Reese Fernandez-Ruiz was teaching children math, science, and reading skills in Payatas—one of the Philippines' biggest dump sites—when she noticed something: local mothers were making foot rugs out of scrap cloth that was furnished to them by a group of middlemen, who got the cloth directly from a factory and retrieved the finished products to sell. The mothers made a total of 20 cents per day. Before the middlemen came along, the mothers took the scrap cloth directly from the local dump site. And so, Fernandez-Ruiz (and her Rags2Riches partners) thought: Why not cut out the middleman and give the mothers the pay they deserve?
The Philippines native decided to cold-call Rajo Laurel—a high-end Filipino designer that she likens to Georgio Armani—to ask if he would be interested in participating in her project, which would solicit designs for the mothers to produce. To her surprise, he said yes. There was suddenly a lot of money to be made in scrap-cloth products. And since a major designer was on board, Fernandez-Ruiz was able to persuade other local designers to participate as well.
A cottage industry was soon born: Fernandez-Ruiz and her Rags2Riches partners (there are now 14) bring back drawings from local designers, instruct the mothers on how to create the products, and pay them based on the time and labor-intensity of each project.
So far, Rags2Riches has three product lines: foot rugs, a line of small purses and bags, and a higher-end designer line. Mothers begin their Rag2Riches careers with the foot rugs (making up to $2 per day) and eventually work up to the designer line, which can pay $12 per day. For some perspective, a nurse in the Philippines can expect to make about $7 a day, according to Worldsalaries.org.
Rags2Riches also has a "quality of life program" for the mothers—for every product they make, part of their income goes into a bank account that they can use for social security, education, or health care. "These things are not accessible to the poor. When they're able to increase their income potential, they also increase their potential to have these benefits as well," says Fernandez-Ruiz.
The entrepreneur is currently at Santa Clara University for the Global Social Benefit Incubator, an eight-month mentoring and business training program. Fernandez-Ruiz says that she is learning a lot—and that she expects Rags2Riches to grow from 450 mothers today to 5,000 in the next five years. "It's not about lack of talent or determination," she says. "People need opportunities to be able to get out of poverty."