Latin America is one of the most unequal regions in the world in terms of per capita income. It is home to extreme poverty but also to enormous fortunes which in general are not being channeled into social entrepreneurship or innovative philanthropic models. Artists like Shakira have done more then most to demonstrate the positive impact that philanthropic investments can have in reinventing education, for example.
However, there are many local organizations that are devoted to the promotion of social entrepreneurship in South America. Market-based approaches to tackling poverty in the region include new funds like Vox in Brazil, Inversor in Colombia, and enterprise development leaders like FUNDES and the social business arm of Ashoka. The concept of ecosystems of support for entrepreneurship highlights the absence of key players in many Latin American countries, including those from the public sector and universities.
Social Entrepreneurship Leader
Felipe Vergara is a social entrepreneurship leader who founded the Colombia-based social enterprise Lumni. He recently recevied a Latin American Social Entrepreneur of the Year 2011 award for his ground breaking work on the Lumni venture capital fund, which invests directly in human capital. Lumni finances education for students in exchange for a small fixed percentage of their future income over a pre-set time period.
The firm currently operates in Colombia, Chile, Mexico and the US, and Vergara has grown Lumni from supporting 150 students to over 1,600 students today. The program has a low dropout rate of just 5%, and a default rate below 2%. Due to this excellent performance, Lumni has attracted a lot of investor interest which currently exceeds 150 individuals and corporations with capital totals of $15 million across 20 funds.
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