Case study

HHS: How is Nest funded?

I founded Nest in 2006 immediately following a Masters in Social Work program at Washington University in St. Louis. The school had a social enterprise business plan competition and my idea for Nest won the $24,000 prize that became Nest's startup capital. As a nonprofit, Nest is able to raise charitable dollars to support our global work, however, we also work with brands, retailers and designers on how to ethically and sustainably source from artisans and makers. This dual approach to revenue provides diversification and ensures nonprofit impartiality, mission-focus and an ability to reach early stage or more at-risk groups that do not yet have a strong market access potential. Key philanthropic support comes from: Bloomberg Philanthropies, the Winn Family Foundation, the Elevate Prize, the OAK Foundation and the Cordes Family Foundation. Key brand partners include Etsy, Target, West Elm and Pottery Barn.

HSS: Being a founder is risky. How did you decide to start Nest?

When Muhammad Yunus won the Nobel Peace Prize (2006), enthusiasm for and attention to, the concepts of microfinance exploded. New organizations and corporations emerged to put Yunus’ principles into practice, scaling applications of microfinance and not necessarily with a strong foundation of research guiding their actions. Keep in mind that these were the early days of “not-only-for profit” businesses and many of the firms emerging, while driven by a social mission, were also focused on protecting their bottom lines first and foremost. As a young student, just graduating with my Master’s Degree in Social Work, I understood effective social programs as being less about public policy and more about direct practice with people – so this rapid scaling of lending took me aback. Loans make debt, not a business in and of themselves, and so the conflation of these two concepts was worrying to me - though it turns out, in the most productive sense.

It was my interest in generating economic opportunities in emerging economies without the burden of debt that drove me to found Nest. My vision was for a sustainable model – one not just about lending, but also about more holistic business development – inclusive of education and market building. Instead of teaching a man to fish, as the old adage goes, I wanted to not just finance a woman’s purchase of sewing machine, I wanted to give her the skills to improve her business and find a larger customer base.

HSS: Once you got some traction how did you get your initial clients and how did you keep them?

Our approach is unique in that our work spans the public and private sectors – we believe that buy-in from the fashion and design industries is an important factor in generating change that can then be sustained by artisans and brands alike. Brands seeking to work with global artisan cooperatives or US makers can hire Nest to both identify and then help bring important services to the handmade producers they employ. This includes our Ethical Handcraft program, which brings transparency to the work when it takes place in a home or informal small workshop by creating internal policies that make production easier for smaller manufacturers. This is particularly true for larger companies whose systems are designed for work with major factory facilities, not tiny maker operations. 

We also support companies in the design and delivery of programs to help ensure these artisan enterprises are successful from business education programing to design support. Finally, we want to help companies examine and drive forward an agenda of equity – ensuring that they are sourcing from diverse producers both globally and here in the United States. We have worked with many brands over the years including fashion companies like Chloe and Ralph Lauren to larger retailers such as Pottery Barn and Target. I think brands stick with us because our model has proven effective and impactful and others join for the same reasons! Sitting at the intersection of the supply chain and buying we can make sure things run as smoothly and ethically as possible.

 HSS: How did you handle the competition and how were you able scale?

As a nonprofit, we see competition as a good thing – the problem we are aiming to solve is massive and the more organizations of all types that are working towards our shared mission, the better for women globally. We try hard to maintain this mindset and work collaboratively with others with a similar goal. In particular, we think multilateral collaboration is very important – if we can get the private and public sectors working together, sustainable scale can be achieved.

A great example of this was the development of Nest’s Ethical Handcraft program – Nest brought together diverse partners including multilateral groups like the United Nations Office of Partnerships; brands and retailers including Target, Patagonia and West Elm; charitable institutions like Bloomberg Philanthropies to co-create the first set of regulatory Standards for work that is happening outside of factories, inside homes and small workshops where craft takes place. These Standards inform both training and auditing practices and craft businesses whose compliance can be verified carry the Nest Seal of Ethical Handcraft. This consumer Seal is seen on a range of products at those earlier stated retailers and beyond. Our reach is so much more significant together than alone and this type of collaboration is leading to true systems change on a global level.

HSS: Can you think of the moment when Nest catapulted to the mainstream? Can you pinpoint the time when you thought this is it?

Following my interest in global development, I had conducted my fair share of both academic research and field work in various countries. Craftswomen were everywhere I went. Yes, there were farmers too, but the majority of the women I saw were making things with their hands. It is strange to think about this now, but I founded Nest 17 years ago – Etsy was actually founded just a year prior and, at that time, was a fledgling start up without much global appeal!

