Founded in 1979, the Trickle Up Program's mission is to help the lowest income people worldwide take the first step up out of poverty, by providing conditional seed capital and business training essential to the launch of a microenterprise. This proven social and economic empowerment model is implemented in partnership with local agencies.

Trickle Up works in the poorest areas of the US, both rural and urban regions, from California to the Cheyenne River Lakota Sioux reservation in South Dakota, to the coast of Maine. In New York City alone, poverty rates hover between 25 percent and 35 percent despite the economic boom of the 1990s. Community economic development and poverty alleviation programs have long been faced with the question of how to reach the poorest populations.

Microenterprise development has proved to be an effective poverty alleviation tool, because it can provide a viable alternative to jobs paying the minimum wage, which are becoming increasingly scarce in this difficult economy. It provides flexibility, especially for women who may need to work from home to fulfill child-care responsibilities. For many immigrants, starting their own small business is a viable alternative to taking a job that may pay less than the minimum wage and offers no health insurance. Many entrepreneurs also develop their microenterprise initially on a part-time basis, patching together household income from a number of sources to make ends meet. The flexibility to operate a microenterprise on either a part-time or full-time basis allows the entrepreneur to develop the income strategy most suited to meet their particular needs.

Microenterprise development is a chance for very poor people to work their way to self-reliance. According to a 1999 Aspen Institute study of the U.S. microenterprise development field:

• 72 percent of poor microentrepreneurs increase their household income over five years, by an average of $8,484;
• Over half - 53 percent - of poor entrepreneurs moved over the poverty line;
• Reliance on public assistance decreased by 61 percent.

Most Trickle Up entrepreneurs do not otherwise have access to capital or business training to pursue their business interests. For many who see entrepreneurship as a way to improve their economic standing, opportunities are sorely lacking. Loans from banks are nearly impossible to secure. Despite changes in the banking community regarding small business financing and the growth of non-traditional financial organizations, opportunities for small-scale financing are scarce for low-income start-ups. Opportunities simply do not exist for individuals lacking collateral or a credit history, especially for women and men who are seeking to leave the welfare rolls.

Approximately 40 percent of Trickle Up's US entrepreneurs are in the process of moving from public assistance to self-reliance, and 75 percent of our entrepreneurs are women.

Trickle Up Approach

Trickle Up's domestic program provides basic business training and seed capital typically in the form of US $700 conditional grants, distributed in two installments, to entrepreneurs who are starting or expanding their own business, often home-based sole proprietorships. Entrepreneurs receive the first portion of the grant ($500) after preparing a Trickle Up Business Plan. After three months or the first business cycle, they complete a Trickle Up Business Report, showing they have established a viable business and met program requirements, and receive the second grant installment.

Accessing Trickle Up Grants

Trickle Up works around the world in partnership with nearly 250 Coordinating Partner Agencies, generally community-based development organizations. They use the Trickle Up Poverty Assessment Tool, which assists Coordinators in selecting the poorest in a community via an array of economic and social indicators, to identify groups of usually three or more people, often from the same household, living in extreme poverty.

The Coordinating Partner Agency then works with the business leader to complete a two-page Trickle Up Business Plan outlining a viable business. The first grant installment usually of $50 ($500 in the U.S.) is awarded with the approval of the business plan, which outlines the product or service, market, how the grant will be spent, costs, projected income and profit and, in the U.S. cash flow projections.

The second is awarded three months later upon approval of the Trickle Up Grant Business Report, which outlines the business costs, profit, reinvestment and plans for growth.

See Trickle Up's website for more information.