Ethics, Faith, and Profit: Exploring the Motives of the U.S. Fair Trade Social Entrepreneurs

Abstract

Although fair trade has grown exponentially in the U.S. in recent years, we do not have a clear understanding of why small U.S. firms choose to participate in it. To answer this question, we use a qualitative case study approach and grounded theory analysis to explore the motivations of 35 small fair trade businesses. We find that shared values (ethical, religious, or business) and the desire to help others (altruism), often triggered by a critical incident, lead social entrepreneurs to found and sustain fair trade businesses. The relationship between shared values and engagement in fair trade and the relationship between altruism and engagement in fair trade are strengthened by four motivating factors: direct relationships with producers, support for social causes, the desire for the preservation of craftsmanship, and the desire to share aesthetic products. These links are strengthened by four facilitating factors (which make fair trade engagement easier): the acquisition of business knowledge, family member involvement in the firm, assistance from faith communities, and assistance from the fair trade community. Additional analysis reveals three types of fair trade social entrepreneurs: “ethics first” (or ethical) entrepreneurs, primarily motivated by human rights and social justice concerns; “faith first” (or faithful) fair traders, motivated primarily by their religious faith; and “business first” (or benevolent) businesspeople, motivated by what they perceive to be an opportunity to build a successful business while simultaneously doing “good” and helping others.