trickle down, Trickle Up has helped thousands get started
The first of two parts
When Emily Flores and Angel Ortiz Campos formed Quesitos Texidor Caterers
four years ago, she knew sales and marketing, and he knew quesitos. Ortiz
had made the cheese-filled pastries in Puerto Rico for years as a bakery
employee. In 1994, he began turning out fruit, meat, vegetable, and seafood
versions, as well as the traditional cheese, in the kitchen of their New
York apartment. Flores distributed fliers and samples around their Bronx
neighborhood on weekends. They sold.
The quesitos remained a part-time venture, however, until 1997, when
Flores lost two jobs in her field within months of each other. Suddenly,
the catering business became a lifeline. "I was 50 -- a middle-aged Latino
woman. What was I going to do?" she says. Flores learned about Trickle
Up in a course for small-scale entrepreneurs at the Women's Housing &
Economic Development Corp., a New York state agency. Nonprofit and
international, Trickle Up helps low-income entrepreneurs expand businesses,
giving preference to women, minorities, recent immigrants, and those receiving
welfare or public assistance. With no income other than her unemployment
checks and depleted savings, Flores qualified for a Trickle Up grant.
SURVIVAL PLAN. Mildred Robbins Leet and her late husband, Glen, founded the Trickle
Up program in 1979 with $1,000 of their own money. Since then, it has launched 67,000 small, typically home-based businesses in 115 countries
-- 600 of them in the U.S., where the program has operated since 1994.
"We've never said we made millionaires," says Leet. "We are helping people
move out of poverty. Starting a business is the way you survive."
The Leets, who worked for decades in international community aid, chose
the name -- a play on "trickle-down" economic theory -- after
seeing how few people benefited from donor money. "We saw the massive infusions
of aid did not trickle down," says Leet. "The rich were getting richer,
and the poor were getting poorer. We developed the idea of the grants with
the expectation that [their benefits] would trickle up."
Today, Trickle Up operates out of a New York loft. Funded by individuals,
foundations, development organizations, and corporations, it has a
$2 million budget and a staff of 13. It has partnerships with about 340
coordinating agencies -- grassroots organizations that identify candidates
for grants. They also train recipients and counsel them once they start
OVERSEAS UPSTARTS. In Rwanda and Mozambique, $100 grants have helped displaced persons and refugees
set up businesses. In Cambodia, land-mine victims have established vehicle repair shops with such minimal sums. "Some people
feel they cannot fix a motorcycle if they've lost an arm or leg," says
Chhem Sip, deputy director of the United Cambodian Community Development
Foundation, which administers grants for Trickle Up in rural Kampot
province. "But we can train them to use their foot instead of their arm
or their foot and their mouth." In the U.S., Trickle Up grants are $700,
reflecting the higher cost of living.
Applicants anywhere must draw up business plans, specifying their product,
the amount they will invest, and their market. "That is an entire business-training course in itself," says Suzan Habachy, Trickle
Up's executive director. U.S. recipients get $500 to start; those overseas
get $50. Each entrepreneur in a project must put in 250 hours of work over
three months and reinvest or save at least 20% of any profit to get the
"Many of the people we target would never test their idea, would never
make it profitable," says Maria Elena DelValle, coordinator of the food-training
initiative at WHEDCO, which helped Flores develop her business plan and
will lease her space in its commercial kitchen. "With the grant
money, they can implement their business concept."
In the U.S., $700 might not seem like much. But a small cash infusion
can make a difference to such home-based enterprises. "The program fills a narrow
niche," says Jason Friedman, director of economic development for Iowa's
Institute for Social & Economic Development, one of Trickle Up's coordinating
agencies. "We had someone who makes electronic repairs, and then he diversified
into selling pagers. He needed Internet access, and the grant paid half the cost of the computer."
With the $700 Flores received last summer, she bought ingredients, baking
sheets, and a multiple-wheel pastry cutter that made the quesitos more uniform
and sped production. "This meant more product and more sales. It was a
small investment for the increase in revenue," says Flores. In December,
the couple sold more than $2,500 worth of quesitos -- just from direct orders.
Their next step, she says, is expanding to stores and restaurants.
Next in this two-part series: Growing after the First Grant
By Karin Halperin in New York