Philanthropy has long been a great way for some of the World’s big business owners and CEO’s to give something back to society using the wealth that they have accumulated. In the same vein we have also seen a rise in recent years of social entrepreneurship, contrasting slightly from philanthropy, this form of charitable work involves entrepreneurs setting up business with the pure aim of helping to bring about social change. Social entrepreneurs use business techniques within their organization to go about raising funds for their enterprise that has the sole purpose of helping people. There are several of these brilliant non-profit organizations in operation across the World and we’re going to take a look at one such non-profit that is helping people in an innovative way. The Tampa-based Mercy Foundation provides micro-loans to people across the globe in order to help them improve their own lives, let’s take a look further into the organization.
Joe Johnson Mercy Foundation’s CEO and founder started the organization in 2009, he is a young and hungry businessman who is currently CEO of the commercial real estate brokerage firm The Welfont Group. Johnson has long been involved in charitable organizations such as Seed for America, an organization that created business schools across America. The CEO has strong Christian beliefs and aims to promote these Christian values through his charity work.
How They Raise Money
The Mercy Foundation has a brilliantly creative way of fundraising the money which it then sends around the World. The organization buys underutilized property, usually commercial real estate and takes advantage of the fact that selling to a non-profit organization means that the tax is deductible, this is known as a 170 transaction, the IRS code for such a sale that considers the difference between sales price and market value a gift, foregoing any capital gains. The foundation then sells the property for a profit which it uses to fund the micro-loans.
Drawing on Johnson’s knowledge of the real estate market, the foundation has bought more than 4 million square feet of space in over 16 states in the US. In its primary years much of the money earned was spent on start-up costs, now it is fully established, the foundation provides between 3-4,000 micro loans to people in over 60 countries.
The organization does accept donations but its main strategy for fundraising is through the 170 purchases.
How They Help People
The organization does not believe in offering hand-outs, the aim is to give people living in third world countries the opportunity to take themselves out of poverty by giving micro-loans of usually $400-500 to help start or fund small businesses or education. The money is used in a huge variety areas, helping to send children to schools and colleges, aiding shopkeepers to overcome high pricing or to create their own businesses, helping to buy small vehicles so that people can begin their own small business and many other uses that help people to take their first step on the road to a better life.