Even the best cause marketing campaigns and employee volunteer programs don’t give your company the social mission necessary to distinguish it in the eyes of competitors, potential employees and investors. Still, these initiatives are terrific tools that I fully encourage you to use, which is why I invite experts here to teach them. However, if you have the best hand-crafted furniture and lighting, but your house lacks a floor, you’re not paying attention.  A social mission is integrated in all elements of a business from marketing to resources to employee policies to shareholder dividends.

I asked Salah Boukadoum, co-founder of Soap Hope, an online retailer of natural body care products, to talk to us about his radical business model and how it puts money directly in the hands of non-profits, funds micro-loans, provides low-cost marketing and gets him revved for work each day.  His ideas and ambition for the Good Returns business model are fascinating and thus far proving to work.      To download instead, right-click and save.

Key points:

• Salah and his co-founder Craig Tiritilli hypothesize that a self-sustaining organization can have social good as part of its mission.  To test this model of ‘Good Return,’ they created Soap Hope (formerly, they ran a successful B2B software firm in Dallas).
• At the end of each year, Soap Hope  invests 100% of profits into partner organizations that provide micro-loans to women in poverty all over the world. One year later, they the investment is returned without interest. During this year, non-profits are able to use the capital to grow their infrastructure, expand services, etc.
• If Salah and Craig’s hypothesis is true, then every company of a similar size would earn their shareholders higher returns on capital if they operate under a Good Returns model than they would otherwise because 1) customers will choose a company with a social mission over one without, price and quality equal, and 2) the company can forge relationships with non-profits that aid in marketing and networking.
• Soap Hope does not donate profits. It’s a true for-profit company that pays dividends to shareholders. The difference is that they delay they payment by one year to invest the profits in a non-profit partner.

• Soap Hope’s marketing costs are proving to be substantially lower than a company without a social mission even though many of Soap Hope customers aren’t even aware of the company’s social mission the first or second time they purchase products.
• In the next five years, Salah and Craig aim to recruit 99 additional companies to the Good Returns model (which doesn’t mandate that these companies invest 100% of profits, but that their model is built around a social mission), to generate $1 million in micro-loans and to create a series of templates that guide other for- and non-profits in creating deep partnerships.
• Since Soap Hope launched in December 2008, it’s grown 25% month over month. Salah expects profitability in year two.

Salah goes deep into his beliefs about the power of business and Soap Hope’s business model. I really encourage you to listen to our conversation.

In March 2009 Amy Cowin raised $32,000 through a personal fundraising page to pay for an operation to remove one of her kidneys and donate it to her sister Jessica. This is not Amy and Jessica’s story. It’s the story of GiveForward.org–the idea and technology that enabled this operation and hundreds of others like it.

I spoke with Desiree Vargas, co-founder and president of GiveForward, an online platform that provides free fundraising pages to individuals and non-profits to raise money for loved ones’ medical treatments, volunteer service projects, community initiatives or charitable sporting events. Vargas runs GiveForward with her co-founder Ethan Austin and crew of interns.

Since its launch in August 2008, GiveForward has helped more than 5,000 individuals raise more than $660,000 and has earned praise from the Chicago Tribune as ”the future of medical fundraising in the Internet Age.”

In our conversation Vargas talks about the voice that woke her up at 1 a.m. telling her to “Get Started,” inexpensive resources for getting your startup off the ground and what she does with failure.  Click the player to listen.

Key points from our conversation:

• After Hurricane Katrina Vargas wanted to directly donate to affected individuals. She was frustrated that instead, her donation needed to be processed through a larger organization where overhead and administrative costs would dilute it. A year later, she was thinking about how she could raise the money for a different business idea, when the thought of raising capital from friends and family came to her. She conceptualized this as an online platform that would enable people to connect on a individual basis to raise and donate money.
• Vargas threw a handful of mini-launch parties around the country to raise money from friends, usually in $10-$20 increments, to seed GiveForward. Each party raised $1,000-$1,500.
• Many universities have resource centers in their law or business schools that offer free or low-cost legal and business advice to entrepreneurs. Vargas used Northwestern University’s Small Business Opportunity Center to solicit feedback on her business plan and to legally establish the company.
• GiveForward charges a 3% transaction fee, which doesn’t cover Vargas or Austin’s salaries (like most entrepreneurs with young businesses, they pick up additional work) but does cover the company’s minimal operating expenses. 3% is lower than the 5-15% charged by similar sites.
• After the success of people like Amy and Jessica Cowin, medical fundraising on GiveForward has grown exponentially. It now comprises 70% of the site’s fundraising pages, and medical fundraising drives 80% of new users and donations.
• From a mentor, Vargas learned to talk about her idea as much as possible. By doing so, you’ll glean feedback, ideas, contacts and publicity for your business. Outside of high-tech, stealth-mode is overrated.
• Look at failure as an opportunity to learn. In GiveForward’s first months, some donations took too long to go out and sometimes the donate button wouldn’t work. Austin in particular was passionate about seeing these snafus as a means to engage and win-over the customer.
• Be flexible. GiveForward’s original mission had nothing to do with medical fundraising, but this is what people came for and needed. Now, GiveForward can target this sector.
• Give-Forward aims to be ‘the eBay of giving’–the preeminent destination to fundraise for–and fund–personal and non-personal causes.

