With the pandemic and everything that comes with it, right now seems like a particularly difficult time to be in business. As the economy continues to shrink like clothes in the washer, small businesses are especially in trouble. Smaller companies not sitting on piles of liquid assets rely on regular cash flow to keep the lights on. Consumer demand shrinkage during a recession, then, presents them with a unique challenge.
In light of the harsh climate, fashion magnate Sara Blakely, founder of the women's apparel company Spanx by Sara Lively, has her nonprofit foundation raising funds for majority woman-owned small businesses. The nonprofit, Spanx and The Spanx by Sara Blakely Foundation, is partnering with GlobalGiving, a veritable GoFundMe for the philanthropic world. It's a crowdfunding site that provides a platform for people to donate to charitable projects.
The current fundraiser is called "The Red Backpack Fund," a name that carries symbolic significance for Blakely. In her account of her own sort of Horatio Alger, rags-to-riches origin story, she says she started her successful business venture with $5,000 in savings and a red backpack. This latter tidbit demonstrates that sometimes all a person needs in this life, says Blakely, is what's on her back.
The Blakely Foundation donated $5 million to the fund on GlobalGiving, an amount they say will provide $5,000 each to 1,000 fortunate female small business owners. There will be three rounds of applications for interested entrepreneurs, all three of which are happening this summer in June, July, and August, respectively. If there's leftover money at the end of the summer, the fund will continue each month until the proceeds run dry.
There are a few stipulations for eligible recipients to qualify. A "small business" is defined as an entity that employs between one and 50 employees, with the one not including the owner herself. The Red Backpack Fund doesn't cover "sole proprietors." "Female-owned" means majority, or 51 percent or more, female ownership. The company must be based in the U.S. The company's proceeds can't have exceeded $5 million in the past year, and the owner must be 18 years or older.