While the Fair Trade Movement existed, it brought to mind for many people a limited view of craft based on holiday ornaments and knick-knacks. It was not the vital industry we see it blossoming into today. The rapid rise in consumer demand for handcrafted items has taught us not just about the power of this sector to advance the rights of women globally, it has certainly catapulted Nest into the mainstream. Our partners went from smaller design brands committed to artisan sourcing to multinational corporations like Target to Williams Sonoma, Inc (including all of their companies – West Elm, Pottery Barn and more).

HSS: Did you have any points where you were ready to give up?

It was not a formal research study and so its findings are certainly subject to scrutiny, but we were curious what the philanthropic landscape looks like for the craft sector. We downloaded the 990s (these are IRS forms that non-profits must fill out) from the top 50 institutional funders in the United States and went through them cataloging where they made their investments and researching the beneficiary organizations.

A shocking .02% of them invested in the craft sector. This was true in spite of research suggesting that there are 300M homeworkers globally, most of whom are women, and many of whom are estimated to be engaged in craft production. What we uncovered was, to me, a staggering example of gender inequity that made me take a physical step backward.

Artisanal work has long been stereotyped as “niche” to “non-scaleable”, allowing it to be ignored or rejected by philanthropy for decades, despite a steady interest in agriculture and a growing interest in supply chain development and in the informal economy – worlds that share heavy overlap with that of craft-based employment.

This has been really disheartening at times – to feel like important work requires so much convincing.  We shout from the rooftops, publish data, but mostly, we have learned over time to just say: “Join us.” Join us as we watch what happens in the next 15 years -- as automation and robotics powerfully set off and spur forward a growing counter-movement that demands a knowledge of, and craves a connection to, the producer. Join us to build a movement that realizes that slowing down (at least for some things) makes us all happier. 

HSS: What were your lessons learned as you look back on the business?

There have been many lessons learned! I think the most significant one is the importance of remaining both nimble and iterative. I really encourage our team to never think of any of our programs as “final” in their design. Nonprofit or development work should always be led with constituent voice and the needs of the beneficiaries of that effort. We must co-create the solutions in partnership with our artisans and makers and this might mean our programs continuing to evolve as needs change. This also allows us to be really responsive to the changing world around us – we more or less stopped our core programs during the height of the Covid-19 pandemic to ensure we are meeting people where their needs were – we pivoted to small grant making and other supportive services. Another example is climate change and the impacts the more severe and changing weather is having on our artisan and maker partners. If they are facing major challenges to sustaining their livelihoods because of these issues, we need to either address those challenges or forge partnerships to ensure that they have recourse. We spend a lot of our time listening to, and building with, our partners.

HSS: Do you have any additional advice for female-founded endeavors? When was being a female an advantage for you and when was it a disadvantage?

I think many people think of social entrepreneurs as visionaries and, while I believe that is true, I think the difference between a visionary and a true social entrepreneur is that entrepreneurs can transition their gaze from the distant mountains of the world that we want to create down to our feet to start walking there. I think women are uniquely able to do this – we are born to multitask, to be organized and juggle many things, and to care not just about our own lives but those of our family, our community, the world around us.

I am a BIG believer in list making (as are most women I know!) – we need to take our creative ideas, our visions and our hopes and break them down into to do lists. I think it's the journey from idea to checklist where many people break down. The big pictures can seem overwhelming but if we can take the vision and create the path to walk there then all of us can join in.

I think this fixation on doing is evident at Nest, people always marvel at how quickly we can mobilize, shift gears, respond. To many it might feel chaotic but to me, its centering and grounding to know that we CAN make change, and how to do it.

Being female-founded is no longer the challenge it might have once been. I stand in gratitude to the many, many women who came before me and helped shatter the glass ceiling above me. I think our role now is to recognize that not all women face the same access and we must take the benefits we have been given and use it to create pathways for those who still face disproportionate access to funding, to networks and to success.

Insights

How We Met: Virtual Introduction

Rebecca’s CFO/ COO was the professor for one of my classes at NYU. He would use Nest as an example in class, and when I looked up Nest I saw that Rebecca was the founder. I emailed my professor to ask if Rebecca had time for an interview.

Lisa Richardson

I've always been passionate about women helping other women. I created this blog to tell stories of successful female-founded businesses. Hopefully, these stories will help inspire more women to found their own businesses.

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