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Microfinance hit hockey stick growth in the past few years in large part because:

• Muhammad Yunus won the Nobel Peace prize in 2006 for providing credit to the poor with Grameen Bank;
• Kiva created a participatory platform that engaged Americans in micro-lending and financed $100 million worth of loans; and
• It’s mighty effective. It works for individuals in any country, in any industry, of any ethnicity and under any government.

This growth means that:

• You have more choices about what you finance due to niche micro-lending sites like Vittana, Samasource, GiveForward andDonorsChoose;
• Microfinance organizations are segmenting and learning to work in concert with each other;
• We’re not far off from a Mark Burnett reality microfinance production; and
• Millions of people now have the seed capital and tools to work their way out of poverty.

I spoke with Windy Wilkins and Steve Schwartz from Unitus, a non-profit that works to increase access to microfinance services, to learn about Unitus’ specialized model (instead of working directly with borrowers, Unitus identifies high-impact microfinance institutions (MFIs) and helps them attract capital and systematize processes) and why the organization is so effective. Unitus-supported MFIs are growing seven-times as fast as traditional MFIs, and in its eight years of operations, the organization has helped its partner institutions to serve more than 10 million families. Wilkins leads the global network and Schwartz manages media relations.

What makes Unitus unique?
Windy: We partner with high-potential microfinance institutions. We currently have 23 partners to whom we provide a variety of services including help with capacity-building and seed or early stage funding.  Are work is intended to help the organizations grow and deliver high-impact services to their clients.

How do you identify high-impact institutions?
Windy: We’ve surveyed 1000s of MFIs and have come up with only 23 partners, so it’s a rigorous process. We choose partners who are working in high-demand regions. Once we identify regions where we think there’s extreme need or potential for growth, we start to identify institutions. Typically, we partner with early-stage institutions. We also look for a commercial focus. We want to make sure the institutions are taking a commercial approach to microfinance.

Windy: An organization that is dependent on donor funding and doesn’t have a plan to change that. We feel that in order for scale to be reached, there needs to be an element of commercial capital. An NGO-focused model that may be reliant on one or two major donors is also a more non-commercial approach.

Are there any commonalities among the MFIs despite their geographic and cultural differences? How do they vary in terms of size, government support, aptitude?
Windy: the commonality comes out when you look at the management. I’m responsible for running the network so I connect all of our partners to each other, find ways for them to share best practices and learn from each other. Every year we do an annual leadership summit that brings together the CEOs and senior management of our partners. I’m always surprised by how much commonality there is among them. When you look at their capability and their passion, they have a lot in common.

What do you specifically offer your partners and how do you develop these programs?
Windy: We offer functional consulting in human resources, technology and operations. These three areas were chosen based on needs that we saw as essential to helping these businesses grow. In operations for example, we work with MFIs to become more efficient, to streamline costs and reduce operational expenses. This ranges from analyzing the cost of customer acquisition to teaching middle management project management.

How much tweaking do you need to do for programs for each region?
Windy: there’s always some tweaking involved, particularly as we work more in East African, where the institutions are generally younger than in India.

What’s a signature program for Unitus?
Windy: I was recently in East Africa providing support to our East African Growth Center, which is a leadership development program for MFIs in Tanzania and Kenya. There are 11 MFIs participating. We conduct growth workshops to help CEOs become better leaders and grow their organizations. Part of this is helping them develop strategic plans. Initially, some of the staff didn’t see the value in strategic planning. It was the first time they had been through an exercise like this. Giving them the opportunity to think through what their organizations’ missions and goals would be for the next year helped them feel more connected to their institutions and inspired in their ability help people.

Most of the Unitus team, which is small, is located in Seattle. How do you effectively work with your local partners?
Windy: We also have offices located in Bangalore and one in Nairobi and our staff there works very closely with local partners.

Steve: Windy’s being modest. She and her team spend a good portion of the year traveling and working closely with our partners as well.

Unitus-supported MFIs are growing 7-times as fast as those not affiliated with Unitus. What do you attribute your success rate to?
Windy: We have these great early-stage partners with high potential for growth. We’ve found institutions that are the best and brightest in microfinance. A lot is owed to our rigorous selection process. Once we’ve selected our partners, we take a needs-based approach to help them reach their goals. Having team on the ground helps as well.

Steve: Unitus has not shied away from innovation—whether it’s the delivery of microfinance through the MFIs or innovation in the marketplace to discover new ways to capitalize MFIs.

Do you have to customize training programs specifically for each region?
Windy: We’ve found that we can take much of what we’ve developed for India and use it with our new partners in East Africa. Microfinance operations are similar across regions so we’ve been able to apply our knowledge about operations and technology in both geographies. With mobile technology, for example, we are able to take what we learned in Africa and apply it to India.

Do you see others adopting the Unitus model?
Windy: I don’t see anyone replicating our emphasis on early-stage and high potential institutions in the short-term because it’s a little bit risky. There are a lot of players in the microfinance space but not a lot who provide capacity-building support as well as seed capital.

Steve: Microfinance is a very diverse area. As it grows, it becomes more complicated for one organization to serve all of the needs. We’re focused on expanding early stage MFIs and creating more opportunities for empowerment. Everyone’s playing a slightly different role; we’re not to the point where there is genuine competition.

What drew you to microfinance?
Windy: I’ve had a long-time interest in development, but what attracted me to microfinance is its potential for impact. I’m a firm believer in grassroots, bottom-up approaches to development. Getting money in the hands of people who need it and who have the potential to lift themselves and their families out of poverty is really exciting.

Steve: I got a degree in international relations and public diplomacy and I took that down to Wall Street to misuse it for a couple of years representing hedge funds. I then went into the Peace Corps and ended up in West Africa and Benin and did microfinance with a lot of women’s groups. I saw the potential impact microfinance had on these women’s self esteem and identity. The add-on effects of microfinance were fantastically profound when you saw them in action. Now I’m working to tell the microfinance story at Unitus.

What do you suggest to people who are interested in microfinance?
Windy: Go work in the field, work for an MFI. But I recognize it’s not something that everyone can do—that wasn’t the route I took.

Steve: There’s 10,000 MFIs worldwide. Even being in one that’s failing miserably, you get to see what the advantages and challenges are.

There’s a solid chance that readers here are familiar with Kiva. But just last week I realized a friend of mine who is hip to causes hadn’t received the proverbial memo. Kiva is the first person-to-person micro-lending website. The organization allows everyday Joes and Janes to lend to a specific entrepreneur in the developing world, empowering them to move beyond poverty.

At Kiva.org, you can see the name, picture, age, occupation and purpose of the loan for thousands of entrepreneurs around the world. Lenders make a credit card loan, which Kiva passes along to its certified micro-finance partners worldwide. These partners distribute the funds, and typically provide training and other support to maximize the entrepreneurs’ success. As a lender, you receive email progress updates as the loan is repaid. Recently, Kiva switched to returning portions of the loan as they were paid off, which allows for immediate reinvestment in another project (like the purchase of cattle,grain, computers, looms or solar panels).

Nobel Laureate Muhammad Yunus popularized the model of micro-lending with his successful Grameen Bank in Bangladesh. Kiva took this model and adapted it to function and scale online. Brilliance, and I’m not the only one to see this. In recent months, the amount of lenders that Kiva has attracted has topped the number of loans available, leaving the organization scurrying to get more vetted entrepreneurs signed up for their future.

My friend made a loan to a 51-year-old in agriculture entrepreneur in Ghanna. Her investment fulfilled the remainder of the woman’s loan request ($625). Within eight-months, my friend will have her money back and is then free to re-invest or withdraw it. I’m on my third cycle of
investment. For me and thousands of others, it’s an infinite loop of making a difference in individuals” lives and feeling amazing about it.

Grameen Bank, the institution that launched social enterprise as we know it, is augmenting its American programs with operations in Los Angeles. The first American division opened in Queens, New York this spring. Isabel Maxwell heads the Los Angeles office.

Grameen America, Like Grameen Bank, is a microcredit lender, providing poor individuals–primarily women–small loans that they use to launch businesses and elevate their families from poverty. Muhammad Yunus (pictured at left at the opening of the Queens branch) started Grameen in Bangladesh 30 years ago. Its reach has since exceeded 100 million families and sired the Internet micro-lending phenomenon Kiva.

Here’s the part where I confront my (American) elitism and admit that I didn’t view Americans as obvious recipients of microfinancing. At first blush I thought Grameen had come to Los Angeles for the usual biz dev and fundraising circuit.

I’m now reminded that nascent entrepreneurs live in all grids of the globe and that there is no objective scale to measure the boundless and border-less potential of a starter loan.

It may be a small shift in thought, but like Yunus’ other small shifts in thought, this one has infinite impact.